LONG-TERM DEBT OBLIGATIONS

The following table summarizes the carrying amount of the Company's borrowings (in thousands):



	December 31, 2015		December 31, 2014
Senior credit facility	$	19,088	$	—
Term loan	—		22,950
Convertible notes	105,000		105,000
Total debt	124,088		127,950
Less: current portion of long-term debt	4,000		4,000
Total long-term debt	$	120,088	$	123,950

Term Loan and Revolving Credit Facility

On June 25, 2012, in conjunction with the acquisition of eBioscience, Inc., the Company entered into a five-year $100.0 million Senior Credit Facility credit agreement (the "Credit Agreement"). The Credit Agreement provided for a Term Loan in an aggregate principal amount of $85.0 million and a revolving credit facility in an aggregate principal amount of $15.0 million.

On October 17, 2013 the Company refinanced its Senior Secured Credit Facility and entered into the Fourth Amendment to Credit Agreement (the "Fourth Amendment"). The Fourth Amendment provided, among other things, for a term loan in the aggregate principal amount of $38.0 million and revolving loan commitments in the aggregate principal amount of $10.0 million, each with a term of five years. The Company borrowed a total of $38.0 million under the Term Loan and $10.0 million under the revolving loan upon refinancing.

On July 28, 2014, the Company entered into the Fifth Amendment to Credit Agreement (the "Fifth Amendment" and the Credit Agreement as so amended, the "Amended Credit Agreement"). The Fifth Amendment provided, among other things, for (1) an uncommitted incremental term loan facility in an aggregate amount not to exceed $50.0 million and (2) the reduction of interest rate margins.

At the option of the Company (subject to certain limitations), borrowings under the Fourth Amendment bore interest at either a base rate or at the London Interbank Offered Rate ("LIBOR"), plus, in each case, an applicable margin. Under the Base Rate Option, interest was at the base rate plus 1.50% to 1.75% dependent on the senior leverage ratio then in effect calculated on the basis of the actual number of days elapsed in a year of 365 or 366 days (as applicable) and payable quarterly in arrears. The base rate was equal to the greatest of (a) the rate last quoted by The Wall Street Journal (or another national publication described in the Fourth Amendment) as the U.S. "Prime Rate", (b) the federal funds rate, plus 0.50% per annum, and (c) LIBOR for an interest period of one month plus, 1.00% per annum. Under the LIBOR Option, interest was determined based on interest periods to be selected by Affymetrix of one, two, three or six months (and, to the extent available to all relevant lenders, nine or 12 months) and was equal to LIBOR plus 2.50% to 2.75% dependent on the senior leverage ratio then in effect, calculated based on the actual number of days elapsed in a 360-day year. Interest was paid at the end of each interest period or in the case of interest periods longer than three months, quarterly.

The loans and other obligations under the Senior Secured Credit Facility were (i) guaranteed by substantially all of the Company's domestic subsidiaries (subject to certain exceptions and limitations) and (ii) secured by substantially all of the assets of the Company and each guarantor (subject to certain exceptions and limitations).

The Amended Credit Amendment required the Company to maintain an interest coverage ratio of at least 3.5 to 1.0 and a senior leverage ratio not exceeding initially 1.75 to 1.00 and stepping down to 1.20 to 1.00. The Amended Credit Agreement also included other covenants, including negative covenants that, subject to certain exceptions, limit the Company, and that of certain of its subsidiaries’, ability to, among other things: (i) incur additional debt, including guarantees by the Company or its subsidiaries, (ii) make investments, pay dividends on capital stock, redeem or repurchase capital stock, redeem or repurchase the Company’s senior convertible notes or any subordinated obligations, (iii) create liens and negative pledges, (iv) make capital expenditures, (v) dispose of assets, (vi) make acquisitions, (vii) create or permit restrictions on the ability of the Company's subsidiaries to pay dividends or make distributions to the Company, (viii) engage in transactions with affiliates, (ix) engage in sale and leaseback transactions, (x) consolidate or merge with or into other companies or sell all or substantially all the Company’s assets and (xi) change their nature of business, their organizational documents or their accounting policies.

