TESS » Topics » REPLACEMENT OF REVOLVING LINE OF CREDIT FACILITY

This excerpt taken from the TESS 8-K filed Jun 6, 2007.

REPLACEMENT OF REVOLVING LINE OF CREDIT FACILITY

On May 31, 2007, the Registrant established a $50 million revolving line of credit facility with SunTrust Bank and Wachovia Bank, National Association, replacing the Registrant’s previously existing $30 million revolving line of credit facility with the same lenders, which concurrently terminated. 

Subject to the terms and conditions of a Credit Agreement, SunTrust Bank and Wachovia Bank, National Association, have severally agreed to make loans and other credit accommodations to the Registrant and its primary operating subsidiaries from time to time, on a revolving credit basis, with the aggregate borrowing availability, up to $50 million, to be determined in accordance with a borrowing base.  The credit facility is unsecured, and interest is payable monthly at the LIBOR rate, plus an applicable margin, which ranges from 1.25% to 2.75%, depending upon the Registrant’s ratio of funded debt to EBITDA.  The credit facility also imposes certain covenants, including a minimum tangible net worth covenant, a minimum cash flow coverage ratio and a maximum ratio of funded debt to EBITDA.  The credit facility expires in May 2010, and the lenders may agree to extend the term for a longer period.

Copies of the Credit Agreement and $50 million Revolving Credit Note made by the Registrant and its primary operating subsidiaries for the benefit of the lenders in connection with the $50 million revolving line of credit facility are attached to this Current Report as Exhibits 10.1 and 10.2, respectively, and are incorporated by reference herein.

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