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NOTES PAYABLE | 12 Months Ended
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Dec. 31, 2019
Debt Disclosure [Abstract] |
Notes Payable | NOTE 6 - NOTES PAYABLE The following table summarizes our outstanding debt as of December 31, 2019 and 2018:
| Maturity |  | Stated Interest Rate |  | 2019 |  | 2018
Subordinated Notes Payable- acquisitions | 10/1/2019 - 7/1/2021 |  | 2.00% - 3.50% |  | $ | 7,185 |  |  | $ | 10,327 |
Term Loan - Wells Fargo term loan | 12/31/2024 |  | 8.00% |  | 20,000 |  |  | — |
Term Loan - Wells Fargo Syndicate Partner | 5/25/2022 |  | 10.55% |  | — |  |  | 52,106 |
Term Loan - Wells Fargo | 5/25/2022 |  | 5.55% |  | — |  |  | 52,106 |
Total Notes Payable |  |  |  | $ | 27,185 |  |  | $ | 114,539 |
Short-term notes payable |  |  |  | $ | 2,696 |  |  | $ | 5,864 |
Long-term notes payable |  |  |  | $ | 24,489 |  |  | $ | 108,675 |
The following table summarizes the debt issuance costs as of December 31, 2019 and 2018:
| December 31, 2019
| Gross Notes Payable |  | Debt Issuance Costs |  | Net Notes Payable
Notes payable, current portion | $ | 2,696 |  |  | $ | (125 | ) |  | $ | 2,571 |
Notes payable, net of current portion | 24,489 |  |  | (347 | ) |  | 24,142 |
Total Notes Payable | $ | 27,185 |  |  | $ | (472 | ) |  | $ | 26,713 |
| December 31, 2018
| Gross Notes Payable |  | Debt Issuance Costs |  | Net Notes Payable
Notes payable, current portion | $ | 5,864 |  |  | $ | (1,131 | ) |  | $ | 4,733 |
Notes payable, net of current portion | 108,675 |  |  | (2,041 | ) |  | 106,634 |
Total Notes Payable | $ | 114,539 |  |  | $ | (3,172 | ) |  | $ | 111,367 |
We used a portion of the proceeds from the sale of the Workspace Management business to repay our notes payable. In connection with the payment of our debt, we recorded a loss on extinguishment of debt of $2,808, which is included in interest expense and other, net in the consolidated statement of comprehensive income (loss) for the year ended December 31, 2019. The following table summarizes the future gross principal payments related to our outstanding debt as of December 31, 2019:
Year Ending |
2020 | $ | 2,696 |
2021 | 5,489 |
2022 | 1,000 |
2023 | 1,000 |
2024 | 17,000 |
Gross Notes Payable | $ | 27,185 |
Term Loan - Wells Fargo In March 2014, we entered into a credit agreement (the “Credit Agreement”) with Wells Fargo, as administrative agent, and the lenders that are party thereto. The Credit Agreement contains customary events of default, including, among others, payment defaults, covenant defaults, judgment defaults, bankruptcy and insolvency events, cross defaults to certain indebtedness, incorrect representations or warranties, and change of control. In some cases, the defaults are subject to customary notice and grace period provisions. In March 2014 and in connection with the Credit Agreement, we and our wholly-owned active subsidiaries entered into a Guaranty and Security Agreement with Wells Fargo Bank. Under the Guaranty and Security Agreement, we and each of our wholly-owned active subsidiaries have guaranteed all obligations under the Credit Agreement and granted a security interest in substantially all of our and our subsidiaries’ assets. Third Amended and Restated Credit Agreement In December 2019, we entered into a third amended and restated credit agreement (the “Third Restated Credit Agreement”) with Wells Fargo Bank, as agent and lender, amending and restating the terms of the Second Amended and Restated Credit Agreement dated as of March 2018. The Third Restated Credit Agreement provides for $20,000 in term loans and a $10,000 revolver. The Third Restated Credit Agreement amends the applicable margin rates for determining the interest rate payable on the loans as follows:
Leverage Ratio | Applicable Margin Relative to Base Rate Loans | Applicable Margin Relative to LIBOR Rate Loans
< 2.00:1.00 | 2.25% percentage points | 3.25% percentage points
≤ 3.00:1.00, and ≥ 2.00:1.00 | 2.75% percentage points | 3.75% percentage points
≥ 3.00:1.00 | 3.25% percentage points | 4.25% percentage points
The outstanding principal amount of the term loan is payable as follows:
• | $125 beginning on March 31, 2020 and the last day of each fiscal quarter thereafter through and including December 31, 2021; and
• | $250 beginning on March 31, 2022 and the last day of each fiscal quarter thereafter.
The outstanding principal balance and all accrued and unpaid interest on the term loans is due on December 31, 2024. The Third Restated Credit Agreement also:
• | adds a covenant that requires that we achieve EBITDA of at least $3,750 for the three months ended March 31, 2020, $4,850 for the six months ended June 30, 2020 and $5,950 for the nine months ended September 30, 2020, which covenant is in lieu of a leverage covenant calculated at March 31, 2020, June 30, 2020 and September 30, 2020;
• | amends our leverage ratio covenant to decrease the maximum ratio to 3.50:1.00 at December 31, 2020, 3.25:1.00 at March 31, 2021 and June 30, 2021 and 2.50:1.00 at September 30, 2021 and each quarter-end thereafter; and
• | amends our fixed charge coverage ratio to be no less than 1.00:1.00 at March 31, 2020, and each quarter end thereafter through and including December 31, 2021, 1.50:1.00 at March 31, 2022, 1.60:1.00 at June 30, 2022, and 2.00:1:00 at September 30, 2022 and each quarter end thereafter.
As of December 31, 2019 and December 31, 2018, no amount was outstanding and $10,000 and $5,000, respectively, was available for borrowing under the revolver. As of December 31, 2019, compliance with certain financial covenants was not yet required under the Third Restated Credit Agreement and all payments remain current. We expect to be in compliance or be able to obtain compliance through debt repayments with available cash on hand or cash we expect to generate from the ordinary course of operations over the next twelve months.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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