Quadrant 4 System entered into a credit agreement with BMO Harris Bank for a maximum aggregate amount of $25 million.

The agreement provides for a revolving credit facility with maximum availability of $7 million, subject to borrowing base requirements set forth in the credit agreement, which generally limit availability under the revolving credit facility to 80% of company’s receivables to the extent such receivables meet eligibility requirements as set forth in the credit agreement. The revolving credit facility is also subject to reserves implemented by the lender in its discretion from time to time.

The company utilized the proceeds of the loans advanced under the credit agreement at closing to repay and satisfy in full all amounts owing to its former senior lender, as well as to repay various obligations owed in respect of subordinated notes previously issued by the company and to pay fees and expenses incurred in connection with the negotiation and documentation of the credit agreement.

The credit agreement also provides for a $13 million term loan, the entire principal amount of which was advanced at closing and used for the purposes stated above. The company is required to make quarterly principal payments on the term loan in the amount of $812,500 until maturity. Interest on the term loan is payable at the end of each LIBOR interest period (but no less frequently than quarterly). The term loan matures on July 1, 2019.

In addition to the revolving credit facility and the term loan, the credit agreement provides for a software capital expenditure line of credit in the maximum amount of $5 million for the purposes of funding the production of licensed software programs. Under this line of credit, the company may borrow at any time through March 31, 2019, subject to annual limitations on borrowings. No advances were made at closing.