| Item 1.01 | Entry into a Material Definitive Agreement. |
On May 19, 2021, Computer Task Group, Incorporated (“CTG”) entered into an asset based revolving credit and security agreement (the “Credit Agreement”) among CTG, as Borrower, Bank of America N.A., a national banking association, in its capacity as collateral agent and administrative agent for itself and certain secured parties together with any successor agent appointed pursuant to the terms of the Credit Agreement, Bank of America, N.A. as Sole Lead Arranger and Sole Book Runner. Borrowers under the Credit Agreement include CTG, Computer Task Group Belgium N.V., Computer Task Group Luxembourg PSF S.A., and Computer Task Group IT Solutions S.A. Guarantors include Computer Task Group International, Inc., CTG ITS S.A., and Computer Task Group Europe B.V. (the “Guarantors”).
The Credit Agreement provides for a five-year revolving credit facility in an aggregate principal amount of $50 million (available in US dollars and Euros), including a US sublimit of $19 million, Belgian sublimit of $14 million, Luxembourg sublimit of $17 million and sublimit for letters of credit of $10 million. Loans under the Credit Agreement bear interest at per annum rates as follows: (i) in the case of a US Base Rate Loan, at the US Base Rate in effect from time to time plus the Applicable Margin for such Loan; (ii) in the case of European Base Rate Loan, at the European Base Rate in effect from time to time plus the Applicable Margin for European Base Rate Loans, (iii) in the case of a LIBOR Loan, at LIBOR for the applicable Interest Period plus the Applicable Margin for LIBOR Loans; and (iv) in the case of a EURIBOR Loan, at the EURIBOR for the applicable Interest Period plus the Applicable Margin for EURIBOR Loans.
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 December 21, 2017 (the “2017 Credit Agreement”).
All obligations under the Credit Agreement are guaranteed by the Guarantors. The Credit Agreement is secured by a first priority lien on the assets of CTG and the Guarantors except for real estate and the equity of Excluded Subsidiaries as well as other customary carve-outs.
