Note 8 – Debt and Subsequent Event

On March 30, 2011, we and Amerigon Europe entered into a new credit agreement with a syndicate of banks led by Bank of America (the "US Bank of America credit facility") and W.E.T. and W.E.T. Automotive Systems Ltd., a Canadian corporation wholly owned by W.E.T., entered into a credit facility with the same syndicate of banks (the "W.E.T. Bank of America credit facility"). We cancelled our then existing credit facility with Comerica Bank.

The US Bank of America credit facility provides two term notes (referred to as the "US Term Note and Europe Term Note") and a $25,000 revolving line of credit note ("US Revolving Note"). The W.E.T. Bank of America credit facility provides W.E.T. with a €30,000 term note ("W.E.T. Term Note") and a €10,000 revolving line of credit note ("W.E.T. Revolving Note").

We and W.E.T. borrowed the following amounts on each note:


Borrowing proceeds on March 31, 2011	Currency Borrowed		US Dollars
US Term Note	$	35,000	$	35,000
Europe Term Note ⁽¹⁾	€	23,426		33,000
US Revolving Note	$	19,011		19,011
Borrowing proceeds on May 31, 2011
W.E.T. Term Note ⁽¹⁾	€	30,000		42,072
W.E.T. Revolving Note	€	—		—

Total borrowed			$	129,083

(1)	The Europe Term Note and the W.E.T. Term Note were drawn and are denominated in the European Euro.

Proceeds of the US Term Note, Europe Term Note and the US Revolving Note were used along with existing cash reserves and proceeds from the sale of the Company's Series C Convertible Preferred Stock to fund an escrow account sufficient to acquire 100% of the outstanding stock of W.E.T. in accordance with a tender offer. The tender offer resulted in our acquiring only 76.3% of W.E.T. The excess amount held in escrow, totaling approximately $49,700, was used to repay a portion of the Europe Term Note and a portion of the then outstanding US Revolving Note of credit totaling €19,948 and $21,767, respectively.

The W.E.T. Term Note proceeds were used to repay then existing senior indebtedness.

In addition to the initial borrowing under the US Revolving Note, we made $8,000 in additional borrowings and $27,011 in repayments. No amounts were outstanding under either the US Revolving Note or the W.E.T. Revolving Note as of September 30, 2011 and $25,000 and €10,000 were available under each note, respectively.

The Company incurred $4,184 in expenses associated with the US Bank of America credit facility which has been recorded as deferred financing costs. A portion of these expenses related to that portion of the European Term Note that was repaid, totaling $967, has been charged to expense as debt retirement expense. The remaining balance will be amortized over the life of the credit agreement using the effective interest method. The US Bank of America credit facility expires on March 30, 2016.

The US Term Note and Europe Term Note are subject to quarterly principal payments, with total principal amortization of 10% of the original principal amount in the first year and amortization of 12.5%, 15%, 17.5% and 20% of the original principal amount during years two, three, four and five, respectively with all remaining amounts owing under each term facility due and payable in full at the term loan maturity date. The W.E.T. Term Note is subject to quarterly principal payments totaling 20% annually. Principal outstanding under both the US Bank of America credit facility and W.E.T. Bank of America credit facility will be due and payable in full on March 30, 2016. Interest is payable at least quarterly. The Company has the option to elect interest rates based on either a Eurocurrency (LIBOR or EUIBOR) rate ("Eurocurrency Rate Loans") (0.20% – 1.80% at September 30, 2011) or a base rate ("Base Rate Loans") plus a margin ("Applicable Rate") which, after an initial period will vary based on the Consolidated Leverage Ratio of the Company, as defined by the US and W.E.T. Bank of America credit agreements. This initial period will end during the fourth quarter of 2011. The base rate is equal to the highest of the Federal Funds Rate (0.10% at September 30, 2011) plus 0.5%, Bank of America's prime rate (3.25% at September 30, 2011), or a one month Eurocurrency rate plus 1.0%. The Applicable Rate during the initial period is 3.25% for Eurocurrency Rate Loans and 2.25% for Base Rate Loans.

The Company must maintain certain financial ratios including a minimum Consolidated Fixed Charge Coverage Ratio and a maximum Leverage Ratio as defined by the Bank of America credit agreement. The loans are secured by all of the Company's assets.

As of September 30, 2011, we were in compliance with all terms as outlined in the credit agreement for each of the US Bank of America credit facility and the W.E.T. Bank of America credit facility.

The following table summarizes the Company's debt at September 30, 2011.


	Interest Rate			Principal Balance
US Term Note		3.52	%	$	34,125
Europe Term Note		4.80	%		4,609
US Revolving Note		—			—
W.E.T. Term Note		4.38	%		38,201
W.E.T. Revolving Note		—			—
Capital Leases		5.50	%		4,390

Total debt					81,325
Current portion					(15,277	)

Long-term debt, less current maturities				$	66,048

We had no outstanding debt at December 31, 2010.

Subsequent Event

On August 16, 2011, W.E.T. held its annual general assembly meeting during which the W.E.T. shareholders approved the adoption of a Domination and Profit and Loss Transfer Agreement ("DPLTA") which is expected to be registered and effective during the first quarter of 2012. Under the terms of the DPLTA, the minority shareholders of W.E.T. will be guaranteed a recurring, annual payment (the "Guaranteed Compensation") of EUR 3.71 per share of W.E.T. held, subject to statutory taxes and deductions, resulting in a net payment of EUR 3.17 per share beginning in 2012; however, the minority shareholders of W.E.T. can elect to forego the Guaranteed Compensation and instead tender their shares to Amerigon Europe for a one-time cash payment of EUR 44.95 per share after the agreement is registered. If all minority shareholders of W.E.T. tendered their shares, the total payment obligation of Amerigon Europe would be approximately EUR 33,139,000.

In order to provide financing for the potential tender offer, the Company entered into an amendment to the US Bank of America credit facility, on October 28, 2011. The amendment provides for a $45,000 term loan facility for Amerigon Europe to replace Amerigon Europe's existing Europe Term Note. Of such available amount, approximately $4,609 will be drawn upon to pay the balance of the Europe Term Note that was outstanding on September 30, 2011 resulting in existing availability under the new Amerigon Europe term loan facility on the date of execution of approximately $40,391. Amerigon Europe is permitted to access this additional term loan financing in one or more draws through no later than January 1, 2013, and the proceeds of such draws may only be used by Amerigon Europe to fund the potential tender of shares of W.E.T. in connection with the DPLTA.