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Credit Facility
9 Months Ended
Sep. 30, 2011
Credit Facility [Abstract] 
Credit Facility
8. Credit Facility
The Company’s $5.0 million revolving credit facility was amended in August 2011, extending its term and adjusting certain other financial terms and covenants. Unless earlier payment is required by an event of default, all principal and unpaid interest will be due and payable on August 31, 2016. At the Company’s option, the Revolving Credit Facility (“Credit Agreement”) bears interest at either the prime rate less 1.00% or the London Interbank Offered Rate (“LIBOR”) plus the applicable LIBOR margin. The applicable LIBOR margin is based on the ratio of total funded debt to earnings before interest, other income and expense, income taxes, depreciation, and amortization (“EBITDA”) for the preceding four fiscal quarters. As of September 30, 2011, the applicable LIBOR margin, which was the operative rate during the quarter ended September 30, 2011, was 1.25%.
The Company is also required to pay an unused line fee on the daily unused amount of its Revolving Credit Facility at a per annum rate based on the ratio of total funded debt to EBITDA for the preceding four fiscal quarters. As of September 30, 2011, the per annum unused line fee rate was 0.20%.
At September 30, 2011 and December 31, 2010 there were no amounts outstanding under this Credit Agreement. There was a $1.5 million standby letter of credit related to the Company’s corporate headquarters lease that was outstanding at September 30, 2011, bringing our available borrowings on the $5.0 million facility to $3.5 million.
Borrowings under the Credit Agreement are collateralized by a security interest in substantially all assets of the Company. Covenants governing the Credit Agreement include the maintenance of certain financial ratios. At September 30, 2011 the Company was in compliance with all covenants under the Credit Agreement.