Note 6 –Long-Term Debt

Long-term debt consists of the following:

	September 30, 2017		December 31, 2016
In thousands	September 30, 2017		December 31, 2016
8¼% Limited convertible senior subordinated notes due 2012	$	387	$	387
9½% Subordinated debentures due 2012		220		220
Revolving credit line		1,507		1,805
Term loans		1,590		872
Term loan – related party		500		500
Total debt		4,204		3,784
Less deferred financing costs		184		243
Net debt		4,020		3,541
Less portion due within one year		3,064		2,984
Net long-term debt	$	956	$	557

On July 12, 2016, the Company entered into a credit and security agreement, as subsequently amended on September 8, 2016, February 14, 2017, March 28, 2017, July 28, 2017, October 10, 2017 and November 9, 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 and SCM Specialty Finance Opportunities Fund, L.P. (“SCM”) 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% (8.25% and 7.75% at September 30, 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% (10.25% and 9.75% at September 30, 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 made net payments of $298,000 of the revolving loan and borrowed the remaining $600,000 on the term loan, of which $1.5 million and $840,000, respectively, were outstanding as of September 30, 2017, and $1.8 million and $380,000, respectively, were outstanding as of December 31, 2016. 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 Company to maintain a fixed charge coverage ratio, as amended by the Sixth Amendment to the Credit Agreement dated November 9, 2017, of at least 1.0 to 1.0 starting with their August 31, 2017 financial statements 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. As of September 30, 2017 and as a result of the Sixth Amendment to the Credit Agreement, the Company was in compliance with all financial covenants.

The Credit Agreement is secured by substantially all of the Company’s assets and expires on 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 Stock. The Notes matured as of March 1, 2012 and are currently in default. As of September 30, 2017 and December 31, 2016, the Company accrued $258,000 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 September 30, 2017 and December 31, 2016, the Company had accrued $164,000 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 July 28, 2017, the Company entered into a credit agreement with Mr. Penner, pursuant to which the Company could borrow up to $1.5 million at a loan fee of $35,000, with a maturity date of August 19, 2017 (the “Penner Agreement”). As of September 30, 2017, the Company had borrowed the entire amount and had repaid $750,000, leaving the remaining $750,000 outstanding. Subsequent to September 30, 2017, the Company repaid the balance of the loan and satisfied the agreement in full.

In connection with the Penner Agreement, the Company entered into a Fourth Amendment to the Credit Agreement dated as of July 28, 2017 with SCM, to provide for certain adjustments to the Credit Agreement to allow for the Company’s entry into the Penner Agreement and the security interest granted to Mr. Penner thereunder. The Company, Mr. Penner and SCM also entered into a Mutual Lien Intercreditor Agreement, dated as of July 28, 2017, setting forth SCM’s senior lien position to all collateral of the Company, except for the purchase order securing the Penner Agreement, and the rights of each of SCM and Mr. Penner with respect to the collateral of the Company.

On November 6, 2017, the Company entered into a second credit agreement with Carlisle, pursuant to which the Company can borrow up to $500,000 at a fixed interest rate of 12.00%, which is due to mature on December 10, 2017 (the “Second Carlisle Agreement”). As of November 9, 2017, the entire amount was outstanding. Under the Second Carlisle Agreement, the Company granted a security interest to Carlisle in accounts receivable, materials and intangibles relating to a certain purchase order for equipment issued in April 2017.

In connection with the Carlisle Agreement, the Company entered into a Fifth Amendment to the Credit Agreement dated as of October 10, 2017 with SCM, to provide for certain adjustments to the Credit Agreement to allow for the Company’s entry into the Second Carlisle Agreement and the security interest granted to Carlisle thereunder. The Company, Carlisle and SCM also entered into a Mutual Lien Intercreditor Agreement, dated as of October 10, 2017, setting forth SCM’s senior lien position to all collateral of the Company, except for the purchase order securing the Second Carlisle Agreement, and the rights of each of SCM and Carlisle with respect to the collateral of the Company.

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.