Form 8-K for TRX INC/GA
5-Jun-2008
Entry into a Material Definitive Agreement, Termination of a Material Definitive Agree
Item 1.01 - Entry into a Material Definitive Agreement.
On May 30, 2008, TRX, Inc. ("TRX", the "Company", "we" or "our") entered into a three year Credit Agreement, by and among the Company, as borrower, and Atlantic Capital Bank ("ACB"), as lender (the "Credit Agreement"). This Credit Agreement matures on May 30, 2011 and contains substantially the same terms and conditions of our previous credit facility.
The Credit Agreement provides for a senior secured revolving credit facility with aggregate principal commitments not to exceed $10.0 million, which will include a $2.0 million letter of credit subfacility. On May 30, 2008 TRX borrowed approximately $1.3 million against this facility to pay down the outstanding balance of its existing facility, which was terminated. A loan under the Credit Agreement may be a Base Rate loan or a LIBOR loan, at the option of the Company. Interest under the Credit Agreement accrues at Base Rate (Prime Rate) or LIBOR (plus 0.50 % for Base Rate Loans and 2.50% for LIBOR Loans) for the revolving credit facility. For letters of credit, the letter of credit fee is equal to the Applicable Rate (as defined in the Credit Agreement) times the daily amount available to be drawn under the letter of credit. Base Rate is the Prime Rate announced publicly by ACB from time to time. Overdue amounts bear a fee of 2% per annum above the applicable rate.
The Credit Agreement requires the Company to meet certain financial tests, including a consolidated leverage ratio (as defined) and a fixed charge coverage ratio (as defined). The Credit Agreement also contains additional covenants which, among other things, require the Company to deliver to ACB specified financial information, including annual and quarterly financial information, and limit the Company's ability to (or to permit any subsidiaries to), subject to various exceptions and limitations, (i) merge with other companies, (ii) create liens on its property, (iii) incur debt obligations, (iv) enter into transactions with affiliates, except on an arms-length basis, and (v) dispose of property.
Item 1.02 - Termination of a Material Definitive Agreement.
In connection with its entry into the Credit Agreement, TRX terminated its existing $10.0 million credit facility with Bank of America, N.A. which was scheduled to mature in April 2009. There were no prepayment penalties related to terminating this credit facility.
surf's up......crikey
