BCOR Blucora Inc

On May 22, 2017, Blucora, Inc. (the “Company” or “Blucora”) and most of its direct and indirect domestic subsidiaries (in their capacity as guarantors) entered into a Credit Agreement (the “Credit Agreement”) and ancillary agreements and documents (collectively, with the Credit Agreement, the “Credit Facility”) with Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent (in such capacity, the “Agent”), and each lender from time to time a party to the Credit Facility (collectively, the “Lenders”).

Under the terms of the Credit Facility, the Company borrowed $375,000,000 from certain of the Lenders on May 22, 2017 in the form of a term loan (the “Term Loan”). The Credit Facility also includes a revolving credit facility with a commitment amount of $50,000,000 (the “Revolver”) with certain of the Lenders. No amounts were borrowed under the Revolver on May 22, 2017. The final maturity date of the Term Loan is May 22, 2024 and the final maturity date of the Revolver is May 22, 2022.

The proceeds of the Term Loan will be used to (i) pay in full all outstanding obligations under the Credit Agreement dated December 31, 2015 by and among TaxAct, Inc. and H.D. Vest, Inc. (as the borrowers), TaxAct Holdings, Inc., certain of the direct and indirect subsidiaries of TaxAct, Inc. and H.D. Vest, Inc., as guarantors, Bank of Montreal, as Administrative Agent, and the lenders party thereto that Blucora used to fund the acquisition of H.D. Vest (the “TaxAct - HD Vest 2015 Credit Facility”), (ii) redeem, on June 5, 2017, all of the Company’s then outstanding convertible senior notes due 2019, and (iii) pay fees and expenses associated with the Credit Facility. The remaining proceeds of the Term Loan, if any, may be used for general corporate purposes. Proceeds of the Revolver may be used for general corporate purposes.

The outstanding principal balance of the Term Loan bears interest at the applicable margin plus, at the Company’s election, either (a) the Eurodollar Rate (a LIBOR based interest rate index, as defined in the Credit Agreement) or (b) the highest of (i) the rate of interest determined by the Agent as its prime rate in effect at its principal office in New York City, (ii) the federal funds effective rate from time to time plus 0.50% per annum and (iii) the 1-month Eurodollar Rate plus 1.00% per annum (the “ABR”). The applicable margin for the Term Loan is (x) for Eurodollar Rate Loans, 3.75% and (y) for ABR Loans, 2.75%.

The outstanding principal balance of the Revolver bears interest at the applicable margin plus, at the Company’s election, either (a) the Eurodollar Rate or (b) the ABR. The applicable margin for the Revolver is dependent on the Consolidated First Lien Net Leverage Ratio (as defined in the Credit Agreement). The range of the applicable margin for the Revolver is (x) for Eurodollar Rate Loans, 2.75% to 3.25% and (y) for ABR loans, 1.75% to 2.25%. The Company is required to pay a commitment fee on the undrawn commitment under the Revolver in a percentage that is dependent on the Consolidated First Lien Net Leverage Ratio that ranges from 0.375% to 0.50%.

The Company is required to make payments in an amount equal to all accrued interest on the Term Loan and the Revolver (a) as to any Eurodollar Rate Loan, the last day of each applicable interest period; provided that if any interest period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such interest period and (b) as to any ABR Loan, the last business day of each March, June, September and December.

The Company is required to make principal amortization payments on the Term Loan in equal quarterly installments payable on the last business day of each calendar quarter (beginning on September 30, 2017), in an amount equal to 0.25% of the initial principal balance of the Term Loan (the amount of principal amortization payments may be reduced as a result of the application of prepayments during the term of the Term Loan in accordance with the order of priority set forth in the Credit Agreement). In addition to the quarterly amortization payments, all outstanding principal and interest on the Term Loan is payable on the maturity date of May 22, 2024.

The Company is required to pay all outstanding principal and interest on the Revolver on the maturity date of May 22, 2022.

As set forth in more detail in the Credit Agreement, the Company is required to make mandatory prepayments on the Term Loan in the event of certain specified events, including the generation of consolidated Excess Cash Flow (as defined in the Credit Agreement) by the Company. The Company may also prepay amounts under the Term Loan, subject to certain restrictions and costs specified in the Credit Agreement. As set forth in more detail in the Credit Agreement, in the event that the Term Loans are prepaid, refinanced, substituted or replaced in whole or in part in connection with a transaction pursuant to which the Company or any of its subsidiaries that are guarantors incur indebtedness with an all-in yield that is less than that applicable to the Term Loan on or before November 22, 2017, or the Company enters into any amendment to the Credit Agreement that reduces the all-in yield on or before November 22, 2017, the Company would be required to pay a prepayment premium equal to 1.00% of the amount prepaid. The Company may prepay and terminate the Revolver without premium, subject to certain restrictions and costs specified in the Credit Agreement.

The Credit Agreement contains the customary terms and conditions that are applicable to the Company and its Restricted Subsidiaries (as defined in the Credit Agreement), including, but not limited to: (a) representations and warranties regarding (i) financial condition, (ii) absence of any material adverse effect and (iii) organizational and legal status and authority; (b) affirmative covenants regarding (i) financial and collateral reporting, (ii) payment of taxes and other obligations, (iii) continuation of business and maintenance of existence and rights, and (iv) maintenance of property and insurance; and (c) negative covenants regarding (i) limitations on the incurrence of debt, (ii) limitation on liens, (iii) limitation on changes in nature of business, (iv) limitation on consolidation, merger, sale, or purchase of assets, (v) limitation on advances, investments, and loans, (vi) limitations on dividend, distributions and other restricted payments and (vii) the maximum Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement). The Credit Agreement also contains events of default consistent with those customarily found in similar financings, including, but not limited to, (i) non-payment of obligations, (ii) inaccuracy of representations or warranties, (iii) non-performance of covenants and obligations, (iv) default on other material debt, (v) change of control and (vi) bankruptcy or insolvency.

The foregoing description of the Credit Agreement and the Credit Facility is a summary, does not purport to be a complete description of the Credit Agreement or the Credit Facility, and is qualified in its entirety by reference to the Credit Agreement, a copy of which is filed as Exhibit 10.1 and is incorporated herein by reference.

On May 23, 2017, the Company issued a press release regarding the transactions contemplated by the Credit Agreement, a copy of which is filed as Exhibit 99.1.