LifeLock 2013 Annual Report Download - page 55

All of our obligations under the Senior Credit Facility are unconditionally and jointly and severally guaranteed by each of our existing and future, direct
or indirect, domestic subsidiaries, subject to certain exceptions. In addition, all of our obligations under the Senior Credit Facility, and the guarantees of those
obligations, are secured, subject to permitted liens and certain other exceptions, by a first-priority lien on our and our subsidiaries’ tangible and intangible
personal property, including a pledge of all of the capital stock of our subsidiaries.
The Senior Credit Facility requires us to maintain certain financial covenants. In addition, the Senior Credit Facility requires us to maintain all material
proprietary databases and software with a third-party escrow agent in accordance with an escrow agreement that we re affirmed in connection with the Senior
Credit Facility. The Senior Credit Facility also contains certain affirmative and negative covenants limiting, among other things, additional liens and
indebtedness, investments and distributions, mergers and acquisitions, liquidations, dissolutions, sales of assets, prepayments and modification of debt
instruments, transactions with affiliates, and other matters customarily restricted in such agreements. The Senior Credit Facility also contains customary
events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross defaults to other contractual agreements,
events of bankruptcy and insolvency, and a change of control. As of December 31, 2013, we were in compliance with all covenants.
As of December 31, 2013, we had an outstanding letter of credit issued in connection with the revolving line of credit in our Senior Credit Facility in the
total amount of $0.1 million.
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On February 7, 2012, we entered into a credit agreement (“prior senior credit facility”), which we amended on March 14, 2012, April 30, 2012, and
May 29, 2012. The prior senior credit facility provided for a $68.0 million term loan and a $2.0 million revolving line of credit. T he revolving line of credit
also included a letter of credit sub-facility, which, together with outstanding revolving borrowings, could not exceed $2.0 million. The prior senior credit
facility had a maturity date of February 7, 2016. On October 12, 2012, we repaid the amount owing under our term loan. As of December 31, 2012, there
were no amounts outstanding on the revolving line of credit. As described above, on January 9, 2013, we refinanced the prior senior credit facility and entered
into a new credit agreement.
Borrowings under the prior senior credit facility carried a per annum interest rate equal to, at our option, either (a) a base rate equal to the highest of
(i) the Federal Funds Rate, plus .50%, (ii) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime
rate,” and (iii) the eurodollar rate for base rate loans, plus 1.00%, plus an applicable rate ranging from 2.75% to 3.75%, or (b) the eurodollar rate for
eurodollar rate loans, plus an applicable rate ranging from 3.75% to 4.75%. The initial applicable rate was 3.75% for base rate loans and 4.75% for eurodollar
rate loans, subject to adjustment from time to time based upon our achievement of a specified consolidated leverage ratio.
In addition to paying interest on the outstanding principal under the prior senior credit facility, we were also required to pay a commitment fee to the
administrative agent at a rate per annum equal to the product of (a) 0.50% multiplied by (b) the actual daily amount by which the aggregate revolving
commitments exceed the sum of (1) the outstanding amount of revolving borrowings, and (2) the outstanding amount of letter of credit obligations.
We also paid a letter of credit fee to the administrative agent for the account of each lender in accordance with its applicable percentage of a letter of credit
for each letter of credit, which fee was equal to the applicable rate then in effect, multiplied by the daily maximum amount available to be drawn under the
letter of credit. The initial applicable rate for the letter of credit fee was 4.75%, subject to adjustment from time to time based upon our achievement of a
specified consolidated leverage ratio.
We had the right to prepay our borrowings under the prior senior credit facility from time to time in whole or in part, without premium or penalty,
subject to the procedures set forth in the prior senior credit facility .
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On September 23, 2008, we entered into a $12.0 million loan and security agreement with Silicon Valley Bank. The agreement consisted of a revolving
line of credit, or LOC, in the initial amount of $12.0 million with the right for us to increase the LOC to $17.0 million and $20.0 million. The LOC had an
original maturity date of September 23, 2010, which was subsequently extended to March 21, 2011. In conjunction with entering into the LOC in 2008, we
issued a warrant to purchase 56,193 shares of Series D convertible redeemable preferred stock with an exercise price of $5.34 per share. The relative fair
value of the warrant was recorded as a debt issuance cost and was amortized over the remaining term of the LOC.
On July 24, 2009 and February 8, 2010, we exercised our rights under the LOC, or the LOC Rights, to increase the LOC to $17.0 million and $20.0
million, respectively. In conjunction with our exercise of the LOC Rights, we issued a warrant to purchase 9,365 and 5,619 shares of Series D convertible
redeemable preferred stock in 2010 and 2009, respectively, with an exercise p rice of $5.34 per share. The relative fair value of the warrants was recorded as a
debt issuance cost and was amortized over the remaining term of the LOC.
On March 18, 2011, we entered into an amendment to the LOC to increase the LOC to $25.0 million and extend the maturity date to March 21, 2013.
On March 14, 2012, the LOC was terminated in connection with our prior senior credit facility.
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