Minimum loan size

$ 500,000

$ 500,000

10 million dollars

Maximum loan size

The lesser of (1) $ 25 million or (2) an amount that, added to existing outstanding and unused debt, does not exceed 4x 2019 Adjusted EBITDA.

The lesser of (1) $ 25 million or (2) an amount that, added to existing outstanding and unused debt, does not exceed 6x 2019 Adjusted EBITDA.

The lesser of (1) $ 200 million, (2) 35% of the outstanding and unused available debt that is pari passu in priority with the eligible loan and the equivalent in secured status, or (3) an amount that , when added to the existing and unused outstanding debt, does not exceed 6x 2019 adjusted EBITDA.

Security

Can be secure or unsecured.

Can be secured or unsecured, but any collateral that secures the underlying loan must secure the increased tranche on a pari passu basis.

Priority

Must not be contractually subordinated in terms of priority of payment to any other debt of the borrower.

Must not be contractually subordinated in terms of priority of payment to any other debt of the borrower.

Must be priority or pari passu with, in terms of priority and security, the borrower’s other debt, other than mortgage debt (i.e. debt secured by real estate).

Additional information on priority rules is provided in FAQ # 8 below.

Term

Four years

Refund

Principal and deferred interest for one year. Deferred and unpaid interest will be capitalized. One-third capital payments at the end of years two, three and four.

Principal and deferred interest for one year. Deferred and unpaid interest will be capitalized. Principal payments of 15%, 15% and 70% at the end of years two, three and four, respectively.

Voluntary prepayment

Authorized without penalty.

Compulsory prepayment

Every Main Street loan must contain a provision requiring prepayment if the borrower breaches certain covenants or makes a material misstatement with respect to certain certificates.

Interest rate

LIBOR (one or three months) + 3.00%

Costs

• 1.00% transaction fee paid by original lender – fees may be passed on to borrower.
• Up to 1.00% origination fee paid by the borrower.
• 0.25% service charge paid by the federal government to the lender.

• 0.75% transaction fee paid by original lender – fees may be passed on to borrower.
• Up to 0.75% origination fee paid by the borrower.
• 0.25% service fee paid by the federal government from FRB to the lender.

Percentage of participation

FRB purchases 95% stake.

FRB purchases an 85% stake.

FRB purchases 95% stake.

Commitments (remuneration)

Up to 12 months after loan repayment:

• Officers and employees whose total compensation exceeds $ 425,000 in calendar year (AC) 2019 cannot:
  • Receive full compensation for any period of 12 consecutive months in excess of the total compensation received in CY2019.
  • Receive severance pay or other benefits in the event of termination of employment exceeding twice the total compensation received in 2019.

• Officers / employees whose total compensation exceeded $ 3 million in CY2019 cannot receive total compensation in any consecutive 12-month period greater than (1) $ 3 million, plus (2) 50% of the excess of more than $ 3 million in total compensation received in CY2019.

“Total compensation” includes salary, bonuses, stock awards and other financial benefits.

Commitments (restricted payments)

Up to 12 months after loan repayment:

• The borrower may not redeem listed equity securities (including securities issued by the borrower’s parent company), except to the extent required by a contractual obligation in effect on March 27, 2020.
• The borrower cannot pay dividends or make other distributions of capital in respect of the common stock of the company (other than tax distributions by S corporations and other flow-through entities).

Commitments (debt repayment)

• No payments can be made on other debts (other than mandatory and due payments) until the loan has been repaid. However, the borrower can refinance other debts at the time of granting a loan under the Senior Loan Facility.
• Payments on other debts are considered “mandatory and due” (1) on the future dates on which they were due from April 24, 2020, or (2) during a mandatory early repayment event under a debt contract executed before April 24, 2020 (except that such early repayments triggered by the appearance of new debt can only be paid (i) if these early repayments are de minimis, or (ii) in the context of a loan under the Senior Loan Facility at the time of issuance of such loan).
• No cancellation or reduction of committed credit lines is authorized.

Commitments (Employee loyalty)

The borrower should make commercially reasonable efforts to retain employees during the term of the loan. In the Main Street Program FAQ guidelines, the FRB states that a borrower “should undertake good faith efforts to maintain the payroll and retain employees, in light of their abilities, the economic environment, its available resources and the company’s workforce needs ”. Borrowers who have already laid off or fired workers due to disruption caused by COVID-19 are eligible for the Main Street program.

Commitments (Financial report)

Borrowers must adhere to stringent annual and quarterly reporting requirements that are more detailed than many typical credit agreements require.

A language template for such engagement is provided on page 52 of the Main Street Program FAQ Guide. [2]

Must include the same annual and quarterly reporting requirements as loans under the New Loan Facility and Senior Loan Facility, except for loans under the Extended Loan Facility which are part of the Multi Credit Facilities -lenders, a financial disclosure clause that was negotiated in good faith before April 24, 2020, will be deemed sufficient.

Cross acceleration

Each Main Street loan that is part of a bilateral facility must contain a cross-acceleration provision, triggering an event of default under the Main Street loan if any debt owed by a borrower to the lender or an affiliate of the lender is accelerated.

A language model for such a cross-acceleration layout is provided on page 50 of the Main Street Program FAQ guide. [3]

Must include the same cross-acceleration provision as loans under the New Loan Facility and Senior Loan Facility, except for loans under the Extended Loan Facility which are part of multi-credit facilities. lenders, a cross-default or cross-acceleration provision that was negotiated in good faith prior to April 24, 2020, will be considered sufficient.