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Credit Facility and Accrued Interest Expense
6 Months Ended
Jun. 30, 2013
Credit Facility and Accrued Interest Expense  
Credit Facility and Accrued Interest Expense

7. Credit Facility and Accrued Interest Expense

 

On February 7, 2010, the Company amended its then existing loan and security agreement with Silicon Valley Bank (“SVB”). As amended, the loan and security agreement provided for a $7,000 revolving working capital credit facility. The credit facility includes customary conditions to borrowing, covenants and events of default. The credit facility also contains a financial covenant requiring that the ratio of current assets to current liabilities (excluding deferred revenue) be at least 1.25 to 1. As collateral for its obligations under the credit facility, the Company granted a first priority security interest to SVB in all assets of the Company other than intellectual property. The Company has agreed not to pledge its intellectual property as collateral without SVB’s prior written consent.

 

In February 2011, the credit facility was amended to, among other things, revise the interest rate to be equal to SVB’s prime rate plus 1.0% and provide for a fee of 0.20% for any unused portion of the revolving credit facility. Such fee is payable quarterly but no fee is charged for a particular quarter if the average principal amount of borrowings during such quarter is more than $10,000.

 

On December 31, 2011, the Company expanded the borrowing capacity under the credit facility to the lesser of $25,000 and a borrowing base equal to 80% of eligible accounts receivable.

 

On March 8, 2012, the credit facility was amended to, among other things, revise the interest rate to SVB’s prime rate plus 0.5% and provide for a termination date of December 30, 2014. The Company had $6,000 aggregate principal amount of borrowings outstanding under the facility and was in compliance with all covenants as of each December 31, 2012 and June 30, 2013.

 

On July 30, 2013, the Company repaid $6,033, in principal borrowings and accrued, but unpaid interest expenses (refer to note 15).