NOTE 3—DEBT

Our debt consisted of the following on the dates indicated:


	March 31, 2012			December 31, 2011
Term loan	$	198,502	(1)	$	198,923	(1)
Current maturities		(2,043	)		(2,043	)

Total long-term debt	$	196,459		$	196,880

(1)	Term loan is reflected net of unamortized discount of $1,216 and $1,306 at March 31, 2012 and December 31, 2011, respectively.

On January 27, 2010, the Company entered into a Credit Agreement (the "Credit Agreement"), by and among the Company, as borrower, and several banks and other financial institutions or entities from time to time parties to the Credit Agreement, as lenders, consisting of:

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a $265,000 six year term loan facility that matures on January 27, 2016; and

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a $30,000 three year revolving credit facility that matures on January 27, 2013.

The $265,000 senior secured term loan facility has an interest rate of LIBOR (subject to a floor of 2.0%) plus a margin of 3.5%, or the base rate (subject to a floor of 3.0%) plus a margin of 2.5%, as the Company may elect. The Credit Agreement (as amended) provides that if the Company's leverage ratio exceeds 4.50 to 1.00 for any period of four consecutive fiscal quarters, the interest rate on outstanding term loans would increase by 25 basis points (0.25%), and if the leverage ratio exceeds 5.00 to 1.00 for any period of four consecutive fiscal quarters, the interest rate on outstanding term loans would increase by an additional 25 basis points (0.25%).

The debt was issued with a discount of approximately $2,650, which is being amortized to interest expense using the effective interest method over the life of the debt. The Company is currently required to make principal repayments of the senior secured term loan in the amount of $511 on the last day of each calendar quarter, with a balance of $192,567 due at final maturity on January 27, 2016. For the three months ended March 31, 2012 and 2011, the average interest rate on the Company's debt was 5.50%.

The $30,000 revolving credit facility has an interest rate of LIBOR (subject to a floor of 2.0%) plus a margin of 4.0%, or base rate (subject to a 3.0% floor) plus a margin 3.0%, as the Company may elect. Thereafter, the applicable margins are subject to adjustment based on the Company's ratio of total debt to EBITDA as reflected in the Company's quarterly or annual financial statements, with the margins ranging from 3.50% to 4.00% on LIBOR based loans, and from 2.50% to 3.00% on base rate based loans. In addition, the Company is required to pay commitment fees on the unused portion of the revolving credit facility. The commitment fee rate is initially 0.75% per annum, and is also subject to adjustment thereafter based on the Company's ratio of total debt to EBITDA, with the rates ranging from 0.50% to 0.75%. There was no outstanding balance on the revolving credit facilities at March 31, 2012 or 2011.

The Credit Agreement requires that mandatory prepayments be made from (1) 100% of the net cash proceeds from certain asset sales, dispositions or issuances of certain debt obligations, (2) 100% of the net cash proceeds from sales-leaseback transactions, and (3) various percentages (ranging from 0% to 75% depending on our consolidated leverage ratio) of excess annual cash flow as defined in the credit agreement.

The senior secured term loan and revolving credit facilities are guaranteed by each of the Company's subsidiaries and secured by a perfected first priority security interest in substantially all of the Company's present and future assets.

The fair value of the senior secured term loan is estimated based on quoted market prices as follows:


	As of March 31,		As of December 31,
	2012		2011
Carrying amount, net	$	198,502	$	198,923
Fair value	$	200,218	$	198,247

Interest Rate Cap Agreement

The Company is required as part of its senior secured term loan facility to enter into interest rate protection to the extent necessary to provide that at least 50% of the term loan is subject to either a fixed interest rate or interest rate protection for a period of not less than three years. On April 15, 2010, the Company entered into a three-year interest rate cap agreement which was not designated as a hedging instrument. This agreement caps the interest rate on $125,000 of aggregate principal amount of the Company's outstanding term loan at 9.5%. As of March 31, 2012 and December 31, 2011, the fair value of the interest rate cap was immaterial. The Company terminated its interest rate cap agreement in April 2012 (see Note 12 – Subsequent Events).

Debt Covenants

The senior secured term loan and revolving credit facilities contain covenants which, among other things, restrict the Company's ability, and that of its restricted subsidiaries, to:

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pay dividends or make any other restricted payments to parties other than to the Company;

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incur additional indebtedness and financing obligations;

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create liens on their assets;

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make certain investments;

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sell or otherwise dispose of their assets other than in the ordinary course of business;

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consolidate, merge or otherwise transfer all or any substantial part of their assets;

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enter into transactions with their affiliates; and

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engage in businesses other than those in which the Company is currently engaged or those reasonably related thereto.

The Credit Agreement for the term loan and revolving credit facilities imposes an annual limit of $25,000 on capital expenditures, plus a carryforward of $5,000 of any unused capital expenditures from the prior year. In addition to the dollar limitation, the Company may not make any capital expenditure if any default or event of default under the credit agreement has occurred and is continuing, or if a breach of the financial covenants contained in the credit agreement would result on a pro forma basis after giving effect to the capital expenditure.

The Credit Agreement also contains financial covenants that require the Company to maintain a ratio of total debt to adjusted EBITDA ("leverage ratio") below a specified maximum ratio, a ratio of adjusted EBITDA to interest expense ("interest coverage ratio") above a specified minimum ratio and a ratio of total adjusted debt (adjusted for certain leases and financing obligations) to adjusted EBITDA plus rental expense ("EBITDAR ratio") below a specified maximum ratio. The financial covenants contain normal and customary periodic changes in the required ratios over the life of the senior secured term loan and revolving credit facilities.

As of March 31, 2012, the Company was in compliance with all of the financial covenants in the amended Credit Agreement for the term loan and revolving credit facilities. As of March 31, 2012, the Company's leverage, interest coverage, and EBITDAR ratios were 2.44, 3.30, and 4.95, respectively.

Termination of Credit Agreement

On April 27, 2012, the Company terminated the Credit Agreement and issued $210,000 aggregate principal amount of 7.375% Senior Secured Notes. The Company also entered into a $25,000 senior secured revolving credit facility. These transactions are discussed further in Note 12 – Subsequent Events.