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Debt
3 Months Ended
Mar. 31, 2014
Debt

7. Debt

 

Note Payable – Related Party

 

Promissory Note

 

In June 2011, CPL, a wholly owned subsidiary of the Company, executed a $25.0 million Promissory Note (the “Promissory Note”) in favor of Allied. Interest accrues on the outstanding principal under the Promissory Note at a rate of the 30 day London Interstate Bank Offered Rate (“LIBOR”) plus 2% per annum. The Promissory Note is set to mature and become due July 2014.  In January 2014, Allied agreed to amend the Promissory Note and extend the maturity date to July 2015 in the event the Company is not successful in obtaining external financing by June 2014. The Company has guaranteed all of CPL’s obligations under the Promissory Note. As of March 31, 2014, $7.1 million was outstanding under the Promissory Note.

 

Allied Transaction

 

Included in the note payable – related party is $85.0 million due to Allied for the remaining cash consideration upon the Second Closing of the Private Placement with PIC.  See Note 3 – Acquisitions, for details relating to the Allied Transaction.

 

Long-Term Note Payable – Related Party

 

As partial consideration in connection with the February 2014 closing of the Allied Transaction, the Company issued the $50.0 million Convertible Subordinated Note in favor of Allied. The principal of the Convertible Subordinated Note was deemed advanced in two equal $25.0 million tranches at each of the First Closing and the Second Closing of the Private Placement. Interest on the Convertible Subordinated Note accrues at a rate per annum of one-month LIBOR plus 5%, payable quarterly in cash until the maturity of the Convertible Subordinated Note five years from the closing of the Allied Transaction. At the election of the holder, the Convertible Subordinated Note will be convertible into shares of the Company’s common stock at an initial conversion price of $0.7164 per share, subject to customary anti-dilution adjustments. The Convertible Subordinated Note is subordinated to the Company’s existing and future senior indebtedness and is subject to acceleration upon an Event of Default (as defined in the Convertible Subordinated Note). The Company may, at its option prepay the note, in whole or in part, at any time, without premium or penalty. The note is subject to mandatory prepayment upon (i) the Company’s issuance of capital stock or incurrence of indebtedness, the proceeds of which the Company does not apply to repayment of senior indebtedness or (ii) any capital markets debt issuance to the extent the net proceeds of such issuance exceed $250.0 million. Allied may assign all or any part of its rights and obligations under the Convertible Subordinated Note to any person upon written notice to the Company.