LONG-TERM DEBT AND FINANCING LEASE OBLIGATIONS

3 Months Ended

Mar. 29, 2020

Long-term Debt and Financing Lease Obligations

Long-term Debt and Financing Lease Obligations

(8)          Long-Term Debt and Financing Lease Obligations

On June 20, 2019, the Company entered into a Loan Agreement among the Company and Choice Financial Group. The Loan Agreement provides for a term loan in the principal amount of up to $24.0 million and is evidenced by a promissory note. The note has a maturity date of June 20, 2025. The first year of the note provides for payments of interest only, with the remaining five years requiring payments of interest and principal based on a 60 month amortization period. Interest shall be payable in an amount equal to the Wall

Street Journal Prime Rate, but in no circumstances shall the rate of interest be less than 5.00%. The Note may be prepaid, partially or in full, at any time and for no prepayment penalty.

Debt outstanding under the above referenced promissory note consisted of the following as of the periods presented:

(in thousands)	March 29, 2020		December 29, 2019
Term Loan	$	15,025	$	6,924
Less: deferred financing costs		(83)		(50)
Less: current portion of long-term debt		(2,020)		(616)
Long-term debt, less current portion	$	12,922	$	6,258

The weighted-average interest rate of long-term debt outstanding as of March 29, 2020 and December 29, 2019 was 5.0%.

The Company is subject to various financial and non-financial covenants on this debt, including a debt-service coverage ratio. As of March 29, 2020, the Company was compliant with all of its covenants.