LONG-TERM DEBT AND LINE OF CREDIT

12 Months Ended

Dec. 31, 2011

11. LONG-TERM DEBT AND LINE OF CREDIT

Long-term debt as of December 31, 2011 and 2010, consist of the following:

	2011		2010
$3,000,000 ten-year term loan, with Merrill Lynch at LIBOR plus 1.3%, approximately 1.56% at December 31, 2011. Due 2017.	$	2,375,000	$	2,525,000
$1,500,000 ten-year term loan, with Merrill Lynch at LIBOR plus 1.3%, approximately 1.56% at December 31, 2011. Due 2017		1,188,000		1,263,000
$2,600,000 3-year term loan, with Bank of America at Libor plus 2%, approximately 2.26% on December 31, 2011. Due 2012		893,000		1,388,000
$475,000 seven-year loan with PNC at a variable rate of LIBOR plus 2.50%, approximately 2.76% at December 31, 2011, and was repaid in June 2011		-	$	269,000
		4,456,000		5,445,000
Less current portion		1,119,000		797,000
	$	3,337,000	$	4,648,000

Future principal payments on long-term debt are as follows:

2012	$	1,119,000
2013		225,000
2014		225,000
2015		225,000
2016		225,000
Thereafter		2,437,000
	$	4,456,000

The Bank of America line of credit and term loan is secured by substantially all the assets of the Company and contain customary covenants including covenants that, in certain circumstances, restrict the Company’s ability to incur additional indebtedness, pay dividends and redeem capital stock, make other payments, including investments, sell its assets and enter into consolidations, mergers and transfers of all or substantially all of its assets. The line of credit and term loan agreements also require the Company to maintain specified financial ratios and satisfy certain financial condition tests. At December 31, 2011, the Company was in compliance with all of the required financial ratios and also met all of the financial condition tests. The Merrill Lynch ten-year term loans are secured by two buildings, together with an assignment of rents and a security interest upon all fixtures now or hereafter located in the two buildings. All loans contain customary events of default. Upon the occurrence of an event of default under the term loans or line of credit, the lenders may cease making loans and declare amounts outstanding to be immediately due and payable.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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