CREDIT AGREEMENT, LONG-TERM DEBT AND CAPITAL LEASES

The Company’s Credit Agreement, long-term debt and capital leases consisted of the following:



	June 30, 2011			September 30, 2010
	(In thousands)
Term loan facility	$	44,063		$	44,625
Less: current portion of long-term debt	(2,963		)	(750		)
Long-term debt, less current portion	$	41,100		$	43,875

The Company recently amended its credit agreement on August 3, 2011. As of June 30, 2011, the Company's original credit agreement with Comerica Bank, dated as of April 27, 2007, as amended (the "Original Credit Agreement"), provided that (i) the consolidated total leverage ratio to a ratio be not greater than 1.50 to 1.00; (ii) the total borrowing capacity under the Original Credit Agreement was $90 million, which included a $45 million revolving credit facility and a t$45 million term loan; and (iii) the definition of Consolidated EBITDA was to include any extraordinary, unusual or non-cash non-recurring expenses or losses (including, whether or not otherwise includable as a separate item in the Consolidated Statement of Operations for such period, losses on sales of assets outside the ordinary course of business) of up to $10 million, commencing June 30, 2010. As a result of this definition of Consolidated EBITDA, the Company has historically calculated Adjusted EBITDA because Adjusted EBITDA was the basis for which compliance with a number of covenants were determined in the Original Credit Agreement, including certain ratios. The calculation of Adjusted EBITDA was as follows:

Consolidated net income or loss

+ Interest expense

+ Depreciation and amortization expense

+ Non-cash expense related to stock compensation

+ Extraordinary, unusual or non-cash non-recurring expenses or losses (up to $10 million)

- Non-cash income items

- Extraordinary income or gains

As of June 30, 2011, the Company was in compliance with all loan covenants, the $44.1 million term loan bore interest at 6.5% and the Company had approximately $45.0 million available under the Original Credit Agreement, subject to covenant restrictions.

The Company accounts for amendments or changes to the Original Credit Agreement in accordance with ASC 470-50-40-21, “Modifications and exchanges of line of credit or revolving debt arrangements.” Based on the requirements of ASC 470-50-40-21, the Company is amortizing the remaining deferred costs of obtaining the Original Credit Agreement of approximately $565,000 over the remaining term of the Original Credit Agreement.

The Original Credit Agreement was collateralized by substantially all of the Company’s assets, and also contained financial covenants as defined in the agreement. The Original Credit Agreement required certain mandatory prepayments be made on the term loan from the net cash proceeds of certain asset sales and condemnation proceedings (in each case to the extent not reinvested, within certain specified time periods, in the replacement or acquisition of property to be used in its businesses). The Original Credit Agreement provided the Company with the ability to finance development agreements and acquisitions and working capital for general corporate purposes. Advances under the revolving credit commitment and the term loan were set to mature on April 27, 2012.

On August 3, 2011, the Company entered into an amended and restated credit agreement with Comerica Bank in its capacity as administrative agent and lead arranger and Wells Fargo Bank, N.A., as syndication agent (the "Amended Credit Agreement") to provide the Company a $74 million credit facility which replaced its previous credit facility in its entirety. The Amended Credit Agreement consists of three facilities; an approximately $20.6 million revolving credit facility, a $37 million term loan and an approximately $16.4 million draw-to term loan. The Amended Credit Agreement matures on August 3, 2016. The term loan is amortized on a straight line basis over a ten year period, payable in equal quarterly installments of $925,000. The revolving credit facility and the draw-to term loan provide the Company the ability to finance development and placement agreements, acquisitions, and working capital for general corporate purposes. At closing, the Company fully drew down the $37 million term loan, drew down approximately $6.9 million on the revolving credit facility and had no amounts outstanding on the draw-to term loan. The Company's total indebtedness remains unchanged after giving effect to the closing.

The components of the Amended Credit Agreement will be priced based on an applicable margin grid according to the Company's leverage ratio. Assuming that the Company utilizes LIBOR as the key interest rate driver the following margins would apply based on the applicable leverage ratio:



	Level I	Level II
Consolidated Total Leverage Ratio	Less than 0.75 to 1.00	Greater than or equal to 0.75 to 1.00
Term loan	3.00	3.50
Revolving credit facility	2.25	2.75
Draw-to term loan	3.00	3.50

Level II pricing will apply to the Amended Credit Agreement until the Company delivers its financial statements for the year ended September 30, 2011.

The Company will be subject to two primary financial covenants; a total leverage ratio and a fixed charge coverage ratio. The total leverage ratio is calculated as total net funded debt to EBITDA(net income before interest expense, tax expense, depreciation and amortization expense, stock compensation expense and any extraordinary, unusual or non-cash non-recurring expenses up to $7.5 million for any trailing twelve month period). Total net funded debt is defined as total funded debt of the Company less cash in excess of $10.0 million. The Company will be required to maintain a total leverage ratio of 1.5 to 1.0.

The fixed charge coverage ratio is calculated as EBITDA minus:


•	Income tax expense


•	Dividends or other distributions on equity, not funded by the Amended Credit Agreement


•	Routine capital expenditures, defined as $2.5 million per quarter


•	Repurchases or redemptions of capital stock, not funded by the Amended Credit Agreement


•	Payments and advances under development agreements, not funded by the Amended Credit Agreement

compared to fixed charges, which include interest expense and all regularly scheduled installments of principal. The Company will be required to maintain a fixed charge coverage ratio of 1.2 to 1.0.

In accordance with the provision of ASC Topic 470, “Debt,” as of June 30, 2011, the Company adjusted its current portion of long-term debt to reflect the principal amounts paid subsequent to the balance sheet or required to be paid within one year based on the terms of the Amended Credit Agreement.