Credit Agreement

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Credit Agreement

11. CREDIT AGREEMENT

On September 8, 2021, the Company and the subsidiary guarantors thereunder entered into a credit agreement with Wintrust Bank N.A. (“Wintrust”), in its capacities as the sole lead arranger, sole bookrunner, administrative agent and letter of credit issuer for the lenders from time to time parties thereto. The credit agreement provides the Company with the benefit of a $125.0 million senior secured revolving credit facility. The $125.0 million revolving credit facility under the credit agreement is scheduled to mature on September 8, 2024. So long as no default has occurred and other conditions have been met, the Company may request an increase in the aggregate commitment in an amount not to exceed $50.0 million. The loans and letter of credit obligations under the credit

agreement are secured by substantially all assets of the Company and the subsidiary guarantors. The credit agreement requires that interest is payable at the end of each respective interest period or monthly in arrears, fees are payable quarterly in arrears and principal is payable at maturity. Under the credit agreement, outstanding principal amounts bear annual interest at a fluctuating rate equal to 1.0% less than the administrative agent’s prime commercial rate, subject to a 3.0% minimum rate. A higher rate may apply to late payments or if any event of default exists.

We may prepay amounts outstanding under the credit agreement provided notice be received by Administrative agent on the date of prepayment by early morning, in each case without premium or penalty, and terminate or reduce the commitments provided notice received by Administrative agent five business days prior. The credit agreement and the ancillary documents executed in connection therewith contain customary affirmative, negative and financial maintenance covenants. The Company is required to maintain unrestricted cash, cash equivalents and short-term investments in domestic accounts in an amount at least equal to the aggregate loan commitments then in effect. Acquisitions to be undertaken by the Company must meet certain criteria, and the Company’s ability to make restricted payments, including payments in connection with a repurchase of shares of our common stock and quarterly dividend payments, is subject to an aggregate maximum of $100.0 million per fiscal year. Upon the occurrence of certain regulatory events or if the Company’s unrestricted cash, cash equivalents and short term investments are less than 125% of the aggregate amount of the loan commitments then in effect, the Company is required to maintain cash in a segregated, restricted account in an amount not less than the aggregate loan commitments then in effect. The credit agreement also contains customary representations and warranties, events of default, and rights and remedies upon the occurrence of any event of default thereunder, including rights to accelerate the loans, terminate the commitments and realize upon the collateral securing the obligations under the credit agreement.

As of December 31, 2023 and 2022, there were no outstanding borrowings under the revolving credit facility.

Selected details of our credit agreement as of and for the years ended December 31, 2023 and 2022 were as follows (dollars in thousands):

	As of December 31,
	2023			2022
Credit Agreement:
Credit facility remaining availability	$	124,133		$	124,113
Outstanding letters of credit	$	867		$	887
Availability of additional letters of credit (1)	$	124,133		$	124,113
Weighted average daily revolving credit borrowings    for the year ended	$	-		$	-
Weighted average annual interest rate		0.00	%		0.00	%
Commitment fee rate		0.30	%		0.30	%
Letter of credit fee rate (2)		7.50	%		6.50	%

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(1)The letters of credit availability under the credit agreement with Wintrust is up to the borrowing limit of $125.0 million.

The letter of credit fee rate is based on prime minus 1.0%, subject to a minimum rate of 3.0%. The prime rate as of December 31, 2023 was 8.50%, which would yield a 7.50% fee rate, which is reflected in the table above.