Rosetta Stone 2010 Annual Report Download - page 97

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Table of Contents
7. INTANGIBLE ASSETS (Continued)
The following table summarizes the estimated future amortization expense related to intangible assets as of December 31, 2010 (in thousands):
As of
December 31,
2010
2011 $ 84
2012 40
Thereafter 217
Total $ 341
8. OTHER CURRENT LIABILITIES
The following table summarizes other current liabilities (in thousands):
December 31,
2010 2009
Marketing expenses $ 11,075 $ 8,746
Professional and consulting fees 2,820 2,720
Sales return reserve 8,391 4,708
Taxes payable 2,722 2,043
Other 7,617 7,421
$ 32,625 $ 25,638
9. BORROWING AGREEMENT
On January 4, 2006, the Company entered into a Credit Agreement with Madison Capital, which provided the Company a $4.0 million revolving credit
facility ("Revolver") and a $17.0 million term loan ("Term Loan"). The Credit Agreement was amended on August 2, 2007 and April 23, 2008 to amend
certain covenants, terms, and definitions. Under the Credit Agreement, all amounts outstanding under the Revolver and the Term Loan accrued interest at the
Base Rate plus the Applicable Margin or the LIBOR Rate plus the Applicable Margin, as specified by the Company. As of December 31, 2008, the interest
rate on the term loan was 4.65%.
On January 16, 2009, the Company entered into a new credit agreement with Wells Fargo Bank, N.A. ("Wells Fargo"), which provides the Company
with a $12.5 million revolving line of credit. This revolving credit facility has a two-year term and the applicable interest rate is 2.5% above one month
LIBOR, or approximately 2.76% as of December 31, 2010. On January 16, 2009, the Company borrowed approximately $9.9 million under this revolving
credit facility and used these funds to repay the entire outstanding principal and interest of the Term Loan the Company had with Madison Capital. As a
result, the Company has no borrowings owed to Madison Capital under either their Term Loan or Revolver, and the Company has terminated these credit
agreements. As a result of the early repayment of the Madison Capital Loan, the Company wrote-off the remaining unamortized capitalized financing costs
associated with this loan. The amount of the write-off was approximately $0.2 million. Upon completion of the Company's initial public offering, the
Company repaid the $9.9 million balance of its revolving credit facility with Wells Fargo during the three months ended June 30, 2009, and a total of
$12.5 million under revolving credit facility is available to the Company for borrowing thereunder.
F-23