Short-Term Borrowings

Silicon Valley Bank

The Company has a $35.0 million secured revolving line of credit agreement (as amended, the "Agreement") with Silicon Valley Bank ("SVB") with a stated maturity date of July 28, 2016. On November 1, 2013 the Agreement was amended to reduce the total size of the secured revolving credit facility from $40.0 million to $35.0 million, revise the minimum two quarter rolling EBITDA financial covenant for the quarters ended September 30, 2013, December 31, 2013, and March 31, 2014 and modify certain terms within the liquidity ratio, all of which are reflected herein.

The secured revolving credit facility is available for cash borrowings and is subject to a borrowing formula based upon eligible accounts receivable and EBITDA (as defined in the Agreement) non-formula thresholds. Eligible accounts receivable include 80% of domestic and 65% of foreign accounts receivable (70% in certain cases) for our U.S. companies, limited to concentration by certain customers, not greater than 60 days past due and no greater than 120 days from original invoice date. EBITDA non-formula availability is $15.0 million when two rolling quarters EBITDA is $9.0 million or greater and $10.0 million when two rolling quarters EBITDA is $6.0 million or greater but less than $9.0 million. Borrowings under the Agreement bear interest based on a debt to EBITDA ratio where EBITDA is calculated on a rolling four quarter basis. The calculation of interest under the Agreement is as follows:


•	Debt to EBITDA ratio less than 2.0:1.0 - LIBOR, which was 0.18% as of September 30, 2013, plus 2.00%;


•	Debt to EBITDA ratio less than 3.0:1.0, but more than or equal to 2.0:1.0 - LIBOR plus 2.25%;


•	Debt to EBITDA more than or equal to 3.0:1.0 - LIBOR plus 2.50%.

The Company is required to make interest payments monthly. The Company was further required to pay a commitment fee equal to $35,000 on the original closing date of the Agreement and annually thereafter and to pay quarterly in arrears an unused facility fee based on the debt to EBITDA ratio as follows: debt to EBITDA ratio less than 2.0:1.0 - 0.375% per year of the unused amount of the facility; and debt to EBITDA ratio of 2.0:1.0 or greater - 0.50% per year of the unused amount of the facility.

The Agreement requires the Company to make and maintain certain financial covenants, representations, warranties and other agreements that are customary in credit agreements of this type. The Agreement also requires the Company to maintain the following specific financial covenants:

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minimum monthly liquidity ratio of 1.25 at the end of intra-quarter months and 1.5 at the end of quarter end months. The liquidity ratio is defined as cash, cash equivalents and short term investments (with cash and cash equivalents held by the Company's foreign subsidiaries not to exceed $10.0 million and excluding any investments held by the Company's foreign subsidiaries) plus eligible accounts receivable, divided by the sum of obligations owing to SVB under the Agreement;

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beginning September 30, 2014 until the 2015 convertible senior notes are repaid, (i) minimum cash balance of $18.0 million held at either SVB or in an account held with a financial institution where SVB shall have received a Qualifying Control Agreement (as defined in the Agreement) and (ii) immediately after giving pro forma effect to the payment of the 2015 convertible senior notes as if such payment occurred on September 30, 2014, compliance with the liquidity covenant noted above;

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minimum two quarter rolling EBITDA (earnings before interest, taxes, depreciation, amortization, stock based compensation, non-cash restructuring charges (as defined in the Agreement) and cash restructuring charges not to exceed $12.0 million cumulatively during 2013 and 2014 combined) of $2.0 million for the quarter ending September 30, 2013, $(3.0) million for the quarter ending December 31, 2013, $2.0 million for the quarter ending March 31, 2014, $6.0 million for the quarters ending June 30, 2014, September 30, 2014 and December 31, 2014 and $9.0 million in subsequent quarters; and


•	capital expenditures may not exceed $11.0 million during the period January 1, 2013 to December 31, 2013 and $8.0 million in subsequent years.

As of September 30, 2013 and December 31, 2012, the Company had outstanding balances of $15.0 million and $0.0 million issued on its behalf under the Agreement. At September 30, 2013, the Company had $12.2 million of total borrowing availability remaining under the Agreement. After giving effect to the amendment to the Agreement, the Company was in compliance with all covenants under the Agreement.