. DEBT

Long-term Debt

June 29, 2018,

the Company entered into a new credit agreement (the “Credit Agreement”) with BMO Harris Bank N.A. (“BMO”) that provided for the assignment and assumption of the previously existing loans between the Company and Bank of Montreal and subsequent amendments (the

“2016

Credit Agreement”), into a term loan (the “Term Loan”) and revolving credit loans (each a “Revolving Loan” and, collectively, the “Revolving Loans,” and, together with the Term Loan, the “Loans”). Pursuant to the Credit Agreement, BMO agreed to make the Term Loan to the Company in a principal amount

not

to exceed

$35,000

and the Company

may,

from time to time prior to the maturity date, enter into Revolving Loans in amounts

not

to exceed, in the aggregate,

$50,000

(the “Revolving Credit Commitment”). The Credit Agreement also allows the Company to obtain Letters of Credit from BMO, which if drawn upon by the beneficiary thereof and paid by BMO, would become Revolving Loans.

The Credit Agreement provides that the Company

may

elect that the Term Loan and each Revolving Loan to be either “LIBOR Loans” or “Eurodollar Loans.” LIBOR Loans will bear interest at an annual rate equal to the sum of a specified margin (the “Applicable Margin,” determined by the Company’s total funded debt to EBITDA ratio) plus the Monthly Reset LIBOR Rate from time to time in effect. Eurodollar Loans will bear interest at an annual rate equal to the sum of the Applicable Margin plus the Adjusted LIBOR applicable for such interest period. The Adjusted LIBOR will be calculated as follows:

Adjusted LIBOR =	LIBOR
	1 - Eurodollar Reserve Percentage

In calculating the Eurodollar Rate, the Eurodollar Reserve Percentage is equal to the maximum reserve percentage at which reserves are imposed by the Board of Governors of the Federal Reserve System on “eurocurrency liabilities,” as defined in such Board’s Regulation D.

In addition to the monthly interest payments and any mandatory principal payments required by the Credit Agreement (if applicable), the Company will be responsible for paying a quarterly Revolving Credit Commitment Fee and quarterly Letter of Credit Fees. The Revolving Credit Commitment Fee will be paid at an annual rate equal to the Applicable Margin on the average daily unused portion of the Revolving Credit Commitment. The Letter of Credit Fee shall be paid at the Applicable Margin for Revolving Loans that are Eurodollar Loans on the daily average face amount of Letters of Credit outstanding during the preceding calendar quarter. The Company

may

prepay the Loans (or any

one

of the Loans), subject to certain limitations.

Borrowings under the Credit Agreement are secured by substantially all of the Company’s personal property, including accounts receivable, inventory, machinery and equipment, and intellectual property, and the personal property of Mill-Log Equipment Co., Inc. (“Mill-Log”), a wholly-owned domestic subsidiary of the Company. The Company has also pledged

100%

of its equity interests in certain domestic subsidiaries and

65%

of its equity interests in certain foreign subsidiaries. To effect these security interests, the Company and Mill-Log entered into various amendments and assignment agreements that consent to the assignment to BMO of certain agreements previously entered into between the Company and Mill-Log with Bank of Montreal in connection with the

2016

Credit Agreement. The Company also entered into a Collateral Assignment of Rights under Purchase Agreement for its acquisition of Veth Propulsion Holding, B.V., (“Veth Propulsion”) described in Note R.

Upon the occurrence of an event of default, BMO

may

take the following actions upon written notice to the Company: (

) terminate its remaining obligations under the Credit Agreement; (

) declare all amounts outstanding under the Credit Agreement to be immediately due and payable; and (

) demand the Company to immediately cash collateralize letter of credit obligations in an amount equal to

105%

of the aggregate letter of credit obligations or a greater amount if BMO determines a greater amount is necessary. If such event of default is due to the Company’s bankruptcy, BMO

may

take the

three

actions listed above without notice to the Company.

Long-term debt consisted of the following at

June 30:

	2018		2017
Revolving loan agreement	$	4,787	$	6,285
Other		37		38
Total long-term debt	$	4,824	$	6,323

As of

June 30, 2018,

the balance of

$4,787

represents drawings under the Revolving Loan at an interest rate of

4.25%,

and the Company had

not

drawn on the Term Loan. As of

June 30, 2017,

the balance pertains to revolving loan drawings under the

2016

Credit Agreement.

As of

June 30, 2018,

the Company’s borrowing capacity under the terms of the Credit Agreement was approximately

$53,348,

and the Company had approximately

$45,213

of available borrowings. As of

June 30, 2018,

the interest rate under this arrangement was

4.25%.

July 2, 2018,

in connection with the acquisition of Veth Propulsion, as described in Note R, the Company drew a total of

$60,729

of additional borrowings on the new credit facility, consisting of a

$35,000

Term Loan payable and revolver borrowings of

$25,729.

The aggregate scheduled maturities of outstanding long-term debt obligations in subsequent years are as follows:

Fiscal Year
2019	$	3
2020		3
2021		3
2022		3
2023		4,787
Thereafter		25
	$	4,824

Other lines of credit

The Company has established unsecured lines of credit, which

may

be withdrawn at the option of the banks. Under these arrangements, the Company has unused and available credit lines of

$1,477

with a weighted average interest rate of

5.0%

as of

June 30, 2018,

and

$1,472

with a weighted average interest rate of

4.9%

as of

June 30, 2017.