NOTE H – LONG-TERM DEBT AND CAPITAL LEASES

Long-term debt and capital lease obligations consist of the following (in thousands):

	November 29, 2011		May 31, 2011

Revolving credit facility	$	182,000	$	177,000
Series B senior notes,
due April 2013		44,442		44,442
Mortgage loan obligations		115,471		122,546
Capital lease obligations		244		286
		342,157		344,274
Less current maturities		17,357		15,090
	$	324,800	$	329,184

On December 1, 2010, we entered into a five-year revolving credit agreement (the “Credit Facility”). Under the original terms of the Credit Facility, we were allowed to borrow up to $320.0 million with the option to increase our capacity by $50.0 million to $370.0 million. On July 19, 2011, we entered into an amendment of the Credit Facility to increase the amount of the optional additional revolving commitments available from $50.0 million to $60.0 million, thereby increasing the maximum aggregate revolving commitment amount under the Credit Facility from $370.0 million to $380.0 million. On the same date, we exercised our option to increase the revolving commitments from $320.0 million to $380.0 million pursuant to new lender commitment agreements with the existing lenders and an additional new lender.

The terms of the Credit Facility provide for a $40.0 million swingline subcommitment and a $50.0 million letter of credit subcommitment. The Credit Facility also includes a $50.0 million franchise facility subcommitment, which covered our guarantees of debt of the franchise partners (the “Franchise Facility Subcommitment”). All amounts guaranteed under the Franchise Facility Subcommitment were settled during fiscal 2011.

The interest rates charged on borrowings pursuant to the Credit Facility can vary depending on the interest rate option we choose to utilize. Our Base Rate for borrowings is defined to be the higher of Bank of America's prime rate, the Federal Funds Rate plus 0.5%, or an adjusted LIBO Rate plus 1.00%, plus an applicable margin ranging from 0.25% to 1.25%. The applicable margin for our Eurodollar Borrowings ranges from 1.25% to 2.25%.

Under the terms of the Credit Facility, we had borrowings of $182.0 million with an associated floating rate of interest of 2.58% at November 29, 2011. As of May 31, 2011, we had $177.0 million outstanding with an associated floating rate of interest of 2.27%. After consideration of letters of credit outstanding, we had $188.7 million available under the Credit Facility as of November 29, 2011. The Credit Facility will mature on December 1, 2015.

The Credit Facility contains financial covenants relating to the maintenance of leverage and fixed charge coverage ratios and minimum net worth. We were in compliance with our debt covenants as of November 29, 2011 and the date of this filing.

On April 3, 2003, we issued notes totaling $150.0 million through a private placement of debt (the “Private Placement”). On December 1, 2010, we entered into an amendment of the notes issued in the Private Placement (the “Note Amendment”). Among other changes, this amendment conformed the covenants in this agreement to the covenants contained in the Credit Facility discussed above.

At November 29, 2011 and May 31, 2011, the Private Placement consisted of $44.4 million in notes with an interest rate of 7.17% (the “Series B Notes”). The Series B Notes mature on April 1, 2013, and thus have been classified as non-current in our November 29, 2011 and May 31, 2011 Condensed Consolidated Balance Sheets.

Our $115.5 million in mortgage loan obligations as of November 29, 2011 consists of various loans acquired upon franchise acquisitions. These loans, which mature between December 2011 and March 2024, have balances which range from negligible to $8.5 million and interest rates of 3.35% to 11.28%. Many of the properties acquired from franchisees collateralize the loans outstanding.