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Subsequent Events
6 Months Ended
Jun. 30, 2016
Subsequent Events [Abstract]  
Subsequent Events

16. Subsequent Events

 

On July 20, 2016, KBEL entered into a Sales Finance Agreement with Santander UK plc (“Santander”), (the “Invoice Discounting Facility”) pursuant to which Santander provided KBEL with an approximately $2,306,000 (£1,750,000) maximum revolving line of credit (the “Review Limit”) with advances permitted up to 85% of KBEL’s qualified accounts receivable. This facility has a minimum maturity of twelve months, but will be automatically extended unless terminated by either party upon three months’ written notice. If the Invoice Discounting Facility terminates on or before the first anniversary, KBEL must pay as breakage costs 3% of the Review Limit. The Invoice Discounting Facility carries an interest rate of 2.1% above the Santander base rate and a fixed service charge of approximately $1,300 (£1,000) per month. The Invoice Discounting Facility binds KBEL to certain financial covenants relating to accounts receivable including turnover ratios, maximum dilution, and ageing, while also requiring KBEL to maintain a minimum level of net tangible assets.

 

On July 20, 2016, KBEL used the proceeds from Invoice Discounting Facility provided by Santander to repay the entire amount owed on the RBS invoice discounting facility.

 

Effective July 22, 2016, MBC, Releta, and MB Financial entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit and Security Agreement dated June 23, 2011, as previously amended on March 29, 2013, January 21, 2015, and June 20, 2016. The Fourth Amendment extended the maturity date of the Credit and Security Agreement from July 23, 2016 to September 21, 2016 and increased the interest rate under the Credit and Security Agreement to the Wall Street Journal prime rate plus 6% (including default interest). The Fourth Amendment also confirms the continuance of certain events of default under the Credit and Security Agreement.