Credit Agreement and Related Instruments

Credit Agreement

We are a party to a senior secured credit facility (the "Credit Agreement") with Royal Bank of Canada ("RBC") which consists of a term loan facility and a $50.0 million revolving credit facility. As of December 28, 2014, we had $698.0 million in term loan borrowings and no revolving borrowings.

Under our Credit Agreement, we may borrow under a "Base Rate" which approximates the prime rate plus an applicable margin or "Eurodollar Rate" which approximates LIBOR plus an applicable margin. Eurodollar Rate loans are also subject to a Eurodollar Floor. At December 28, 2014, the principal amounts outstanding were Eurodollar Rate loans and interest rate information as of December 28, 2014 were as follows (amounts in thousands):



	Principal Outstanding		Base Rate		Base Rate Margin		Eurodollar Rate Margin		Eurodollar Floor		Applicable Rate
Revolving and swingline loans	$	—	3.25	%	3.25	%	4.25	%	—	%	—	%
Term loan	$	646,375	3.25	%	1.50	%	2.50	%	0.75	%	3.25	%
Incremental term loan	$	51,651	3.25	%	1.75	%	2.75	%	0.75	%	3.50	%

The fair value of our term loans was approximately $681.0 million at December 28, 2014 and $693.0 million at September 28, 2014. We classify this valuation as a Level 2 fair value measurement.

Our term loan facility matures in February 2020 and as of December 28, 2014, there are no scheduled principal repayments until the maturity date. The Credit Agreement stipulates an annual principal payment of a percentage of Excess Cash Flow ("ECF"). The first ECF application date will be measured as of the end of fiscal year 2015 and the ECF percentage will be 50% if the Consolidated Leverage Ratio (as defined in the Credit Agreement) as of the last day of the fiscal year is equal to or greater than 3.00 to 1.00 and 0% otherwise.

As of December 28, 2014, our undrawn commitment fee was 0.375% on the unused portion of the revolving facility. If any letters of credit are issued, then we expect to pay a fronting fee equal to 0.25% per annum of the aggregate face amount of each letter of credit and a participation fee on all outstanding letters of credit at a per annum rate equal to the margin then in effect with respect to Eurodollar Rate-based loans on the face amount of such letter of credit. The revolving facility expires on November 2, 2015.

Our Credit Agreement includes financial covenants requiring a maximum leverage ratio and minimum fixed charge coverage ratio that are applicable only when revolving loans or swingline loans are outstanding at the end of a fiscal quarter and also contains other customary affirmative and negative covenants and events of default. We were in compliance with our covenants as of December 28, 2014.

Interest Rate Swap Agreements

In connection with our Credit Agreement in 2011, we entered into interest rate swap agreements for the purpose of minimizing the variability of cash flows in the interest rate payments of our variable rate borrowings. The cash flows received under the interest rate swap agreements are expected to offset the change in cash flows associated with LIBOR rate borrowings between the effective and maturity dates of the swaps. Our outstanding swap agreement had a notional amount of $24.0 million, a fixed rate of 2.21% and expired in January 2015. We classify our interest rate swap balance as a Level 2 fair value measurement. We determined the fair value of our interest rate swap agreements based on mid-market valuations reported to us by the counterparty to the swap agreement.