Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Note 9 - Commitments and Contingencies

Operating Leases

We lease several facilities under operating leases expiring through 2014. Certain leases require us to pay increases in real estate taxes, operating costs and repairs over certain base year amounts. Lease payments for the six and three months ended June 31, 2011 were $247,000 and $123,000, respectively.  Lease payments for the six and three months ended June 31, 2010 were $193,000 and $96,000, respectively.

Capital Lease Obligation

We lease certain equipment under a non-cancelable lease agreement at a fixed interest rate of 6%. The lease is accounted for as capital lease. The equipment under the capital lease as of June 30, 2011 had a cost of $512,000. Future minimum commitments under all non-cancelable capital leases are as follows (in thousands):

	Total		Interest		Principal
2011	$	62	$	9	$	53
2012		185		21		164
2013		186		12		174
2014		124		3		121
	$	557	$	45	$	512

Commercial Commitments

We have entered into a number of agreements with telecommunications companies to purchase communications services. Some of the agreements require a minimum amount of services to be purchased over the life of the agreement, or during a specified period of time.

Glowpoint believes that it will meet its commercial commitments.  In certain instances where Glowpoint did not meet the minimum commitments, no penalties for minimum commitments have been assessed and the Company has entered into new agreements.  It has been our experience that the prices and terms of successor agreements are similar to those offered by other carriers.

Glowpoint does not believe that any loss contingency related to a potential shortfall should be recorded in the condensed consolidated financial statements because it is not probable, from the information available and from prior experience, that Glowpoint has incurred a liability.

Letter of Credit

In November 2010, the Company entered into an irrevocable standby letter of credit (“LOC”) for $115,000 to secure our security deposit for the sublease of our corporate headquarters.  The LOC was obtained from Silicon Valley Bank (“SVB”) and will be renewed yearly until January 2014, the expiration date of our sublease.