NOTE 3 FINANCING AGREEMENTS

On May 2, 2012, we entered into the fourth amendment to the third amended and restated credit agreement with Wells Fargo Bank (WFB). The credit agreement with WFB provides for a line of credit arrangement of $13.5 million, which expires if not renewed, on May 31, 2015. The credit arrangement also provides a $1.8 million real estate term note with a maturity date of March 31, 2027, which replaced the $0.9 million real estate term note that was to expire on May 31, 2012, and a new term loan of up to $2.0 million for capital expenditures to be made prior to December 31, 2013 with a maturity date of May 31, 2015. At December 31, 2013 we borrowed $1.4 million of the $2.0 million capital term loan.

On December 31, 2012, in connection with our purchase of the Mankato building from Winland Electronics we again amended our credit agreement with WFB to include an additional $1.7 million real estate term note that expires if not renewed on May 31, 2015. The purchase of the building was funded through our line of credit which was paid down when the new real estate term note was funded on January 9, 2013.

Under the agreement, both the line of credit and real estate term notes are subject to variations in the LIBOR rate. Our line of credit bears interest at three-month LIBOR + 2.75% (3.0% at December 31, 2013) while our real estate term notes bear interest at three-month LIBOR + 3.25% (3.5% at December 31, 2013). The weighted-average interest rate on our line of credit and real estate term note were 3.15% and 3.58%, respectively for the year ended December 31, 2013. We had borrowings on our line of credit of $7,234,983 and $7,923,487 outstanding as of December 31, 2013 and 2012, respectively.

The credit agreement contains certain covenants which, among other things, require us to adhere to regular reporting requirements, abide by annual shareholder dividend limitations, maintain certain financial performance, and limit the amount of annual capital expenditures.

The availability under the line is subject to borrowing base requirements, and advances are at the discretion of the lender. At December 31, 2013, we have net unused availability under our line of credit of approximately $5.8 million. The line is secured by substantially all of our assets.

A summary of long-term debt balances at December 31, 2013 and 2012 is as follows:

Description	2013			2012

Term notes payable—Wells Fargo Bank, N.A.
Real estate term notes bearing interest at three month LIBOR + 2.75% (approx. 3.0%), maturing May 31, 2027, and December 31, 2017 with combined monthly payments of approximately $19,000 plus interest, secured by substantially all assets.	$	3,105,627		$	1,707,894
Equipment notes bearing interest at three month LIBOR + 3.25% (approx. 3.5%) maturing May 2015 with a combined monthly payments of approximately $27,000 plus interest, secured by substantially all assets		1,333,463			1,091,110
Industrial revenue bond payable to the City of Blue Earth, Minnesota which bears a variable interest rate (approx. 0.3% at December 31, 2013), and has a maturity date of June 1, 2021, with principal of $80,000 payable annually on June 1		440,000			520,000


Total long-term debt		1,333,463			1,091,110
Current maturities of long-term debt		(632,176	)		(453,105	)


Long-term debt—net of current maturities	$	701,287		$	638,005

Future maturity requirements for long-term debt outstanding as of December 31, 2013, are as follows:

Years Ending December 31,	Amount

2014	$	632,176
2015		640,093
2016		537,176
2017		537,176
2018		310,067
Future		2,222,402


	$	4,879,090