COMPUTER TASK GROUP, INCORPORATED (NASDAQ:CTG) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On December21, 2017, Computer Task Group, Incorporated (“CTG”) entered into a Credit and Security Agreement (the “Credit Agreement”) among CTG, as Borrower, KeyBank National Association, as Administrative Agent, Swing Line Lender and Issuing Lender, and KeyBanc Capital Markets Inc., as Lead Arranger and Sole Book Runner.
The Credit Agreement provides for a three-year revolving credit facility in an aggregate principal amount of $45million, including a sublimit of $10million for letters of credit and a $10million sublimit for swing line loans. Loans under the Credit Agreement bear interest at per annum rates equal to, at CTG’s option, (i)adjusted or daily LIBOR plus a spread ranging from 1.5% to 2.0% based on the amounts outstanding under the Credit Agreement or (ii)the greater of (1)the prime rate of KeyBank National Association, (2)the federal funds effective rate plus 0.50%, and (3)adjusted LIBOR plus 1.0%, plus a spread ranging from 0.5% to 1.0% based on the amounts outstanding under the Credit Agreement.
Actual borrowings by CTG under the Credit Agreement are subject to a borrowing base, which is a formula based on certain eligible receivables and reserves. Funds provided under the Credit Agreement will be used by CTG to fund working capital and other general corporate purposes and to repay in full and terminate that certain Credit Agreement among CTG, as Borrower, KeyBank National Association, as Administrative Agent, Swing Line Lender and Issuing Lender, and KeyBanc Capital Markets Inc., as Lead Arranger and Sole Book Runner, dated as of October30, 2015 (the “2015 Credit Agreement”).
All obligations under the Credit Agreement will be unconditionally guaranteed by certain of CTG’s subsidiaries (the “Guarantors”). Subject to certain exceptions, the Credit Agreement will be secured by a first priority lien on the assets of CTG and the Guarantors and a pledge of 50% of the equity interests in the direct domestic subsidiaries of CTG and the Guarantors and 65% of the equity interests in the direct foreign subsidiaries of CTG and the Guarantors.
CTG is also subject to customary covenants under the Credit Agreement, including certain reporting requirements. Further, CTG must comply with certain financial covenants, including a minimum fixed charge coverage ratio. In addition, the Credit Agreement contains a number of covenants that, among other things, limit CTG’s and its subsidiaries’ ability to (i)incur capital expenditures; (ii)incur additional indebtedness; (iii)create liens on any assets; (iv)pay dividends or make certain restricted payments; (v)consummate certain asset sales; and (vi)merge, consolidate and/or sell or dispose of all or substantially all of CTG’s assets.
The description of the Credit Agreement is qualified in its entirety by the copy thereof, which is attached as Exhibit 10.1 and incorporated herein by reference.
Item 1.01 Termination of a Material Definitive Agreement.
On December21, 2017, concurrently with CTG’s entry into the Credit Agreement described in Item 1.01 hereof, CTG repaid in full and terminated the 2015 Credit Agreement, which provided for a three-year revolving credit facility in an aggregate principal amount of $40million.
Item 1.01 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
Item 1.01 Financial Statements and Exhibits.
(d) Exhibits
COMPUTER TASK GROUP INC ExhibitEX-10.1 2 d420988dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 CREDIT AND SECURITY AGREEMENT among COMPUTER TASK GROUP,…To view the full exhibit click here
About COMPUTER TASK GROUP, INCORPORATED (NASDAQ:CTG)
Computer Task Group, Incorporated (CTG) is an information technology (IT) solutions and staffing services company. The Company primarily operates in the segment of providing IT services to its clients. The Company has operations in North America and Europe. The Company is engaged in providing IT services, including IT Solutions, and IT and other Staffing. CTG provides these primary services to all of the markets that it serves. The services provided encompass the IT business solution life cycle, including phases for planning, developing, implementing, managing, and maintaining the IT solution. It provides administrative or warehouse employees to clients to supplement the IT resources. The Company promotes a portion of its services through five vertical market focus areas: technology service providers, manufacturing, healthcare (which includes services provided to healthcare providers, health insurers, and life sciences companies), financial services, and diversified industrials.