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Related Party Notes Payable
 12 Months Ended
Jun. 30, 2013
Related Party Notes Payable

3. RELATED PARTY NOTES PAYABLE

Related party notes payable consists of the following (in thousands):

 

 

 

 

 

 

 

Year Ended June 30,

 

 

Maturity Date

 

Interest Rate

 

2013

 

 

2012

Related party notes payable

 

07/31/2013

 

  8

%

 

$

  2,897

 

 

$

  5,563

 

We have an interest-bearing subordinated loan, or the Note, from our Chief Executive Officer, Ashutosh Roy, which originated in 2002 and previously had a maturity date of March 31, 2012. On March 31, 2012, we entered into Amendment No.1 to the loan agreement with Mr. Roy. Pursuant to the Amendment and subject to the terms and conditions contained therein, we agreed that (i) the maturity date of the Note would be extended 90 days to June 29, 2012; (ii) as of April 1, 2012 the “Face Amount” of the Note would be $5.6 million, which included $109,000 of interest for the 90 day extension. The Face Amount of $5.6 million reflects the reduced interest rate on the Note of 8% beginning April 1, 2012 prior to which the interest rate was 12%; and (iii) the Company may prepay the Note in full or in part at any time prior to the maturity date without interest penalty.

 

On June 29, 2012, we entered into Amendment No. 2 to the loan agreement with Mr. Roy. Pursuant to Amendment No. 2, and subject to the terms and conditions contained therein, we agreed to extend the maturity date of the Note to July 31, 2013. We may prepay the Note in full or in part at any time prior to the maturity date without interest penalty. On December 31, 2012, we made a $3.0 million partial repayment to Mr. Roy bringing the remaining indebtedness to Mr. Roy to $2.8 million.

 

Interest expense on related party notes was $334,000, $588,000, and $1.2 million, for fiscal years 2013, 2012, and 2011, respectively.

 

On July 31, 2013, we repaid the outstanding amount of $2.9 million owed under the Note to Mr. Roy (see Note 11).