The Company was required to make the following mandatory prepayments: (a) annual prepayments in an amount equal to 50% of excess cash flow (as defined in the Credit Agreement), subject to a leverage-based step down, (b) prepayments in an amount equal to 100% of the net cash proceeds of issuances or incurrences of debt obligations of Affymetrix and its subsidiaries (other than debt incurrences expressly permitted by the Credit Agreement), (c) prepayments in an amount equal to 100% of the net proceeds of asset sales in excess of $2.5 million annually (subject to certain reinvestment rights) and (d) prepayments in an amount equal to any indemnification payments or similar payments received under the Acquisition Agreement, subject to certain exclusions.

The Amended Credit Agreement also contained events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-default and cross-acceleration to other indebtedness in excess of specified amounts, monetary judgment defaults in excess of specified amounts, bankruptcy or insolvency, actual or asserted invalidity or impairment of any part of the credit documentation (including the failure of any lien on a material portion of the collateral to remain perfected) and change of ownership or control defaults. In addition, the occurrence of a "fundamental change" under the indenture governing the 4.00% Notes would be an event of default under the Credit Agreement. As of December 31, 2014, the Company was in compliance with the covenants.

The proceeds received on June 25, 2012 from the original Term Loan were net of debt issuance costs of approximately $4.5 million that were being amortized over the 5-year term of the Senior Secured Credit Facility. Following the refinance under the Fourth Amendment, the Company wrote off unamortized debt issuance costs of $2.5 million associated with the original Term Loan, and received proceeds on October 17, 2013 from the new Term Loan and Revolver, net of debt issuance costs of approximately $0.8 million that amortize on the effective interest rate method beginning October 17, 2013.

Quarterly, principal payments were made under the Term Loan, which amortized such that 10% of the outstanding principal was due during the first four years and the remaining 60% is due in the fifth year, including any remaining principal balance and any outstanding revolver balance at such time.

The Company incurred $0.9 million and $1.6 million in interest expense under the Senior Secured Credit Facility for the years ended December 31, 2015 and 2014, respectively. On October 28, 2015, the Company paid off the Term Loan entirely in connection with the execution of the Senior Credit Facility Agreement discussed below.

Senior Credit Facility

On October 28, 2015, the Company entered into a five year $100.0 million Senior Credit Facility Agreement and terminated and paid off the Senior Secured Credit Facility with the draw down. The Senior Credit Facility Agreement provides for a Senior Credit Facility in an aggregate amount of $100.0 million of revolving commitments and an accordion feature permitting the Company to request an increase in the revolving commitments or term loan commitments by an additional amount of up to $50.0 million in the aggregate.

At the option of the Company (subject to certain limitations), borrowings under the Senior Credit Facility Agreement bear interest at either the Base Rate or LIBOR, plus in each case an applicable margin. Under the Base Rate option, interest will be at the Base Rate plus 0.50% to 1.00% depending on the consolidated leverage ratio then in effect. The Base Rate will be equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) the Eurodollar Rate plus 1.00%; and if the Base Rate shall be less than zero, such rate shall be deemed zero for purposes of the Senior Credit Facility Agreement. Under the LIBOR option, interest will be determined based upon interest periods selected by the Company of one, two, three, or six months (or if available to all Lenders, twelve months) and will be equal to LIBOR plus 1.50% to 2.00% depending on the consolidated leverage ratio then in effect. Interest will be paid at the end of each LIBOR interest period or in the case of interest periods longer than three months and in the case of Base Rate loans, quarterly. As of December 31, 2015, the applicable interest rate was approximately 2.07%.

The loans and other obligations under the Senior Credit Facility are (i) guaranteed by substantially all of the Company’s domestic subsidiaries (subject to certain exceptions and limitations) and (ii) secured by substantially all of the assets of the Company and each guarantor (subject to certain exceptions and limitations).

