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Line Of Credit
9 Months Ended
May 26, 2012
Line Of Credit [Abstract]  
Line Of Credit

NOTE 3 – LINE OF CREDIT

On March 13, 2012, we entered into the First Modification Agreement to our previously existing amended and restated secured credit agreement (the Restated Credit Agreement) with our existing lender. The primary purpose of the First Modification Agreement was to extend the maturity date of the Restated Credit Agreement, which originally expired on March 14, 2012. The First Modification Agreement extended the maturity date of the Restated Credit Agreement to March 31, 2013.

Subsequent to May 26, 2012, we entered into the Second Modification Agreement to the Restated Credit Agreement. The primary purpose of the Second Modification Agreement was to extend the maturity date of the Restated Credit Agreement from March 31, 2013 to March 31, 2015. We wanted to ensure the availability of our line of credit facility over the next three years so that we can use excess cash to pursue special initiatives, such as the potential repurchase of shares of our common stock, and for other growth opportunities. The credit facility will continue to provide a maximum borrowing amount of $10.0 million and the interest rate continues to be LIBOR plus 2.50% per year. The unused credit fee on the facility increased slightly from .25% to .33%.

The Second Modification Agreement continues to have debt covenants that include 1) a Funded Debt to EBITDAR ratio, 2) a Fixed Charge Coverage ratio, and 3) an annual limit on purchases of property and equipment. The previously existing minimum net worth covenant was eliminated. At May 26, 2012, we believe that we were in compliance with the applicable terms and covenants of the Restated Credit Agreement.

The other terms, conditions, and financial covenants in the Second Modification Agreement are substantially the same as those defined in the Restated Credit Agreement. In the event of noncompliance with the financial covenants and other defined events of default, the lender is entitled to certain remedies, including acceleration of the repayment of amounts outstanding on the line of credit facility.