Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On September 30, 2021, Assisted 4 Living, Inc., a Nevada corporation (the
"Company"), along with certain direct and indirect wholly-owned subsidiaries,
executed into a Second Amendment to Credit Agreement made as of September 30,
2021 (the "Second Amendment") with Gemino Healthcare Finance, LLC ("Gemino").
The Second Amendment amends that certain Credit Agreement dated May 9, 2019 by
and among Trillium Healthcare Group, LLC ("Trillium"), its direct and indirect
wholly-owned subsidiaries (the "Trillium Group") and Gemino (the "Credit
Agreement"). The Credit Agreement was previously amended on April 30, 2020
pursuant to a Waiver and First Amendment to Credit Agreement (the "First
Amendment").
The Credit Agreement was entered into in connection with a $10 million credit
facility to be used for working capital and general business purposes, and
secured by a first priority perfected security interest in the assets of
Trillium and the Trillium Group. The credit facility terminates on May 9, 2022.
Each revolving loan under the credit facility bears interest on the outstanding
principal amount thereof from the date made until paid in full, at a rate per
annum equal to the greater of: (i) the annual rate reported as the London
Interbank Offer Rate applicable to ninety (90) day deposits of United States
Dollars as reported in the Money Rates Section of The Wall Street Journal on the
date of determination; and (ii) 2.00%, plus 4.95% (together, the "Interest
Rate"). The Interest Rate on all amounts outstanding under the credit facility
is adjusted daily based on any changes in the amount under subsection (i) above
and subsection (ii) above, as applicable. There are also various fees the
Company pays in connection with the credit facility, including: (1) a monthly
collateral monitoring fee of 1.00% of the average borrowing base during the
prior month; (2) a monthly unused line fee equal to 0.75% per annum of the
unused portion of the maximum amount of credit facility; (3) a minimum use fee
if the outstanding revolving loan balance is less than $2 million equal to the
Interest Rate times the minimum balance of $2 million; and (4) a termination fee
of $100,000 if the credit facility is terminated by the Company prior to May 9,
2022. The credit facility also contains typical affirmative and negative
covenants found in credit facilities of this type and amount.
The First Amendment amended the Credit Agreement by: (1) releasing seven
entities from the Trillium Group of their obligations under the credit facility
in connection with Trillium's sale of those entities; (2) increasing to 5.95%
the rate used to calculate the Interest Rate; (3) increasing the monthly
collateral monitoring fee to 1.50%; (4) lowering the revolving commitment amount
from $10 million to $7 million; and (5) waiving borrower's failure to comply
with the fixed charge coverage ratio for the fiscal quarters ending September
30, 2019, December 31, 2019, and March 31, 2020.
The Second Amendment further amended the Credit Agreement by: (1) adding the
Company as a guarantor to the credit facility and releasing Trillium and it's
four principal individuals from their obligations under the credit facility; (2)
increasing the term of the credit facility so that it now expires on September
29, 2023; (3) revising the termination fee to reflect the increase in the term
of the credit facility; (4) modifying the fixed percentage used to calculate the
Interest Rate from 5.95% to a range of 4.50% to 3.90%, depending on the
outstanding loan balance during the preceding three months, with the rate
decreasing as the amount borrowed increases; (5) reducing the collateral
monitoring fee from 1.50% to 1.00%; (6) reducing the unused line fee from 0.75%
to 0.50%; (7) increasing the maximum amount of the credit facility from $10
million to $25 million; and (8) revising terms regarding financial statements
and collateral reports, limitations on certain corporate guarantors and curing
defaults.
The foregoing summary of the Credit Agreement, the First Amendment and the
Second Amendment are qualified in their entirety by reference to the full text
of the Credit Agreement, First Amendment and Second Amendment which are attached
hereto as Exhibit 10.1(a), 10.1(b) and 10.1(c), respectively, and incorporated
herein by reference.
You are urged to read said exhibits attached hereto in their entirety.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1(a) Credit Agreement dated May 9, 2019 by and among Trillium
Healthcare Group, LLC, its direct and indirect wholly-owned
subsidiaries and Gemino Healthcare Finance, LLC.
10.1(b) Waiver and First Amendment to Credit Agreement made as of April
30, 2020 by and among Trillium Healthcare Group, LLC, its direct and
indirect wholly-owned subsidiaries and Gemino Healthcare Finance,
LLC.
10.1(c) Second Amendment to Credit Agreement made as of September 30, 2021
by and among Assisted 4 Living, Inc., its direct and indirect
wholly-owned subsidiaries and Gemino Healthcare Finance, LLC.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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