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Subsequent Event

3 Months Ended

Mar. 31, 2013

(10)

Subsequent Event

On April 3, 2013, the Company amended its first lien credit agreement. The amendment waived certain restrictions to permit the prepayment of the $25.0 million second lien facility in full with $20.0 million of additional term loan borrowings and $2.0 million of additional revolving credit facility borrowings from the first lien facility and $3.0 million of cash on hand. The amendment also modified the interest rate margins on the term loan. In connection with the amended credit agreement, the Company expects to record a loss on extinguishment of long-term debt of $1.3 million during the second quarter of 2013.

The amended first lien facility consists of a term loan with a remaining balance of $105.7 million and a revolving credit facility with a maximum commitment of $20.0 million. As of April 3, 2013, the Company had $13.0 million in remaining commitments available under its revolving credit facility. At the Company’s election, the first lien facility may bear interest at either (i) the adjusted LIBOR rate, as defined in the first lien credit agreement, plus a margin ranging from 3.5% to 5.0% that is determined by the Company’s consolidated total debt ratio, as defined in the first lien credit agreement or (ii) the base rate, as defined in the first lien credit agreement, plus a margin ranging from 2.5% to 4.0% that is determined by the Company’s consolidated total debt ratio. Interest on adjusted LIBOR rate loans is payable at the end of each applicable interest period and, for those interest periods with a duration in excess of three months, the three month anniversary of the beginning of such interest period. Interest on base rate loans is payable quarterly in arrears.

The amended first lien facility is secured by a first-priority lien on substantially all of the Company’s assets and the assets of substantially all of its subsidiaries and is guaranteed jointly and severally by the Company and substantially all of its subsidiaries. The guarantees were issued to the Company’s lenders for repayment of the outstanding balance of the first lien facility. If the Company defaults under the terms of the first lien credit agreement, the Company and its applicable subsidiaries may be required to perform under their guarantees. As of April 3, 2013, the maximum amount of undiscounted payments the Company and its applicable subsidiaries would have had to make in the event of default was $112.7 million. The guarantees for the first lien facility expire on August 9, 2017.

The aggregate scheduled principal repayments of the amended credit facility for the remainder of 2013 and the next four years are as follows:


	Term loan		Revolving credit facility		Total
2013	$	3,250,000	$	—	$	3,250,000
2014		6,875,000		—		6,875,000
2015		8,250,000		—		8,250,000
2016		9,625,000		—		9,625,000
2017		77,750,000		7,000,000		84,750,000

Total	$	105,750,000	$	7,000,000	$	112,750,000