NOTE E – MORTGAGE PAYABLE

As noted above under Note D – Notes Payable, on August 4, 2011, the Company replaced the previous mortgage note on the Company's corporate headquarters with a new $3.7 term loan. The term loan has a term of five (5) years and an amortization schedule based on 20 years, with a balloon payment due on August 4, 2016. As amended pursuant to the restated loan and security credit facility described in Note D above, interest on the term loan varies between 50 and 250 basis points over the Base Rate (as defined in the Credit Facility) or LIBOR depending on the level of the fixed charge coverage ratio. The type of interest rate is an election made periodically by the Company. At December 31, 2011, $3.5 million of the mortgage bears an interest rate of LIBOR plus 2.50% (3.0% at December 31, 2011) and the remaining outstanding balance of approximately $65,000 was at the Prime Rate plus 1.00% (4.25% at December 31, 2011). As also described in Note D, at December 31, 2011, the Company did not comply with the required fixed charge coverage ratio under the Credit Facility and as a result, beginning on February 28, 2012, interest on the term loan varies between 250 and 300 basis points over the Base Rate or 400 to 450 basis points over LIBOR depending on the level of the fixed charge coverage ratio.

Mortgage payments as of December 31, 2011 for the next five years are as follows (in 000's):


2012	$	215
2013		215
2014		215
2015		215
2016		2,705

Total	$	3,565