Annual report pursuant to Section 13 and 15(d)

NOTE 11: - LONG TERM DEBT

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NOTE 11: - LONG TERM DEBT
12 Months Ended
Dec. 31, 2014
Disclosure Text Block [Abstract]  
Long-term Debt [Text Block]
NOTE 11:–                      LONG TERM DEBT

a.                 Mortgage Note, Ann Arbor, Michigan:

In July 2011, the Training and Simulation Division purchased a building for $1,500,000 containing both office and lab space.  The building was financed with a $1,100,000 mortgage loan that was obtained through the Company’s primary bank. The note requires a payment (principal and interest) of approximately $8,000 per month at an interest rate of LIBOR plus 375 basis points per annum with a balloon payment due in May 2017. (See Note 8 for the relevant covenants.) In December 2012, FAAC leased surplus space of the purchased building to a non-profit organization for $6,300 per month as office space for a term of 10 years with an option to terminate the lease with a one year prior notice in May 2018.

b.                 Term loans A and B – UEC acquisition:

In April 2014, pursuant to the Amended Credit Agreement, the parties to the original credit agreement agreed to amend the Line of Credit to add two term loans to it: an $18,000,000 61-month senior term loan at an interest rate of 3.75% over LIBOR, and a $4,500,000 61-month B term loan at an interest rate of 5.5% over LIBOR. Arotech is also a guarantor of any sums due pursuant to the Amended and Restated Credit Agreement which are detailed in Note 8 above. Principal payments are made monthly for term loan A and quarterly for term loan B. Interest is paid monthly for both loans.

c.                 Mortgage Note, Auburn, Alabama:

In March 2007, the Company purchased space for the now-discontinued Armor Division in Auburn, Alabama for approximately $1,100,000 pursuant to a seller-financed secured purchase money mortgage. Half the mortgage is payable over ten years in equal monthly installments based on a 20-year amortization of the full principal amount, and the remaining half is payable at the end of ten years in a balloon payment. The note requires a payment (principal and interest) of approximately $9,300 per month at an interest rate of 8.0% per annum. In September 2013, the Company transferred the seller-financed mortgage to Arotech from the discontinued Armor Division. Until February 2015, the Company was leasing this building to the buyer of the Armor Division for approximately $9,300 per month under a three year lease expiring in June 2015.  On February 9, 2015, the Company sold the building to the current tenant for $925,000. On that same date, the existing mortgage and existing building lease were terminated which ended any obligation the Company had for this property.

d.                 Minimum loan payments:

Minimum loan payments
 
December 31,
 
2015
 
$
4,380,730
 
2016
   
4,379,923
 
2017
   
5,908,150
 
2018
   
4,280,267
 
2019
   
2,366,020
 
Thereafter
   
 
Total
 
$
21,315,090