Debt:

12 Months Ended

Dec. 25, 2021

Debt:

Debt:

6.     Debt:

Line of Credit

During 2019, the Company’s Line of Credit with CIBC Bank USA (formerly known as the PrivateBank and Trust Company) and BMO Harris Bank N.A. (the “Line of Credit”) was amended to, among other things:

● Provide the consent of the lenders for the 2020 Tender Offer;

● Amend the tangible net worth covenant calculation to remove the effect of the 2020 Tender Offer; and

● Allow the replacement of LIBOR.

During 2020, the Line of Credit was amended to, among other things:

● Decrease the aggregate commitments from $40.0 million to $25.0 million;

● Remove BMO Harris Bank N.A. as a lender under the Credit Agreement;

● Extend the termination date from July 19, 2021 to August 31, 2024;

● Amend the tangible net worth covenant requirement to be reset as of September 26, 2020;

● Permit the Company to issue up to $25.0 million in additional term notes to one or more affiliates or managed accounts of Prudential Investment Management, Inc.;

● Provide the consent of CIBC Bank USA for the 2020 Special Dividend;

● Amend the fixed charge coverage ratio definition to remove the effect of the 2020 Special Dividend.

During 2021, the Line of Credit was amended to, among other things:

● Permit the Company to issue up to $30.0 million in additional term notes to one or more affiliates or managed accounts of PGIM, Inc. (formerly Prudential Investment Management, Inc.) (collectively, “Prudential”);

● Remove the tangible net worth covenant minimum requirement, amend the fixed charge coverage ratio definition, and amend the restricted payments covenant to allow the Company more flexibility with respect to shareholder distributions and/or common stock repurchases as long as certain conditions are met (as defined within the amendment);

● Amend the provisions that allow for the replacement of LIBOR as an interest rate option in connection with borrowings under the Line of Credit.

The Line of Credit has been and will continue to be used for general corporate purposes. During 2020 and 2019, the Line of Credit was used to finance in part the 2020 Tender Offer and 2019 Tender Offer (as indicated above in Note 5). Borrowings under the Line of Credit are subject to certain borrowing base limitations, and the Line of Credit is secured by a lien against substantially all of the Company’s assets, contains customary financial conditions and covenants, and requires maintenance of minimum levels of debt service coverage and maximum levels of leverage (all as defined within the Line of Credit). As of December 25, 2021, the Company was in compliance with all of its financial covenants, there were no borrowings outstanding under the Line of Credit and the Company’s additional borrowing availability under the Line of Credit was $25.0 million.

The Line of Credit allows the Company to choose between two interest rate options in connection with its borrowings. The interest rate options are the Base Rate (as defined) and the LIBOR Rate (as defined) plus an applicable margin of 0% and 2.0%, respectively. Interest periods for LIBOR borrowings can be one, two, three, six or twelve months, as selected by the Company. The Line of Credit also provides for non-utilization fees of 0.25% per annum on the daily average of the unused commitment.

Notes Payable

The Company has a Note Agreement (the “Note Agreement”) with Prudential.

During 2019, the Note Agreement was amended to, among other things, provide the consent of Prudential for the 2020 Tender Offer and to amend the tangible net worth covenant calculation to remove the effects of the 2020 Tender Offer.

During 2020, the Note Agreement was amended to, among other things, amend the tangible net worth covenant requirement to be reset as of September 26, 2020, provide the consent of Prudential for the declaration and payment of the 2020 Special Dividend and to approve the fixed charge coverage ratio definition to remove the effect of the 2020 Special Dividend.

During 2021, the Note Agreement was amended to, among other things:

● Provide for the issuance of $30.0 million in new senior secured notes;

● Remove the tangible net worth covenant minimum requirement, amend the fixed charge coverage ratio definition, and amend the restricted payments covenant to allow the Company more flexibility with respect to shareholder distributions and/or common stock repurchase as long as certain conditions are met (as defined within the amendment).

During 2021, the Company issued $30.0 million of Series C notes, with the proceeds to be used for general corporate purposes, including share repurchases and dividends. As of December 25, 2021, with the $10.5 million in principal outstanding from the $25.0 million Series A notes issued in May 2015 and $7.2 million in principal outstanding from the $12.5 million Series B notes issued in August 2017, the aggregate principal outstanding under the Note Agreement was $47.7 million.

The final maturity of the Series A and Series B notes is 10 years from the issuance date. The final maturity of the Series C notes is 7 years from the issuance date. For the Series A notes, interest at a rate of 5.50% per annum on the outstanding principal balance is payable quarterly, along with required prepayments of the principal of $500,000 quarterly for the first five years, and $750,000 quarterly thereafter until the principal is paid in full. For the Series B notes, interest at a rate of 5.10% per annum on the outstanding principal balance is payable quarterly, along with required prepayments of the principal of $312,500 quarterly until the principal is paid in full. For the Series C notes, interest at a rate of 3.18% per annum on the outstanding principal balance is payable quarterly until the principal is paid in full. The Series A, Series B and Series C notes may be prepaid, at the option of the Company, in whole or in part (in a minimum amount of $1.0 million), but prepayments require payment of a Yield Maintenance Amount, as defined in the Note Agreement.

The Company’s obligations under the Note Agreement are secured by a lien against substantially all of the Company’s assets (as the notes rank pari passu with the Line of Credit), and the Note Agreement contains customary financial conditions and covenants, and requires maintenance of minimum levels of fixed charge coverage and maximum levels of leverage (all as defined within the Note Agreement). As of December 25, 2021, the Company was in compliance with all of its financial covenants.

In connection with the Note Agreement, the Company incurred debt issuance costs, of which unamortized amounts are presented as a direct deduction from the carrying amount of the related liability.

As of December 25, 2021, required prepayments of the notes payable for each of the next five years and thereafter are as follows:

2022	$ 4,250,000
2023	4,250,000
2024	4,250,000
2025	2,750,000
2026	1,250,000
Thereafter	30,937,500
Total	$ 47,687,500