Form 8-K StarTek, Inc. For: Jan 20
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 20, 2016
STARTEK, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE | 1-12793 | 84-1370538 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
8200 E. Maplewood Ave., Suite 100, Greenwood Village, CO 80111
(Address of principal executive offices; zip code)
Registrant’s telephone number, including area code: (303) 262-4500
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
£ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
£ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
£ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
£ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement |
On January 20, 2016, we entered into a third amendment to our Credit Agreement with BMO Harris Bank N.A. (the “Lender”). The amendment establishes the Consolidated EBITDA financial covenants for each month of fiscal 2016 that would apply if we cross the availability threshold set forth in the original agreement. These covenants are set forth in the amendment filed as Exhibit 10.1 hereto.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibit. | ||
10.1 | Third Amendment to Credit Agreement, by and among BMO Harris Bank N.A, and StarTek, Inc. | ||
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
STARTEK, INC. | ||
Date: January 26, 2016 | By: | /s/ Chad A. Carlson |
Chad A. Carlson President and Chief Executive Officer | ||
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (“Third Amendment”) is made as of this 20th day of January, 2016, by and among STARTEK, INC., a Delaware corporation (the “Company”), STARTEK HEALTH SERVICES, INC., a Colorado Corporation (“SHS”) and STARTEK USA, INC., a Colorado Corporation (“SUSA”) (each of the Company, CCI, SHS and SUSA may be referred to herein, individually, as a “Borrower” and, collectively, as “Borrowers”), COLLECTION CENTER, INC., a North Dakota corporation (“CCI”), as a guarantor, EACH LENDER FROM TIME TO TIME PARTY HERETO (collectively, the “Lenders” and individually, a “Lender”), and BMO HARRIS BANK, N.A., as Administrative Agent, Swing Line Lender, and an Letter of Credit Issuer.
WHEREAS, the Administrative Agent, Lenders and Borrowers entered into a certain Credit Agreement dated as of April 29, 2015 as amended by a certain First Amendment to Credit Agreement dated as of June 1, 2015 by and among the Administrative Agent, Lenders and Borrowers and by a certain Second Amendment to Credit Agreement dated as of November 6, 2015 by and among the Administrative Agent, Lenders and Borrowers (said Credit Agreement, as so amended and as amended from time to time hereafter, is referred to as the “Credit Agreement”); and
WHEREAS, the Administrative Agent, Lenders and Borrowers desire to amend certain provisions of the Credit Agreement pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements herein contained, and any extension of credit heretofore, now or hereafter made by Agent and Lenders to Borrowers, the parties hereto agree as follows:
1.Definitions. Except as otherwise provided herein, all capitalized terms used herein without definition shall have the meanings contained in the Credit Agreement.
2.Financial Covenants. Sections 8.12(a) and (b) of the Credit Agreement are hereby deleted and the following are inserted in their stead:
“8.12 Financial Covenants.
(a) Consolidated EBITDA. Permit the Consolidated EBITDA, determined as of (i) the last day of each period listed below most recently ended before the commencement of a Fixed Charge Coverage Trigger Period and (ii) the last day of each period listed below thereafter ending during any Fixed Charge Coverage Trigger Period to be less than the amount set forth opposite such period:
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Period | Amount | ||
One month ending October 31, 2015 | $ | 709,000 | |
Two months ending November 30, 2015 | $ | 1,299,000 | |
Three months ending December 31, 2015 | $ | 2,090,000 | |
Four months ending January 31, 2016 | $ | 2,381,000 | |
Five months ending February 29, 2016 | $ | 3,359,000 | |
Six months ending March 31, 2016 | $ | 4,867,000 | |
Seven months ending April 30, 2016 | $ | 5,260,000 | |
Eight months ending May 31, 2016 | $ | 5,702,000 | |
Nine months ending June 30, 2016 | $ | 6,650,000 | |
Ten months ending July 31, 2016 | $ | 7,267,000 | |
Eleven months ending August 31, 2016 | $ | 8,619,000 | |
Twelve months ending September 30, 2016 | $ | 9,335,000 | |
Twelve months ending October 31, 2016 | $ | 9,753,000 | |
Twelve months ending November 30, 2016 | $ | 10,570,000 | |
Twelve months ending December 31, 2016 | $ | 11,346,000 | |
For purposes of this Minimum Consolidated EBITDA covenant only, the amount of restructuring and/or impairment charges added back to Consolidated Net Income pursuant to clause (g) of the definition of Consolidated EBITDA, for the fourth quarter of 2015, shall not exceed $1,000,000.
(b) Consolidated Fixed Charge Coverage Ratio. With respect to Measurement Periods ending on or after January 31, 2017, permit the Consolidated Fixed Charge Coverage Ratio, determined as of (i) the last day of the Measurement Period most recently ended before the commencement of a Fixed Charge Coverage Trigger Period and (ii) the last day of each Measurement Period thereafter ending during any Fixed Charge Coverage Trigger Period to be less than 1.10 to 1.00 for such Measurement Period.
3.Conditions Precedent. This Third Amendment shall become effective when Borrowers, the Administrative Agent and Lenders shall have executed and delivered to each other this Third Amendment.
4.Governing Law. This Third Amendment shall be governed by, and construed in accordance with, the laws of the State of Illinois, without regard to the principles thereof relating to conflict of laws.
5.Execution in Counterparts. This Third Amendment may be executed in any number of separate counterparts, each of which shall, collectively and separately, constitute one agreement. Delivery of an executed counterpart of a signature page of this Third Amendment by telecopy or electronically (such as PDF) shall be effective as delivery of a manually executed counterpart of this Third Amendment.
6.Continuing Effect. Except as otherwise specifically set out herein, the provisions of the Credit Agreement shall remain in full force and effect.
(Signature Page Follows)
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(Signature Page to Third Amendment to Credit Agreement)
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Credit Agreement to be duly executed as of the date first above written.
By: | Borrowers: STARTEK, INC., a Delaware Corporation /s/ Chad A. Carlson |
Chad A. Carlson President and Chief Executive Officer | |
By: | STARTEK HEALTH SERVICES, INC., a Colorado Corporation /s/ Chad A. Carlson |
Chad A. Carlson President and Chief Executive Officer | |
By: | STARTEK USA, INC., a Colorado Corporation /s/ Chad A. Carlson |
Chad A. Carlson President and Chief Executive Officer | |
By: | GUARANTOR: COLLECTION CENTER, INC., a North Dakota Corporation /s/ Doug Tackett |
Doug Tackett Secretary | |
ADMINISTRATIVE AGENT: | BMO HARRIS BANK N.A., as Administrative Agent |
By: | /s/ Quinn Heiden |
Quinn Heiden Director | |
LENDERS: | BMO HARRIS BANK N.A., as a Lender, L/C Issuer and Swing Line Lender |
By: | /s/ Quinn Heiden |
Quinn Heiden Director | |
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