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Note 7 - Bank Lines of Credit and Other Debt

3 Months Ended

Mar. 31, 2012

7.	Bank Lines of Credit and Other Debt

At March 31, 2012 and December 31, 2011, the Company had debt outstanding of $12,991,000 and $10,114,000, respectively, (excluding outstanding letters of credit of $321,000 at March 31, 2012 and $280,000 at December 31, 2011).

Debt outstanding under the Company’s Loan Agreement (“the Loan Agreement”) with Bank of America, N.A. (“BofA”) (not including borrowings by Palladium) was $10,005,000 and $9,716,000 at March 31, 2012 and December 31, 2011, respectively. The terms of and borrowings under the Loan Agreement as of March 31, 2012 was as follows (dollars in thousands):

Amount Outstanding			Outstanding Letters of Credit				Unused Lines of Credit (3)				Total				Interest Rate		Expiration Date
$	10,005		$	321			$	10,674			$	21,000			2.08% (1)		April 2012 to May 2012 (2)

(1)

This represents the weighted average interest rate of borrowings under the Loan Agreement. The interest is at the Company’s option at (i) BofA’s prime rate minus 0.75 percentage points, or (ii) IBOR plus 1.25 percentage points.

(2)

This represents the maturity dates of the borrowings under the Loan Agreement. The Loan Agreement was scheduled to expire on July 1, 2013, but as discussed in detail in Note 14 below, on April 25, 2012, the Company entered into a new credit agreement with Wells Fargo Bank and in connection therewith terminated the Loan Agreement and repaid in full all borrowings thereunder.

(3)

In January 2012, the Company entered into the Second Amendment with BofA which reduced the amount of availability by any obligations owed for using BofA’s treasury or cash management services up to $1,500,000.

Palladium debt outstanding under its lines of credit and term loans was $2,986,000 and $398,000 at March 31, 2012 and December 31, 2011, respectively. The terms of and current borrowing under Palladium’s lines of credit facilities and term loans at March 31, 2012 was as follows (dollars and Euros in thousands):

	Amount Outstanding		Outstanding Letters of Credit		Unused Lines of Credit		Total		Interest Rate	Expiration Date
Secured lines of credit (1)	$	0	$	0	$	1,334	$	1,334	Variable, 1.98% to 2.86%	June 30, 2012
Secured line of credit		2,803		0		2,533		5,336	Variable, 1.70%	December 31, 2012
Fixed rate loans		182		0		0		182	5.42% to 5.60%	2012 to 2013
Accrued interest		1		0		0		1
	$	2,986	$	0	$	3,867	$	6,853

(1)

Under these lines of credit, the facility amount available between January 1 and June 30, 2012 is €1,000 (or approximately $1,334).

Interest expense of $75,000 and $15,000 was incurred on these bank loans and lines of credit during the three months ended March 31, 2012 and 2011, respectively.

- 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.

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