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.