Notes Payable to Bank and Long-Term Debt

3 Months Ended

Mar. 31, 2014

Notes Payable to Bank and Long-Term Debt [Abstract]

Notes Payable to Bank and Long-Term Debt

E.Note Payable to Bank

	March 31, 2014		December 31, 2013
Note Payable:	(in thousands)
MtronPTI revolving loan with JPMorgan Chase Bank, N.A. ("Chase") due September 30, 2014. The loan bears interest at the greater of Chase's prime rate or the one-month LIBOR rate plus 2.50% per annum (3.25% at March 31, 2014), which is due and payable monthly.	$	1,395	$	1,181

On June 30, 2011, MtronPTI entered into a loan agreement with Chase, which was amended on June 28, 2012, September 28, 2012, June 30, 2013 and September 19, 2013 (the "Chase Loan Agreement"). The Chase Loan Agreement provides for a revolving line of credit in the amount of $1,500,000, to be used solely for working capital needs (the "Chase Revolving Loan") and matures on September 30, 2014. The Chase Loan Agreement also provides that it may be extended for up to three 12-month renewal terms starting on June 30, 2014, upon written request by MtronPTI and approval by Chase. On May 5, 2014, Chase approved the extension of the maturity date under the Chase Loan Agreement from June 30, 2014 to September 30, 2014. The total borrowing capacity on the Chase Loan Agreement is subject to certain limitations on the borrowing base as defined in the Chase Loan Agreement.

At March 31, 2014, MtronPTI had approximately $1,395,000 outstanding under the Chase Revolving Loan and available borrowing capacity of approximately $105,000.

All outstanding obligations of MtronPTI under the Chase Loan Agreement are collateralized by a first priority security interest in all of the assets of MtronPTI, excluding real property. Additionally, in connection with the Chase Loan Agreement, PTI entered into a separate agreement with Chase providing that PTI would not mortgage or otherwise encumber certain real property it owns in Florida while any credit facility is outstanding under the Chase Loan Agreement.

As additional security for MtronPTI's obligations under the Chase Loan Agreement, MtronPTI's obligations under the Chase Loan Agreement are fully collateralized in cash.  Accordingly, Chase retains a security interest in a separate account holding $1,500,000 of MtronPTI cash deposits pursuant to an Assignment of Deposit agreement.  The amount of the cash collateral deposit with Chase is recorded as restricted cash in the accompanying condensed consolidated balance sheets as of March 31, 2014 and December 31, 2013.  The related Assignment of Deposit agreement restricts MtronPTI's ability to withdraw any portion of the deposit and does not allow MtronPTI to assign the deposit or any part thereof.

The Chase Loan Agreement also contains a variety of affirmative and negative covenants, including, but not limited to, a financial covenant that MtronPTI maintain tangible net worth not less than $6,000,000. As of March 31, 2014, MtronPTI was not in compliance with the tangible net worth covenant under the Chase Loan Agreement. Based on the definition of tangible net worth under the Chase Loan Agreement, MtronPTI had a tangible net worth of $3,992,000 as of March 31, 2014, as compared to the minimum requirement of $6,000,000. Chase has waived non-compliance with this covenant as of March 31, 2014, in accordance with the terms of a letter agreement dated May 5, 2014.