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Debt | 12 Months Ended
--- | ---
Dec. 31, 2016
Debt Disclosure [Abstract] |
Debt | 7. Debt Long-term debt consisted of the following at December 31, 2016 and 2015 (in thousands):
| December 31,
| 2016 |  | 2015
Senior secured loans (includes unamortized discount of $1,442 and $1,008 at December 31, 2016 and December 31, 2015, respectively, based on imputed interest rate of 6.6%) | $ | 47,929 |  |  | $ | 23,366 |
Seller notes due 2016 | — |  |  | 500 |
| 47,929 |  |  | 23,866 |
Less current maturities | (2,190 | ) |  | (1,500 | )
Total long-term debt | $ | 45,739 |  |  | $ | 22,366 |
Loan and Security Agreements Loan and Security Agreements On November 15, 2016, Upland Software, Inc. (the “Company”) amended its Credit Agreement (the “Credit Agreement”) with a consortium of lenders (the “Lenders”), Wells Fargo Capital Finance, as agent, providing for a secured credit facility (the “Loan Facility”). As of December 31, 2016, there was (i) none in U.S. revolving loans outstanding under the Credit Agreement, (ii) none drawn on the Canadian revolving credit facility, (iii) $43.8 million in U.S. term loans outstanding under the Credit Agreement; and (iv) $5.6 million in Canadian term loans outstanding under the Credit Agreement. Loans The Credit Agreement provides for up to $90.0 million of financing credit as outlined below. The Credit Agreement provides (i) a U.S. revolving credit facility in an aggregate principal amount of up to $9.0 million (the “U.S. Revolver”), (ii) a U.S. term loan facility in an aggregate principal amount of up to $44.4 million (the “U.S. Term Loan”), (iii) a delayed draw term loan facility in an aggregate principal amount of up to $10.0 million (the “DDTL”). (iv) a Canadian revolving credit facility in an aggregate principal amount of up to $1.0 million (the “Canadian Revolver” and, together with the U.S. Revolver, the “Revolver”); and (v) a Canadian term loan facility in an aggregate principal amount of up to $5.6 million (the “Canadian Term Loan” and, together with the U.S. Term Loan, the “Term Loan”). The Credit Agreement also includes provisions for optional, uncommitted increases in the maximum size of the loan facility available under the Credit Agreement by an aggregate principal amount of $20.0 million upon the satisfaction of the terms and conditions set forth in the Credit Agreement. The Credit Agreement also provides for, among other things, (i) a maturity date of November 15, 2021, (ii) a maximum amount of permitted stock repurchases of $8,300,000, and (iii) a maximum amount of seller subordinated indebtedness permitted to be incurred in connection with permitted acquisitions of $16,700,000. Terms of Revolver Loans under the Revolver are available up to the lesser of (i) $10.0 million (the “Maximum Revolver Amount”) or (ii) the result of (a) 100% multiplied by (subject to step-downs beginning December 31, 2016) of certain subsidiaries' recurring revenues on a trailing twelve month basis, minus (b) the outstanding balance of the Term Loans and any swing line loans made under the Credit Agreement (such amount, the “Credit Amount”). The Revolver provides a subfacility whereby Borrowers may request letters of credit (the “Letters of Credit”) in an aggregate amount not to exceed, at any one time outstanding, $0.5 million and $0.25 million, from the U.S & Canadian facilities, respectively. The aggregate amount of outstanding Letters of Credit are reserved against the credit availability under the Maximum Revolver Amount and the Credit Amount. Loans under the Revolver may be borrowed, repaid and reborrowed until November 15, 2021 (the “Maturity Date”), at which time all amounts borrowed under the Credit Agreement must be repaid. Terms of Term Loans The Term Loans are repayable, on a quarterly basis beginning December 31, 2016, by an amount equal to 5.0% per annum of the original principal amount of such loan. Any amount remaining unpaid is due and payable in full on the Maturity Date. Terms of Delay Draw Term Loan Pursuant to the terms of the Credit Agreement, the DDTL is to be used to finance acquisitions. The DDTL can be drawn upon until November 