Line Of Credit Modification Agreement

9 Months Ended

May 28, 2016

Line Of Credit Modification Agreement [Abstract]

Line Of Credit Modification Agreement

NOTE 3 – LINE OF CREDIT MODIFICATION AGREEMENT

On May 24, 2016, we entered into the Fifth Modification Agreement to our previously existing amended and restated secured credit agreement (the Restated Credit Agreement) with our existing lender.  We generally renew the Restated Credit Agreement on a regular basis to maintain the long-term availability of this credit facility.  The primary purposes of the Fifth Modification Agreement are to (i) obtain a term loan from the Lender for $15.0 million (the Term Loan); (ii) increase the maximum principal amount of the revolving line of credit from $30.0 million to $40.0 million; (iii) extend the maturity date of the Restated Credit Agreement from March 31, 2018 to March 31, 2019; (iv) permit the Company to convert balances outstanding from time to time under the revolving line of credit to term loans; and (v) adjust the fixed charge coverage ratio from 1.40 to 1.15.

The Term Loan provided us with $15.0 million of cash at an interest rate of LIBOR plus 1.85% per annum.  Interest is payable monthly and principal payments of $937,500 are due and payable on the first day of each January, April, July, and October until May 2019.  The remaining $3.75 million of principal due at the Term Loan maturity date may be repaid or converted into another term loan.  The proceeds from the Term Loan may be used for general corporate purposes and may be repaid sooner than May 2019 at our discretion.

In connection with the Fifth Modification Agreement, the Company and certain of our subsidiaries entered into a new Consent and Agreement of Guarantor and a promissory note for the Term Loan.