DEBT



	June 30, 2014		September 30, 2013
	(in thousands)
Term A Loan, bearing interest at 9.0% and 10.5% as of June 30, 2014 and September 30, 2013, respectively, due August 2016	$	7,783	$	7,919
Term B Loan, convertible, bearing interest at 9.0% and 8.0% as of June 30, 2014 and September 30, 2013, respectively, due August 2016	8,545		8,444
Other	—		3
Long-term debt, net	16,328		16,366
2014 Debentures, convertible, 8.0% fixed-rate notes, due October 2014	32,375		44,384
Total debt, net	$	48,703	$	60,750

Additional information about our debt is as follows:



	Term A Loan			Term B Loan			2014 Debentures
	(in thousands)
Principal	$	7,857		$	9,342		$	32,843
Unamortized debt discount	(74		)	(797		)	(468		)
Carrying value	$	7,783		$	8,545		$	32,375

Interest payable terms	Quarterly, in arrears			Quarterly, in arrears			Semi-annually, in arrears
Annual effective interest rate	9.5		%	13.5		%	12.2		%
Conversion rate per common share	n/a			$	4.95		$	4.50

Our current debt is comprised of our convertible subordinated debentures (“2014 Debentures”). Our long-term debt is comprised of our senior term loans (the “Term A Loan” and “Term B Loan”, which we collectively refer to as our “Term A and B Loans”).

The credit agreements for the Term A and B Loans and 2014 Debentures provide that we must repurchase, at the option of the holders, indebtedness at its principal amounts plus accrued and unpaid interest upon the occurrence of a fundamental change involving us, as described in the agreements. Upon the occurrence of a fundamental change involving us, the holders of the 2014 Debentures and the Term B Loan may be entitled to receive a “make-whole premium” if they convert their 2014 Debentures or Term B Loan into common stock, payable in additional shares of common stock, if the trading price of our common stock is between $3.20 and $6.00 per share. During the three months ended June 30, 2014, cash of $0.7 million was restricted for payment of the 2014 Debentures following the sale of assets under the terms of the credit agreement.

On November 5, 2013, we amended the credit agreement for the Term A and B Loans (the “Amendment”). The Amendment extends the maturity dates of our outstanding Term A Loan and Term B Loan from February 4, 2014 and October 30, 2014, respectively, to August 31, 2016, and also provides that the Term A and B Loans will each bear interest in cash at 9.0% per annum payable quarterly in arrears. The Amendment provides us with a right to optionally prepay the Term A and B Loans in whole or in part, at any time and from time-to-time, subject to the payment of a prepayment fee. The prepayment fee is 5% of the aggregate principal amount repaid for prepayments made prior to October 30, 2014, 3% for prepayments made on or after October 30, 2014 but prior to October 30, 2015, and 2% for prepayments made on or after October 30, 2015. The credit agreement for the Term A and B Loans continues to require that we prepay the Term A and B Loans upon the occurrence of certain prepayment events, but the Amendment provides us with greater flexibility to sell assets and use the resulting proceeds for purposes other than repaying the Term A and B Loans after repayment of our 2014 Debentures.

The Amendment provides us with the right, so long as no event of default exists under the credit agreement for the Term A and B Loans, to purchase, repay, redeem, or defease any or all of the 2014 Debentures. In addition, the Amendment requires us to maintain an unrestricted cash balance of $8.0 million and achieve minimum quarterly revenues of $10.0 million. We were in compliance with all covenants as of June 30, 2014.

The credit agreement for the Term A and B Loans continues to provide the lenders with the right to convert the Term B Loan into shares of our common stock at a conversion price of $4.95 per share through October 30, 2014. After that date, the lenders will not have the right to convert the Term B Loan into common stock.

In connection with the Amendment, we paid the lenders a consent fee of $0.3 million which was recorded as a debt discount and will be amortized over the remaining term of the Term A and B Loans. Additionally, in connection with the Amendment we repurchased $13.7 million principal amount of our 2014 Debentures at 107% of the principal amount thereof plus accrued interest, which eliminated the potential issuance of approximately 3.0 million dilutive common shares. We recorded a loss on extinguishment of debt in the amount of $1.6 million related to the repurchase of the 2014 Debentures. After this transaction, $32.8 million principal amount of 2014 Debentures remain outstanding and are due on October 30, 2014.

Debt Maturities

Maturity of our total aggregated outstanding debt is as follows:



Fiscal Year	(in thousands)
2014	$	—
2015	32,843
2016	17,199
Total	$	50,042

Except for required repurchases upon a change in control or in the event of certain asset sales, as described in the applicable credit agreements, we are not required to make any sinking fund or redemption payments with respect to this debt.