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OREGON
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0-21820
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93-0822509
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive
Agreement.
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The
information set forth in Item 2.03 below regarding new financial
obligations is incorporated by reference into this Item
1.01.
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Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
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On
December 16, 2008, Key Technology, Inc. (the “Company”) completed
borrowing arrangements under a Loan Agreement with Bank of America, N.A.
(“the Lender”). Under the Loan Agreement, the Lender will
provide a revolving line of credit facility to the Company in the maximum
principal amount of $10,000,000 and a credit sub-facility of up to
$6,000,000 for standby letters of credit. The revolving line of
credit facility matures on December 1, 2009. The credit
facility bears interest, at the Company’s option, of either the Lender’s
prime rate minus 1.75% or the British Bankers Association LIBOR Rate (“BBA
LIBOR”) plus 1.0% per annum. The revolving line of credit is
secured by all U.S. accounts receivable, inventory, equipment, and
fixtures. At December 16, 2008, the Company had no outstanding
borrowings under the revolving line of credit facility.
The
Loan Agreement also provides for a 15-year term loan in the amount of $6.4
million. The term loan provides for a mortgage on the Company’s
Avery Street headquarters’ land and building located in Walla Walla,
Washington. The term loan bears interest at the BBA LIBOR rate
plus 1.4% and matures on January 2, 2024. The Company has also
simultaneously entered into an interest rate swap agreement with the
Lender to fix the interest rate at 4.27%, resulting in an initial
quarterly interest expense of approximately $68,000.
The
credit facilities contain covenants which require the maintenance of a
funded debt to EBITDA ratio, a fixed charge coverage ratio and minimum
working capital levels. The Loan Agreement permits capital
expenditures up to a certain level, and contains customary default and
acceleration provisions. The credit facilities also restrict
acquisitions, incurrence of additional indebtedness and lease expenditures
above certain levels without the prior consent of the Lender.
The
Company’s prior credit facility with a domestic lender is expected to be
terminated prior to December 31, 2008.
The
description set forth above is qualified in its entirety by reference to
the Loan Agreement, a copy of which is filed as Exhibit 10.1 hereto and is
incorporated herein by
reference.
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Item
9.01
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Financial
Statements and Exhibits
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||
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(d)
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Exhibits
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10.1
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Loan
Agreement dated December 10, 2008 between Registrant and Bank of America,
N.A.
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KEY
TECHNOLOGY, INC.
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/s/ DAVID M.
CAMP
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David
M. Camp
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President
and Chief Executive Officer
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