Long-term Obligations. Our revolving bank line of credit provides that we may borrow up to 85% of eligible accounts receivable and up to 55% of eligible inventory, but in no event more than $25,000,000 at any one time. Interest on our borrowings under the revolving line of credit is payable at the bank’s prime rate plus 1.25% or, at our option (but subject to certain limitations), at LIBOR (which was 0.24% at September 30, 2011) plus 3.00% per annum. The maturity date of the bank line of credit is July 10, 2014.

At September 30, 2011, outstanding bank borrowings totaled $10.9 million. Our bank borrowings are secured by substantially all of our assets, and rank senior in priority to other indebtedness of the Company.

Our revolving bank line of credit agreement, as amended, contains a single financial covenant, which requires us to achieve a fixed charge coverage ratio of at least 1.10 to 1.0 for successive rolling 12 month periods ending on the last day of each fiscal quarter. Pursuant to an amendment to the credit line agreement entered into with the bank effective November 8, 2011, the 12 months ending March 31, 2012 will be the first of those rolling 12-month periods to which that covenant will apply. The amendment contains a covenant which requires the Company to maintain a minimum EBITDA for the nine months ending September 30, 2011. At September 30, 2011, we were is in compliance with that covenant.