Note 6 –Long-Term Debt

Long-term debt consists of the following:

	March 31 2017		December 31 2016
In thousands	March 31 2017		December 31 2016
8¼% Limited convertible senior subordinated notes due 2012	$	387	$	387
9½% Subordinated debentures due 2012		220		220
Revolving credit line		1,201		1,805
Term loans		940		872
Term loan – related party		500		500
Total debt		3,248		3,784
Less deferred financing costs		236		243
Net debt		3,012		3,541
Less portion due within one year		2,008		2,984
Net long-term debt	$	1,004	$	557

On July 12, 2016, the Company entered into a Credit and Security Agreement, as subsequently amended on September 8, 2016, February 14, 2017 and March 28, 2017 (collectively, the “Credit Agreement”), with its wholly-owned subsidiaries Trans-Lux Display Corporation, Trans-Lux Midwest Corporation and Trans-Lux Energy Corporation as borrowers (the “Borrowers”) and SCM Specialty Finance Opportunities Fund, L.P. (the “Lender”) as lender. Under the Credit Agreement, the Company is able to borrow up to an aggregate of $4.0 million, which includes (i) up to $3.0 million of a revolving loan, at an interest rate of prime plus 4.00% (8.00% and 7.75% at March 31, 2017 and December 31, 2016, respectively), for an equipment purchase, repayment of certain outstanding obligations, including payments to the Company’s pension plan, the purchase of inventory/product and general working capital purposes, and (ii) a $1.0 million term loan, at an interest rate of prime plus 6.00% (10.00% and 9.75% at March 31, 2017 and December 31, 2016, respectively), for the purchase of equipment. The availability under the revolving loan is calculated based on certain percentages of eligible receivables and inventory. Due to limited availability at the inception of the Credit Agreement, the Company capped the revolving loan at $2.0 million, while reserving the option to remove the cap when needed. During 2017, the Company paid down $604,000 of the revolving loan and borrowed the remaining $600,000 on the term loan, of which $1.2 million and $940,000, respectively, were outstanding as of March 31, 2017. Interest under the Credit Agreement is payable monthly in arrears. The Credit Agreement also requires the payment of certain fees, including, but not limited to a facility fee, an unused line fee and a collateral management fee.

The Credit Agreement contains financial and other covenant requirements, including, but not limited to, financial covenants that require the Borrowers to maintain a fixed charge coverage ratio of at least 1.1 to 1.0 and a loan turnover rate of no more than 35 days (or 45 days for certain periods). The Credit Agreement allows the Company to continue to pay dividends on all its Series B Convertible Preferred Stock (the “Preferred Stock”) or any other new preferred stock, if any, which dividends will be excluded as fixed charges until January 12, 2018. As of March 31, 2017, the Company was in compliance with all financial covenants except the fixed charge coverage ratio, for which the Company’s ratio was 0.9 to 1.0 for the testing period; the non-compliance was waived by the Lender.

The Credit Agreement is secured by substantially all of the Borrowers’ assets and expires July 12, 2019, unless earlier terminated by the parties in accordance with the termination provisions of the Credit Agreement. The foregoing description of the Credit Agreement is included to provide information regarding its terms. It does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Credit Agreement.

The Company has outstanding $387,000 of Notes which are no longer convertible into common shares. The Notes matured as of March 1, 2012 and are currently in default. As of March 31, 2017 and December 31, 2016, the Company had accrued $242,000 and $234,000, respectively, of interest related to the Notes, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets. The trustee, by notice to the Company, or the holders of 25% of the principal amount of the Notes outstanding, by notice to the Company and the trustee, may declare the outstanding principal plus interest due and payable immediately.

The Company has outstanding $220,000 of Debentures. The Debentures matured as of December 1, 2012 and are currently in default. As of March 31, 2017 and December 31, 2016, the Company had accrued $153,000 and $148,000, respectively, of interest related to the Debentures, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets. The trustee, by notice to the Company, or the holders of 25% of the principal amount of the Debentures outstanding, by notice to the Company and the trustee, may declare the outstanding principal plus interest due and payable immediately.

On April 27, 2016, the Company received a $500,000 loan from Carlisle Investments Inc. (“Carlisle”) at a fixed interest rate of 12.00%, which is due to mature on April 27, 2019 with a bullet payment of all principal due at such time. Interest is payable monthly. Mr. Elser, a director of the Company, exercises voting and dispositive power as investment manager of Carlisle.

On September 8, 2016, the Company entered into a credit agreement with BFI Capital Fund II, LLC (the “BFI Agreement”), pursuant to which the Company could borrow up to $750,000 at a fixed rate of interest of 10.00%, with a maturity date of March 1, 2017. As of December 31, 2016, the outstanding balance was $492,000. On March 1, 2017, the Company repaid the loan in full and terminated the BFI Agreement.