NOTE C — LONG-TERM DEBT

Long-term debt consists of the following maturities:




	March 10,		June 3,
	2015		2014

	(in thousands)
Current maturities	$	822	$	1,996	Current maturities

Mar-17		853		1,685	Jun-16
Mar-18		559		1,616	Jun-17
Mar-19		41		1,164	Jun-18
Mar-20		-		272	Jun-19
Long-term maturities	$	1,453	$	4,737	Long-term maturities

Total long-term debt	$	2,275	$	6,733	Total long-term debt

Loan Agreement

All of the Company’s long-term debt is governed under a three year loan agreement that has been in place since October 31, 2013 (2013 Loan Agreement). On December 9, 2014 the Company paid $3,101 for the early retirement of the remaining balances owed on six outstanding term loans, pursuant to which prepayment penalties aggregating $43 were incurred.

# 1- Construction Loan Facility under the 2013 Loan Agreement

The purpose of the Construction Loan Facility is to finance the construction and opening and/or refurbishing of Frisch’s Big Boy restaurants. Funds borrowed are initially governed under the Construction Phase of the Facility, which then must be converted into a Term Loan within six months. The sum of $5,000 is available to be borrowed at any time through October 31, 2016. So long as no default exists, the Company may request the lender’s commitment be increased to $15,000. However, the lender has no obligation to increase its commitment in response to such request.

As of March 10, 2015, the Company had no borrowings in the Construction Phase, and the aggregate outstanding balance of two remaining Term Loans (five were retired in the December 9, 2014 transaction described earlier) was $2,275 ($822 is included in current maturities), which represents all of the debt in the table above. Both of the outstanding Term Loans are subject to fixed interest rates, the weighted average of which is 3.67 percent, and are being repaid in equal monthly installments of principal and interest aggregating to $74. Final installments are scheduled to be made on September 1, 2017 and May 1, 2018.

# 2- Revolving Loan Facility under the 2013 Loan Agreement

The purpose of the Revolving Loan Facility is to fund working capital needs and for other corporate uses. The sum of $11,000 is available to be borrowed at any time through October 31, 2016. Amounts repaid may be re-borrowed so long as the amount outstanding does not exceed $11,000 at any time. No borrowed funds were outstanding as of March 10, 2015.

# 3 - 2011 Term Loan under the 2013 Loan Agreement

On December 9, 2014 the Company elected to pay-off the remaining balance owed in connection with the 2011 Term Loan (formerly styled as the Stock Repurchase Loan). Therefore, no balance was outstanding at March 10, 2015.

Loan Covenants

The 2013 Loan Agreement contains covenants relating to cash flows, debt levels, lease expense, asset dispositions, investments and restrictions on pledging certain restaurant operating assets. As a result of the Company’s late filing of its Quarterly Report on Form 10-Q for the period ended December 16, 2014 with the Securities and Exchange Commission, the Company was in violation under the 2013 Loan Agreement. As previously reported, the Company obtained a waiver for the non-compliance associated with the late filing and on March 13, 2015, the Company cured the non-compliance with the filing of the Company’s 10-Q for the period ended December 16, 2014 with the Securities and Exchange Commission. The Company was in compliance with all other loan covenants at March 10, 2015.

Other

None of the Company’s real property is currently encumbered by mortgages and compensating balances are not required under the terms of the 2013 Loan Agreement.

Fair Values

The carrying value of long-term debt at March 10, 2015 approximates its fair value.