Convertible Debt

2013 Convertible Senior Notes

During February 2008, the Company offered and sold in a public offering pursuant to the shelf registration statement $55.0 million aggregate principal amount of 2.75% convertible senior notes due 2013 (the “2013 convertible senior notes”).

During the year ended December 31, 2012, the Company exchanged, in a private offering, $18.0 million aggregate principal amount of the 2013 convertible senior notes for $18.0 million aggregate principal amount of 4.50% convertible senior notes due 2015 (the “2015 convertible senior notes”). The Company accounted for the exchange in accordance with the relevant accounting guidance for debt exchanges and modifications. Refer below for further details of the 2015 convertible senior notes.

During the year ended December 31, 2012, the Company repurchased $10.1 million aggregate principal amount of the 2013 convertible senior notes, decreasing the aggregate principal amount of the 2013 senior convertible notes outstanding at December 31, 2012 to $16.9 million.

On February 15, 2013, the maturity date of the 2013 convertible senior notes, the Company repaid the entire outstanding aggregate principal balance of $16.9 million in accordance with the terms thereof.

2015 Convertible Senior Notes

On June 20, 2012, the Company entered into subscription agreements with certain holders of the Company's 2013 convertible senior notes. Pursuant to the subscription agreements, on June 29, 2012 the Company exchanged $18.0 million aggregate principal amount of the 2013 convertible senior notes for $18.0 million aggregate principal amount of the Company's 2015 convertible senior notes. The 2015 convertible senior notes mature on February 15, 2015. Holders of the 2015 convertible senior notes may convert their notes into a number of shares of the Company's common stock determined as set forth in the indenture governing the notes at their option on any day to and including the business day prior to the maturity date. The 2015 convertible senior notes are initially convertible into 117.2333 shares of the Company's common stock per $1,000 principal amount of the notes (which is equivalent to a conversion price of approximately $8.53 per share), subject to adjustment upon the occurrence of certain events. Upon the occurrence of a fundamental change, holders of the 2015 convertible senior notes may require the Company to repurchase some or all of their notes for cash at a price equal to 100% of the principal amount of the notes being repurchased, plus accrued and unpaid interest, if any. In addition, if certain fundamental changes occur, the Company may be required in certain circumstances to increase the conversion rate for any 2015 convertible senior notes converted in connection with such fundamental changes by a specified number of shares of the Company's common stock. The 2015 convertible senior notes are the Company's general unsecured obligations and rank equal in right of payment to all of its existing and future senior indebtedness, and senior in right of payment to the Company's future subordinated debt. The Company's obligations under the 2015 convertible senior notes are not guaranteed by, and are effectively subordinated in right of payment to all existing and future obligations of its subsidiaries and are effectively subordinated in right of payment to its future secured indebtedness to the extent of the assets securing such debt.

As of December 31, 2012 and December 31, 2011, the Company had outstanding 2013 and 2015 convertible senior notes with a combined face value of $34.9 million and $45.0 million, respectively. Of these balances $16.9 million and $0 were classified as current liabilities in the Condensed Consolidated Balance Sheets at December 31, 2012 and December 31, 2011. As of December 31, 2012 and December 31, 2011, the fair value of the Company's 2013 and 2015 convertible senior notes were $34.3 million and $41.8 million, which is based on quoted prices of the Company's publicly traded debt on each balance sheet date.

As described above, on February 15, 2013 the Company repaid the outstanding aggregate principal balance of $16.9 million in accordance with the terms thereof.

The following table outlines the effective interest rate, contractually stated interest costs, and costs related to the amortization of issuance costs for the Company's 2013 and 2015 convertible senior notes:



	Years Ended
	December 31,
	2012			2011			2010
Effective interest rate of 2013 convertible senior notes	3.73		%	3.64		%	3.64		%
Effective interest rate of 2015 convertible senior notes	4.50		%	NA			NA
Contractually stated interest costs	$	1,289		$	1,372		$	1,375
Amortization of interest costs	$	398		$	501		$	447