Convertible Subordinated Notes

9 Months Ended

Jun. 30, 2011

Convertible Subordinated Notes [Abstract]

Subordinated Borrowings Disclosure [Text Block]

Convertible Subordinated Notes

The Company had $9.0 million and $16.7 million in aggregate principal amount of the Company’s senior subordinated convertible notes due September 2011 (the "Notes") outstanding as of June 30, 2011 and September 30, 2010, respectively. The Notes are general unsecured obligations of the Company and bear interest at the rate of 7.625% per annum, payable quarterly in arrears.

During the nine months ended June 30, 2011, holders of $7.7 million in principal amount of the Notes converted the principal and accrued interest of $0.1 million into 359,235 shares of common stock of the Company. As of June 30, 2011, the remaining Notes are convertible by the holders into 413,034 shares of common stock of the Company at a conversion price of $21.79 per share.

If the dollar-volume weighted-average price of the common stock exceeds $38.25 per share, subject to certain adjustments, for any twenty out of thirty consecutive trading days, the Company will have the right to require the holders of the Notes to convert all or any portion of the Notes into shares of common stock at the then-applicable conversion price.

In the event that the consolidated net interest coverage ratio, as set forth in the Notes, for the 12 months preceding the end of any fiscal quarter is less than 2.0, the interest rate on the Notes will be increased by 2.0% to 9.625% per annum, effective as of the first day of the following fiscal quarter. Through the quarter ended June 30, 2011, the consolidated net interest coverage ratio has exceeded 2.0 and no such increase has been necessary.

The Company entered into a separate Registration Rights Agreement with the holders of the Notes, under which the Company was required to file with the SEC a Registration Statement on Form S-3 within a specified period of time. The Registration Statement was declared effective by the SEC on October 24, 2006. The Company is required, under the Registration Rights Agreement, to maintain the effectiveness of the Registration Statement, failing which it could become liable to pay holders of the Notes liquidated damages of 1% of the value of the Notes, plus a further 1% for every 30 days that it remains ineffective thereafter, up to an aggregate maximum of 10% of the value of the Notes. At June 30, 2011 the Company was in compliance with its requirements under the Registration Rights Agreement.