15, 2018. The DDTL is repayable, on a quarterly basis, by an amount equal to 5.0% per annum of the original funded amount of the DDTL. Any amount remaining unpaid would be due and payable in full on the Maturity Date. Other Terms of Loan Facility At the option of the Company, U.S. loans accrue interest at a per annum rate based on (i) the U.S. base rate plus a margin ranging from 3.0% to 4.0% depending on the leverage ratio or (ii) the U.S. LIBOR rate determined in accordance with the Credit Agreement (based on 1, 2, 3 or 6-month interest periods) plus a margin ranging from 4.0% to 5.0% depending on the leverage ratio. The U.S. base rate is a rate equal to the highest of the federal funds rate plus a margin equal to 0.5%, the U.S. LIBOR rate for a 1-month interest period plus 1.0% and Wells Fargo Capital Finance’s prime rate. At the option of the Company, the Canadian loans accrue interest at a per annum rate based on (i) the Canadian prime rate or the U.S. base rate plus a margin ranging from 3.0% to 4.0% depending on the leverage ratio or (ii) the U.S. LIBOR rate determined in accordance with the Credit Agreement (based on 1, 2, 3 or 6-month interest periods) (or the Canadian Bankers Acceptance ("Canadian BA") rate determined in accordance with the Credit Agreement for obligations in Canadian dollars) plus a margin ranging from 4.0% to 5.0% depending on the leverage ratio. Accrued interest on the loans will be paid monthly, or, with respect to loans that are accruing interest based on the U.S. LIBOR rate or Canadian BA rate, at the end of the applicable U.S. LIBOR or Canadian BA interest rate period. The Company is also obligated to pay other customary servicing fees, letter of credit fees and unused credit facility fees. The Loan Facility contains customary affirmative and negative covenants. The negative covenants limit the ability of the Company and its subsidiaries to, among other things (in each case subject to customary exceptions for a credit facility of this size and type):
• | Incur additional indebtedness or guarantee indebtedness of others;
• | Create liens on their assets;
• | Make investments, including certain acquisitions;
• | Enter into mergers or consolidations;
• | Dispose of assets;
• | Pay dividends and make other distributions on the Company’s capital stock, and redeem and repurchase the Company’s capital stock;
• | Enter into transactions with affiliates; and
• | Prepay indebtedness or make changes to certain agreements.
There are certain financial covenants that become more restrictive starting March 31, 2017. If an event of default occurs, at the election of the Lenders, a default interest rate shall apply on all obligations during an event of default, at a rate per annum equal to 2.00% above the applicable interest rate. The Loan Facility limits the Company's ability to buyback its capital stock, subject to restrictions including a minimum liquidity requirement of $20.0 million before and after any such buyback. Termination of Prior Credit Agreements In conjunction with the amended facility, the Company expensed unamortized financing costs of $0.1 million. Interest Rate and Financing Costs Cash interest costs averaged 5.7% under the new Credit Agreement for the year ended December 31, 2016. In addition, the Company incurred $1.9 million of financing costs associated with the Credit Agreement in the year ended December 31, 2016. These financing costs will be amortized to non-cash interest expense over the term of the Credit Agreement. Seller Notes In May 2013, the Company issued seller notes payable in connection with the acquisition of FileBound. The notes had an aggregate principal amount of $3.5 million with 5% stated interest. $3.0 million of the notes were paid in May 2015 and $500,000 of the notes were paid in May 2016. Debt Maturities Future debt maturities of long-term debt excluding debt discounts at December 31, 2016 are as follows, (in thousands):
Year ending December 31: |
2017 | $ | 2,519 |
2018 | 2,519 |
2019 | 2,519 |
2020 | 2,519 |
2021 | 39,294 |
Thereafter | — |
| $ | 49,370 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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