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October 11, 2018 – RMH Franchise Holdings filed “Term Sheet for Amended Credit Agreement” as Exhibit C to its First Amended Joint Chapter 11 Plan of Reorganization [Docket No. 630]. The term sheet notes that “the Amended Credit Agreement will constitute a modification to and not a novation of the Credit Agreement” and includes the following terms:
- Principal Amount: Approximately $54M (existing debt under the Credit Agreement, less the $8M Credit Agreement Claims Payment) (scheduled amortization payments cannot be paid from sale of the Administrative Agent’s collateral, unless the sale is a sale of substantially all of the Reorganized Debtors’ assets).
- Interest Rate: Current non-default interest rate of LIBOR plus 5%.
- Scheduled Payments: Monthly payments of approximately $450,000, plus accrued interest (commercial style amortization); principal payments based on 10-year amortization period.
- Fee: 0.5% per annum fee (approximately $532,000 for the term through December 31, 2020) due and payable by December 31, 2020; provided that the fee will be waived if the indebtedness under the Amended Credit Agreement is paid in full on or prior to December 31, 2020 and no event of default has occurred.
- Effective Date: The Effective Date shall be no later than December 4, 2018, unless otherwise ordered by the Bankruptcy Court or the Administrative Agent waives such requirement in writing.
- Plan Sponsor Cash Payment: The Plan Sponsor shall pay Cash to the Debtors on the Effective Date an amount not less than $10,000,000.
- Term: December 31, 2020; provided, however, that the term shall be extended to December 31, 2021 if, on or before December 31, 2020, the Reorganized Debtors make each of the following payments in full to Senior Lenders: (A) amortization payments totaling $5M in excess of scheduled amortization and (B) the ‘Fee’ in the approximate amount of $532,000 (see vii below). If the term is extended to December 31, 2021 as provided herein, no later than December 31, 2021, the Reorganized Debtors shall pay Senior Lenders a fee (the ‘2021 Fee’) equal to 0.5% per annum of the outstanding principal balance as of December 31, 2020. The 2021 Fee shall be earned over time (1/12th per month) and will be due and payable in full on the earlier of (x) December 31, 2021 and (y) an event of default. If the full balance of the debt owed is paid in full prior to December 31, 2021 and no event of default has occurred, only the 2021 Fee earned through payout will be due and payable.
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