6. Financing:

Short-term borrowings at September 29, 2012 and October 1, 2011 consist of the following:



		2012		2011
		(expressed in thousands)

Bank line of credit, monthly U.S. LIBOR plus 45 basis points,
retired in September 2012	$	-	$	40,000
Notes payable, non-interest bearing		230		285
Total Short-Term Borrowings	$	230	$	40,285

On September 28, 2012, the Company entered into a credit agreement (“Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and other financial institutions that may become parties to the Credit Agreement from time to time. This agreement replaces the $75 million senior unsecured credit facility that was scheduled to expire in December 2012. The new Credit Agreement provides for a five-year, $100 million senior unsecured revolving credit facility (“Credit Facility”) maturing September 28, 2017. The Company may use the Credit Facility for working capital financing, permitted acquisitions, share purchases, or other lawful corporate purposes. At September 29, 2012, the Company had no borrowings outstanding under the $100 million Credit Facility. At October 1, 2011, outstanding borrowings under the $75 million Credit Facility were $40.0 million. At September 29, 2012, the Company had outstanding letters of credit drawn from the $100 million Credit Facility totaling $10.1 million, leaving approximately $89.9 million of unused borrowing capacity. At October 1, 2011, the Company had outstanding letters of credit drawn from the $75 million Credit Facility totaling $11.3 million, leaving approximately $23.7 million of unused borrowing capacity.

The weighted average interest rate on outstanding borrowings under the $75 million Credit Facility during the fiscal years ended September 29, 2012 and October 1, 2011 was 0.70% and 0.70%, respectively. In order to mitigate its exposure to interest rate increases on its floating rate indebtedness, the Company has entered into floating to fixed interest rate swaps. As of September 29, 2012, all such interest rate swaps have matured. See Note 1 to the Consolidated Financial Statements for additional information on the interest rate swaps.

Request for borrowings will be categorized by the Company and the Lenders as defined in the Credit Agreement. The primary categories of borrowing include Eurocurrency Borrowing, Alternate Base Rate (“ABR”) Borrowing, and Swingline Loans. ABR Borrowings and Swingline Loans made in U.S. Dollars under the Credit Agreement bear interest at a rate per annum equal to the Alternate Base Rate (defined as the greater of (a) the Prime Rate (as defined in the Credit Agreement) in effect on such day, (b) the Federal Funds Effective Rate (as defined in the Credit Agreement) in effect on such day plus ½ of 1%, or (c) the Adjusted LIBO Rate (as defined in the Credit Agreement) for a one month Interest Period on such day plus 1%), plus the ABR Spread based upon the Leverage Ratio applicable on such date. Eurocurrency Borrowings made under the Credit Agreement bear interest at a rate per annum equal to the Adjusted LIBO Rate for the interest period in effect for such Eurocurrency Borrowing plus the Eurocurrency Spread based upon the Leverage Ratio applicable on such date. At September 29, 2012, the prime rate of 3.25% was the applicable Alternate Base Rate, plus ABR Spread ranging from 0% to 0.50% based on the Leverage Ratio. At September 29, 2012, the applicable Adjusted LIBO rate was 0.36%, plus Eurocurrency Spread ranging from 0.875% to 1.50% based on the Leverage Ratio. Commitment fees are payable on the unused portion of the Credit Facility at rates between 0.15% and 0.30%, based on the Company’s leverage ratio. During each of the fiscal years ended September 29, 2012 and October 1, 2011, commitment fees incurred on the Credit Facility were less than $0.1 million.

Under the Credit Agreement, the Company and each Borrower party thereto are subject to customary affirmative and negative covenants, including restrictions on their ability to incur debt, create liens, dispose of assets, make investments, loans, advances, guarantees and acquisitions, enter into transactions with affiliates, and enter into any restrictive agreements, and customary events of default (including payment defaults, covenant defaults, change of control defaults and bankruptcy defaults). The Credit Agreement also contains financial covenants, including the ratio of consolidated total indebtedness to consolidated EBITDA, as well as the ratio of consolidated EBITDA to consolidated interest expense. These covenants restrict the Company’s ability to pay dividends and purchase outstanding shares of common stock. At September 29, 2012 and October 1, 2011, the Company was in compliance with these financial covenants.

Notes payable at September 29, 2012 and October 1, 2011 consisted of non-interest bearing notes payable to vendors by the Company’s Japanese Sensors subsidiary.

At September 29, 2012, the Company had outstanding letters of credit and guarantees totaling $19.1 million and $30.5 million, respectively, primarily to bond advance payments and performance related to customer contracts in Test.