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
Date of
report (Date of earliest event reported): January 20,
2010
YTB
International, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Delaware
(State or
Other Jurisdiction of Incorporation)
000-18412
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20-2181181
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1901
East Edwardsville Road
Wood
River, Illinois
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62095
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(618)
655-9477
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, 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 (see General
Instruction A.2. below):
o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01.
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Entry
into a Material Definitive
Agreement.
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On
January 20, 2010 (the “Closing Date”), YTB
International, Inc. (the “Company”) executed a
commercial promissory note (the “Note”) with Normandy
Corporation (“Normandy”) in the
amount of $650,000 with a maturity date of September 15, 2010. The
Note bears interest at a rate of 14.5 percent per annum (the “Contract Rate”),
payable in monthly installments of interest only beginning on February 16,
2010. The Company has also agreed to pay a loan fee for the Note to
Normandy in the amount of $45,500, of which $3,250 was paid by the Company upon
acceptance of the Note commitment letter, $9,750 was paid at closing and the
remaining $32,500 shall be paid at maturity along with the remaining unpaid
principal amount on the Note and all accrued and unpaid interest
thereon. From the Closing Date through the 90th day
thereafter, no prepayment of principal is allowed.
In
connection with the execution of the Note and as evidenced by the Assignment of
Promissory Note dated January 20, 2010, the Company granted a security interest
to Normandy in the promissory note made by Prestige Management Services, LLC
(“Prestige”)
dated December 16, 2008, and payable to the Company in the amount of $1.2
million (the “Prestige
Note”). As additional security for the Note as evidenced by
the Assignment of Mortgage dated January 20, 2010, the Company assigned to
Normandy the real estate mortgage dated December 16, 2008 made by Prestige to
secure repayment of the Prestige Note to the Company. In the event
that the Company has not received payment in full of all principal and interest
due under the terms and conditions of the Prestige Note by June 16, 2010, the
Company is to deliver to Normandy a fully executed modification of the Prestige
Note no later than July 16, 2010, the terms of which must be approved by
Normandy prior to the modification.
In the
event of default, as defined in the Note, Normandy has the right to declare the
entire unpaid balance of principal and interest on the Note due and
payable. In addition, the Contract Rate shall be changed to 18
percent per annum effective on the date notice of default is given to the
Company and shall remain in effect until the default is completely cured to the
satisfaction of Normandy, its successors and assigns and all subsequent holders
of this Note. Default is defined in the Note as (i) a default in the
payment of principal or interest due on the Note; (ii) the Company’s insolvency
or the assignment for the benefit of creditors; (iii) the Company’s loss of
possession of any of the Company’s business or property to creditors of any
governmental agency or receiver; (iv) the commencement of bankruptcy or
insolvency proceedings for the relief of debtors against, by or in respect of
the Company; (v) the issuance of any execution against the Company; (vi) the
nonpayment, in whole or in part, of any judgment against the Company not fully
bonded for at least five days after the entry thereof; (vii) in the
event of a Prestige default, the Company’s failure to deliver to Normandy a
modification of the Prestige Note on or before July 16, 2010, the terms of which
must be satisfactory to Normandy; or (iv) any other default under the terms of
the Note.
Item
2.03.
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a
Registrant.
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The
information disclosed under Item 1.01 above is incorporated under this Item 2.03
by reference.
Item
9.01.
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Financial
Statements and Exhibits.
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(d) Exhibits.
No.
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Description
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10.1
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Commercial
Promissory Note by and between YTB International, Inc. and Normandy
Corporation dated January 20, 2010 to be filed with the Registrant’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2009.
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SIGNATURES
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.
YTB
INTERNATIONAL, INC.
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Date:
January 26, 2010
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By:
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/s/
Robert M. Van Patten
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Name:
Robert M. Van Patten
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Title:
Chief Executive Officer
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