CCIX » Topics » Senior Debt

This excerpt taken from the CCIX 8-K filed Mar 23, 2007.
Senior Debt
 
The revolving credit facility and term loans A and B were entered into under a credit agreement.
 
(1) In March 2005, the Company entered into a revolving credit facility providing for borrowings up to $85,000, as amended, limited to the sum of eligible accounts receivable and inventories of the Company, as defined in the credit agreement. The revolving credit facility expires on March 31, 2008, at which time the outstanding principal balance is due. The revolving credit facility contains a subjective acceleration clause and a requirement that cash deposits be only made through a lockbox maintained by the senior lender; therefore, the entire balance has been classified as current. The Company had $28,552 and $11,873 available under the revolving credit facility at December 31, 2006 and 2005, respectively.
 
(2) In March 2005, the Company entered into a term loan A, as amended, for $13,250. Term loan A is payable in equal monthly principal installments of $184 through March 1, 2008, and a final installment of unpaid principal on March 31, 2008.


F-43


 

 
Copperfield, LLC
 
NOTES TO FINANCIAL STATEMENTS — (Continued)
(in thousands of dollars)

 
(3) In March 2005, the Company entered into a term loan B, as amended, for $5,000. Term loan B is payable in equal monthly principal installments of $139 through March 1, 2008, and a final installment of unpaid principal on March 31, 2008.
 
Borrowings under the revolving credit facility and term loan A and B bear interest at the bank’s reference rate plus margin or the LIBOR rate plus margin. The revolving credit facility and term loans had the following margins at December 31, 2006 and 2005, respectively:
 
         
Bank reference rate — revolving credit facility
    0 %
LIBOR rate — revolving credit facility
    2.50 %
Bank reference rate — term loans
    .50 %
LIBOR rate — term loans
    3.00 %
 
At December 31, 2006 and 2005, the bank’s reference rate was 8.25% and 7.25%, respectively, and the LIBOR rate was 5.33% and 4.39%, respectively.
 
Borrowings under the credit agreement are collateralized by all the Company’s assets and require the Company to meet certain restrictive financial covenants relating to minimum debt service coverage ratio, minimum net income, maximum total leverage ratio, maximum capital expenditures and operating lease commitment. The credit agreement also contains a subjective acceleration clause and cross-default provisions. At December 31, 2006, the Company was in violation of one of its covenants. On February 15, 2007, the Company obtained a waiver for the maximum capital expenditures covenant violation.
 
(4) In March 2005, the Company entered into a $3,200 mortgage promissory term note. The note is payable in equal monthly installments of principal and interest of $36 through March 2010. The note bears interest at 6% and is collateralized by the land and building. The note includes certain restrictive financial covenants relating to minimum debt service coverage ratio, maximum total leverage ratio, minimum net income, maximum capital expenditures and contains cross-default provisions. At December 31, 2006, the Company was in violation of one of its covenants. On February 12, 2007, the Company obtained a waiver and amendment for the maximum capital expenditures covenant violation.
 
(5) In November 2005, the Company entered into a $1,420 mortgage promissory term note. The note is payable in equal monthly installments of principal and interest of $8 through November 2008. The note bears interest at the bank’s reference rate plus 1% and is collateralized by the land and building. The note includes certain restrictive financial covenants relating to minimum debt service coverage ratio, maximum total leverage ratio, minimum net income, maximum capital expenditures and contains cross-default provisions. At December 31, 2006, the Company was in violation of one of its covenants. On February 12, 2007, the Company obtained a waiver and amendment for the maximum capital expenditures covenant violation.
 
(6) In February 2006, the Company entered into a $1,580 mortgage promissory term note. The note is payable in equal monthly installments of principal and interest of $9 through February 2009 when remaining principal and interest are due. The note bears interest at the bank’s reference rate plus 1% and is collateralized by the land and building. The note includes certain restrictive financial covenants relating to minimum debt service coverage ratio, maximum total leverage ratio, minimum net income, maximum capital expenditures and contains cross-default provisions. At December 31, 2006, the Company was in violation of one of its covenants. On February 12, 2007, the Company obtained a waiver and amendment for the maximum capital expenditures covenant violation.
 
(7) In November 2005, the Company entered into a $5,837 equipment promissory term note. The note is due in equal monthly installments of principal and interest of $97 through November 2008. The note bears interest at the bank’s reference rate plus 1% and is collateralized by equipment acquired in the


F-44


 

 
Copperfield, LLC
 
NOTES TO FINANCIAL STATEMENTS — (Continued)
(in thousands of dollars)

Wire Technology, Inc. transaction. The note includes certain restrictive financial covenants relating to minimum debt service coverage ratio, maximum total leverage ratio, minimum net income, maximum capital expenditures and contains cross-default provisions. At December 31, 2006, the Company was in violation of one of its covenants. On February 12, 2007, the Company obtained a waiver and amendment for the maximum capital expenditures covenant violation.
 
(8) In November 2002, the Company entered into a master lease, as amended, under which the Company may finance a series of individual leases up to $4,500. The individual leases bear interest at various rates ranging between 4.09% and 6.59% and are due in varying monthly payments through October 2009. The master lease requires the Company to meet certain restrictive financial covenants related to minimum fixed charge coverage ratio, maximum total leverage coverage ratio and contains cross-default provisions. At December 31, 2005, the Company was in violation of certain covenants. On March 28, 2006, the Company obtained a waiver for the violations of the fixed charge coverage ratio and the maximum total leverage ratio.
 
(9) In September 2005, the Company entered into a capital lease obligation for $4,093. The capital lease is payable in equal monthly principal installments of $68 through September 2010 and bears interest at the 30-day LIBOR rate plus 3.75%.
 
(10) In December 2005, the Company entered into a capital lease obligation for $1,468. The capital lease is payable in equal monthly principal installments of $24 through December 2010 and bears interest at the 30-day LIBOR rate plus 3.75%.
 
(11) In September 2006, the Company entered into a capital lease obligation for $1,745. The capital lease is payable in equal monthly principal installments of $29 through September 2011 and bears interest at the 30-day LIBOR rate plus 3.40%.
 
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