Item 1.02. Termination of a Material Definitive Agreement.
OnMarch 26, 2020 ,Hennessy Advisors, Inc. (the "Company") prepaid in full all principal, accrued and unpaid interest, and costs and expenses under the Term Loan Agreement by and between the Company andU.S. Bank National Association ("U.S. Bank "), as administrative agent and as lender, dated as ofSeptember 17, 2015 , as amended to date (the "Loan Agreement"). The Loan Agreement required monthly payments of$364,583 plus interest. As ofDecember 31, 2019 , the effective interest rate under the Loan Agreement was 3.947%. Borrowings under the Loan Agreement were secured by substantially all of the Company's assets, and the final installment of the then-outstanding principal plus accrued interest was due onMay 9, 2022 . The aggregate prepayment amount of$15,351,609.63 (the "Payoff Amount") was funded by cash on hand. The Company did not incur any prepayment penalties in connection with the termination of the Loan Agreement. Upon payment of the Payoff Amount, the Loan Agreement was terminated, all outstanding indebtedness and obligations of the Company were satisfied and paid in full, and all liens and security interests securing the Loan Agreement were fully released.U.S. Bank and its affiliates provide fund administration, accounting, transfer agency, custody, and distribution services to the family of mutual funds advised by the Company. In addition, the family of mutual funds advised by the Company has an uncommitted line of credit withU.S. Bank for shortterm financing needs. A complete copy of the Loan Agreement is incorporated by reference from Exhibit 4.1 to the Company's Current Report on Form 8-K filed with theSecurities and Exchange Commission (the "SEC") onSeptember 23, 2015 , and to Exhibit 99.1 to each of the Company's Current Reports on Form 8-K filed with theSEC onSeptember 23, 2016 ,November 20, 2017 ,December 4, 2017 ,September 21, 2018 ,May 9, 2019 , andJuly 19, 2019 . --------------------------------------------------------------------------------
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