11. Long-Term Debt

At June 30, 2015 and December 31, 2014, the Company had no long-term debt.

Lines of Credit

Susquehanna Bank

At June 30, 2015, the Company had a Master Loan and Security Agreement and Revolving Credit Note with Susquehanna Bank ("Susquehanna"). The Company and its subsidiary, GSE Performance Solutions, Inc., were jointly and severally liable as co-borrowers. The Loan Agreement provides a $7.5 million revolving line of credit for the purpose of (i) issuing stand-by letters of credit and (ii) providing working capital. Working capital advances bear interest at a rate equal to the Wall Street Journal Prime Rate of Interest, floating with a floor of 4 1/2%. The agreement expires on June 30, 2016.

As collateral for the Company's obligations, the Company granted a first lien and security interest in all of the assets of the Company, including but not limited to, accounts receivable, proceeds and products, intangibles, trademarks, patents, intellectual property, machinery and equipment.

On September 9, 2014, the Company signed a Third Comprehensive Amendment to the Master Loan and Security Agreement. According to the Third Amendment, the Company is to maintain a segregated cash collateral account at Susquehanna Bank equal to the greater of (i) $3.0 million or (ii) the aggregate principal amounts of all Loans outstanding under the Revolving Credit Facility (including any issued and outstanding letters of credit, working capital advances, and negative foreign exchange positions) as security for the Company's obligations. Under this Amendment, Susquehanna Bank shall have complete and unconditional control over the cash collateral account.

On September 30, 2014, Susquehanna Bank collateralized the outstanding letters of credit issued under the line of credit. At June 30, 2015 and December 31, 2014, the cash collateral account totaled $4.5 million and $4.2 million, respectively. The balances were classified as restricted cash on the balance sheet.

Effective for the quarter ending June 30, 2015, Susquehanna Bank modified the financial covenants in the Company's financing documents. The amendment to the Master Loan and Security Agreement reduced the number of restrictive covenants from four to two, as depicted below. The credit agreement still contains certain restrictive covenants regarding future acquisitions and incurrence of debt.

		As of
	Covenant	June 30, 2015

Minimum tangible capital base	Must Exceed $10.5 million	$13.1 million
Quick ratio	Must Exceed 1.00 : 1.00	1.52 : 1.00

As of June 30, 2015, the Company was in compliance with its covenants as defined above.

IberiaBank

At June 30, 2015, Hyperspring, LLC has a $1.0 million working capital line of credit with IberiaBank for a one year period. Under the executed promissory note, interest is payable monthly at the rate of 1.00 percentage points over the prime rate of interest as published in the money rate section of the Wall Street Journal resulting in an effective interest rate of 4.25%. The line is secured by all accounts of Hyperspring and guaranteed by GSE Systems, Inc.

On July 6, 2015, Hyperspring renewed its $1.0 million working capital line of credit with IberiaBank under the same terms for a one year period. The line of credit expires on July 6, 2016.

Letters of Credit and Bonds

As of June 30, 2015, the Company has fourteen standby letters of credit and one surety bond totaling $4.5 million which represent advance payment and performance bonds on twelve contracts. The Company has deposited the full value of fourteen standby letters of credit in escrow accounts, amounting to $4.5 million, which have been restricted in that the Company does not have access to these funds until the related letters of credit have expired. The cash has been recorded on the Company's balance sheet at June 30, 2015 as restricted cash.