Debt

9 Months Ended

Oct. 02, 2011

Debt

Debt

Note 7. Debt

Effective March 3, 2011, we amended our credit agreement ("New Credit Agreement") with Wells Fargo Bank, National Association (the "Bank"), to provide a new three-year, $100 million, secured revolving credit facility (the "New Facility"), which matures on March 3, 2014. The New Facility will be used for general corporate purposes, including acquisitions. The New Facility includes standard financial covenants and is secured by pledges of equity in certain assets of our domestic subsidiaries and guaranties of payment obligations from certain of our domestic subsidiaries. We are in compliance with our covenants as of October 2, 2011.

The amount outstanding under the New Facility bears interest at a variable rate equal to LIBOR plus a margin ranging from 1.25% to 1.75%. For the third quarter of 2011, the interest rate on borrowed funds under the New Facility was 2.125%.We are also required to pay a fee ranging from 1.25% to 1.75% on the amount drawn under each letter of credit that is issued and outstanding under the New Facility. The fee on the unused portion of the New Facility ranges from 0.15% to 0.25%. The unused portion of the New Facility was $21.5 million at October 2, 2011.

If we default under certain provisions of the New Facility, then the Bank may accelerate payment of amounts due under the New Credit Agreement, and the Bank's obligation to extend further credit would cease. In addition, the Bank may exercise its security interest in our equity interests in the assets of certain of our domestic subsidiaries, and it may call the guaranties of payment obligations made by certain of our domestic subsidiaries.