Note 6 – Long-term debt:

On July 6, 2011, under the Equipment Finance Addendum to the Credit Agreement, REFCO provided to the Company a $2,430,000 term loan with a fixed interest rate of 3.54%. Principal and interest on the term loan are payable in equal monthly installments through July 6, 2017, the date the term loan matures. The proceeds of the term loan were used to pay the Company’s remaining obligations under the lease agreement relating to the Series 2002 Bonds described in the following paragraph. At December 31, 2011 the Company had approximately $2,277,000 of the term loan outstanding.

At December 31, 2010, the Company had outstanding rent obligations under the two lease agreements between Kinpak and the Industrial Development Board of the City of Montgomery, Alabama. Payments under the lease agreements were used to pay debt service on two series of industrial revenue bonds issued in 1997 (the “Series 1997 Bonds”) and 2002 (the “Series 2002 Bonds”), respectively. On March 1, 2011, the Series 1997 Bonds were paid in full, and on July 6, 2011, the Series 2002 Bonds were paid in full. As a result, Kinpak acquired the facilities and equipment subject to the lease agreement.

At December 31, 2011 and December 31, 2010, the Company was obligated under various capital lease agreements covering equipment utilized in the Company’s operations. The capital leases, aggregating $62,400 and $93,112 at December 31, 2011 and December 31, 2010, respectively, have varying maturities through 2015 and carry interest rates ranging from 7% to 14%.

The following table provides information regarding the Company’s long-term debt at December 31, 2011 and 2010:

		Current Portion				Long-term Portion
		2011		2010		2011		2010

Lease Agreement -Industrial Development Bonds	$	-	$	460,000	$	-	$	2,445,000
Term loan		375,562		-		1,901,830		-
Capitalized equipment leases		24,868		30,127		37,532		62,985

Total long-term debt	$	400,430	$	490,127	$	1,939,362	$	2,507,985

Required principal payments under these obligations are set forth below:

Year ending December 31,
2012	$	400,430
2013		407,096
2014		414,505
2015		425,657
2016		432,601
Thereafter		259,503
Total	$	2,339,792