TSSI TSS Inc (QB)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

July 2, 2014

Date of Report (Date of earliest event reported)

  

 

TSS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware	001-33627	20-2027651
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

 

7226 Lee DeForest Drive, Suite 104
Columbia, Maryland		21046
(Address of principal executive offices)		(Zip Code)

 

(410) 423-7438

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))

 

 

Item 1.01. Item 2.03

Entry into a Material Definitive Contract Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

 

On July 2, 2014, TSS, Inc. (the “Company”) and its subsidiaries Innovative Power Systems, Inc. and VTC, L.L.C. (together with the Company, collectively, the “Borrowers”) entered into an agreement (the “2014 Modification) to modify their revolving credit facility (the “Credit Facility”) with Bridge Bank, National Association (the “Lender”). The Borrowers had originally obtained the Credit Facility from the Lender pursuant to a Business Financing Agreement by and among the Borrowers and the Lender on May 21, 2013 (the “Financing Agreement”), which was amended by a Business Modification Agreement dated April 8, 2014, by and among the Borrowers and the Lender. The 2014 Modification, among other things, extended the maturity date of the Credit Facility to May 21, 2016.

 

A copy of the 2014 Modification is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the attached 2014 Modification.

 

Item 9.01.

Financial Statements and Exhibits.

 

99.1 Business Financing Modification Agreement, dated July 2, 2014, by and among the TSS, Inc., Innovative Power Systems, Inc., VTC, L.L.C. and Bridge Bank, National Association

 

 

S I G N A T U R E S

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	TSS, INC.
	By:	/s/ Anthony Angelini
		Anthony Angelini
		President and Chief Executive Officer

Date: July 3, 2014

 

 

BUSINESS FINANCING MODIFICATION AGREEMENT

 

This Business Financing Modification Agreement is entered into as of July 2, 2014, by and between TSS, Inc., Innovative Power Systems, Inc., and VTC, L.L.C. (individually “Borrower”, and collectively “Borrower” or “Borrowers”) and Bridge Bank, National Association (“Lender”).

 

1.             DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be owing by Borrowers to Lender, Borrowers are indebted to Lender pursuant to, among other documents, a Business Financing Agreement, dated May 21, 2013, by and among Borrowers and Lender, as may be amended from time to time (the “Business Financing Agreement”). Capitalized terms used without definition herein shall have the meanings assigned to them in the Business Financing Agreement.

 

Hereinafter, all indebtedness owing by Borrowers to Lender shall be referred to as the “Indebtedness” and the Business Financing Agreement and any and all other documents executed by Borrowers in favor of Lender shall be referred to as the “Existing Documents.”

 

2.             DESCRIPTION OF CHANGE IN TERMS.

 

A.

Modification(s) to Business Financing Agreement:

 

(i)

Subsection 4.9 in Section 4 entitled “Miscellaneous Provisions” is hereby amended as follows:

 

4.9   Maintain all depository and operating accounts with Lender and, in the case of any investment accounts not maintained with Lender, grant to Lender a first priority perfected security interest in and “control” (within the meaning of Section 9104 of the UCC) of such deposit account pursuant to documentation acceptable to Lender, provided however, Borrower may maintain (i) an operating account with PNC Bank with an aggregate balance not to exceed $200,000 (the “Permitted Accounts”). Borrower shall provide to Lender no later than 30 day after the end of each month, the monthly statements and such other reports related to the Permitted Accounts as Lender may request in its sole discretion. .

 

(ii)

The following defined term in Section 12.1, entitled “Definitions” is hereby amended as follows:

 

"Maturity Date" means May 21, 2016 or such earlier date as Lender shall have declared.

 

3.             CONSISTENT CHANGES. The Existing Documents are each hereby amended wherever necessary to reflect the changes described above.

 

4.             PAYMENT OF FEES. Borrower shall pay Lender the Facility Fee in the amount of $30,000, and the Due Diligence Fee in the amount of $1,000, plus all out-of-pocket expenses.

