(7)

TERM LOAN

On June 28, 2013, the Company amended its Term Loan (the "Term Loan"). The amendment increased the amount borrowed from $2.0 million to $3.7 million, at either, or a combination of, the lender's Base Rate or at LIBOR plus a LIBOR rate margin, at the Company's option. The Base Rate computes interest at the higher of the lender's "prime rate" or the Federal Funds Rate. The LIBOR option computes interest at the LIBOR rate as of the date such LIBOR rate loan was made plus a LIBOR rate margin of 2.0%. As of June 30, 2013, the Company's LIBOR borrowing rate was 2.19% and the Base Rate borrowing rate was 3.25%. The principal amount borrowed is payable quarterly in 16 equal payments of $225,000 plus interest beginning September 30, 2013. The Term Loan matures on June 30, 2017. At June 30, 2013, the Company had approximately $3.7 million outstanding under the Base Rate option. The Term Loan requires the Company to comply with certain covenants, including financial ratios. At June 30, 2013, the Company was in compliance with all of its covenants under the Term Loan.