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Wells Fargo Asset-Based Revolving Credit Line
12 Months Ended
Dec. 31, 2014
Wells Fargo Asset-Based Revolving Credit Line [Abstract]  
Wells Fargo Asset-Based Revolving Credit Line

Note 4: Wells Fargo Asset-Based Revolving Credit Line

In December 2013, the Company entered into an agreement with Wells Fargo Capital Finance, part of Wells Fargo & Company (“Wells Fargo”), for a five-year secured asset-based revolving credit line in the total amount of up to $70 million maturing in December 2018 (the “Credit Line Agreement”). Loans under the Credit Line Agreement  bear interest at a rate equal to, at lender's option, either the lender's prime rate plus a margin ranging from 0.50% to 1.0% or the LIBOR rate plus a margin ranging from 1.75% to 2.25% per annum.

 

 The outstanding borrowing availability varies from time to time based on the levels of the Company's eligible accounts receivable, eligible equipment, eligible inventories and other terms and conditions described in the Credit Line Agreement. The Credit Line Agreement is secured by the assets of the Company. The Credit Line Agreement contains customary covenants and other terms, as well as customary events of default. If any event of default will occur, Wells Fargo may declare, all borrowings under the facility and foreclose on the collateral due immediately. Furthermore, an event of default under the Credit Line Agreement would result in an increase in the interest rate on any amounts outstanding. The Company's obligations pursuant to the Credit Line Agreement are not guaranteed by Tower. 

 

Borrowing availability under the Credit Line Agreement as of December 31, 2014 was approximately $54 million,  of which approximately $24 million had been utilized as of such date (including approximately $19 million through loans and approximately $5 million letters of credit).

 

As of December 31, 2014, the Company was in compliance with all of the covenants under this facility.