The Senior Credit Facility Agreement requires the Company to maintain an interest coverage ratio of at least 3.50 to 1.00 and a consolidated leverage ratio not exceeding initially 3.50 to 1.00 and stepping down to 2.75 to 1.00. The Senior Credit Facility Agreement also includes other covenants, including negative covenants that, subject to certain exceptions, limit the Company, and that of certain of its subsidiaries’, ability to, among other things: (i) incur additional debt, including guarantees by the Company or its subsidiaries, (ii) make investments, pay dividends on capital stock or repay subordinated or convertible indebtedness, (iii) create liens and negative pledges, (iv) dispose of assets, (v) make acquisitions, (vi) create or permit restrictions on the ability of the Company's subsidiaries to pay dividends or make distributions to the Company, (vii) engage in transactions with affiliates, (viii) engage in sale and leaseback transactions, (ix) consolidate or merge with or into other companies or sell all or substantially all the Company’s assets and (x) change their nature of business, their organizational documents or their accounting policies.

The Company is required to make mandatory prepayments immediately if for any reason the dollar equivalent amount of all outstanding exposure exceeds 105% of the aggregate commitments in the amount of such excess over the aggregate commitments.

The Senior Credit Facility Agreement also contains events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-default and monetary judgment defaults in excess of specified amounts, customary ERISA defaults in excess of specified amounts, bankruptcy or insolvency, actual or asserted invalidity or impairment of any material provision of the credit documentation (including the failure of any lien on a material portion of the collateral to remain perfected) and change of control defaults. In addition, the occurrence of a “fundamental change” under the indenture governing the 4.00% Convertible Notes would be an event of default under the Senior Credit Facility Agreement. As of December 31, 2015, the Company was in compliance with the covenants.

Following the execution of the Senior Credit Facility Agreement, the Company received proceeds in the amount of $20.0 million on October 28, 2015, net of debt discount of approximately $0.1 million that amortizes on the effective interest rate method beginning October 28, 2015 over the 5-year term of the Senior Credit Facility. The Company also recorded debt issuance costs of approximately $0.2 million that amortize on the effective interest rate method beginning October 28, 2015 over the 5-year term of the Senior Credit Facility. The proceeds were utilized to repay the existing Term Loan. The Company wrote off unamortized debt issuance costs of $0.7 million associated with the Term Loan in October 2015 accordingly.

The Company incurred $0.1 million in interest expense under the Senior Credit Facility for the year ended December 31, 2015. The principal amount of unpaid maturities per the Senior Credit Facility Agreement is as follows (in thousands):



For the Year Ending December 31,
2016	$	—
2017	—
2018	—
2019	—
2020	19,088
Total	$	19,088

The Company intends to continue making quarterly payments during 2016 and classified $4.0 million as current on the accompanying Consolidated Balance Sheet as of December 31, 2015.

4.00% Convertible Senior Notes

On June 25, 2012, the Company issued $105.0 million principal amount of 4.00% Convertible Senior Notes ("4.00% Notes") due July 1, 2019. The net proceeds, after debt issuance costs totaling $3.9 million from the 4.00% Notes offering, were $101.1 million. The 4.00% Notes bear interest of 4.00% per year payable semi-annually in arrears on January 1 and July 1 of each year, beginning on January 1, 2013 until the maturity date of July 1, 2019, unless converted, redeemed or repurchased earlier. The debt issuance costs are being amortized over the effective life of the 4.00% Notes, which is 7 years.

Holders of the 4.00% Notes may convert their 4.00% Notes into shares of the Company's stock at their option any time prior to the close of business on the business day immediately preceding the maturity date. The 4.00% Notes are initially convertible into approximately 170.0319 shares of the Company's common stock per $1,000 principal amount of notes, which equates to 17,857,143 shares of common stock, or an initial conversion price of $5.88 per share of common stock. The conversion rate is subject to certain customary anti-dilution adjustments. In addition, following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event in certain circumstances. Holders may also require the Company to repurchase for cash their notes upon certain fundamental changes.

On or after July 1, 2017, the Company can redeem for cash all or part of the 4.00% Notes if the last reported sale price per share of the Company's common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending within 5 trading days prior to the date on which the Company provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the 4.00% Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company calls the 4.00% Notes for redemption, a holder of notes may convert its notes only until the close of business on the scheduled trading day immediately preceding the redemption date unless the Company fails to pay the redemption price (in which case a holder of notes may convert such notes until the redemption price has been paid or duly provided for).

As of December 31, 2015, the outstanding balance on the 4.00% Notes was $105.0 million. Interest incurred was $4.8 million for each of the years ended December 31, 2015, 2014 and 2013.