Enom 2010 Annual Report Download - page 125

Table of Contents
Demand Media, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(In thousands, except per share amounts)
9. Notes Payable and Revolving Line of Credit (Continued)
In addition, the Credit Agreement contains covenants restricting the Company's ability to, among other things, incur additional debt or incur or permit to
exist certain liens; pay dividends or make other distributions or payments on capital stock; make investments and acquisitions; enter into transactions with
affiliates; transfer or sell substantially all of the Company's assets.
At December 31, 2009 and 2010, the aggregate borrowings available under the Credit Agreement was approximately $82,200 and $93,000 based on the
Company's trailing 12-month EBITDA (as defined). At December 31, 2009 and 2010, $10,000 and $0, respectively, was outstanding under the Credit
Agreement.
Total debt issuance costs associated with the Credit Agreement were $1,694, which are being amortized as interest expense over the term of the Credit
Agreement. For the years ended December 31, 2008, 2009 and 2010, $403, $386 and $386, respectively, of debt issuance costs were amortized and included
in interest expense. At December 31, 2010, net debt issuance costs of $336 and $132 are included in other current assets and other assets, non-current,
respectively.
Acquisition Related Debt
In August 2006 the Company acquired 100% of the outstanding stock of Trails.com, Inc. ("Trails"). As part of the purchase consideration, the Company
provided the shareholders with $4,000 of unsecured promissory notes with a maturity date of August 31, 2008, bearing interest at 7% annually and payable on
a semi-annual basis. These promissory notes were repaid in full, including $142 accrued interest, in August 2008.
In March 2008 the Company acquired 100% of the outstanding stock of Pluck (Note 18). As part of the purchase consideration, the Company provided
certain Pluck shareholders with $10,000 of unsecured promissory notes with a maturity date of April 3, 2009. These promissory notes and $772 accrued
interest were repaid in full in April 2009.
10. Income Taxes
The income tax benefit (expense) consists of the following:
December 31,
2008 December 31, 2009 December 31, 2010
Current (expense) benefit
Federal $ — $ (7) $ —
State (124) (175) (709)
International (349) (382) (208)
Deferred (expense) benefit
Federal 2,163 (2,807) (2,910)
State 2,922 600 (74)
International — — 4
Total income tax benefit (expense) $ 4,612 $ (2,771) $ (3,897)
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