2K Sports 2009 Annual Report Download - page 94

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Estimated future amortization of intangible assets that will be recorded in cost of goods sold and operating
expenses for the years ending October 31 are as follows:
2010 $ 2,722
2011 5,426
2012 6,687
2013 5,491
2014 2,876
Thereafter 22
Total $23,224
9. LONG-TERM DEBT
Credit Agreement
In July 2007, we entered into a credit agreement which provides for borrowings of up to $140,000 and is
secured by substantially all of our assets and the equity of our subsidiaries (the ‘‘Credit Agreement’’). The
Credit Agreement expires on July 3, 2012. Revolving loans under the Credit Agreement bear interest at
our election of (a) 2.00% to 2.50% above a certain base rate with a minimum 6.00% base rate (8.00% at
October 31, 2009), or (b) 3.25% to 3.75% above the LIBOR Rate with a minimum 4.00% LIBOR Rate
(7.25% at October 31, 2009), with the margin rate subject to the achievement of certain average liquidity
levels. We are also required to pay a monthly fee on the unused available balance, ranging from 0.25% to
0.75% based on amounts borrowed. Information related to availability on our Credit Agreement is as
follows:
October 31, October 31,
2009 2008
Outstanding borrowings $ — $70,000
Available borrowings 88,137 28,964
Outstanding letters of credit 11,560 11,560
Debt issuance costs capitalized in connection with the Credit Agreement totaled $2,770 and are being
amortized as interest expense over the five year term of the Credit Facility. We recorded $4,782, $3,389,
and $1,084 of interest expense related to the Credit Agreement for the years ended October 31, 2009,
2008, and 2007, respectively.
The Credit Agreement substantially limits us and our subsidiaries’ ability to: create, incur, assume or be
liable for indebtedness; dispose of assets outside the ordinary course of business; acquire, merge or
consolidate with or into another person or entity; create, incur or allow any lien on any of their respective
properties; make investments; or pay dividends or make distributions (each subject to certain limitations).
In addition, the Credit Agreement provides for certain events of default such as nonpayment of principal
and interest, breaches of representations and warranties, noncompliance with covenants, acts of insolvency,
default on indebtedness held by third parties and default on certain material contracts (subject to certain
limitations and cure periods). The Credit Agreement also contains a requirement that we maintain an
interest coverage ratio of more than one to one for the trailing twelve month period, if the liquidity of our
domestic operations falls below $30,000 (including available borrowings under the credit facility), based on
a 30-day average. As of October 31, 2009, we were in compliance with all covenants and requirements
outlined in the Credit Agreement.
89