Note F — Long-Term Debt

In thousands	September 30, 2020			December 31, 2019
Revolving credit facility	$	17,100		$	18,700
Paycheck Protection Program Term Note		10,000			—
Total debt		27,100			18,700
Less: current portion of long-term debt		(6,681	)		—
Long-term debt	$	20,419		$	18,700

Credit Facility

As of

September 30, 2020

and

December 31, 2019

, we had

$17.1

million and

$18.7

million borrowings outstanding under the Texas Capital Credit Facility (as defined below), respectively. As of

September 30, 2020

, we had the ability to borrow an additional of

$0.1

million under the facility.

April 17, 2017,

we entered into a secured credit facility with Texas Capital Bank, N.A (“Texas Capital Bank”), that provided a

$20.0

million revolving credit facility (the “Texas Capital Credit Facility”) and for letters of credit issued by Texas Capital Bank up to

$5.0

million. The Texas Capital Credit Facility is secured by substantially all of the Company's and its material domestic subsidiaries' assets. The Texas Capital Credit Facility is guaranteed by HHS Guaranty, LLC, an entity formed to provide credit support for Harte Hanks by certain members of the Shelton family (descendants of

one

of our founders).

Under the Texas Capital Credit Facility, we can elect to accrue interest on outstanding principal balances at either LIBOR plus

1.95%

or prime plus

0.75%.

Unused commitment balances accrue interest at

0.50%.

We are required to pay a quarterly fee of

0.5%

as consideration for the guarantee to HHS Guaranty, LLC of the value of the collateral it actually pledged to secure the facility, which for the

three

months ended

September 30, 2020

amounted to

$0.1

million.

The Texas Capital Credit Facility is subject to customary covenants requiring insurance, legal compliance, payment of taxes, prohibition of

second

liens, and secondary indebtedness, as well as the filing of quarterly and annual financial statements. The Company has been in compliance of all the requirements.

The Texas Capital Credit Facility originally had an expiration date of

April 17, 2019,

at which point all outstanding amounts would have been due. On

January 9, 2018,

we entered into an amendment to the Texas Capital Credit Facility that increased the borrowing capacity to

$22.0

million and extended the maturity by

one

year to

April

17,

2020.

May 7, 2019,

we entered into a

second

amendment to the Texas Capital Credit Facility which further extended the maturity of the facility by

one

year to

April 17, 2021.

May

11,

2020,

we entered into a

third

amendment to the Texas Capital Credit Facility which further extended the maturity of the facility by

one

year to

April 17, 2022

and decreased the borrowing capacity to

$19.0

million. The Texas Capital Credit Facility remains secured by substantially all of our assets and continues to be guaranteed by HHS Guaranty, LLC.

September 30, 2020

, we had letters of credit outstanding in the amount of

million.

amounts were drawn against these letters of credit at

September 30, 2020

. These letters of credit exist to support insurance programs relating to workers' compensation, automobile liability, and general liability.

Paycheck Protection Program Term Note

April 14, 2020,

the Company entered into a promissory note with Texas Capital Bank, for an unsecured loan with a principal amount of

$10.0

million made to the Company pursuant to the Paycheck Protection Program (“PPP Term Note”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Term Note is guaranteed by the United States Small Business Administration.

The PPP Term Note bears interest at a fixed annual rate of

1.00%,

with interest deferred for the

first

six

months. Beginning in

November

2020,

the Company will be required to make

equal monthly payments of principal and interest with the final payment due in

April 2022,

unless the loan is forgiven as described below. The PPP Term Note

may

be accelerated upon the occurrence of an event of default.

The proceeds

may

be used to maintain payroll or make certain covered interest payments, lease payments and utility payments. Under the terms of the CARES Act, the Company can be granted forgiveness for all or a portion of the loan granted under the Paycheck Protection Program, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for permitted expenses.

At this time, the Company anticipates forgiveness of the entire amount of the PPP Term Note; however, we are

not

in a position to estimate the timing of the completion of the forgiveness process. We expect to apply for forgiveness of the PPP Term Note in the

fourth

quarter of

2020.

We have elected to classify the principal balance of the PPP Term Note within both Short-term and Long-term debt, net, on the condensed consolidated balance sheet as of

September 30, 2020

. Under the existing terms of the PPP Term Note, if

forgiveness is granted, approximately

$6.7

million of the principal amount of the PPP Term Note would be due within

twelve

months from

September 30, 2020