Note 9. Short-term and Long-term Obligations

Long-term obligations consisted of the following (in thousands):


	December 31, 2011			June 30, 2011
Line of credit	$	21,125		$	14,554
Building loans		13,533			13,597
Capital leases		68			86

Total		34,726			28,237
Current portion		(12,692	)		(591	)

Long-term portion	$	22,034		$	27,646

In June 2010, the Company obtained a revolving line of credit from Bank of America, N.A. (Bank of America) totaling $25,000,000 that matures on June 15, 2013 with an interest rate at the LIBOR rate plus 1.50% per annum. The Company used $18,553,000 of the line of credit to purchase three buildings in San Jose, California. In December 2010, the Company repaid $13,854,000 of the line of credit by obtaining a new term loan from Wells Fargo Bank for $13,875,000 and the remaining $4,699,000 of the line of credit has been extended to be paid-off by June 15, 2013. As of December 31, 2011, the Company paid off $13,412,500 of the outstanding term loan with Wells Fargo Bank with no prepayment penalty.

In March 2011, the Company drew an additional $9,855,000 from the revolving line of credit with an interest rate equal to the lender's established interest rate which is adjusted monthly and paid $9,195,000 for a deposit to purchase land in Taiwan that is adjacent to land that was purchased in August 2010. In the first quarter of fiscal year 2012, the Company drew an additional $3,156,000 from the revolving line of credit for the construction of facilities in Taiwan and repaid $9,898,000 in the second quarter of fiscal year 2012.

In October 2011, the Company entered into a second amendment to the credit agreement with Bank of America which provided for (i) a $40,000,000 revolving line of credit facility that replaced the existing $25,000,000 revolving line of credit and (ii) a five-year $14,000,000 term loan facility to pay off the outstanding term loan of $13,412,500 with Wells Fargo Bank. The term loan is secured by the three buildings purchased in San Jose, California in June 2010 and the principal and interest are payable monthly through September 30, 2016 with an interest rate at the LIBOR rate plus 1.50% per annum. The interest rate for the revolving line of credit is at the LIBOR rate plus 1.25% per annum. The LIBOR rate was 0.27% at December 31, 2011. In the second quarter of fiscal year 2012, the Company drew an additional $3,967,000 from the revolving line of credit for the construction of facilities in Taiwan. The interest rates for these loans ranged from 1.51% to 1.77% and 1.64% at December 31, 2011 and June 30, 2011, respectively.

In October 2011, the Company also obtained an unsecured revolving line of credit from China Trust Bank totaling $11,150,000 that matures on July 31, 2012 with an interest rate equal to the lender's established interest rate plus 0.5% which is adjusted monthly. In the second quarter of fiscal year 2012, the Company drew $9,898,000 from this revolving line of credit with an interest rate at 1.48% per annum to repay $9,898,000 of the revolving line of credit to Bank of America.

As of December 31, 2011, the total outstanding borrowings under the Bank of America term loan was $13,533,000. The total outstanding borrowings under the Bank of America line of credit was $11,270,000 and $14,554,000 as of December 31, 2011 and June 30, 2011, respectively. The total outstanding borrowings under the China Trust Bank line of credit was $9,855,000 as of December 31, 2011. As of December 31, 2011 and June 30, 2011, the total outstanding borrowings under these loans were $34,658,000 and $28,151,000, respectively. As of December 31, 2011, the unused revolving line of credit under Bank of America was $28,731,000 and under China Trust Bank was $1,295,000.

The credit agreement with Bank of America contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries. The credit agreement contains certain financial covenants, including the following:

•

Not to incur on a consolidated basis, a net loss before taxes and extraordinary items in any two consecutive quarterly accounting periods;

•

The Company's funded debt to EBITDA ratio (ratio of all outstanding liabilities for borrowed money and other interest-bearing liabilities, including current and long-term debt, less the non-current portion of subordinated liabilities to EBITDA) shall not be greater than 2.00;

•

The Company's unencumbered liquid assets, as defined in the agreement, held in the United States shall have an aggregate market value of not less than $30,000,000.

As of December 31, 2011 and June 30, 2011, the total assets except for the three buildings purchased in San Jose, California in June 2010 collateralizing the line of credit with Bank of America were $481,839,000 and $446,347,000, respectively. As of December 31, 2011, total assets collateralizing the term loan were $18,158,000. As of December 31, 2011, the Company was in compliance with all financial covenants associated with the term loan and line of credit with Bank of America.

The credit agreement with China Trust Bank requires the Company to guarantee for the revolving line of credit to its subsidiary in Taiwan. There is no other collateral or financial covenant associated with the revolving line of credit with China Trust Bank.