Term Loans Payable

9 Months Ended

May 31, 2017

NOTE 6 – TERM LOANS PAYABLE

On September 1, 2016, we obtained a $5.0 million term loan (the Term Loan) from the lender on our amended and restated secured credit agreement (the Secured Credit Agreement). Consistent with a $15.0 million term loan obtained in fiscal 2016, this Term Loan has an effective interest rate of LIBOR plus 1.85% per annum. Interest is payable monthly and principal payments of $312,500 are due and payable on the first day of each January, April, July, and October until August 2019. The remaining $1.25 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 the Term Loan may be repaid sooner than August 2019 at our discretion. Principal payments through the remainder of fiscal 2017 and by fiscal year through the maturity dates of our term loans payable are as follows (in thousands):



YEAR ENDING AUGUST 31,		Amount
2017	$	1,250
2018		5,000
2019		9,063
	$	15,313

The terms of our Secured Credit Agreement state that each additional term loan we obtain reduces the amount available to borrow on the revolving line of credit facility. Accordingly, at May 31, 2017, we may borrow up to $35.0 million on our revolving line of credit.

On February 28, 2017, we entered into the Sixth Modification Agreement to our Secured Credit Agreement. The primary purpose of the Sixth Modification Agreement is to adjust the definition of the fixed charge coverage ratio to include 85% of the change in our deferred revenue during the measurement period in calculated earnings before interest, taxes, depreciation, amortization, and rent expense (EBITDAR). The Sixth Modification Agreement is designed to accommodate the changes in our financial statements and business operations resulting from the introduction of the All Access Pass and the deferral of significant amounts of revenue over the lives of the underlying contracts. On May 31, 2017, we entered into the Seventh Modification Agreement to the Secured Credit Agreement. The sole purpose of the Seventh Modification Agreement was to extend the maturity date of the Secured Credit Agreement to March 31, 2020.