11. Long-Term Debt

At September 30, 2016, and December 31, 2015, the Company had no long-term debt.

Lines of Credit

BB&T Bank

At September 30, 2016, the Company had a Master Loan and Security Agreement (the "Loan Agreement") and Revolving Credit Note with BB&T Bank. 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 4.5%.

The agreement would have expired on September 30, 2016, but the Company and BB&T Bank amended the Loan Agreement to extend the expiration date until March 31, 2017. All other terms and conditions remained the same.

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, contract receivables, intangible assets, equipment, software and leasehold improvements.

The Company is obligated to maintain a segregated cash collateral account at 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 agreement, BB&T Bank has complete and unconditional control over the cash collateral account.

At September 30, 2016, and December 31, 2015, the cash collateral account supporting standby letters of credit totaled $3.3 million and $3.5 million, respectively. The balances were classified as restricted cash on the consolidated balance sheets.

The Loan Agreement contains certain restrictive covenants regarding future acquisitions and incurrence of debt. In addition, the Loan Agreement contains financial covenants with respect to the Company's minimum tangible capital base and quick ratio.

		As of
	Covenant	September 30, 2016

Minimum tangible capital base	Must exceed $10.5 million	$27.0 million
Quick ratio	Must exceed 1.00 : 1.00	1.52 : 1.00

As of September 30, 2016, the Company was in compliance with its financial covenants as described above.

Letters of Credit and Bonds

As of September 30, 2016, the Company has nine standby letters of credit totaling $3.3 million which represent advance payment and performance bonds on eight contracts. The Company has deposited the full value of nine standby letters of credit in escrow accounts, amounting to $3.3 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 consolidated balance sheets at September 30, 2016, as restricted cash, of which $1.6 million is categorized as current restricted cash and $1.7 million categorized as long-term restricted cash.