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Financing Arrangements

12 Months Ended

Dec. 31, 2012

NOTE 9 — FINANCING ARRANGEMENTS

The Company has a variety of debt and credit facilities to satisfy the financing requirements of its operations and the countries within which it operates. These arrangements are tabulated below.

	All amounts are in $ thousands
Lines of credit	December 31, 2012		December 31, 2011
Lloyds TSB Commercial Finance		37		139
FACTOCIC		964		329
Bridge Bank		121		-
Total lines of credit	$	1,122	$	468

Long-term debt		December 31, 2012			December 31, 2011
Lloyds TSB term loan		928			1,093
PEM credit agreement		-			1,000
Promissory notes payable		2,877			2,877
Capital lease obligations		170			258
		3,975			5,228
Unamortized premium on debt		-			45
		3,975			5,273
Current portion of long-term debt		(942	)		(1,658	)
Long-term debt	$	3,033		$	3,615

Details of the borrowings set out in the table above are explained below.

Lloyds TSB Commercial Finance

On August 31, 2010, two of the Company’s UK subsidiaries, Pascall Electronics Limited (“Pascall”) and XCEL Power Systems, Ltd. (“XCEL”), each entered into a Receivables Finance Agreement with Lloyds TSB Commercial Finance Limited (“Lloyds”) (each, a “Receivables Finance Agreement” and, collectively, the “Receivables Finance Agreements”), pursuant to which Lloyds agreed to provide Pascall and XCEL with a credit facility to support their UK operations in the aggregate principal amount of £2.75 million ($4.5million based on the exchange rate on December 31, 2012), in each case at an advance rate of 88%, a discount charge of 2.5% above the base rate, and a service fee of 0.2%. The interest and service charge are paid monthly. The Receivables Finance Agreement between Pascall and Lloyds is secured by the All Assets Debenture, dated August 31, 2010, given by Pascall in favor of Lloyds and the Receivables Finance Agreement between XCEL and Lloyds is secured by the All Assets Debenture, dated August 31, 2010, given by XCEL in favor of Lloyds. As of December 31, 2012, and 2011, outstanding borrowings under the Receivable Finance Agreements were $37,000 and $139,000 respectively. The related accounts receivable which had been financed under this arrangement were $42,000 and $158,000 at December 31, 2012 and 2011, respectively.

FACTOCIC

On September 20, 2010, the Company’s French subsidiary, CXR AJ, entered into an accounts receivable financing arrangement (the “CIC Agreement”) with FACTOCIC S.A., a subsidiary of CIC Group (“CIC”), pursuant to which CIC agreed to provide CXR AJ a financing arrangement to support its French operations in the aggregate principal amount of €1.35 million ($1.8 million based on the exchange rate on December 31, 2012) at an advance rate of 90% of presented receivables. The CIC Agreement bears interest at the three month EURIBOR plus 1.4%. As of December 31, 2012, CXR AJ had $964,000 of outstanding borrowings under the CIC Agreement (2011, $329,000). The related accounts receivable which had been financed under this arrangement were $1,070,000 and $364,000 at December 31, 2012 and 2011, respectively.

Bridge Bank

On November 15, 2010, CXR Larus and Bridge Bank, National Association (“Bridge Bank”) executed a Business Financing Agreement dated as of October 22, 2010 (the “Business Financing Agreement”) pursuant to which Bridge Bank agreed to provide to CXR Larus up to $800,000 of advance on trade accounts receivable at an advance rate of 80% with interest at the Prime Rate plus 3.25%. To secure Bridge Bank’s obligations, CXR Larus granted Bridge Bank a continuing security interest in certain collateral. The Company has guaranteed the obligations of CXR Larus under the Business Financing Agreement pursuant to a Guaranty dated as of October 22, 2010, effective November 15, 2010. As of December 31, 2012, CXR Larus had outstanding borrowings of $121,000 under the Business Financing Agreement (2011 $0).The related accounts receivable which had been financed under this arrangement were $151,000 and $0 at December 31, 2012 and 2011, respectively.