Type 10-Q Search Reference Carrying Corp. Revolving Credit Score Rating Facility

Quarterly report [Sections 13 or 15(d)]

6. Notes Payable

Rotating Credit Score Rating Center

On August 5, 2020, QRHC and specific of their domestic subsidiaries entered into that loan, safety and Guaranty Agreement (the “BBVA Loan Agreement”) with BBVA USA, as a lender, and also as administrative representative, equity agent, and giving bank, which gives for a credit score rating establishment (the “ABL Facility”) containing the immediate following:

An asset-based revolving credit score rating facility when you look at the maximum major level of $15.0 million with a sublimit for issuance of characters of credit score rating as much as 10% of the maximum main level of the revolving credit score rating establishment. Each financing underneath the rotating credit score rating establishment carries interest, on consumers’ solution, at either the beds base rates, as well as the Applicable Margin, or perhaps the LIBOR credit speed for any Interest Period in effect, plus the Applicable Margin, in each situation as described from inside the BBVA financing contract. The maturity go out for the revolving credit premises are August 5, 2025. The revolving credit score rating facility includes an accordion element permitting the revolving credit premises are enhanced by to $10 million.

a gear financing establishment during the maximum main level of $2.0 million. Financing underneath the gear financing establishment may be wanted whenever you want until August 5, 2023. Each loan under the devices mortgage center contains interest, in the individuals’ solution, at either the beds base Rate, plus 1.75%, or even the LIBOR Lending rates for Interest years in essence, plus 2.75percent. The maturity date with the gear loan establishment was August 5, 2025.

Select of QRHC’s domestic subsidiaries would be the individuals underneath the BBVA financing contract. QRHC and another of its home-based subsidiaries are guarantors according to the BBVA mortgage arrangement. As security when it comes down to obligations associated with individuals under the BBVA financing Agreement, (i) the individuals under the BBVA Loan arrangement posses approved a primary priority lien on considerably all their real and intangible individual house, like a pledge regarding the investment inventory and membership welfare, as appropriate, of certain of QRHC’s drive and indirect subsidiaries, and (ii) the guarantors according to the BBVA Loan contract have granted a primary consideration lien from the investment stock and account passions, as applicable, of specific of QRHC’s drive and indirect domestic subsidiaries.

The BBVA financing contract have specific economic covenants, like a minimum fixed charge protection ratio. In addition to that, the BBVA mortgage arrangement have negative covenants limiting, on top of other things, further indebtedness, transactions with associates, extra liens, marketing of assets, dividends, opportunities and improvements, prepayments of personal debt, mergers and purchases, as well as other issue customarily constrained in such contracts. The BBVA financing Agreement also incorporates traditional occasions of default, like repayment non-payments, breaches of representations and guarantees, covenant non-payments, occasions of personal bankruptcy and insolvency, change of controls, and breakdown of any guaranty or safety data giving support to the BBVA mortgage Agreement to stay in complete power and result. Upon the event of an event of standard, the outstanding duties under the BBVA mortgage contract may be expidited and become immediately because of and payable.

The ABL establishment carries interest, at our very own option, at either the bottom Rate, as described inside BBVA Loan Agreement, plus a margin which range from 0.75per cent to 1.25per cent (3.0per cent by September 30, 2020), and/or LIBOR financing Rate the interest years in place, plus a margin including 1.75% to 2.25percent (no borrowings since Sep 30, 2020).

Regarding the the ABL center, we settled BBVA United States Of America a fee of $50,000 and incurred different drive outlay of around $166,877, which are being amortized around longevity of the ABL center.

The BBVA Loan Agreement replaced our Loan, Security and Guaranty Agreement , outdated at the time of February 24, 2017, with Citizens financial, state organization (the “Citizens Bank Loan Agreement”), that has been paid and ended efficient August 5, 2020. We recorded $167,964 in loss on extinguishment of personal debt regarding the this loan firing, including the write-off of this unamortized part of loans issuance expenses and costs straight associated with the mortgage reward.