TSS, Inc. Enters into Revolving Line of Credit with Texas Capital Bank, National Association
January 07, 2019 at 04:01 pm EST
Share
On December 31, 2018, TSS, Inc. (“Borrower”) entered into a revolving line of credit (the “credit facility”) with Texas Capital Bank, National Association (“Lender”) pursuant to a Business Loan Agreement (Asset Based) (the “Loan Agreement”) by and among Borrower and Lender. The obligations under the credit facility are secured by substantially all of Borrower’s assets. Borrower’s subsidiaries, Vortech, L.L.C., VTC, L.L.C., Total Site Solutions Arizona LLC and Alletag Builders, Inc. (collectively, the “Guarantors”) jointly and severally guaranteed the obligations of Borrower under the credit facility. The maximum principal amount of the credit facility is $1,500,000. The credit facility is subject to a borrowing base of 80% of eligible accounts receivables, subject to customary exclusions and limitations. Borrowings under the credit facility will bear interest at LIBOR plus 3% (effective rate of 5.37% at December 31, 2018). Certain accounts receivables subject to a vendor payment program with a customer are excluded from the definition of eligible accounts receivables under the credit facility. In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the credit facility, Borrower will pay a 0.25% unused facility fee, payable quarterly in arrears. The credit facility matures on December 31, 2020. The credit facility requires that Borrower maintain a minimum liquidity of $500,000 at all times excluding availability under the loan. It also requires Borrower to comply with certain financial covenants including a maximum Total Leverage Ratio of 3.00, a minimum Total Interest Coverage Ratio of 2.50, and a minimum Total Fixed Charge Coverage Ratio of 1.25. The credit facility also limits the amount of new indebtedness to $250,000 per fiscal year without Lender’s prior written approval.
TSS, Inc. is a data center services company that integrates high-performance computing infrastructure and software. The Company's segments include facilities, and systems integration. Facilities segment is involved in the design, project management and maintenance of data center and mission-critical business operations. Systems integration segment integrates information technology (IT) equipment for original equipment manufacturer vendors and customers to be used inside data center environments, including modular data centers. Its services include rack and systems integration, configuration services, data center and modular data center facility management integrations, deployment and maintenance services, strategic procurement services, project management and technology consulting, design and engineering services. Its IT solutions can be deployed in a variety of physical settings such as data centers, co-location facilities, server rooms, modular or edge-based solutions and others.