UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC  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):   July 17, 2019
HENNESSY ADVISORS, INC.
(Exact name of registrant as specified in its charter)
California
001-36423
68-0176227
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
     
7250 Redwood Blvd., Suite 200
                                                                                     Novato, California  
  94945
(Address of principal executive offices)
(Zip code)

Registrant’s telephone number including area code:                   (415) 899-1555
Not Applicable
(Former name or former address, 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:
☐ 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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company                   ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol
Name of each exchange on which registered
Common stock, no par value
HNNA
The NASDAQ Stock Market LLC

 

 
Item 1.01.
Entry into a Material Definitive Agreement.

On July 17, 2019, Hennessy Advisors, Inc. (the “ Company ”) entered into a Sixth Amendment to Term Loan Agreement (the “ Amendment ”), by and between the Company and U.S. Bank National Association, as administrative agent and as lender, that amended the Term Loan Agreement, dated as of September 17, 2015 (the “ Loan Agreement ”), as previously amended by the First Amendment to Term Loan Agreement, dated as of September 19, 2016 (the “ First Amendment ”), the Second Amendment to Term Loan Agreement, dated as of November 16, 2017 (the “ Second Amendment ”), the Third Amendment to Term Loan Agreement, dated as of November 30, 2017 (the “ Third Amendment ”), the Fourth Amendment to Term Loan Agreement, dated as of September 20, 2018 (the “ Fourth Amendment ”), and the Fifth Amendment to Term Loan Agreement, dated as of May 9, 2019 (the “ Fifth Amendment ”).
The Amendment increased the number of shares of its common stock that the Company may repurchase from 1,000,000 to 1,500,000 to account for a three-for-two stock split of the Company’s common stock that occurred in March 2017.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment filed herewith as Exhibit 99.1 and incorporated herein by reference. A complete copy of the Loan Agreement is incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “ SEC ”) on September 23, 2015. Complete copies of the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, and Fifth Amendment are incorporated by reference herein from Exhibit 99.1 to each of the Company’s Current Reports on Form 8-K filed with the SEC on September 23, 2016, November 20, 2017, December 4, 2017, September 21, 2018, and May 9, 2019, respectively.
Item 9.01.   Financial Statements and Exhibits
The exhibit listed in the exhibit index below is filed under Item 1.01 of this Current Report on Form 8-K.

EXHIBIT INDEX

Exhibit
Description

99.1

Sixth Amendment to Term Loan Agreement, by and between Hennessy Advisors, Inc. and U.S. Bank National Association, dated July 17, 2019.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

                      HENNESSY ADVISORS, INC.



July 19, 2019   By: /s/ Teresa M. Nilsen  
                      Teresa M. Nilsen
                      President
SIXTH AMENDMENT TO TERM LOAN AGREEMENT

THIS SIXTH AMENDMENT TO TERM LOAN AGREEMENT (this “ Amendment ”) is made and entered into as of July 17, 2019 (the “ Effective Date ”), by and between HENNESSY ADVISORS, INC., a California corporation (“ Borrower ”), U.S. BANK NATIONAL ASSOCIATION, a national banking association (“ U.S. Bank ”) as Lender under the Agreement (defined below) and, U.S. Bank as Administrative Agent (in such capacity, “ Agent ”); and has reference to the following facts and circumstances (the “ Recitals ”):

A.   Borrower, Lenders and Agent executed the Term Loan Agreement dated as of September 17, 2015, as amended by the First Amendment to Term Loan Agreement dated as of September 19, 2016, the Second Amendment to Term Loan Agreement dated as of November 16, 2017, the Third Amendment to Term Loan Agreement dated as of November 30, 2017, the Fourth Amendment to Term Loan Agreement dated as of September 20, 2018 and the Fifth Amendment to Term Loan Agreement dated as of May 9, 2019 (as previously amended and as amended by this Amendment, the “ Agreement ”; all capitalized terms used and not otherwise defined in this Amendment shall have the respective meanings ascribed to them in the Agreement as amended by this Amendment and prior amendments).

B.   Borrower, Lender and Agent agree to further amend the Agreement as set forth below.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Borrower, Lender and Agent agree as follows:

1.   Recitals .  The Recitals are true and correct, and, together with the defined terms set forth therein, are incorporated herein by this reference.

2.   Amendment to Agreement .   As of the Effective Date, Section 5.02(i) (Stock Redemptions and Distributions) of the Agreement is deleted and replaced with the following:

(i)   Stock Redemptions and Distributions .  Borrower will not, and it will not cause or permit any Subsidiary to, declare or incur any liability to make any Distributions except with respect to the 2015 Stock Repurchase; provided , however , that so long as no Default or Event of Default has occurred and is continuing or would be created thereby, Borrower and Subsidiaries may make Distributions in an aggregate amount not to exceed 50% of Borrower’s Consolidated Net Income for the previous fiscal year of Borrower (and for purposes of calculating compliance with this covenant, those Distributions consisting of the repurchase of the capital stock of Borrower shall not be included in such calculation).  In addition, so long as no Default or Event of Default has occurred and is continuing or would be created thereby, Borrower may repurchase the shares of its capital stock in the aggregate amount not to exceed 1,500,000 shares (separate and apart from the 2015 Stock Repurchase).

