CREDIT FACILITIES

The Company has an unsecured commercial line of credit agreement which provides for borrowings and issuance of letters of credit of up to a combined total of $10.0 million. This agreement was amended on May 15, 2013 to reduce the minimum tangible net worth from the financial covenants. This agreement expires on May 14, 2014. The outstanding balance bears interest at either the bank’s reference rate (which was 3.25% as of April 6, 2013) or the LIBOR rate (which was 0.20% as of April 6, 2013) plus 1.75 percentage points. As of April 6, 2013, there were no outstanding cash borrowings or trade letters of credit outstanding and $3.0 million of an outstanding stand-by letter of credit. To date, no beneficiary has drawn upon the stand-by letter of credit.

This credit facility requires the Company to comply with certain financial covenants, including minimum tangible net worth and unencumbered liquid assets, and contains certain restrictions on making loans and investments. The Company is in compliance with all covenants in the credit agreement.