Short-Term Borrowings

Silicon Valley Bank

On March 14, 2014, the Company entered into an amended and restated $25.0 million revolving line of credit agreement with Silicon Valley Bank ("SVB") (the "2014 Agreement") which has a stated maturity date of July 28, 2016. On May 30, 2014, the 2014 Agreement was amended to increase the letter of credit sublimit under the secured revolving credit facility from $1.0 million to $2.0 million. On April 23, 2015, the 2014 Agreement was amended to further increase the letter of credit sublimit under the secured revolving credit facility from $2.0 million to $5.0 million or the net borrowing availability. On February 8, 2016, the 2014 Agreement was amended to increase the revolving line of credit to $35.0 million (as amended, the "Amended Agreement") and to extend the stated maturity date to February 8, 2018. The secured revolving credit facility under the Amended Agreement is available for cash borrowings and is subject to a borrowing formula based upon eligible accounts receivable less outstanding letters of credit (aggregate letters of credit are not to exceed $5.0 million). Eligible accounts receivable include 80% of U.S. and 75% of foreign accounts receivable (80% in certain cases), not greater than 60 days past original invoice date. The interest rate is dependent upon the Company's Liquidity (as defined in the Amended Agreement) when compared to a pre-determined threshold (the "Liquidity Threshold"), which is defined in the Amended Agreement as $15.0 million, with the exception of the last month end of each quarter, where it is defined as $20.0 million. Liquidity is calculated under the Amended Agreement as unrestricted cash plus unused availability on the revolving line of credit. The calculation of interest under the 2014 Agreement is as follows:


•	When Liquidity is above the Liquidity Threshold, the interest rate is the prime rate (as published in Wall Street Journal) plus 0.75%; and


•	When Liquidity is below the Liquidity Threshold, the interest rate is the prime rate (as published in Wall Street Journal) plus 2.25%.

Under the Amended Agreement, the Company is required to make interest payments monthly. The Company is further required to pay a loan modification fee of $35,000 and pay a facility fee of $52,500 annually. The Company paid a prorated facility fee equal to $48,000 in February 2016 and will pay the full facility fee of $52,500 annually thereafter. Under the Amended Agreement, the Company is required to pay the higher of actual monthly interest incurred or the interest equivalent of $10.0 million in average monthly borrowings. If the Company terminates the commitment under the Amended Agreement prior to the maturity date, the Company is required to pay a cancellation fee equal to 1.5% of the commitment under the Amended Agreement. The Amended Agreement removed the former requirement to maintain a deposit account balance of at least $4.0 million with SVB or its affiliates and the former requirement that at least 50% of the Company's cash must be deposited with SVB or its affiliates or in an account where SVB has a control agreement. The Amended Agreement did not otherwise change the requirement to maintain all the Company's US domestic cash accounts with SVB or an SVB affiliate.

The Amended Agreement requires the Company to make certain representations, warranties and other agreements that are customary in credit agreements of this type. The Amended Agreement also includes financial covenants that requires the Company to maintain minimum Liquidity of $10.0 million, which is tested monthly. Additionally, the Amended Agreement requires the Company to maintain a minimum adjusted EBITDA of at least $10.0 million if the outstanding principal balance is greater than $15.0 million or maintain a minimum adjusted EBITDA of at least $7.5 million if the outstanding principal balance is equal to or less than $15.0 million, which is tested quarterly. The Amended Agreement defines Adjusted EBITDA as net income plus interest expense, depreciation expense, amortization expense, income tax expense, non-cash stock compensation expense and restructuring expense (limited to $1.7 million, $1.14 million, $1.0 million at the first, second and third quarter 2016 measurement dates and $0 thereafter).

As of June 30, 2016 and December 31, 2015, the Company had an outstanding balance of $25.0 million and $15.0 million under the Amended Agreement. At June 30, 2016, the Company had $3.2 million of total borrowing availability remaining under the Amended Agreement. At June 30, 2016, the Company was in compliance with all covenants under the Amended Agreement.