Voluntary prepayments of amounts outstanding under the WF Term Loans are permitted at any time without premium or penalty.
To the extent applicable, LIBOR breakage fees may be charged in connection with any prepayment.
FGI Equipment Finance LLC Term Loan
On October 20, 2020, the Company entered into a Master Security Agreement and a Promissory Note, among FGI Equipment
Finance LLC, (“FGI”) the Company as debtor, and each of Core Composites Corporation, a subsidiary of the Company organized
in Delaware, and CC HPM, S. de R.L. de C.V., a subsidiary of the Company organized in Mexico, as guarantors, a term loan in
the principal amount of $13,200,000 (the “FGI Term Loan”).
On October 27, 2020, FGI advanced to
the Company $
12,000,000
which proceeds were used to pay off the Company’s existing
outstanding indebtedness with KeyBank National Association, and
to pay certain
fees and expenses
associated with the
transactions, and $
1,200,000
which proceeds were used
to fund a
security
deposit to be held
by FGI.
Interest on the FGI Term Loan is a fixed rate of 8.25% and is payable monthly.
that the security deposit of $
1,200,000
is located in prepaid expenses and other current assets on the balance sheet.
Following the advance of funds by FGI, the FGI Term Loans are to be repaid in monthly principal and interest installments of
$117,000 for the first 12 months, $246,000 for the subsequent 59 months and $1,446,000 due on October 31, 2026, subject to
certain optional and mandatory repayment terms.
The Company’s
obligations under the Master Security
Agreement are secured
by certain machinery and equipment of the guarantors located in Mexico, and real property of Core composites de Mexico, S. de
R.L. de C.V., also a subsidiary of the Company organized in Mexico,
located in Matamoros, Mexico.
The Company may prepay in full or in part (but not less than the amount equal to 20% of the original principal amount of the
loan) outstanding amounts before they are due on any scheduled Payment Date upon at least thirty (30) days’ prior written notice.
The Company will pay a “Prepayment Fee” in an amount equal to an additional sum equal to the following percentage of the
principal amount to be prepaid for prepayments occurring in the indicated period: four percent (4.0%) (for prepayments occurring
prior to the first anniversary of the Loan); three percent (3.0%) (for prepayments occurring on and thereafter and prior to the
second anniversary of the Loan); two percent (2.0%) (for prepayments occurring on and thereafter and prior to the third
anniversary of the Loan ); and one percent (1.0%) (for prepayments occurring any time thereafter).
Leaf Capital Funding
On April 24, 2020 the Company entered into a finance agreement with Leaf Capital Funding of $175,000 for equipment. The
parties agreed to a fixed interest rate of 5.5% and a term of 60 months.
The amount
outstanding at
December 31,
2020 was
$
152,000
120,000
was classified as long-term debt.
Revolving Loans
Wells Fargo Revolving Loan
On October 27, 2020, the Company entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National
Association, as administrative agent, lead arranger and book runner, and the lenders party thereto (the “Lenders”). Pursuant to
the terms of the Credit Agreement, the Lenders made available to the Company a revolving loan commitment (the “WF Revolving
Loan”) of $25,000,000 ($8,745,000 of which was advanced to the Company on October 28, 2020).
Revolving Loan were used to pay off the Company’s existing outstanding indebtedness with KeyBank National Association, and
to pay certain fees and expenses associated with the financing.
The Credit Agreement also makes available to the Company an incremental revolving commitment in the maximum amount of
$10,000,000 at the Company’s option at any time during the three (3) year period following the closing.
The borrowing availability under the line of credit is the lesser of (a) the loan commitment of $25,000,000 or (b) the sum of 90%
of eligible investment grade accounts receivable, 85% of non-investment grade eligible accounts receivable and 65% of eligible
inventory.
At the option of the Company, the WF Revolving Loan bears interest at a per annum rate equal to LIBOR plus a margin of 200
to 250 basis points or base rate plus a margin of 100 to 150 basis points, with the margin rate being based on the excess availability