Note 6 — Debt

The Company maintains a credit facility which provides borrowing availability up to $20 million (with the option to increase to $30 million) in the form of a line of credit. This agreement allows the Company, at its option, to borrow funds at the LIBOR rate plus the applicable interest rate spread or at the bank’s prime lending rate (3.25% at December 31, 2013). This agreement expires in June 2014. At December 31, 2013, the Company did not have any outstanding balance on this line of credit. The weighted average interest rate paid by the Company was 2.7% during fiscal year 2013. This agreement contains certain loan covenants including leverage and fixed charge coverage ratios. In February 2013, the agreement was amended to allow the Company to exclude certain extraordinary or non-recurring non-cash expenses, charges or losses, and certain litigation expenses incurred during the fourth quarter of 2012. The exclusion of these charges was applied to the Company’s debt covenant calculation through December 31, 2013. Additionally, as part of this amendment, the Company modified its definition of Earnings before Interest Taxes, Depreciation and Amortization (EBITDA), to exclude certain non-cash charges for the remainder of the agreement. The Company is in compliance with these amended covenants at December 31, 2013. This credit facility is secured by certain assets of the Company.

On March 10, 2014, the Company executed a commitment letter with the lenders of its existing credit facility. The commitment initially provides the Company $20 million (with the option to increase to $30 million) in a revolving credit facility. The terms and conditions of the commitment letter are generally consistent with those of the Company’s existing credit agreement which will provide the Company with availability under the line of credit up to 36 months from the date of closing. The committed credit facility will be secured by certain assets of the Company.

The Company has a $1.1 million mortgage loan, collateralized by certain real estate. This mortgage matures on November 1, 2019. In May 2012, the Company amended its mortgage to reduce the fixed interest rate to 4.05% through October 1, 2014. Beginning on October 1, 2014 and through the maturity date of the loan, the fixed rate will be converted to a new rate equal to the then-current five year fixed advanced rate charged by the New York Federal Home Loan bank, plus 225 basis points. The annual mortgage payment including interest through October 1, 2014 totals $207,000.

The Company’s future principal payments under its mortgage are as follows (in thousands):

2014		166
2015		173
2016		180
2017		187
2018		195
Thereafter		183
	$	1,084