8. Long-Term Debt

Long-term debt consists of the following:


	December 30,			December 31,
	2017			2016
	(in thousands)
Term loan payable with a payment of $0.675 million due quarterly. A lump sum payment of $253.8 million due on February 15, 2022. Interest payable quarterly at LIBOR or the prime plus an applicable margin. At December 30, 2017, the average rate is 1.46% plus a margin of 4.75%. At December 31, 2016, the average rate was 1.00% plus a margin of 5.75%.	$	223,975		$	263,975
Other debt		458			—
Fees, costs and original issue discount (1)		(11,460	)		(16,102	)

		212,973			247,873
Less current portion of long-term debt		(294	)		—

Long-term debt, less current portion	$	212,679		$	247,873

(1)	Fees, costs and original issue discount represents third-party fees, lender fees, other debt-related costs, and original issue discount, recorded as a reduction of the carrying value of the debt, and is being amortized over the life of the debt instrument under the effective interest method.

2016 Credit Agreement

On February 16, 2016, we entered into the 2016 Credit Agreement, among us, the lending institutions identified in the 2016 Credit Agreement, and Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent. The 2016 Credit Agreement establishes new senior secured credit facilities in an aggregate amount of $310.0 million, consisting of a $270.0 million Term B term loan facility maturing in February 2022 that will amortize on a basis of 1% annually during the six-year term, and a $40.0 million revolving credit facility maturing in February 2021 that includes a swing line facility and a letter of credit facility. Our obligations under the 2016 Credit Agreement are secured by substantially all of our assets as well as our direct and indirect subsidiaries’ assets. As of December 30, 2017, there were $0.2 million of letters of credit outstanding and $39.8 million available on the revolver.

Interest on all loans under the 2016 Credit Agreement is payable either quarterly or at the expiration of any LIBOR interest period applicable thereto. Borrowings under the term loans and the revolving credit facility accrue interest at a rate equal to, at our option, LIBOR (with a floor of 100 basis points in respect of the term loan), or a base rate (with a floor of 200 basis points in respect of the term loan) plus an applicable margin. The applicable margin was 575 basis points in the case of LIBOR and 475 basis points in the case of the base rate. However, due to our repricing of this facility in February 2017, these rates have been decreased to 475 basis points in the case of LIBOR and 375 basis points in the case of the base rate. We pay quarterly fees on the unused portion of the revolving credit facility equal to 50 basis points per annum as well as a quarterly letter of credit fee at 575 basis points per annum plus a 12.5 basis point facing fee per annum on the face amount of any outstanding letters of credit.

The face value of the 2016 Credit Agreement at the time of issuance was $270.0 million of which $2.0 million has been repaid as scheduled debt repayments through December 31, 2016. In addition, we made a voluntary prepayment of $4.0 million on September 30, 2016, using internally generated cash on hand. During 2017, we made additional voluntary prepayments totaling $40.0 million. We elected to apply the prepayment against upcoming required principal repayments in direct order of maturity, as permitted under the 2016 Credit Agreement, resulting in no required repayments of principal until the maturity of the facility in February 2022. As of December 30, 2017, the face value of debt outstanding under the 2016 Credit Agreement was $224.0 million, and accrued interest was $1.0 million.

The Company incurred third-party fees and costs totaling $1.5 million, and additional lender fees and discount of $14.6 million in the February 2016 refinancing. As a result of the voluntary prepayments of debt discussed above, we accelerated the amortization of lenders fees and discount relating to the term-loan portion of the 2016 Credit Agreement of $0.2 million in 2016, and of $1.9 million in 2017, which are included in interest expense in the accompanying consolidated statement of operations for the years ended December 31, 2016, and December 30, 2017, respectively.

All debt-related fees, costs and original issue discount, including those related to the revolving credit portion of the facility, is classified as a reduction of the carrying value of long-term debt. The activity relating to third-party fees and costs, lender fees and discount for the year ended December 30, 2017, are as follows:


(in thousands)	Total
At beginning of year	$	16,102
Amortization expense through February 17, 2017		(359	)

At time of refinancing		15,743
Less: Amortization expense after repricing		(2,394	)
Less: Accelerated amortization relating to debt prepayment		(1,889	)

At end of year	$	11,460

Estimated amortization expense relating to third-party fees and costs, lender fees and discount for the years indicated, as of December 30, 2017, is as follows:


(in thousands)	Total
2018	$	2,583
2019		2,754
2020		2,996
2021		2,775
2022		352

Total	$	11,460

As a result of voluntary prepayments of $4.0 million in 2016, and $40.0 million in 2017, as previously mentioned, our next scheduled repayment is not until the maturity of the facility in February 2022. The contractual future maturities of long-term debt outstanding, including other debt relating to our software license financing arrangement, as of December 30, 2017, are as follows (at face value):


(in thousands)	Total
2018	$	294
2019		164
2020		—
2021		—
2022		223,975

Total	$	224,433

The 2016 Credit Agreement contains a springing financial covenant. If we draw in excess of twenty percent (20%) of the revolving facility, which requires us to maintain a maximum total net leverage ratio (based on the ratio of total debt for borrowed money to EBITDA, each as defined in the 2016 Credit Agreement), and is tested quarterly based on the last four fiscal quarters and is set at levels as described in the 2016 Credit Agreement. As of December 30, 2017, no test is required as we have not exceeded 20% of our revolving capacity.

The 2016 Credit Agreement also contains a number of affirmative and restrictive covenants, including limitations on the incurrence of additional debt, liens on property, acquisitions and investments, loans and guarantees, mergers, consolidations, liquidations and dissolutions, asset sales, dividends and other payments in respect of our capital stock, prepayments of certain debt and transactions with affiliates. The 2016 Credit Agreement also contains customary events of default. Upon the occurrence of an event of default, the amounts outstanding under the 2016 Credit Agreement may be accelerated and may become immediately due and payable.

Other Debt

In July 2017, we entered into a two-year financing arrangement for the purchase of an enterprise-wide software license relating to office productivity software. This financing arrangement requires 24 monthly payments of $26 thousand each. We estimated the value of this financing arrangement to be $590 thousand, using an imputed annual interest rate of 6.00%, which approximates our borrowing rate under the 2016 Credit Agreement, a Level 3 input. At December 30, 2017, there was $458 thousand outstanding under this financing arrangement.

Interest Expense, Net

Interest expense, net consisted of the following:


	Year Ended
	December 30,			December 31,			January 2,
	2017			2016			2016
(in thousands)
Long-term debt	$	15,644		$	17,351		$	10,562
Debt fees		290			296			269
Amortization and write-offs of deferred finncing costs and debt discount		4,642			2,721			1,014
Interest income		(236	)		(105	)		(70	)

Interest expense		20,340			20,263			11,775
Capitalized interest		(61	)		(138	)		(70	)

Interest expense, net	$	20,279		$	20,125		$	11,705