Note F - Long-term Debt

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Long-term Debt [Text Block]

Note F — Long-Term Debt

As of

March 31, 2020

and

December 31, 2019

, we had

$18.7

million of borrowings outstanding under the Texas Capital Facility (as defined herein). 

Credit Facilities

On

April 17, 2017,

we entered into a secured credit facility with Texas Capital Bank, N.A., that provided a

$20.0

million revolving credit facility (the "Texas Capital Credit Facility") and letters of credit issued by Texas Capital Bank up to

$5.0

million. The Texas Capital Credit Facility is being used for general corporate purposes. The Texas Capital Credit Facility is secured by substantially all of the Company's and its material domestic subsidiaries' assets. The Texas Capital Credit Facility is guaranteed by HHS Guaranty, LLC, an entity formed to provide credit support for Harte Hanks by certain members of the Shelton family (descendants of

one

of our founders).

Under the Texas Capital Credit Facility, we can elect to accrue interest on outstanding principal balances at either LIBOR plus

1.95%

or prime plus

0.75%.

Unused commitment balances accrue interest at

0.50%.

We are required to pay a quarterly fee of

$0.1

million as consideration for the guarantee provided by HHS Guaranty, LLC.

The Texas Capital Credit Facility is subject to customary covenants requiring insurance, legal compliance, payment of taxes, prohibition of

second

liens, and secondary indebtedness, as well as the filing of quarterly and annual financial statements. The Company has been in compliance of all the requirements.

The Texas Capital Credit Facility originally had an expiration date of

April 17, 2019,

at which point all outstanding amounts would have been due. On

January 9, 2018,

we entered into an amendment to the Texas Capital Credit Facility that increased the borrowing capacity to

$22.0

million and extended the maturity by

one

year to

April 

17,

2020.

On

May 7, 2019,

we entered into an amendment to the Texas Capital Credit Facility which further extended the maturity of the facility by

one

year to

April 17, 2021.

On

May

 

11,

2020,

we entered into an amendment to the Texas Capital Credit Facility which further extended the maturity of the facility by

one

year to

April 17, 2022

and decreased the borrowing capacity to

$19.0

million. The Texas Capital Credit Facility remains secured by substantially all of our assets and continues to be guaranteed by HHS Guaranty, LLC.

At

March 31, 2020

, we had letters of credit outstanding in the amount of

$1

.7

 million.

No

amounts were drawn against these letters of credit at

March 31, 2020

. These letters of credit exist to support insurance programs relating to workers’ compensation, automobile, and general liability.