Enom 2011 Annual Report Download - page 100

Operating
Leases Capital Leases
Year ending December 31,
2012 $ 3,851 $ 7
2013 2,495 7
2014 947 3
2015 982 —
2016 273 —
Thereafter — —
Total minimum lease payments $ 8,548 17
Less interest expense (1)
Capital lease obligation $ 16
Rent expense incurred by the Company was $3,776, $4,141 and $4,914, respectively, for years ended December 31, 2009, 2010 and 2011. As of
December 31, 2010 and 2011, accrued expenses and other current liabilities include a deferred rent liability of $541 and $1,208, respectively and $876 was
included in other long-term liabilities as at December 31, 2011.
Letters of Credit
At December 31, 2011, the Company had outstanding standby letters of credit issued via the administrative agent under the Company's revolving credit
facility of approximately $6,972 primarily associated with certain payment arrangements with domain name registries as well as security agreements related
to real estate leases.
Revolving Line of Credit Agreements
On August 4, 2011, the Company replaced its previous revolving credit facility by entering into a credit agreement (the “Credit Agreement”) with a
syndicate of commercial banks. The Credit Agreement provides for a $105,000, five year revolving credit facility, with the right (subject to certain conditions)
to increase such facility by up to $75,000 in the aggregate. The syndicate of commercial banks under the Credit Agreement have no obligation to fund any
increase in the size of the facility.
The collateral for the Credit Agreement consists of substantially all tangible and intangible assets of the Company, under perfected security interests,
including pledges of the common stock of all domestic subsidiaries and a portion of the equity of the foreign subsidiaries of the Company. The Credit
Agreement contains customary events of default and affirmative and negative covenants and restrictions, including certain financial covenants such as a
minimum fixed charge ratio and a maximum total net leverage ratio. As of December 31, 2010 and 2011, the Company was in compliance with these
covenants, and those under the previous credit facility.
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 certain investments and acquisitions; enter into transactions
with affiliates; transfer or sell substantially all of the Company's assets.
At December 31, 2010 and 2011, the aggregate borrowings available under the Credit Agreement in place at that date was approximately $93,000 and
$98,000. At December 31, 2010 and 2011, no amounts were outstanding under the Credit Agreements.
Total debt issuance costs associated with the Credit Agreement were $1,035, which are being amortized as interest expense on a straight-line basis over
the five year term of the Credit Agreement. For the years ended December 31, 2009, 2010 and 2011, $386, $386 and $568 respectively, of debt issuance costs
were amortized and included in interest expense. Interest expense for the year ended December 31, 2011 includes $240 relating to the acceleration of
unamortized debt issuance costs from the credit agreement replaced during that year. At December 31, 2011, net debt issuance costs of $207 and $744 are
included in other current assets and other assets, non-current, respectively.
Litigation
In April 2011, the Company and eleven other defendants were named in a patent infringement lawsuit filed in the U.S. District Court, Eastern District of
Texas. The plaintiff filed and served a complaint making several claims related to a method for displaying advertising on the Internet. In May 2011, the
Company filed its response to the complaint, denying all liability,
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