Notes Payable, net (Tables)

6 Months Ended

Jun. 30, 2020

Notes payable, net consisted of the following (in thousands):



Indebtedness	Borrower	Maturity	Interest Rate	June 30, 2020			December 31, 2019
Term loan ⁽⁷⁾	Ashford Inc.	March 19, 2024	Base Rate ⁽¹⁾ + 2.00% to 2.25% or LIBOR ⁽²⁾ + 3.00% to 3.25%	$	34,563		$	10,000
Term loan ^{(5) (8)}	JSAV	November 1, 2022	One-Month LIBOR ⁽³⁾ + 3.25%	12,300			12,642
Revolving credit facility^{(5) (8)}	JSAV	November 1, 2022	One-Month LIBOR ⁽³⁾ + 3.25%	—			2,599
Equipment note ^{(5) (9)}	JSAV	November 1, 2022	One-Month LIBOR ⁽³⁾ + 3.25%	6,017			3,393
Draw term loan ^{(5) (9)}	JSAV	November 1, 2022	One-Month LIBOR ⁽³⁾ + 3.25%	1,700			1,750
Revolving credit facility ^{(5) (10)}	Pure Wellness	On demand	Prime Rate ⁽⁴⁾ + 1.00%	40			45
Term loan^{(6) (11)}	RED	July 5, 2025	Prime Rate ⁽⁴⁾ + 1.75%	581			605
Revolving credit facility^{(6) (12)}	RED	August 5, 2020	Prime Rate ⁽⁴⁾ + 1.75%	246			106
Draw term loan ^{(6) (13)}	RED	March 5, 2027	Prime Rate ⁽⁴⁾ + 1.75%	1,375			1,400
Term loan ^{(6) (14)}	RED	February 1, 2029	Prime Rate ⁽⁴⁾ + 2.00%	1,592			1,636
Term loan ⁽⁵⁾ ⁽¹⁵⁾	RED	July 17, 2029	6.0% ⁽¹⁶⁾	1,663			1,674
Term loan ⁽⁵⁾ ⁽¹⁶⁾	RED	July 17, 2022	6.5%	900			960
Draw term loan ^{(5) (17)}	RED	February 5, 2028	Prime Rate ⁽⁴⁾ + 2.00%	1,575			—
Notes payable				62,552			36,810
Less deferred loan costs, net				(582		)	(227		)
Notes payable less net deferred loan costs				61,970			36,583
Less current portion				(57,411		)	(3,550		)
Notes payable, net - non-current				$	4,559		$	33,033

__________________


⁽¹⁾	Base Rate, as defined in the term loan agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate plus 0.50%, or (iii) LIBOR plus 1.00%.


⁽²⁾	Ashford Inc. may elect a 1, 2, 3 or 6 month LIBOR period for each borrowing.


⁽³⁾	The one-month LIBOR rate was 0.16% and 1.76% at June 30, 2020 and December 31, 2019, respectively.


⁽⁴⁾	Prime Rate was 3.25% and 4.75% at June 30, 2020 and December 31, 2019, respectively.


⁽⁵⁾	Creditors do not have recourse to Ashford Inc.


⁽⁶⁾	Creditors have recourse to Ashford Inc.

⁽⁷⁾

On March 19, 2020, the Company amended and restated the senior revolving credit facility pursuant to a Fourth Amendment to the Term Loan Agreement. The Company converted and consolidated the existing $10 million borrowing under the senior revolving credit facility (which had been borrowed on a revolving basis) into a term loan and drew down the remaining $25 million balance of the senior revolving credit facility, borrowing $35 million under the term loan in the aggregate. Effective June 23, 2020, the Company and Bank of America N.A. executed the Fifth Amendment to the Term Loan Agreement. The Fifth Amendment (a) established a 0.50% LIBOR floor, (b) eliminated the consolidated net worth financial covenant, and (c) waived the violation of the consolidated net worth financial covenant that occurred on March 31, 2020. The Term Loan Agreement has a four year term and a maximum principal amount of $35 million. Principal payments of 1.25% of the outstanding balance are payable on the last business day of each fiscal quarter commencing June 30, 2020. Principal payment amounts are subject to maintaining a fixed charge coverage ratio below specified thresholds which if not met increase the principal payment due each quarter from 1.25% to 5.0% of the outstanding principal balance. The Company is also subject to certain financial covenants. See covenant compliance discussion below.

⁽⁸⁾

On March 1, 2019, in connection with the acquisition of BAV, JSAV amended the existing term loan and borrowed an additional $5.0 million. The revolving credit facility was also amended to increase the borrowing capacity from $3.0 million to $3.5 million. In connection with the term loan, JSAV entered into an interest rate cap with an initial notional amount totaling $5.0 million and a strike rate of 4.0%. The fair value of the interest rate cap at June 30, 2020 and December 31, 2019, was not material.


⁽⁹⁾	On March 1, 2019, in connection with the acquisition of BAV, JSAV amended the existing equipment note and draw term note to increase the borrowing capacity to $8.0 million and $2.4 million, respectively. All the loans are partially secured by a

security interest on all of the assets and equity interests of JSAV.


⁽¹⁰⁾	On April 6, 2017, Pure Wellness entered into a $100,000 line of credit.


⁽¹¹⁾	On March 23, 2018, RED entered into a term loan of $750,000.


⁽¹²⁾	On February 28, 2019, RED renewed its $250,000 revolving credit facility. Subsequent to June 30, 2020, RED extended the maturity date of the revolving credit facility by three months.


⁽¹³⁾	On February 27, 2019, RED entered into a draw term loan in the amount of $1.4 million.


⁽¹⁴⁾	On August 31, 2018, RED entered into a term loan of $1.8 million.


⁽¹⁵⁾	On July 18, 2019, in connection with the acquisition of Sebago, RED entered into a term loan of $1.7 million. The interest rate for the term loan is 6.0% for the first five years. After five years, the interest rate is equal to the Prime Rate plus 0.5% with a floor of 6.0%.


⁽¹⁶⁾	On July 18, 2019, in connection with the acquisition of Sebago, RED entered into a term loan of $1.1 million.

⁽¹⁷⁾

On March 24, 2020, RED entered into a draw term loan with a maximum aggregate principal amount of $1.9 million. The draw term loan requires payment of interest only until March 5, 2021.