Classmates.com 2004 Annual Report Download - page 41

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Financial Commitments
Capital Lease Commitments
We have entered into certain noncancelable lease obligations for computer and office equipment. The future minimum lease payments are
discounted using varying rates over the lease terms. Future minimum lease payments at December 31, 2004 are as follows (in thousands):
Other Financial Commitments
Our financial commitments, including our operating leases and purchase commitments for telecommunications and media are as follows at
December 31, 2004 (in thousands):
Term Loan
In December 2004, we borrowed $100 million through a term loan facility provided by a credit agreement dated December 3, 2004, among
United Online, Inc., the Lenders party thereto from time to time, Deutsche Bank Trust Company Americas, as Administrative agent, and
Deutsche Bank Securities, as Lead Arranger.
The term loan matures in four years and amortizes in an annual amount of $23.3 million in years one, two and three and $30 million in year
four, payable in quarterly installments. We have the option to maintain the term loan as either base rate loans or Eurodollar loans, but at no time
shall there be outstanding more than four Eurodollar loans. Interest on the loans outstanding under the term loan facility will be payable, at our
option, at (a) a base rate equal to the higher of (i) the prime rate plus a margin of 2% and (ii) 0.50% in excess of the overnight federal funds rate
plus a margin of 2% or (b) at a eurodollar rate generally equal to LIBOR with a maturity comparable to a selected interest period, plus a margin
of 3%. At December 31, 2004, we maintained the $100 million in a base rate loan bearing interest at 7.25%. In January 2005, we converted the
base rate loan into multiple Eurodollar loans with staggered interest periods.
We may make optional prepayments of the term loan, in whole or in part (subject to a minimum prepayment amount), without premium or
penalty, and subject to the reimbursement of lenders' customary breakage costs in the case of a prepayment of Eurodollar borrowings. Subject to
certain restrictions, we are required to make prepayments of a portion of the term loan from excess cash flow
39
Year Ending
December 31,
2005
$
669
2006
399
2007
332
Total minimum obligations
1,400
Less amount representing interest
(81
)
Present value of minimum obligations
1,319
Less current portion
(621
)
Non
-
current portion
$
698
Year Ending December 31,
Contractual Obligations
Total
2005
2006
2007
2008
2009
Thereafter
Operating leases
$
48,283
$
5,141
$
6,291
$
6,390
$
6,308
$
5,297
$
18,856
Telecommunications purchases
18,275
11,038
7,125
112
—
—
—
Media purchases
46,876
46,876
—
—
—
—
—
Total
$
113,434
$
63,055
$
13,416
$
6,502
$
6,308
$
5,297
$
18,856