Item 1.01.  Entry into a Material Definitive Agreement

At March 4, 2006, the Company was not in compliance with certain covenants in its amended and restated credit agreement (the “Credit Agreement”) with respect to the leverage ratio, fixed charge coverage ratio and tangible net worth covenants contained therein. On August 4, 2006, the Company received a waiver from its lending group for the defaults and executed an amendment (the “Amendment”) to the Credit Agreement. In addition, the Amendment also (i) permits the purchase of $14,000,000 of the Company’s 8% convertible senior subordinated notes due 2011 (the “Notes”); (ii) adjusts the minimum required fixed charge coverage ratio for the first quarter of fiscal 2007; (iii) adjusts the minimum tangible net worth requirement; (iv) permits certain transactions contemplated by the Company; (v) eliminates the Company’s Sweden Facility (as defined in the Credit Agreement); (vi) reduces the Company’s Canada Facility (as defined in the Credit Agreement) by approximately $5,400,000; (vii) changes the definition of “Adjusted EBITDA” for covenant purposes; and (viii) provides that the Company maintain excess availability on the borrowing base of not less than $20,000,000 until the Company files its Form 10-Q for the quarter ended March 4, 2006, at which time the Company will maintain excess availability of the borrowing base of not less than $10,000,000.