Note 6. Long-Term Debt

In July 2013, we entered into an amendment to the Credit Agreement to our Revolving Credit and Term Loan Agreement with Wells Fargo Capital Finance (“Wells Fargo Credit Agreement”). Under the terms of the amendment, we are entitled to borrow up to $18.2 million. The total amount that can be borrowed under the credit agreement is based on a multiplier factor of the trailing twelve months of maintenance and recurring Software-as-a-Service revenue. The Wells Fargo Credit Agreement consists of two term notes and a revolving line of credit. Term Note A is for $12.2 million with quarterly principal payments of $252,011 plus an additional annual payment based on our free cash flow for the year ($1,945,403 due on July 31, 2014) with any remaining amount due at maturity, June 30, 2015. We incur interest at the prevailing LIBOR rate plus 4.5-5.0% per annum with a minimum rate of 6.5% (6.5% at April 30, 2014). Term Note B is for $1.0 million payable in full at maturity, June 30, 2015. We incur interest at the prevailing LIBOR rate plus 9.0-10.0% per annum with a minimum rate of 12.0% (12.0% at April 30, 2014). Under the terms of the revolving line of credit, we can borrow up to $5.0 million. We incur interest expense on funds borrowed at the prevailing LIBOR rate plus 4.5-5.0% per annum with a minimum rate of 6.5% (6.5% as of April 30, 2014). The revolver has a maturity date of June 30, 2015. As of April 30, 2014, there is $2.5 million outstanding on the revolving line of credit, none of which is current.

Our long-term debt is as follows (in thousands):


		April 30,		April 30,
		2014		2013
Term Note A	$	11,324	$	7,883
Term Note B		1,000		4,000
Revolving line of credit		2,500		5,500
Capital leases		147		306
		14,971		17,689
Less current portion		(3,123)		(2,519)
Total long term debt, net	$	11,848	$	15,170

The Wells Fargo Credit Agreement requires ongoing compliance with certain affirmative and negative covenants. The affirmative covenants include, but are not limited to: (i) maintenance of existence and conduct of business; (ii) compliance with laws; (iii) use of proceeds; and (iv) books and records and inspection. The negative covenants set forth in the Wells Fargo Credit Agreement include, but are not limited to, restrictions on our ability (and on our subsidiaries): (i) with certain limited exceptions, to create, incur, assume or allow to exist indebtedness; (ii) with certain limited exceptions, to create, incur, assume or allow to exist liens on properties; (iii) with certain limited exceptions, to make certain payments, transfers of property, or investments; or (iv) with certain limited exceptions, to make acquisitions. The Company is in compliance with all such covenants and requirements at April 30, 2014.

We are obligated to maintain certain minimum consolidated adjusted EBITDA levels, certain minimum liquidity levels, certain total leverage ratios, and certain fixed charge coverage ratios, all as calculated in accordance with the terms and definitions determining such amounts as contained in the Wells Fargo Credit Agreement. The Wells Fargo Credit Agreement also contains various information and financial reporting requirements. Under the Wells Fargo Credit Agreement, we granted to Wells Fargo a first priority security interest in substantially all of our assets.

A summary of future payments on long-term debt obligations as of April 30, 2014 is as follows (in thousands):


Fiscal Year Ending April 30,		Amount
2015		3,123
2016		11,848
	$	14,971