Item 1.01 Entry into a Material Definitive Agreement.
On December 6, 2019, Kirkland’s, Inc. (the "Company"), entered into a Second Amended and Restated Credit Agreement (the "2019 Credit Agreement"), by and among the Company which, together with one of its subsidiaries, serves as a guarantor thereunder, the remaining of the Company’s subsidiaries as borrowers (the "Borrowers"), Bank of America, N.A., as administrative agent and collateral agent, and lender. The 2019 Credit Agreement replaces the Company’s Amended and Restated Credit Agreement dated as of August 19, 2011, as amended by that Joinder and First Amendment to Amended and Restated Credit Agreement dated as of February 26, 2016 (as amended, the "2011 Credit Agreement"). Like the 2011 Credit Agreement, the 2019 Credit Agreement contains a $75 million senior secured revolving credit facility. The 2019 Credit Agreement contains substantially similar terms and conditions as the 2011 Credit Agreement, and extends its maturity date to December 2024. The 2011 Credit Agreement was scheduled to expire in February of 2021. Advances under the 2019 Credit Agreement will bear interest at an annual rate equal to LIBOR plus a margin ranging from 125 to 175 basis points with no LIBOR floor.
Pursuant to the 2019 Credit Agreement, the fee paid to the lenders on the unused portion of the credit facility is 25 basis points and there is swingline availability of $10 million. As of December 11, 2019, the Company had no borrowings under the 2019 Credit Agreement and $75 million available for borrowing under the borrowing base formula.
Borrowings under the 2019 Credit Agreement are subject to certain customary conditions and contain customary events of default, including, without limitation, failure to make payments, a cross-default to certain other debt, breaches of covenants, breaches of representations and warranties, a change in control, certain monetary judgments and bankruptcy and ERISA events. Upon any such event of default, the principal amount of any unpaid loans and all other obligations under the 2019 Credit Agreement may be declared immediately due and payable. The maximum availability under the 2019 Credit Agreement is limited by a borrowing base which consists of a percentage of eligible inventory and eligible credit card receivables, less reserves.
Bank of America and its affiliates have provided, and may in the future provide, certain commercial banking, financial advisory, and investment banking services in the ordinary course of business for the Company, its subsidiaries and certain of its affiliates, for which they receive customary fees and commissions.
The foregoing description of the 2019 Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the 2019 Credit Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.