Item 1.01 Entry into a Material Definitive Agreement.
On
The New Credit Facility provides for loans up to the lesser of (a)
The loans under the New Credit Facility accrue interest at a varying rate equal
to the Bloomberg Short-Term Bank Yield Index Rate plus a margin of 2.25% per
annum. The outstanding amounts advanced under the New Credit Facility are due
and payable in full on
The Company may voluntarily prepay all or any portion of the loans advanced under the New Credit Facility at any time, without premium or penalty. The New Credit Facility is subject to mandatory prepayments (i) from the net proceeds of asset dispositions not otherwise permitted under the ABL Agreement; (ii) if the unpaid principal balance under the New Credit Facility plus the aggregate face amount of all outstanding letters of credit exceeds the borrowing base, the Company must immediately prepay the entire amount of such excess; (iii) in an amount equal to 50% of the net proceeds of issuances of capital stock (subject to customary exceptions); or (iv) in an amount equal to the net proceeds from any issuance of debt not otherwise permitted under the ABL Agreement.
The ABL Agreement contains certain covenants restricting the Company's and its subsidiaries' ability to create, incur, assume or become liable for indebtedness; make certain investments; pay dividends or repurchase the Company's stock; create, incur or assume liens? consummate mergers or acquisitions? liquidate, dissolve, suspend or cease operations? or modify accounting or tax reporting methods (other than as required by GAAP).
The ABL Agreement contains certain representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults, certain events under ERISA, cross-acceleration to other debt, material judgments and a change of control. If an event of default occurs, TCB will be entitled to take various actions, including the acceleration of all amounts due under the New Credit Facility and all actions permitted to be taken by a secured creditor.
In connection with entering into the New Credit Facility, the Company and TCB
terminated the Company's existing revolving credit facility with TCB (the "Old
Credit Facility"). Prior to termination of the Old Credit Facility, the Company
used cash on hand to pay down
The foregoing description of the New Credit Facility is subject to and qualified in its entirety by reference to the full text of the ABL Agreement and the Pledge and Security Agreement which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, hereto.
Item 1.02 Termination of a Material Definitive Agreement.
The information in Item 1.01 regarding the Old Credit Facility is incorporated into this Item 1.02 by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 regarding the New Credit Facility and the ABL Agreement is incorporated into this Item 2.03 by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are being filed or furnished herewith:
Exhibit Number Exhibit Title 10.1 Loan Agreement, datedDecember 21, 2021 , amongHarte Hanks, Inc. the subsidiary guarantors party thereto andTexas Capital Bank, National Association . 10.2 Security Agreement, datedDecember 21, 2021 , betweenHarte Hanks, Inc. andTexas Capital Bank, National Association . 99.1December 21, 2021 Press Release ofHarte Hanks, Inc. * 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Furnished herewith
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