3.   Costs and Expenses .  Borrower agrees to reimburse Agent upon demand for all reasonable and documented out-of-pocket costs and expenses (including, without limitation, Attorneys’ Fees) incurred by Lenders in the preparation, negotiation and execution of this Amendment and any and all other agreements, documents, instruments and/or certificates relating to the amendment of the Agreement.  Borrower further agrees to pay or reimburse Agent and Lenders:  (a) for any stamp or other taxes (excluding income or gross receipts taxes) which may be payable with respect to the execution, delivery, filing and/or recording of any of the Transaction Documents; and (b) for the cost of any filings and searches, including, without limitation, Uniform Commercial Code filings and searches.  All of the obligations of Borrower under this Section 5 shall survive the payment of Borrower’s Obligations, the Maturity Date, and the termination of the Agreement.

4.   References to the Agreement .  All references in the Agreement to “this Agreement”, “the Agreement” and any other references of similar import shall mean the Agreement as previously amended and as amended by this Amendment.

5.   Full Force and Effect .   Except to the extent specifically amended by this Amendment, all of the terms, provisions, conditions, covenants, representations and warranties contained in the Agreement and the other Transaction Documents shall be and remain in full force and effect and the same are hereby ratified and confirmed.
6.   Benefit .  The Agreement and the other Transaction Documents shall be binding upon and inure to the benefit of Borrower, Lenders, Agent and their respective successors and permitted assigns, except that Borrower may not assign, transfer or delegate any of its rights or obligations under the Agreement and the other Transaction Documents as amended by this Amendment.

7.   Representations and Warranties .  Borrower represents and warrants to Lender and Agent that as of the Effective Date:

(a)   the execution, delivery and performance by Borrower of this Amendment are within the corporate powers of Borrower, have been duly authorized by all necessary corporate action on the part of Borrower and require no action by or in respect of, consent of or filing or recording with, any governmental or regulatory body, instrumentality, authority, agency or official or any other Person;

(b)   the execution, delivery and performance by Borrower of this Amendment do not conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under or result in any violation of, the terms of the Articles of Incorporation or the Second Amended and Restated Bylaws of Borrower, any applicable Laws, order, writ, judgment or decree of any court or Governmental Authority or any agreement, document or instrument to which Borrower is a party or by which Borrower or any of its Property is bound or to which Borrower or any of its Property is subject;

(c)   this Amendment has been duly executed and delivered by Borrower and constitutes the legal, valid and binding obligation of Borrower enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency or other similar Laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

(d)   upon giving effect to the terms of this Amendment, all of the representations and warranties made by Borrower in the Agreement and in the other Transaction Documents are true and correct in all material respects on and as of the Effective Date as if made on and as of the Effective Date except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true or correct in all material respects on and as of such earlier date;

(e)   no Default or Event of Default under or within the meaning of the Agreement has occurred and is continuing; and

(f)   there has been no change in the financial condition or results of operations of Borrower since March 31, 2019, which had a Material Adverse Effect.

8 .   Inconsistency .   In the event of any inconsistency or conflict between this Amendment and the Agreement, the terms, provisions and conditions contained in this Amendment shall govern and control.

9.   Governing Law .  This Amendment shall be governed by and construed in accordance with the substantive laws of the State of Missouri (without reference to conflict of law principles) but giving effect to Federal laws applicable to national banks.

10.   Electronic Imaging .  Borrower acknowledges the receipt of copies of the Agreement, the Note, this Amendment and all other Transaction Documents.  Agent may, on behalf of Borrower, create a microfilm or optical disk or other electronic image of the Agreement, the Note, this Amendment and any or all of the Transaction Documents.  Agent may store the electronic image of the Agreement, the Note, this Amendment and any other Transaction Document in its electronic form and then destroy the paper original as part of Agent’s normal business practices, with the electronic image deemed to be an original.

11.   Notice Required by Section 432.047 R.S. Mo.   ORAL OR UNEXECUTED AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT
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OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT.  TO PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

  12.   Conditions Precedent .  Notwithstanding any provision contained in this Amendment to the contrary, this Amendment shall not be effective unless and until Agent shall have received the following, all in form and substance reasonably acceptable to Agent:

(a)   this Amendment, duly executed by Borrower, Agent and Lender;

(b)   the Certificate of Secretary (with the form of resolutions attached thereto), duly certified by the Secretary of Borrower;

(c)   a current certificate of good standing for Borrower, issued by the California Secretary of State (or other evidence of good standing acceptable to Lender); and

(d)   such other documents and information as reasonably requested by Agent.

Borrower, Lender and Agent executed this Amendment as of the Effective Date.




[SIGNATURES ON FOLLOWING PAGES]
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SIGNATURE PAGE- BORROWER
SIXTH AMENDMENT TO TERM LOAN AGREEMENT




                          HENNESSY ADVISORS, INC.

                          By:  /s/ Teresa Nilsen
                          Name:  Teresa Nilsen
                          Title:  President


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SIGNATURE PAGE- AGENT AND U.S. BANK
SIXTH AMENDMENT TO TERM LOAN AGREEMENT




                          U.S. BANK NATIONAL ASSOCIATION, as Agent and Lender

                          By:  /s/ Barry K. Chung
                          Name:  Barry K. Chung
                          Title:  Senior Vice President


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