 

5.             NO DEFENSES OF BORROWER/GENERAL Release. Borrower agrees that, as of this date, it has no defenses against the obligations to pay any amounts under the Indebtedness. Each of Borrower and Guarantor (each, a “Releasing Party”) acknowledges that Lender would not enter into this Business Financing Modification Agreement without Releasing Party’s assurance that it has no claims against Lender or any of Lender’s officers, directors, employees or agents. Except for the obligations arising hereafter under this Business Financing Modification Agreement, each Releasing Party releases Lender, and each of Lender’s and entity’s officers, directors and employees from any known or unknown claims that Releasing Party now has against Lender of any nature, including any claims that Releasing Party, its successors, counsel, and advisors may in the future discover they would have now had if they had known facts not now known to them, whether founded in contract, in tort or pursuant to any other theory of liability, including but not limited to any claims arising out of or related to the Agreement or the transactions contemplated thereby. Releasing Party waives the provisions of California Civil Code section 1542, which states:

  

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

The provisions, waivers and releases set forth in this section are binding upon each Releasing Party and its shareholders, agents, employees, assigns and successors in interest. The provisions, waivers and releases of this section shall inure to the benefit of Lender and its agents, employees, officers, directors, assigns and successors in interest. The provisions of this section shall survive payment in full of the Obligations, full performance of all the terms of this Business Financing Modification Agreement and the Agreement, and/or Lender’s actions to exercise any remedy available under the Agreement or otherwise.

 

6.             CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Indebtedness, Lender is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Documents. Except as expressly modified pursuant to this Business Financing Modification Agreement, the terms of the Existing Documents remain unchanged and in full force and effect. Lender’s agreement to modifications to the existing Indebtedness pursuant to this Business Financing Modification Agreement in no way shall obligate Lender to make any future modifications to the Indebtedness. Nothing in this Business Financing Modification Agreement shall constitute a satisfaction of the Indebtedness. It is the intention of Lender and Borrower to retain as liable parties all makers and endorsers of Existing Documents, unless the party is expressly released by Lender in writing. No maker, endorser, or guarantor will be released by virtue of this Business Financing Modification Agreement. The terms of this paragraph apply not only to this Business Financing Modification Agreement, but also to any subsequent Business Financing modification agreements.

 

7.             CONDITIONS. The effectiveness of this Business Financing Modification Agreement is conditioned upon payment of the Facility Fee and the Due Diligence Fee.

 

8.             NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

9.             COUNTERSIGNATURE. This Business Financing Modification Agreement shall become effective only when executed by Lender, Borrowers, and Guarantors.

 

 

BORROWER:	LENDER:
TSS, INC.	BRIDGE BANK, NATIONAL ASSOCIATION

 

 

 

By:      /s/ Anthony Angelini	By:      /s/ Lee A. Shodiss
Name: Anthony Angelini	Name: Lee A. Shodiss
Title:   President & Chief Executive Officer	Title:   Executive Vice President & Manager

 

 

INNOVATIVE POWER SYSTEMS, INC.

 

 

By:       /s/ Anthony Angelini                            

 

Name:  Anthony Angelini                                 

 

Title:   President                                                  

 

 

VTC, L.L.C.

 

 

By:       /s/ Anthony Angelini                            

 

Name:  Anthony Angelini                                 

 

Title:   Chairman                                                  

 

 

Guarantor consents to the modifications to the Indebtedness pursuant to this Business Financing Modification Agreement, hereby ratifies the provisions of the Guaranty and confirms that all provisions of that document are in full force and effect.

 

GUARANTOR:

 

TOTAL SITE SOLUTIONS AZ, INC.

 

 

By:       /s/ Anthony Angelini                            

 

Name:  Anthony Angelini                                 

 

Title:    Manager

Date: July 2, 2014

 

 

VORTECH, L.L.C.

 

 

By:       /s/ Anthony Angelini                            

 

Name:  Anthony Angelini                                 

 

Title:    Chairman

Date: July 2, 2014

 

 

ALLETAG BUILDERS, INC.

 

 

By:       /s/ Anthony Angelini____________

 

Name:  Anthony Angelini______________

 

Title:    President_____________________

Date: July 2, 2014