NOTE C: LONG-TERM OBLIGATIONS

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


	2012		2011
	(In thousands)
Secured notes payable to bank under line of credit due July 10, 2014	$	10,933	$	10,895

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, 2012 was $16,800,000 as compared to $15,300,000, at December 31, 2011. Interest is payable at the bank’s prime rate (3.25% at December 31, 2012) plus 1.75% or, at the Company’s option but subject to certain limitations, at the bank’s LIBOR rate (0.21% at December 31, 2012) plus 3.25%. The credit facility is scheduled to mature at July 10, 2014.

The revolving bank line of credit agreement, as amended, contains a single financial covenant, which requires us to achieve a fixed charge coverage ratio of at least 1.10 to 1.0 for successive rolling 12 month periods ending on the last day of each fiscal quarter, commencing with the 12 month period ending March 31, 2013. Until that covenant is satisfied, the interest rate on our borrowings will be at LIBOR plus 3.25%, an increase of 0.25%, as compared to the interest rate that was in effect in 2011 and available borrowings under the line of credit will be reduced by $1 million.

At March 8, 2013, outstanding borrowings under the revolving credit facility totaled $18,475,000. 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.