Long-term Debt and Capital Lease Obligations

9 Months Ended

Sep. 30, 2012

Long-term Debt and Capital Lease Obligations

5. Long-term Debt and Capital Lease Obligations

Long-term debt and capital lease obligations were comprised of the following at September 30, 2012 and December 31, 2011:

In thousands	September 30, 2012			December 31, 2011
Bank term loan	$	11,550		$	12,600
Capital lease obligations		27			69
		11,577			12,669
Less current portion		(1,952	)		(1,454	)
	$	9,625		$	11,215

The term loan provides for quarterly payments of principal and interest with final scheduled maturity on December 31, 2015. The loan bears interest at LIBOR plus 1.25 to 2.25 percent, depending on the percentage of the Company’s liquid assets on deposit with or invested through the bank, or at the prime rate. The effective interest on the loan was 1.47 percent at September 30, 2012. The loan is secured by a lien on all assets of the Company excluding intellectual property, which the Company has agreed not to pledge to any other party. The loan requires the Company to maintain a minimum of $15 million in unrestricted cash, cash equivalents and investments. The loan also contains certain covenants that restrict additional indebtedness, additional liens and sales of assets, and dividends, distributions or repurchases of common stock.

In addition, the Company leases certain equipment under capital leases with original terms of up to four years. These leases have effective interest rates ranging from 7.2 percent to 12.3 percent and are secured by the underlying leased assets.

The future scheduled principal payments due under these financing obligations were as follows at September 30, 2012:

In thousands	Bank Term Loan			Capital Lease Obligations
Year ended December 31:
2012	$	350		$	12
2013		2,100			15
2014		4,200			—
2015		4,900			—
		11,550			27
Less current portion		(1,925	)		(27	)
Long-term portion	$	9,625		$	—