Quarterly report [Sections 13 or 15(d)]
6. Notes Payable
Rotating Credit Score Rating Establishment
On August 5, 2020, QRHC and certain of its residential subsidiaries registered into a Loan, safety and Guaranty contract (the “BBVA mortgage Agreement”) with BBVA USA, as a loan provider, and also as management broker, guarantee representative, and issuing bank, which gives for a credit score rating premises (the “ABL Facility”) comprising the annotated following:
An asset-based revolving credit center in the max primary level of $15.0 million with a sublimit for issuance of emails of credit as much as 10per cent in the max primary quantity of the revolving credit establishment. Each mortgage according to the revolving credit establishment bears interest, in the consumers’ choice, at either the Base price, and the Applicable Margin, and/or LIBOR Lending Rate for Interest duration in place, and the relevant Margin, in each circumstances as explained for the BBVA financing contract. The readiness date in the revolving credit facility try August 5, 2025. The revolving credit score rating center contains an accordion element permitting the revolving credit establishment becoming enhanced by around ten bucks million.
a devices financing center in the maximum major quantity of $2.0 million. Loans underneath the equipment financing facility can be requested whenever you want until August 5, 2023. Each loan according to the products loan premises bears interest, within individuals’ alternative, at either the beds base price, plus 1.75percent, and/or LIBOR credit price for any Interest Period in effect, plus 2.75%. The maturity time of machines mortgage center was August 5, 2025.
Particular of QRHC’s residential subsidiaries would be the borrowers under the BBVA mortgage arrangement. QRHC and another of its residential subsidiaries include guarantors underneath the BBVA Loan arrangement. As protection when it comes to duties associated with the consumers beneath the BBVA Loan Agreement, (i) the consumers in BBVA mortgage Agreement posses granted a first consideration lien on considerably their physical and intangible individual land, like a pledge from the capital inventory and membership passion, as applicable, of some of QRHC’s drive and secondary subsidiaries, and (ii) the guarantors according to the BBVA Loan arrangement need issued an initial top priority lien on the investment inventory and membership passions, as relevant, of specific of QRHC’s direct and indirect home-based subsidiaries.
The BBVA mortgage Agreement have certain economic covenants, such as the very least fixed fee coverage proportion. And also, the BBVA mortgage arrangement contains negative covenants restricting, among other things, extra indebtedness, deals with associates, extra liens, selling of property, dividends, expenditures and progress, prepayments of obligations, mergers and acquisitions, as well as other matter typically ME payday loans limited this kind of agreements. The BBVA financing arrangement also incorporates traditional activities of standard, like cost non-payments, breaches of representations and guarantees, covenant non-payments, occasions of personal bankruptcy and insolvency, modification of control, and troubles of every guaranty or protection document supporting the BBVA financing Agreement to get into full force and result. Upon the event of an event of default, the outstanding obligations beneath the BBVA mortgage Agreement can be expidited and start to become instantly due and payable.
The ABL Facility carries interest, at the choice, at either the bottom price, as defined for the BBVA mortgage arrangement, plus a margin ranging from 0.75percent to 1.25per cent (3.0% at the time of September 30, 2020), or even the LIBOR financing rates for interest cycle essentially, plus a margin including 1.75per cent to 2.25percent (no borrowings since September 30, 2020).
Relating to the ABL establishment, we paid BBVA American a fee of $50,000 and incurred some other direct expenses of approximately $166,877, which have been becoming amortized on top of the longevity of the ABL Facility.
The BBVA Loan contract replaced all of our Loan, safety and Guaranty Agreement, outdated as of February 24, 2017, with people Bank, state relationship (the “Citizens financial loan Agreement”), that was paid off and ended effective August 5, 2020. We recorded $167,964 in reduction on extinguishment of personal debt relating to this mortgage firing, including the write-off in the unamortized portion of debt issuance bills and costs straight linked to the mortgage payoff.