Kind 10-Q Search Reference Holding Corp. Revolving Credit Premises

Quarterly report [Sections 13 or 15(d)]

6. Records Payable

Revolving Credit Facility

On August 5, 2020, QRHC and certain of their domestic subsidiaries entered into a Loan, safety and Guaranty arrangement (the “BBVA Loan Agreement”) with BBVA United States Of America, as a lender, and as administrative broker, collateral agent, and giving financial, which supplies for a credit establishment (the “ABL Facility”) comprising the following:

An asset-based revolving credit establishment in maximum major level of $15.0 million with a sublimit for issuance of letters of credit score rating all the way to 10per cent on the optimum major number of the revolving credit facility. Each loan in rotating credit premises contains interest, during the individuals’ alternative, at either the Base rates, plus the Applicable Margin, and/or LIBOR credit rates when it comes down to Interest course ultimately, as well as the Applicable Margin, in each circumstances as described in the BBVA Loan contract. The readiness date regarding the revolving credit facility try August 5, 2025. The revolving credit score rating premises have an accordion function permitting the revolving credit score rating center to be increased by to ten bucks million.

a devices loan establishment during the maximum principal level of $2.0 million. Financing according to the devices mortgage premises can be asked for whenever you want until August 5, 2023. Each loan in devices mortgage center bears interest, at the individuals’ alternative, at either the beds base price, plus 1.75percent, or even the LIBOR Lending price when it comes down to Interest duration in place, plus 2.75%. The readiness big date for the products mortgage facility is actually August 5, 2025.

Various of QRHC’s domestic subsidiaries include borrowers according to the BBVA mortgage Agreement. QRHC and one of their home-based subsidiaries tend to be guarantors in BBVA Loan contract. As protection for requirements from the consumers within the BBVA financing arrangement, (i) the borrowers in BBVA Loan contract posses approved a primary priority lien on significantly all of their real and intangible personal home, like a pledge with the funds inventory and membership welfare, as applicable, of particular of QRHC’s drive and secondary subsidiaries, and (ii) the guarantors within the BBVA mortgage Agreement bring provided an initial top priority lien on the money stock and membership interests, as applicable, of some of QRHC’s direct and indirect domestic subsidiaries.

The BBVA mortgage arrangement has some economic covenants, including the absolute minimum fixed charge protection ratio. In addition to that, the BBVA mortgage contract includes negative covenants limiting, on top of other things, extra indebtedness, purchases with affiliates, added liens, product sales of property, returns, opportunities and progress, prepayments of obligations, mergers and acquisitions, as well as other situation customarily constrained this kind of agreements. The BBVA financing contract also incorporates traditional events of default, like repayment defaults, breaches of representations and warranties, covenant non-payments, occasions of case of bankruptcy and insolvency, modification of controls, and problem of any guaranty or safety data supporting the BBVA mortgage Agreement to be in complete energy and effects. Upon the occurrence of an event of default, the exceptional responsibilities underneath the BBVA mortgage contract is likely to be accelerated and turn into instantly due and payable.

The ABL Facility bears interest, at our very own option, at either the beds base speed, as identified within the BBVA Loan arrangement, plus a margin starting from 0.75percent to 1.25% (3.0% since Sep 30, 2020), or perhaps the LIBOR credit Rate when it comes down to interest cycle in effect, plus a margin starting from 1.75percent to 2.25% (no borrowings since Sep 30, 2020).

In connection with the ABL establishment, we settled BBVA American a fee of $50,000 and sustained more immediate outlay of around $166,877, which have been being amortized around life of the ABL center.

The BBVA Loan contract replaced the mortgage, protection and Guaranty contract, dated since February 24, 2017, with Citizens lender, state Association (the “Citizens financial loan Agreement”), that was paid down and terminated effective August 5, 2020. We taped $167,964 in reduction on extinguishment of financial obligation associated with this financing firing, including the write-off on the unamortized portion of debt issuance outlay and charge immediately from the loan payoff.