LONG-TERM DEBT



	2012				2011
	Payable within one year		Payable after one year		Payable within one year		Payable after one year
	(in thousands)
Construction Loan
Construction Phase	$	—	$	—	$	220	$	2,780
Term Loans	5,423		13,241		6,428		17,415

Revolving Loan	—		—		—		—

Stock Repurchase Loan
Draw Phase	—		—		104		896
Term Loans	132		762		—		—

2009 Term Loan	1,038		443		1,002		1,481

	$	6,593	$	14,446	$	7,754	$	22,572

The portion payable after one year matures as follows:



	2012		2011
	(in thousands)
Period ending in 2013	$	—	$	6,848
2014	4,846		5,118
2015	3,652		3,943
2016	2,721		3,031
2017	1,654		1,984
2018	1,235		1,421
Subsequent to 2018	338		227
	$	14,446	$	22,572

The Company has four unsecured loans in place, all with the same lending institution. The Second Amended and Restated Loan Agreement (2012 Loan Agreement), under which the Company may not assume or permit to exist any other indebtedness, governs the four loans. The 2012 Loan Agreement (April 10, 2012) amended and restated the prior loan agreement (2010 Loan Agreement), which consisted of credit facilities to a) finance construction (Construction Loan), b) provide working capital (Revolving Loan) and c) finance repurchases of the Company's common stock (Stock Repurchase Loan). The 2012 Loan Agreement renewed credit facilities for the Construction Loan and the Revolving Loan, under which borrowing is permitted through October 15, 2013. The 2012 Loan Agreement did not renew borrowing capacity under the Stock Repurchase Loan, but it continues to govern the prior amount borrowed to finance stock that was repurchased, as well as a separate loan that originated in 2009 (2009 Term Loan).

Construction Loan

The Construction Loan is an unsecured draw credit line intended to finance construction and opening and/or the refurbishing of restaurant operations. The 2012 Loan Agreement increased the amount available to be borrowed to $15,000,000 from $8,500,000 that was available when the 2010 Loan Agreement expired. As of May 29, 2012, the amount available to be borrowed remained at $15,000,000, as the $2,000,000 that was borrowed during fiscal year 2012 was covered under the 2010 Loan Agreement.

The Construction Loan is subject to an unused commitment fee equal to 0.25 percent of the amount available to be borrowed. Funds borrowed are initially governed as a Construction Phase loan on an interest only basis. Interest is calculated with a pricing matrix that uses changeable basis points, determined by certain of the Company’s financial ratios. Interest is payable at the end of each specific rate period selected by the Company, which may be monthly, bi-monthly or quarterly. Payment of principal without penalty is permitted at the end of any rate period.

Within six months of borrowing (assuming no prepayment at the end of the rate period), the balance outstanding under each loan in the Construction Phase must be converted to a Term Loan, with an amortization period of not less than seven nor more than 12 years as chosen by the Company. For funds borrowed between September 2007 and September 2010, any Term Loan converted with an initial amortization period of less than 12 years, a one-time option, without penalty or premium, is available during the chosen term to extend the amortization period up to a total of 12 years. Outstanding balances of loans initiated prior to September 2007 had to be converted with an amortization period not to exceed seven years. Upon conversion to an amortizing Term Loan, the Company may select a fixed interest rate over the chosen term or may choose among various adjustable rate options.

Prepayments of Term Loans that were initiated prior to September 2009 are permissible upon payment of sizable prepayment fees and other amounts. For Term Loans initiated after September 2009, the Company has the option at the time of conversion to include a small break funding premium over the otherwise applicable fixed rate in exchange for the right to prepay in whole or in part at any time without incurring a prepayment fee. After September 2010, the break funding premium included at conversion is also necessary in order to be permitted to extend the amortization period up to 12 years without incurring additional costs.

As of May 29, 2012, the aggregate outstanding balance under the Construction Loan was $18,664,000, which consisted entirely of Term Loans; no balance was in the Construction Phase awaiting conversion. Since the inception of the Construction Loan (including prior agreements), 24 of the Term Loans ($55,500,000 out of $97,000,000 in original notes) had been retired as of May 29, 2012, including two Term Loans that were prepaid without penalty in fiscal year 2012. In addition, $1,000,000 was retired without penalty in December 2011 (the end of its specific rate period) directly from the Construction Phase. All of the outstanding Term Loans are subject to fixed interest rates, the weighted average of which is 5.0 percent, all of which are being repaid in 84 equal monthly installments of principal and interest aggregating $601,000, expiring in various periods ranging from September 2012 through February 2019.

Any outstanding amount in the Construction Phase that has not been converted into a Term Loan shall mature and be payable in full on October 13, 2013, unless the 2012 Loan Agreement is renewed sooner.

Revolving Loan

The Revolving Loan provides an unsecured credit line that allows for borrowing of up to $5,000,000 to fund temporary working capital needs. Amounts repaid may be re-borrowed so long as the amount outstanding does not exceed $5,000,000 at any time. The Revolving Loan, none of which was outstanding as of May 29, 2012, will mature and be payable in full on October 13, 2013, unless the 2012 Loan Agreement is renewed sooner. It is subject to a 30 consecutive day out-of-debt period each fiscal year. Interest is determined by the same pricing matrix used for loans in the Construction Phase as described above under the Construction Loan. Interest is payable at the end of each specific rate period selected by the Company, which may be monthly, bi-monthly or quarterly. The loan is also subject to a 0.25 percent unused commitment fee.

Stock Repurchase Loan

The unsecured Stock Repurchase Loan originated in July 2011 when $1,000,000 that had been borrowed in fiscal year 2011 (to finance repurchases of the Company's stock) was converted into a Term Loan. The Stock Repurchase Loan, the outstanding balance of which was $894,000 as of May 29, 2012, requires 84 equal monthly installments of $13,000 including principal and interest at a fixed 3.56 percent interest rate. The final payment on the loan is due July 1, 2018.

2009 Term Loan

The unsecured 2009 Term Loan originated in September 2009 when $4,000,000 was borrowed to fund the acquisition of five Frisch's Big Boy restaurants from the landlord of the facilities. The 2009 Term Loan, the outstanding balance of which was $1,481,000 as of May 29, 2012, requires 48 equal monthly installments of $89,000 including principal and interest at a fixed 3.47 percent rate. The final payment on the loan is due October 21, 2013.

Loan Covenants

The 2012 Loan Agreement contains covenants relating to cash flows, debt levels, lease expense, asset dispositions, investments and restrictions on pledging certain restaurant operating assets. The Company was in compliance with all loan covenants as of May 29, 2012. Compensating balances are not required under the terms of the 2012 Loan Agreement.

Fair Values

The fair values of the fixed rate Term Loans within the Construction Loan as shown in the following table are based on fixed rates that would have been available at May 29, 2012 if the loans could have been refinanced with terms similar to the remaining terms under the present Term Loans. The carrying value of substantially all other long-term debt approximates its fair value.



	Carrying Value		Fair Value
	(in thousands)
Term Loans under the Construction Loan	$	18,664	$	19,400

Other

The final payment on a separate term loan (2007 Term Loan - a bullet loan prior to March 15, 2007) was made on March 15, 2010. It had required 36 equal monthly installments of $92,000 including principal and interest at a fixed 6.13 percent rate and was secured by mortgages that encumbered the real property of two Golden Corral restaurants.

None of the Company’s real property is currently encumbered by mortgages.