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I. . . . . .. .. .. ,. '. '. I. :. ,. I. I. I. I. I. I. . ,. . I. .. '. !. . '. I. . . . . . . . . . .e . . . . . I. . '. I. . . I. . . . NOTE 7. LONG-TERM DEBT AND LINE OF CREDIT BERMELLO, AJAMIL & PARTNERS, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2006 AND 2005 The Company maintains a line of credit (the "Line") with a bank, primarily to support working capital needs, with maximum borrowings of $5,000,000. The Line bears interest at the Wall Street Journal prime rate, 8.25% and 7.25% at December 31, 2006 and 2005, respectively. The Line is collateralized by substantially all assets of the Company and is guaranteed by the principal stockholders. This Line is renewed annually and expires on February 14, 2008 as of December 31, 2006. As of December 31, 2006 and 2005, the Company had borrowed $749,951 and $999,951, respectively. Management believes this Line will be renewed at the 'maturity date. At December 31, 2006, the Company was in compliance with all debt covenants stipulated in the Line. Long-term debt is summarized as follows at December 31 : 2006 2005 6% unsecured note payable to a related party; monthly payments of principal and interest of $1,600 through December 2006 (NOTE 4). $ Loan payable with a fixed interest rate of 6%, with a maturity date of June 15, 2009, collateralized by selected fixed assets. Unsecured loan payable, with a variable interest rate of 8.50% at December 31, 2006, with a maturity date of September 15, 2008. Various notes payable to a bank bearing interest at rates ranging from 4.75% to 7.75% at December 31, 2006 and 2005, collateralized by selected fixed assets and due at various dates through April 2008. $ 2,587 23,590 244,861 Less current portion of long-term debt 7.130 12.204 275,581 14,791 129.547 7.66] $ 146.034 $ 7.130 -16-