December 5, 2018 – The Debtors filed an exit facility commitment letter (the “Exit Facility Commitment Letter”) sent by Fortress Credit Corp (“Fortress”) to AFH Franchise Holdings detailing Fortress’s agreement to provide the reorganized Debtors with a senior secured term facility in an aggregate principal amount of $50mn (the “Term Facility”) and a senior secured revolving credit facility in an aggregate principal amount of up to $5mn [Docket No. 859].
Keys Terms of the Proposed Exit Facility
- Borrower: RMH Franchise Corporation (the “Borrower”).
- Guarantors: RMH Franchise Holdings, Inc., a wholly owned subsidiary of ACON (“Holdings”), the direct 100% owner of the Borrower. and each of the direct and indirect subsidiaries of the Borrower and Holdings.
- Lenders: Fortress and other entities, selected by the Administrative Agent in accordance with the Commitment Letter with commitments in respect of the Senior Facilities.
- Senior Facilities: $50 million of first lien senior secured financing consisting of (i) a term loan facility (the “Term Facility,” and the loans thereunder, the “Term Loans”) in an aggregate principal amount of $50mn and (ii) a revolving credit facility (the “Revolver,” and the loans thereunder, the “Revolving Loans” (the Revolving Loans together with the Term Loans, the “Loans”)) in an aggregate principal amount of up to $5mn (collectively, the “Senior Facilities”).
- Purpose: Proceeds of the Term Loans will be used on the Closing Date, together with the proceeds of the Equity Contribution (as defined in Exhibit B), to (i) fund the repayment of certain indebtedness and other obligations of the Loan Parties (in each case, as set forth in and authorized by the RMH Plan and Confirmation Order) and (ii) pay the fees, costs and expenses incurred in connection with the Transactions (collectively, the “Transaction Costs”). Proceeds of the Revolving Loans will be used for working capital and other general corporate purposes.
- Maturity: The Senior Facilities will mature five years from the Closing Date (the “Maturity Date”).
- Amortization: For the Term Facility only, 5.0% per annum, payable quarterly commencing with the first quarter ending after the closing date (but with the amortization amount due on such first date being reduced on a pro rata basis to the extent the elapsed period is less than a full quarter). The remaining balance of the Term Facility will be due on the maturity date therefor.
- Interest: The Loans will bear interest at a rate equal to the 30 day LIBOR (subject to a 1.5% floor) + 5.75%, payable monthly in cash. Interest will (i) be calculated based upon a year of 360 days for actual days elapsed and (ii) be payable monthly in arrears. During an event of default, the Loans shall bear interest at the then current rate plus 3.0%.
- Collateral: Perfected lien on and security interest in all now owned and hereafter acquired tangible and intangible assets of the Loan Parties including all equity interests in the Borrower and each Guarantor (other than Holdings).
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