Form 10-Q Pursuit Source Holding Corp. Revolving Credit Facility

Quarterly report [Sections 13 or 15(d)]

6. Notes Payable

Rotating Credit Establishment

On August 5, 2020, QRHC and particular of its residential subsidiaries registered into that loan, Security and Guaranty arrangement (the “BBVA financing Agreement”) with BBVA USA, as a lender, and as administrative broker, equity broker, and issuing lender, that provides for a credit facility (the “ABL Facility”) comprising the annotated following:

An asset-based revolving credit score rating facility when you look at the max main quantity of $15.0 million with a sublimit for issuance of characters of credit score rating as much as 10percent of optimal main number of the revolving credit facility. Each loan in rotating credit premises holds interest, at the borrowers’ option, at either the bottom rates, in addition to the relevant Margin, or even the LIBOR financing rates for any Interest cycle in place, in addition to the relevant Margin, in each instance as explained into the BBVA Loan arrangement. The maturity time regarding the revolving credit score rating center is August 5, 2025. The revolving credit score rating facility have an accordion element permitting the revolving credit score rating facility to-be increased by to $10 million.

a machines mortgage premises in the optimum major amount of $2.0 million. Financial loans in equipment mortgage facility are required whenever you want until August 5, 2023. Each loan underneath the equipment loan premises bears interest, on borrowers’ solution, at either the bottom price, plus 1.75%, or perhaps the LIBOR credit price when it comes to Interest cycle in effect, plus 2.75%. The readiness day associated with gear financing establishment try August 5, 2025.

Various of QRHC’s residential subsidiaries are the consumers according to the BBVA Loan contract. QRHC and another of their residential subsidiaries become guarantors according to the BBVA Loan Agreement. As security the responsibilities of individuals according to the BBVA Loan arrangement, (i) the borrowers underneath the BBVA financing Agreement have actually approved an initial consideration lien on considerably all of their real and intangible personal home, including a pledge for the funds inventory and account hobbies, as relevant, of certain of QRHC’s drive and secondary subsidiaries, and (ii) the guarantors payday loans OK within the BBVA financing Agreement bring granted a primary priority lien on the capital stock and membership welfare, as appropriate, of some of QRHC’s drive and secondary domestic subsidiaries.

The BBVA financing contract includes specific economic covenants, including the very least fixed fee coverage ratio. On top of that, the BBVA mortgage arrangement includes bad covenants limiting, among other things, additional indebtedness, transactions with associates, added liens, income of assets, returns, opportunities and advances, prepayments of loans, mergers and acquisitions, as well as other thing typically constrained this kind of agreements. The BBVA mortgage arrangement also contains customary happenings of standard, such as repayment non-payments, breaches of representations and warranties, covenant defaults, occasions of personal bankruptcy and insolvency, modification of controls, and troubles of every guaranty or safety data giving support to the BBVA Loan arrangement to stay in complete power and influence. Upon the event of a meeting of default, the exceptional duties according to the BBVA mortgage arrangement might be expidited and become straight away due and payable.

The ABL Facility bears interest, at our very own choice, at either the beds base price, as identified from inside the BBVA Loan arrangement, plus a margin ranging from 0.75per cent to 1.25per cent (3.0per cent since Sep 30, 2020), or the LIBOR credit rates for the interest cycle in essence, plus a margin starting from 1.75percent to 2.25% (no borrowings by September 30, 2020).

In connection with the ABL establishment, we paid BBVA United States Of America a fee of $50,000 and sustained some other immediate bills of approximately $166,877, which have been getting amortized on the longevity of the ABL premises.

The BBVA Loan contract replaced our financing, protection and Guaranty arrangement, outdated as of February 24, 2017, with residents financial, nationwide connection (the “Citizens Bank Loan Agreement”), which was paid back and ended effective August 5, 2020. We taped $167,964 in control on extinguishment of debt associated with this mortgage cancellation, such as the write-off of unamortized portion of personal debt issuance expenses and charge right associated with the loan reward.