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had reached the stage of development calling for capitalization, in the amounts of $2.0 million, $1.9 million, and $2.4 million 2013,
2012, and 2011, respectively. During 2013, we invested net $5.4 million in marketable securities. On July 6, 2012, we completed the
acquisition of microDATA for approximately $35 million, comprised of $20.8 million in cash at closing, plus $14.3 million in
promissory notes and performance-based earn-out opportunities. During 2012, we received net $4.0 million from the sale and maturity
of marketable securities. In 2011, we acquired Trident for $17.2 million, including $1.1 million of cash acquired. During 2011, we
received net $16.1 million from the sale and maturity of marketable securities.
Financing activities:
Financing activities for 2013 included new $130 million Senior Credit Facilities agreements, we retired
$50 million of our outstanding 4.5% Convertible Senior Notes in exchange for new $50 million 7.75% Convertible Senior Notes, and
the repurchase of $28.9 million of 4.5% Convertible Senior Notes. We made $42.4 million in payments towards the termination of our
prior term loan and scheduled payments on bank borrowings. We paid off our $6.0 million of borrowings on our prior line of credit
outstanding December 31, 2012. We also made our scheduled $7.5 million payment due on our promissory notes payable and made
our regularly scheduled capital lease payments of $6.3 million. We funded fixed asset purchases with capital leases totaling $6.0
million, $4.9 million, and $5.3 million, in 2013, 2012, and 2011, respectively.
Financing activities for 2012 included an amendment to our loan and security agreement. We made regularly scheduled
payments on bank borrowings and capital leases of $27 million. We also repurchased a portion of our 4.5% convertible notes for $9.6
million and borrowed an additional $9.5 million under our line of credit. In 2012, we also made an earn-out payment of $3.9 million
related to a 2009 acquisition. Financing activities for 2011 included $25 million of debt principal payments, including the final $10
million on the NIM promissory notes and $15 million towards the term loan with the our commercial bank and our leasing
arrangements partly offset by $9.5 million of funding from our line of credit. Also, in 2011, we made a $3.2 million earn-out payment
related to a 2009 acquisition.
Senior debt: On June 25, 2013, we closed on new $130 million Senior Credit Facilities (the “Senior Credit Facilities”). The
Senior Credit Facilities included (i) a $56.5 million term loan A facility (“Term Loan A Facility”), (ii) a $43.5 million delayed draw
term loan facility (“Delayed Draw Term Loan Facility”), and (iii) a $30 million revolving loan facility (“Revolving Loan
Facility”).The Senior Credit Facilities also include a $25 million incremental loan arrangement subject to the Company’s future needs
and bank approval, although no assurance can be given that this incremental loan amount will be available to us when and if needed.
On June 25, 2013, we borrowed $56.5 million under the Term Loan A Facility. Proceeds were used for (i) repayment of the
remaining balance under 2012 Term Loan, which was terminated, (ii) approximately $16 million for on-going working capital and
other general corporate purposes, and (iii) fees and expenses associated with the new facility. On September 30, 2013, we borrowed an
additional $10 million under the Delayed Draw Term Loan Facility which was used towards the purchase of an additional $28.9
million of our 4.5% convertible notes. Additional liquidity is available through the undrawn $30 million Revolving Loan Facility, to
be used for our on-going working capital and other general corporate purposes, replacing the revolving line under the 2009 Loan and
Security Agreement which has been paid off and terminated.
Loans borrowed under the Term Loan A Facility, the Revolving Loan Facility or the Delayed Draw Term Loan Facility may be
borrowed at rates based on the Eurodollar/LIBOR (beginning at L +3.75%) or Alternate Base Rate (ABR) (beginning at ABR +
2.75%), which may be adjusted as provided in the Credit Agreement. The Term Loan A Facility, the Delayed Draw Term Loan
Facility, and the Revolving Loan Facility have a maturity date of March 31, 2018, unless extended as provided in the Credit
Agreement. Beginning October 1, 2013, the Term Loan A Facility and the Delayed Term Loan Facility are to be paid in consecutive
quarterly installments of $0.4 million on the first day of each fiscal quarter, increasing to $0.8 million in the quarter ending
December 31, 2014 and to $1.2 million in the quarter ending December 31, 2016 and to $2.4 million in the quarter ending
December 31, 2017, with the remaining principal due at maturity. Additional Delayed Draw Term Loan Facility borrowings would be
repaid on the same dates and in the same proportions as the Term Loan A Facility and the existing Delayed Draw Term Loan Facility
borrowings, with the remaining principal due at maturity.
The Senior Credit Facilities are secured by substantially all of the Company’s tangible and intangible assets, including
intellectual property. The Credit Agreement contains customary representations and warranties of the Company and customary
covenants and events of default. Availability under the Revolving Loan Facility and the Delayed Draw Term Loan Facility is subject
to certain conditions, including the continued accuracy of the Company’s representations and warranties and compliance with
covenants. The Senior Credit Facilities are also subject to possible mandatory repayments from excess cash flow and other sources,
such as net cash proceeds of debt or equity issuances, asset sales, casualty insurance claims and other recovery events, as described in
the Credit Agreement. At December 31, 2013, the Company was subject to a mandatory repayment of $3.6 million from excess cash
flow and other sources payable in the first quarter of 2014. During the continuance of an event of default, at the request of the required
lenders, all outstanding loans shall bear interest at a rate per annum equal to the rate that would otherwise be applicable thereto plus
2%, and shall be payable from time to time on demand.
In July 2012, we borrowed $45 million under our term loan agreement (“2012 Term Loan”) with Silicon Valley Bank, as
administrative and collateral agent (“SVB”). Approximately $19 million of the borrowings under the 2012 Term Loan were used to
