Form 10-Q Journey Resource Holding Corp. Revolving Credit Score Rating Center

Quarterly report [Sections 13 or 15(d)]

6. Records Payable

Revolving Credit Score Rating Establishment

On August 5, 2020, QRHC and particular of their domestic subsidiaries inserted into financing, Security and Guaranty arrangement (the “BBVA financing Agreement”) with BBVA American, as a loan provider, so that as management representative, guarantee broker, and issuing lender, which offers for a credit score rating premises (the “ABL Facility”) containing the annotated following:

An asset-based revolving credit facility within the optimum major number of $15.0 million with a sublimit for issuance of characters of credit score rating as high as 10% of the optimum main number of the revolving credit score rating center. Each financing underneath the rotating credit score rating establishment contains interest, during the individuals’ alternative, at either the bottom speed, plus the Applicable Margin, or the LIBOR financing Rate for the Interest duration in essence, in addition to the relevant Margin, in each situation as defined when you look at the BBVA mortgage arrangement. The maturity day on the revolving credit score rating center is August 5, 2025. The revolving credit score rating facility includes an accordion element permitting the revolving credit facility are improved by as much as $10 million.

a products financing center inside max major quantity of $2.0 million. Financing according to the equipment mortgage establishment could be requested whenever you want until August 5, 2023. Each loan beneath the equipment mortgage facility holds interest, at the consumers’ alternative, at either the Base rates, plus 1.75per cent, or the LIBOR financing rates when it comes to Interest duration essentially, plus 2.75percent. The readiness day of the gear loan center was August 5, 2025.

Particular of QRHC’s home-based subsidiaries are the borrowers underneath the BBVA mortgage arrangement. QRHC and something of its home-based subsidiaries is guarantors under the BBVA Loan arrangement. As safety for the obligations of the individuals under the BBVA financing Agreement, (i) the consumers underneath the BBVA Loan arrangement has approved an initial consideration lien on substantially all of their concrete and intangible personal belongings, like a pledge regarding the funds stock and account passions, as appropriate, of particular of QRHC’s drive and indirect subsidiaries, and (ii) the guarantors underneath the BBVA Loan contract have granted a first priority lien in the funds inventory and membership passion, as appropriate, of some of QRHC’s drive and secondary residential subsidiaries.

The BBVA financing arrangement consists of particular financial covenants, like the absolute minimum fixed fee protection proportion. In addition, the BBVA financing contract contains unfavorable covenants restricting, among other things, added indebtedness, purchases with associates, extra liens, product sales of possessions, returns, financial investments and improvements, prepayments of personal debt, mergers and purchases, also point customarily restricted in such contracts. The BBVA financing contract also contains traditional events of default, such as cost non-payments, breaches of representations and warranties, covenant defaults, activities of case of bankruptcy and insolvency, changes of regulation, and problems of every guaranty or security document giving support to the BBVA Loan arrangement to stay full power and result. Upon the incident of a meeting of standard, the exceptional requirements in BBVA mortgage Agreement could be expidited and significant link turn into immediately because of and payable.

The ABL center holds interest, at our choice, at either the beds base speed, as identified into the BBVA mortgage arrangement, plus a margin starting from 0.75% to 1.25% (3.0% at the time of September 30, 2020), or even the LIBOR financing speed for interest stage essentially, plus a margin ranging from 1.75percent to 2.25per cent (no borrowings since September 30, 2020).

Associated with the ABL premises, we compensated BBVA United States Of America a fee of $50,000 and obtain additional drive expenses of around $166,877, which have been getting amortized throughout the longevity of the ABL establishment.

The BBVA Loan contract changed all of our Loan, protection and Guaranty Agreement, outdated since February 24, 2017, with residents financial, nationwide relationship (the “Citizens financial loan Agreement”), that has been reduced and ended efficient August 5, 2020. We recorded $167,964 in loss on extinguishment of obligations associated with this mortgage firing, including the write-off for the unamortized part of financial obligation issuance prices and charge straight linked to the mortgage payoff.


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