NOTE B - LONG-TERM DEBT


	Fiscal Year 2015				Fiscal Year 2014
	Payable Within One Year		Payable After One Year		Payable Within One Year		Payable After One Year

	(in thousands)
Construction Loan
Construction Phase	$	—	$	—	$	—	$	—
Term Loans		—		—		1,854		4,265

Revolving Loan		—		—		—		—

Stock Repurchase Loan		—		—		142		472

	$	—	$	—	$	1,996	$	4,737

Long term debt consists of the following maturities:


	Fiscal Year
	2015		2014

	(in thousands)

Current Maturities	$	—	$	1,996	Current Maturities

June 2017		—		1,685	June 2016
June 2018		—		1,616	June 2017
June 2019		—		1,164	June 2018
June 2020		—		272	June 2019
Long-term maturities		—		4,737	Long-term maturities

Total long-term debt	$	—	$	6,733	Total long-term debt

Loan Agreement

The Company’s long-term debt is governed by a three year unsecured loan agreement that has been in place since October 31, 2013 (2013 Loan Agreement). The terms of the 2013 Loan Agreement are set forth below in the various components.

NOTE B – LONG-TERM DEBT (continued)

Construction Loan Facility under the 2013 Loan Agreement

The purpose of the Construction Loan 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 to a Term Loan within six months.

When funds are borrowed and in the Construction Phase, interest is based on the LIBOR Rate Margin, plus the one, two, or three month LIBOR rate, as selected by the Company. The sum of $5,000 is available for construction financing through October 31, 2016. At the lender's discretion, the Company may request that the facility be increased up to $15,000 at any time. The Company is required to pay the lender an unused credit fee in an amount equal to 0.25 percent per annum on the unused Construction Loan amount.

As of June 2, 2015, the Company had no borrowings in the Construction phase and no outstanding balances of Construction Term Loans. At June 3, 2014, the Company had aggregate outstanding Construction Term Loans of $6,119 ($1,854 of which was included in current maturities, in the table above, in the prior year), all of which was retired in Fiscal Year 2015.

During Fiscal Year 2015, outstanding Term Loans were subject to fixed interest rates between 3.25 percent and 6.63 percent. Included in interest expense in Fiscal Year 2015, the Company paid $84 in early termination penalties to retire the Construction Term Loans discussed above.

Revolving Loan under the 2013 Loan Agreement

The purpose of the Revolving Loan is to fund working capital needs and for other corporate needs. The sum of $11,000 is available to be borrowed at any time through October 16, 2016. Amounts repaid may be re-borrowed so long as the amount outstanding does not exceed $11,000 at any time. Interest accrues on each advance at an annual rate equal to the LIBOR Rate Margin plus the one month LIBOR rate, currently 1.54 percent. The Company is required to pay the lender an unused credit fee equal to 0.25 percent per annum on the unused Revolving Loan amount. There were no outstanding amounts under the Revolving Loan as of June 2, 2015 and June 3, 2014, respectively.

Revolving loans are ordinarily classified as short term. However, the 2013 Loan Agreement does not require a consecutive day "out-of-debt" period during each fiscal year, and any outstanding balance will not be due and payable until October 31, 2016. Management has evaluated the terms of the 2013 Loan Agreement and determined that all criteria have been satisfied in order to classify any outstanding balance on the Revolving Loan as long-term debt until October 31, 2015.

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 as of June 2, 2015.

NOTE B – LONG-TERM DEBT (continued)

Loan Covenants

The 2013 Loan Agreement contains financial covenants relating to the relationship of Senior Bank Debt and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and minimum required levels of EBITDA, lease expense, asset dispositions, investments and restrictions on pledging certain restaurant operating assets. The Company was in compliance with all loan covenants as of June 2, 2015. Compensating balances are not required under the terms of the 2013 Loan Agreement.

Other

As discussed in NOTE A – ACCOUNTING POLICIES above, on May 21, 2015 the Company entered into an Agreement and Plan of Merger. The Merger Agreement provides for a business combination whereby Merger Sub will merge with and into the Company (the Merger). As a result of the Merger, the separate corporate existence of Merger Sub will cease. The Company will continue as the surviving corporation in the Merger and will be a wholly-owned subsidiary of Parent. The closing of the transaction contemplated by the Merger Agreement would effectively terminate the existing 2013 Loan Agreement and the Company would need to enter into a new loan agreement in order to maintain its existing borrowing capacity.