Enom 2013 Annual Report Download - page 97

The C redit Agreement permits the Proposed Business Separation to occur subject to certain conditions, including pro forma compliance
with the affirmative and negative covenants, including the financial covenants, set forth in the Credit Agreement, and maintenance of a minimum
level of liquidity and a minimum trailing twelve month adjusted earnings before taxes, interest, depreciation and amortization expense
(“Adjusted EBITDA”) after giving effect to the Proposed Business Separation.
The Credit Agreement contains customary events of default and affirmative and negative covenants, including certain financial
maintenance covenants requiring compliance with a maximum consolidated leverage ratio and a minimum fixed charge coverage ratio, as well
as other restrictions typical for a financing of this type that, among other things, restrict our ability to incur additional debt, pay dividends and
make distributions, make certain investments and acquisitions, repurchase our capital stock and prepay certain indebtedness, create liens, enter
into agreements with affiliates, modify the nature of our business, enter into sale-leaseback transactions, transfer and sell material assets and
merge or consolidate. Non-compliance with one or more of the covenants and restrictions could result in the full or partial principal balance
outstanding under the Credit Agreement becoming immediately due and payable and termination of the commitments available under the
Revolving Loan Facility. As of December 31, 2013, we were in compliance with the covenants under the Credit Agreement.
Our obligations under the Credit Agreement are guaranteed by our material direct and indirect domestic subsidiaries, subject to certain
exceptions. Our obligations under the Credit Agreement and the guarantees are secured by a lien on substantially all of our tangible and
intangible property and substantially all of the tangible and intangible property of our domestic subsidiaries that are guarantors, and by a pledge
of all of the equity interests of our material direct and indirect domestic subsidiaries and 66% of each class of capital stock of any material first-
tier foreign subsidiaries, subject to limited exceptions.
Under the Credit Agreement, loans bear interest, at our option, at an annual rate based on LIBOR or a base rate. Loans based on LIBOR
bear interest at a rate between LIBOR plus 2.00% and LIBOR plus 3.00%, depending on our consolidated leverage ratio. Loans based on the
base rate bear interest at the base rate plus an applicable margin of 1.00% or 2.00%, depending on our consolidated leverage ratio. We are
required to pay a commitment fee between 0.20% and 0.40% per annum, depending on our consolidated leverage ratio, on the undrawn portion
available under the Revolving Loan Facility and the Term Loan Facility.
As of December 31 , 2013, no principal balance was outstanding and approximately $113.8 million was available for borrowing under the
Revolving Loan Facility, after deducting the face amount of outstanding standby letters of credit of approximately $11.2 million, and we were in
compliance with all covenants.
In connection with entering into the Credit Agreement, we incurred debt issuance costs of $1.9 million. Debt issuance costs are capitalized
and amortized into interest expense over the term of the underlying debt. During the year ended December 31, 2013 we amortized $0.2 million
of deferred debt issuance costs.
8. Commitments and Contingencies
Leases
We conduct our operations utilizing leased office facilities in various locations and lease certain equipment under non-cancellable
operating and capital leases. Our leases expire between April 2014 and December 2019. During the first quarter of 2014 we amended our lease
for the headquarters of our domain name business in Kirkland, Washington which is expanding our leased space from 34,000 square feet to
41,000 square feet in May 2014, under a lease that expires in April 2019.
The following is a schedule of future minimum lease payments under operating and capital leases as of December 31, 2 013 (in
thousands):
F-21
Operating Capital
leases Leases
Year ending December 31,
2014
$
4,425
$
728
2015
3,853
61
2016
3,117
-
2017
2,360
-
2018
3,506
-
Thereafter
1,509
-
Total minimum lease payments
$
18,770
789
Less interest expense
(18
)
Capital lease obligation
$
771