Short-term and Long-term Obligations

Short-term and long-term obligations as of June 30, 2012 and 2011 consisted of the following (in thousands):



	June 30,
	2012			2011
Lines of credit	$	20,624		$	14,554
Building term loans	12,133			13,597
Capital leases	58			86
Total	32,815			28,237
Current portion	(13,398		)	(591		)
Long-term portion	$	19,417		$	27,646

Activities under Revolving Lines of Credit and Term Loans

Bank of America

In June 2010, the Company obtained a revolving line of credit from Bank of America, N.A. ("Bank of America") totaling $25,000,000 that matures on June 15, 2013 with an interest rate at the LIBOR rate plus 1.50% per annum. The Company used $18,553,000 of the line of credit to purchase three buildings in San Jose, California. In December 2010, the Company repaid $13,854,000 of the line of credit by obtaining a new term loan from Wells Fargo Bank for $13,875,000 and the remaining $4,699,000 of the line of credit has been extended to be paid-off by June 15, 2013. In October 2011, the Company paid off $13,413,000 of the outstanding term loan with Wells Fargo Bank with no prepayment penalty.

In October 2011, the Company entered into a second amendment to the credit agreement with Bank of America which provided for (i) a $40,000,000 revolving line of credit facility that replaced the existing $25,000,000 revolving line of credit and (ii) a five-year $14,000,000 term loan facility to pay off the outstanding term loan of $13,413,000 with Wells Fargo Bank. The term loan is secured by the three buildings purchased in San Jose, California in June 2010 and the principal and interest are payable monthly through September 30, 2016 with an interest rate at the LIBOR rate plus 1.50% per annum.

For borrowings denominated in U.S. dollars, the interest rate for the revolving line of credit is at the LIBOR rate plus 1.25% per annum. The LIBOR rate was 0.24% at June 30, 2012. For borrowings denominated in Taiwanese dollars, the interest rate is equals to the lender's established interest rate which is adjusted monthly. In fiscal year 2011, the Company drew an additional $9,855,000 from the revolving line of credit with Bank of America and paid $9,195,000 for a deposit to purchase land in Taiwan that is adjacent to land that was purchased in August 2010. In fiscal year 2012, the Company drew an additional $9,798,000 from the revolving line of credit with Bank of America for the construction of facilities in Taiwan and repaid $13,485,000. In July 2012, the Company drew an additional $2,200,000 from the revolving line of credit with Bank of America for expansion of business operations in Taiwan with an interest rate at 1.29% per annum and repaid $4,863,000.

As of June 30, 2012, the total outstanding borrowings under the Bank of America term loan was $12,133,000. The total outstanding borrowings under the Bank of America line of credit was $10,562,000 and $14,554,000 as of June 30, 2012 and 2011, respectively. As of June 30, 2012 and 2011, borrowings denominated in Taiwanese dollars under the Bank of America line of credit were translated to U.S. dollars of $4,863,000 and $9,855,000, respectively. The interest rates for these loans ranged from 1.29% to 1.81% per annum at June 30, 2012 and was 1.64% per annum at June 30, 2011, respectively. As of June 30, 2012, the unused revolving line of credit with Bank of America was $29,438,000.

China Trust Bank

In October 2011, the Company also obtained an unsecured revolving line of credit from China Trust Bank totaling NT300,000,000 Taiwanese dollars or $9,898,000 U.S. dollars equivalents that matures on July 31, 2012 with an interest rate equal to the lender’s established interest rate plus 0.5% which is adjusted monthly. In fiscal year 2012, the Company drew the full amount from this revolving line of credit to repay $9,898,000 of the revolving line of credit to Bank of America. The interest rate for the borrowing under this line of credit was 1.41% per annum at June 30, 2012. The total outstanding borrowings under the China Trust Bank line of credit was denominated in Taiwanese dollars and was translated into U.S. dollars of $10,062,000 as of June 30, 2012. There was no unused revolving line of credit with China Trust Bank as of June 30, 2012.

In July 2012, the Company entered into a NT$450,000,000 Taiwanese dollars or $14,912,000 U.S. dollars equivalents credit facility with China Trust Bank. The credit facility provides for a one-year term loan. In July 2012, the Company drew NT$150,000,000 Taiwanese dollars or $5,014,000 U.S. dollars equivalents under the term loan. In addition, the Company borrowed under the term loan to pay down the outstanding revolving line of credit of NT$300,000,000 Taiwanese dollars or $10,062,000 U.S. dollars equivalents. The term loan is secured by the land and building located in Bade, Taiwan with an interest rate at the lender's established interest rate plus 0.3% which is adjusted monthly. The term loan matures on July 31, 2013 with an interest rate at 1.16% per annum. The Company used the proceeds from this term loan to repay $4,863,000 of the revolving line of credit to Bank of America. In July 2012. the Company has an outstanding balance under the term loan of NT$450,000,000 Taiwanese dollars or $14,912,000 U.S. dollars equivalents, which is the full available balance under the credit facility.

Covenant Compliance

The credit agreement with Bank of America contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries. The credit agreement contains certain financial covenants, including the following:



	•		Not to incur on a consolidated basis, a net loss before taxes and extraordinary items in any two consecutive quarterly accounting periods;



	•		The Company’s funded debt to EBITDA ratio (ratio of all outstanding liabilities for borrowed money and other interest-bearing liabilities, including current and long-term debt, less the non-current portion of subordinated liabilities to EBITDA) shall not be greater than 2.00;



	•		The Company’s unencumbered liquid assets, as defined in the agreement, held in the United States shall have an aggregate market value of not less than $30,000,000.

As of June 30, 2012 and 2011, the total assets except for the three buildings purchased in San Jose, California in June 2010 collateralizing the line of credit with Bank of America were $571,060,000 and $446,347,000, respectively. As of June 30, 2012, total assets collateralizing the term loan were $18,043,000. As of June 30, 2012, the Company was in compliance with all financial covenants associated with the term loan and line of credit with Bank of America.

The credit agreement with China Trust Bank, entered into by our Taiwan subsidiary, requires the parent company to guarantee for the revolving line of credit obligation. There is no other collateral or financial covenant associated with the unsecured revolving line of credit with China Trust Bank at June 30, 2012; however, the term loan obtained from China Trust Bank in July 2012 is secured by the land and building located in Bade, Taiwan.

Debt Maturities

The following table as of June 30, 2012, summarizes future minimum principal payments on the Company’s debts excluding capital leases (in thousands):



Fiscal Years Ending June 30,
2013	$	13,362
2014	12,862
2015	2,800
2016	2,800
2017	933
Thereafter	—
Total	$	32,757