NOTE C: LONG-TERM OBLIGATIONS

Long-term obligations consist of the following at December 31:


	2011		2010
	(In thousands)
Secured notes payable to bank under line of credit due July 10, 2014	$	10,895	$	10,113

Secured Notes Payable to Bank

The secured notes payable to bank evidence borrowings under a revolving credit facility which permits us to borrow up to the lesser of (i) $25,000,000, or (ii) an amount equal to 85% of the value of our eligible accounts receivable and up to 55% of the value of our eligible inventory. The Company’s borrowing base at December 31, 2011 was $15,300,000 as compared to $15,000,000, at December 31, 2010. Interest is payable at the bank’s prime rate (3.25% at December 31, 2011) plus 1.50% or, at the Company’s option but subject to certain limitations, at the bank’s LIBOR rate (.3% at December 31, 2011) plus 3.00%. The credit facility is scheduled to mature at July 10, 2014.

As of December 31, 2011, we were in compliance with all of our financial and other covenants under our bank line of credit agreement. Beginning March 31, 2012, we will be required to achieve a fixed charge coverage ratio of at least 1.1-to-1.0 for rolling 12 month periods ending on the last day of each fiscal quarter, and the bank has reduced the maximum amount of credit line borrowings that will be available to us by $1 million until that covenant is achieved. The bank line of credit agreement also contains certain other covenants, which restrict our ability to pay dividends above certain levels, repurchase our stock and invest in or acquire other businesses.

At March 16, 2012, outstanding borrowings under the revolving credit facility totaled $13,800,000. Our credit facility borrowings are secured by substantially all of our consolidated assets and rank senior in priority to any other indebtedness that the Company may incur.