Debt and Other Financing

On March 21, 2016, we and our subsidiaries entered into the Prior Credit Agreement with Crystal Financial SPV LLC. In connection with the Prior Credit Agreement, we and our subsidiaries also entered into a security agreement, a pledge and security agreement, an intellectual property security agreement and other related documents. The Prior Credit Agreement provided for a $20.0 million term loan, which was fully funded at closing, with a maturity date of March 21, 2019 unless the facility is otherwise terminated pursuant to the terms of the Prior Credit Agreement. We invested $15.0 million of the net proceeds at closing in our i4c subsidiary and for general corporate purposes. The remaining net proceeds were used for general corporate purposes of our other businesses. The Prior Credit Agreement allowed for the orderly wind down of our Pet Health Monitoring segment and the exit of our Bail Bonds Industry Solutions segment and the Habits at Work businesses.

Amounts borrowed under the Prior Credit Agreement bear interest at the greater of LIBOR plus 10% per annum or 10.5% per annum. Interest is payable monthly. The aggregate principal amount of the term loans outstanding must be repaid quarterly starting September 30, 2017 and on the last day of each fiscal quarter thereafter in the quarterly amount of $1.4 million. Certain income tax refunds specified in the Prior Credit Agreement, if agreed upon subsequent to June 30, 2017, must be used to repay principal in the quarter in which we receive them and will be applied to the scheduled quarterly principal payment for that quarter. The Prior Credit Agreement also requires the prepayment of the aggregate principal amount outstanding in an amount equal to 50% of our excess cash flow (as defined in the Prior Credit Agreement) for each fiscal year commencing with the fiscal year ending December 31, 2017 and continuing thereafter. Certain other events defined in the Prior Credit Agreement require prepayment of the aggregate principal amount of the term loan, including all or a portion of proceeds received from asset dispositions (except for proceeds from the sale of assets in our i4c subsidiary of up to $2.2 million), casualty events, extraordinary receipts, and equity issuances. In addition, we are permitted to invest up to an additional $2.2 million in our i4c subsidiary to complete the wind-down, which is expected to be completed by June 30, 2017 (or such later date as the Administrative Agent may permit). Once amounts borrowed have been paid or prepaid, they may not be reborrowed.

The Prior Credit Agreement contains certain customary covenants, including among other things covenants that limit or restrict the following: the incurrence of liens; the making of investments including a prohibition of any capital contributions to our subsidiary i4c other than from the proceeds of the term loan made on the closing date and fair and reasonable allocation of overhead and administrative expenses; the incurrence of certain indebtedness; mergers, dissolutions, liquidations, or consolidations; acquisitions (other than certain permitted acquisitions); sales of substantially all of our or any of our subsidiaries’ assets, except for the exiting of the aforementioned businesses; the declaration of certain dividends or distributions; transactions with affiliates (other than parties to the Prior Credit Agreement) other than on fair and reasonable terms; and the formation or acquisition of any direct or indirect domestic or first-tier foreign subsidiary unless such subsidiary becomes guarantor and enter into certain security documents.

The Prior Credit Agreement requires us to maintain at all times a minimum cash on hand amount, as defined in the Prior Credit Agreement, of at least 25% of the total amount outstanding under the term loan until June 30, 2017 and 40% of the total amount outstanding under the term loan subsequent to June 30, 2017. The Prior Credit Agreement also requires us to maintain on a quarterly basis a maximum churn (defined as (i) the sum of subscribers who have discontinued the provision of services provided under certain of our customer’s agreements as of the end of any fiscal month divided by (ii) the aggregate total number of all active subscribers under that certain customer agreement as of the first day of such fiscal month, expressed as a percentage) of 1.875%. Further, if our rights to provide services to subscribers under our agreements with Bank of America cease as a result of Bank of America transferring the provision of such services or using a different service provider and such cessation results in greater than a 20% decline in our consolidated revenue, a covenant violation exists under the Prior Credit Agreement. We are also required to maintain compliance on a quarterly basis with specified minimum consolidated EBITDA (as defined in the Prior Credit Agreement and adjusted for certain non-cash, non-recurring and other items, and up to $4.3 million of non-recurring charges incurred in the wind-down events). As of March 31, 2017, we were in compliance with all such covenants.

As of March 31, 2017, $13.4 million was outstanding under the Prior Credit Agreement, which was presented net of unamortized debt issuance costs of $1.0 million in our condensed consolidated balance sheets in accordance with U.S. GAAP. As of March 31, 2017, $3.6 million, net, was classified as short-term, which included the minimum maturities as well as our estimated required prepayments, as described above.

Subsequent to March 31, 2017, we refinanced our existing senior secured indebtedness under the Prior Credit Agreement with a new $20.0 million term loan facility, which was fully funded at closing, with PEAK6 Investments, L.P. ("New Credit Agreement"). Under the New Credit Agreement, minimum required maturities are as follows (in thousands):



For the remaining nine months ending December 31, 2017	$	—
For the years ending December 31:
2018	—
2019	1,250
2020	5,000
2021	13,750
Total outstanding	$	20,000

For additional information on the New Credit Agreement, please see Note 21.