10. Long-Term Debt

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

Line of Credit

BB&T Bank

At December 31, 2015, the Company had a Master Loan and Security Agreement and Revolving Credit Note with BB&T Bank. The Company's former bank, Susquehanna Bank, was acquired by BB&T Bank effective November 8, 2015. The Company and its subsidiary, GSE Performance Solutions, Inc., are 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 (now BB&T 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, BB&T 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 December 31, 2015 and 2014 the cash collateral account totaled $3.5 million and $4.2 million, respectively, and was classified as restricted cash on the consolidated balance sheets.

The credit agreement contains certain restrictive covenants regarding future acquisitions and incurrence of debt. On July 31, 2015, the Company signed a Fifth Comprehensive Amendment to the Master Loan and Security Agreement in which the Company's financial covenants were reduced from four to two, and the covenant targets were adjusted.

		As of
	Covenant	December 31, 2015

Minimum tangible capital base	Must exceed $10.5 million	$10.8 million
Quick ratio	Must exceed 1.00 : 1.00	1.44 : 1.00

As of December 31, 2015, the Company was in compliance with its financial covenants as defined above.

IberiaBank

On November 14, 2014, the acquisition date, Hyperspring had a $1.0 million working capital line of credit with IberiaBank. Hyperspring used the IberiaBank line of credit as needed mainly to provide for payroll funding. The line was replenished through collection of receivables obtained in the following weeks. Interest was payable monthly at a rate of the prime rate of interest as published in the money rate section of the Wall Street Journal plus 2.50%. The effective rate at November 14, 2014 was 5.75%. The line was secured by all accounts and was guaranteed by the members of Hyperspring.

On December 7, 2014, the working capital line of credit matured while the Company was renegotiating the new terms with IberiaBank subsequent to the acquisition of Hyperspring. On January 22, 2015, a promissory note was executed between Hyperspring and IberiaBank to extend the $1.0 million line of credit. Under the new terms, 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. The effective rate at the date of the promissory note was 4.25 %. The line is secured by all accounts of Hyperspring and guaranteed by GSE Systems, Inc. The maturity date of the line of credit is July 6, 2016.

At December 31, 2014, the outstanding balance on the line of credit was $339,000. The outstanding balance on the line of credit was repaid in 2015 and no additional borrowings have been made against the line of credit.