NOTE 7 – CREDIT AGREEMENT

On June 11, 2014, in connection with the acquisition of Healthy Directions, we entered into a fourth amendment to our credit agreement with Bank of America, N.A. and other lenders. We also entered into an amendment of a guaranty agreement in favor of Bank of America, N.A. and other lenders, which relates to a loan with the Mississippi Business Finance Corporation (the “MBFC Loan”). These amendments, among other things, increased the unsecured revolving commitment of the credit agreement from $375 million to $570 million. Additionally, the amendments modified the limitation on dividends and stock repurchases to allow for the Company to declare or pay cash dividends to shareholders or make stock repurchases if, after giving effect to the dividends or share repurchases, the leverage ratio is not greater than 2.75 to 1.00. Finally, the amendments increased the leverage ratio limit to 3.25 to 1.00, from a previous limit of 3.00 to 1.00.

On January 16, 2015, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and the other lenders party thereto. The unsecured revolving commitment under the Credit Agreement was increased from $570 million to $650 million, subject to the terms and limitations described below. The maturity of the commitment under the Credit Agreement was extended from December 31, 2015 to January 16, 2020. Accordingly, borrowings under the Credit Agreement are reported as long-term debt at February 28, 2015. Additionally, the LIBOR interest rate, letter of credit fees and loan commitment fees under the Credit Agreement were reduced and the limitations of certain covenants were eased. Borrowings under the Credit Agreement accrue interest at a “Base Rate” plus a margin of zero to 1.00 percent per annum based on the leverage ratio at the time of borrowing. The Base Rate is equal to the highest of the Federal Funds Rate plus 0.50 percent, Bank of America’s prime rate, or the LIBOR rate plus 1.00 percent. Alternatively, if the Company elects, borrowings accrue interest based on the respective 1, 2, 3, or 6-month LIBOR rate plus a margin of 1.00 to 2.00 percent per annum based upon the Leverage Ratio at the time of the borrowing. The Company will incur loan commitment fees under the Credit Agreement at a rate ranging from 0.15 to 0.35 percent per annum on the unused balance of the Credit Agreement. Additionally, the Company will incur letter of credit fees under the Credit Agreement at a rate ranging from 1.00 to 2.00 percent per annum on the face value of any letter of credit. Outstanding letters of credit reduce the borrowing availability under the Credit Agreement on a dollar-for-dollar basis. All obligations under the Credit Agreement are unconditionally guaranteed, on a joint and several basis, by the Company and certain of the Company’s subsidiaries.

The Credit Agreement and our other debt agreements require the maintenance of a maximum leverage ratio and minimum interest coverage ratio, and contain other customary covenants, which restrict or limit the Company from incurring liens on any of its properties and place certain limits on the amount of dividends the Company may pay for shares of common stock the Company may repurchase, among other things. The Company was in compliance with the terms of its debt agreements as of February 28, 2015.

In connection with the amendments to our credit agreement in fiscal year 2015, we incurred a total of $4.59 million in new debt acquisition costs that are being amortized over the remaining term of the Credit Agreement. As of February 28, 2015, there was $337.50 million in revolving debt and $0.77 million of open letters of credit outstanding under the Credit Agreement. As of February 28, 2015, the amount available for borrowings under the Credit Agreement was $311.73 million.

The following table contains information about interest rates on our Credit Agreement and the related weighted average borrowings outstanding for the periods covered by our consolidated statements of income:

INTEREST RATES ON CREDIT AGREEMENT

(in thousands)


	Fiscal Years Ended the Last Day of February,
	2015			2014			2013
Average borrowings outstanding (1)	$	300,280		$	29,680		$	143,100
Average interest rate during each year (2)		2.5	%		1.3	%		1.7	%
Interest rate range during each year		1.9 - 4.4	%		1.2 - 3.6	%		1.6 - 4.0	%
Weighted average interest rates on borrowings outstanding at year end		1.9	%		0.0	%		1.6	%

(1)Average borrowings outstanding is computed as the average of the current and four prior quarters ending balances of our revolving credit facility.

(2)The average interest rate during each year is computed by dividing the total interest expense associated with our revolving credit facility for a fiscal year by the average borrowings outstanding for the same fiscal year.