Note 5—Long-Term Debt

Long-term debt consists of the following:	June 30		December 31
	2013		2012

Term loan	$	2,638,936	$	2,807,298
Obligation for purchase of distributorship, as modified		-		223,645
		2,638,936		3,030,943
Less current maturities		444,807		629,631
	$	2,194,129	$	2,401,312

Originating in September 2012 with its primary lender, the term loan is for a period of thirty-eight months with interest accruing at a floating interest rate based on the 30-day LIBOR plus 2%. At June 30, 2013, the term loan's interest rate was 2.1943%. Monthly principal and interest are based on approximately a seven-year amortization. The aggregate outstanding balance of principal and interest is due and payable on November 30, 2015. The Company also has a $5 million revolving loan agreement with its primary lender. As of June 30, 2013, there have not been any revolver borrowings in 2013.

The term loan agreement and the revolving line of credit agreement are secured by all tangible and intangible assets of the Company and also by a mortgage on the real estate of the Company's headquarters. These agreements also include loan covenants requiring the Company to maintain net tangible worth of not less than $11 million, and that borrowings under the agreements shall not exceed EBITDA by a ratio of 2.5 to 1. At June 30, 2013, the Company was in compliance with its loan covenants.

The Company's obligation for purchase of a distributorship required monthly payments of principal and interest of $37,500 which ended in June 2013.