NOVATION COMPANIES, INC. (OTCMKTS:NOVCQ) Files An 8-K Entry into a Material Definitive Agreement

NOVATION COMPANIES, INC. (OTCMKTS:NOVCQ) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

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On November 17, 2017, Healthcare Staffing, Inc. (“HCS”), a wholly-owned subsidiary of Novation Companies, Inc. (the “Company”), entered into a Revolving Credit and Security Agreement, dated as of the same date (the “FNCC Credit Agreement”), with Federal National Payables, Inc. (d/b/a Federal National Commercial Credit) (“FNCC”) providing HCS with a line of credit of up to $5,000,000. Availability under the FNCC Credit Agreement is based on a formula tied to HCS’s eligible accounts receivable, and borrowings under the FNCC Credit Agreement bear interest at the prime rate plus 1.25%. The FNCC Credit Agreement also provides for customary origination and collateral monitoring fees payable to FNCC during its term. The initial term of the FNCC Credit Agreement expires on November 17, 2018, but it will be renewed automatically for consecutive one-year terms thereafter unless the FNCC Credit Agreement is terminated to its terms. The obligations of HCS under the FNCC Credit Agreement are secured by HCS’s accounts receivable.

The FNCC Credit Agreement contains customary representations, warranties and affirmative and negative covenants, including but not limited to financial covenants. The FNCC Credit Agreement also contains customary events of default, including but not limited to payment defaults, cross defaults with certain other indebtedness, breaches of covenants and bankruptcy events. In the case of an event of default, FNCC may, among other remedies, accelerate payment of all obligations under the FNCC Credit Agreement.

In connection with the FNCC Credit Agreement, the Company and Novation Holding, Inc., a wholly-owned subsidiary of the Company and sole stockholder of HCS, executed guaranties in favor of FNCC (collectively, the “FNCC Guaranties”) guaranteeing all of HCS’s obligations under the FNCC Credit Agreement.

The above description of the FNCC Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the FNCC Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein 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 regarding the FNCC Credit Agreement and the FNCC Guaranties set forth in Item 1.01 of this Form 8-K is incorporated by reference into this Item 2.03.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits


NOVATION COMPANIES, INC. Exhibit
EX-10.1 2 ex101to8k11464004_112017.htm REVOLVING CREDIT AND SECURITY AGREEMENT Exhibit 10.1   REVOLVING CREDIT AND SECURITY AGREEMENT THIS REVOLVING CREDIT AND SECURITY AGREEMENT (“Agreement”) is entered into as of November 17,…
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About NOVATION COMPANIES, INC. (OTCMKTS:NOVCQ)

Novation Companies, Inc. is seeking to acquire operating businesses or make other investments. The Company has not identified any specific acquisition targets. The Company owned Corvisa LLC (Corvisa), a developer and seller of cloud-based communication software under the CorvisaOne brand, telecommunications services, and implementation consulting services. The Company’s subsidiaries include Novation Holdings, Inc., NovaStar CDO Holdings, Inc., NCIP Holdings, LLC and 2114 Central, LLC.

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