Long-Term Debt

Credit Facility with Silicon Valley Bank

We have a secured revolving loan facility and term loan facility of up to $30.0 million with Silicon Valley Bank (“SVB”), which, as amended in March 2015, expires May 23, 2017 (the “Loan Agreement”). Revolving loans may be converted into term loans under the facility, with all outstanding term loans reducing the availability under the revolving loan facility. Interest is accrued, at our option, at (i) an adjusted LIBOR rate, plus a margin of 2.0% or 2.25%, or (ii) the prime rate, plus a margin of 0.25% or 0.50%, in each case with such margin determined based on our adjusted quick ratio.

Repayment on the term loan began July 1, 2012, and is payable in 16 quarterly installments. Each of the installment payments is $0.6 million, plus accrued interest.

The adjusted quick ratio is a ratio of our unrestricted cash and cash equivalents to our current liabilities minus the current portion of our deferred revenue. Interest on the revolving loans and the term loans is due and payable in arrears at the end of an interest period of 30, 60 or 90 days, as selected by us, for loans that bear interest based on the adjusted LIBOR rate, or quarterly for loans that bear interest based on the prime rate. Obligations under the loan facility are secured by a security interest on substantially all of our assets, excluding intellectual property.

The Loan Agreement contains affirmative and negative covenants subject to certain exceptions. We must also comply with financial covenants under the Loan Agreement, including:


(i)	a minimum quick ratio;


(ii)	for the period from the closing through December 31, 2013, a minimum adjusted EBITDA; and


(iii)	beginning with the fiscal quarter ending March 31, 2014, a minimum fixed charge coverage ratio and a maximum leverage ratio.

On February 18, 2014, we entered into a Second Loan Modification Agreement with SVB to modify the minimum adjusted EBITDA financial covenant for periods occurring after December 31, 2013. Additionally, the Second Loan Modification Agreement removed the fixed charge coverage ratio and maximum leverage ratio financial covenants, which were set to begin in periods occurring after December 31, 2013.

On March 31, 2015, we entered into a Third Loan Modification Agreement with SVB to modify the adjusted EBITDA financial covenant for periods ending after December 31, 2014 and to amend the expiration date of the Loan Agreement.

The Loan Agreement also restricts our ability to pay dividends by requiring the written consent of SVB to pay cash dividends to our stockholders.

The Loan Agreement contains events of default including, among others, payment defaults, breaches of covenants, bankruptcy and insolvency events, cross defaults with certain material indebtedness, judgment defaults, and breaches of representations and warranties. Upon an event of default, all or a portion of the outstanding obligations may be declared to be immediately due and payable. During the existence of an event of default, interest on the obligations under the Loan Agreement could be increased by 5.0% per annum.

At December 31, 2015, we had $0.7 million of outstanding letters of credit, no revolving loans outstanding under the Loan Agreement, $3.6 million of term loans outstanding at an interest rate of 2.48%, $30.0 million was available under the revolving loan facility and we were in compliance with all covenants.

Summary

Our long-term debt is summarized as follows (in thousands):



	December 31,
	2015			2014
Silicon Valley Bank loans	$	3,600		$	6,000
Less current portion	(2,400		)	(2,400		)
	$	1,200		$	3,600

Annual maturities of long-term debt as of December 31, 2015 were as follows (in thousands):




2016	$	2,400
2017	1,200
	$	3,600