Entry into a Material Definitive Agreement.
On August 7, 2020, EverQuote, Inc. (the “Company”) entered
into an Amended and Restated Loan and Security Agreement (the
“Amended Loan Agreement”) with Western Alliance Bank (the
“Lender”), which provides for a revolving line of credit of
$25,000,000, replacing the Company’s previous revolving line of
credit with the Lender of $11.0 million, which expired in May
Under the Amended Loan Agreement, borrowings under the revolving
line of credit cannot exceed 80% of eligible accounts receivable
balances and bear interest at the greater of 3.25% or the prime
rate. In an event of default, as defined in the Amended Loan
Agreement, and until such event is no longer continuing, the
interest rate to be charged would be the rate otherwise applicable
to borrowings under the Amended Loan Agreement plus 5.00%.
Borrowings under the Amended Loan Agreement are repayable in
monthly interest-only payments until the maturity date of the loan,
which is August 7, 2022. The Company may prepay any advances
without a penalty or premium.
Borrowings are collateralized by substantially all of the Company’s
assets and property. Under the Amended Loan Agreement, the Company
has agreed to affirmative and negative covenants to which the
Company will remain subject until maturity. The covenants include
limitations on the Company’s ability to incur additional
indebtedness and engage in certain fundamental business
transactions, such as mergers or acquisitions of other businesses.
In addition, under the Amended Loan Agreement, the Company is
required to maintain a minimum asset coverage ratio of 1.5 to 1
calculated as the sum of unrestricted cash and qualified accounts
receivable divided by borrowings outstanding under the revolving
line of credit.
The Company’s obligations under the Amended Loan Agreement are
subject to acceleration upon occurrence of specified events of
default, including payment defaults, insolvency events, failure to
comply with covenants and material adverse events with respect to,
among other things, the Company’s business, operations, assets or
Creation of a Direct Financial Obligation or an Obligation under an
Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on
Form 8-K with respect to
the Amended Loan Agreement is incorporated by reference into this