BANK DEBT

During the third quarter of 2010, we agreed to terms of certain credit facilities with TD Bank, N.A. aggregating up to approximately $2,100,000, which are secured by substantially all of our assets. These credit facilities are comprised of a $1,000,000 ten-year mortgage loan, a $600,000 fifty-four month note and a $500,000 line of credit, which is renewable annually. Proceeds from the $1,000,000 mortgage were received during the third quarter of 2010. Based on a 15-year amortization schedule, a balloon principal payment of $451,885 will be due in the third quarter of 2020. We hedged our interest rate exposure on this mortgage loan with an interest rate swap agreement that effectively converted a floating interest rate based on the London Interbank Offered Rate (LIBOR) of 3.42% as of December 31, 2013 to the fixed rate of 6.04%. All derivatives are recognized on the balance sheet at their fair value. The agreement has been determined to be highly effective in hedging the variability of the identified cash flows and has been designated as a cash flow hedge of the variability in the hedged interest payments. Changes in the fair value of the interest rate swap agreement are recorded in other comprehensive income (loss), net of taxes. The original notional amount of the interest rate swap agreement of $1,000,000 amortizes in accordance with the amortization of the mortgage. The notional amount of the interest rate swap was $850,864 as of December 31, 2013. Payments required by the interest rate swap totaled $23,096, $23,903 and $25,094 during the years ended December 31, 2013, 2012 and 2011, respectively. As the result of our decision to hedge this interest rate risk, we recorded other comprehensive income (loss), net of taxes, in the amount of $30,284, ($9,308) and ($50,443) during the years ended December 31, 2013, 2012 and 2011, respectively, which reflects the change in fair value of the interest rate swap (liability) asset, net of taxes. The fair value of the interest rate swap has been determined using observable market-based inputs or unobservable inputs that are corroborated by market data. Accordingly, the interest rate swap is classified as level 2 within the fair value hierarchy provided in Codification Topic 820, Fair Value Measurements and Disclosures. Proceeds from the $600,000 note were received during the first quarter of 2011. Interest on the note is variable at the higher of 4.25% per annum or the LIBOR plus 3.25% per annum. The $500,000 line of credit is available as needed and has been extended through May 31, 2014 and is renewable annually thereafter. The line of credit was unused as of December 31, 2013 and 2012. Interest on any borrowings against the line of credit would be variable at the higher of 4.25% per annum or the LIBOR plus 3.5% per annum. These credit facilities are subject to certain financial covenants. We are in compliance with all applicable covenants as of December 31, 2013. Principal payments due under debt outstanding as of December 31, 2013 are reflected in the following table by the year that payments are due:

Period		$1,000,000 mortgage			$600,000 note		Total
Year ending December 31, 2014	$		50,900	$		139,490	$	190,390
Year ending December 31, 2015			54,044			96,260		150,304
Year ending December 31, 2016			57,384			—		57,384
Year ending December 31, 2017			61,056			—		61,056
Year ending December 31, 2018			64,876			—		64,876
After December 31, 2018			562,604			—		562,604
Total	$		850,864	$		235,750	$	1,086,614