NOTE 10 — DEBT

The following table presents the Company’s debt as of:


	December 31,
(Dollars in thousands)	2012		2011
Lines of credit	$	1,000	$	5,116


Notes Payable	$	37,246	$	39,000
Term loan		6,900		7,800
Seller notes		2,906		4,813

Total long-term debt, including amounts due within one year	$	47,052	$	51,613

Long-term debt due within one year is as follows:


	December 31,
(Dollars in thousands)	2012		2011
Contractual principal payments due within one year:
Term loan	$	1,200	$	900
Seller notes		2,290		1,907

Long-term debt due within one year	$	3,490	$	2,807

Lines of credit

Lines of credit consists of an $8.0 million asset-based revolving loan, which matures in September 2014 and is subject to a borrowing base. At December 31, 2012 and 2011, outstanding borrowings on the revolving line of credit were $1.0 million and $5.1 million, respectively. As of December 31, 2012, available borrowing capacity under the revolving line of credit was $7.0 million. The line of credit has a variable interest rate based upon the lender’s base rate, which was 4.0% on December 31, 2012, and is secured by all of the assets of Industrial Supply. Interest expense on lines of credit was $0.1 million and $0.2 million for the years ended December 31, 2012 and 2011, respectively.

Notes Payable

On July 16, 2010, as partial settlement of the Company’s then outstanding 9.0% Trust Originated Preferred Securities (the “TOPrS”), the former holders of the TOPrS received $39.0 million in notes payable, due December 2016, bearing interest at 9.0% per annum (the “Notes Payable”). Interest expense on the Notes Payable was $3.4 million and $3.5 million for the years ended December 31, 2012 and 2011, respectively.

The Company acquired $1.8 million of the Notes Payable in an open market trade in May 2012, for $1.4 million, and recognized a $0.4 million gain on extinguishment of debt in other income (expense) in the consolidated statements of operations. At December 31, 2012 and 2011, the Notes Payable balance was $37.2 million and $39.0 million, respectively.

The Notes Payable indenture contains covenants that limit the ability of the Company and certain subsidiaries, subject to certain exceptions and qualifications, to (i) pay dividends or make distributions, repurchase equity securities, or make guarantee payments on the foregoing; (ii) make payments on debt securities that rank pari passu or junior to the Notes Payable; (iii) effect a change in control of the Company; or (iv) enter into transactions with insiders.

Term loan

The term loan consists of an $8.0 million loan maturing in September 2016, which had an outstanding balance of $6.9 million and $7.8 million at December 31, 2012 and 2011, respectively. The term loan is subject to annual principal payments of $0.8 million in year one, $1.2 million in each of years two and three, $1.6 million in each of years four and five, with a balloon payment of any remaining principal balance due at maturity. The term loan has a variable interest rate based upon the lender’s base rate plus 1.00% per annum. In the event of default, the interest rate will increase by 5.00% per annum. At December 31, 2012, the interest rate on the term loan was 5.00%. The term loan is secured by all of the assets of Industrial Supply. Interest expense on the term loan was $0.4 million and $0.1 million for the years ended December 31, 2012 and 2011, respectively.

Seller notes

Seller notes are comprised of $5.0 million in obligations owed to the former owners of NABCO that were issued in connection with the 2011 acquisition of NABCO, which had aggregate outstanding balances of $2.9 million and $4.8 million at December 31, 2012 and 2011, respectively. The seller notes mature on January 29, 2016 and are subject to scheduled quarterly principal payments and, subject to certain conditions, accelerated principal payments. Based on NABCO’s 2011 earnings before interest, taxes, depreciation and amortization (“EBITDA”), $1.2 million of accelerated principal payments were due and paid in the year ended December 31, 2012. Based on NABCO’s 2012 EBITDA, $1.6 million of accelerated principal payments are due in the year ending December 31, 2013. The seller notes bear interest at 6.00% per annum and interest is paid quarterly. Interest expense on the seller notes was $0.2 million and $0.1 million for the years ended December 31, 2012 and 2011, respectively.

As of December 31, 2012, the Company was in compliance with all of the covenants under its debt agreements, which includes restrictions on dividends from Industrial Supply to Signature.

Contractual maturities of long-term debt as of December 31, 2012 are as follows:


	Contractual Payments Due By Period
(Dollars in thousands)	Less Than One Year		One to Three Years		Three to Five Years		More Than Five Years		Total
Notes Payable	$	—	$	—	$	37,246	$	—	$	37,246
Term loan		1,200		5,700		—		—		6,900
Seller notes		2,290		616		—		—		2,906

Total long-term debt	$	3,490	$	6,316	$	37,246	$	—	$	47,052