Note 8 Credit Agreement

Credit Agreement

On March 31, 2015, we entered into Amendment No. 6 to our existing Amended and Restated Credit Agreement dated as of October 13, 2011 (such Amended and Restated Credit Agreement as further amended and supplemented prior to March 31, 2015, the "Existing Credit Agreement"; and as amended by Amendment No. 6, the “Amended Credit Agreement"), with Bank of America, N.A., as administrative agent and collateral agent. Pursuant to the Existing Credit Agreement, certain lenders provided first lien credit facilities, consisting of a term loan facility and a revolving credit facility. Amendment No. 6 provided for, among other things, (1) certain amendments to the provisions relating to incremental credit facilities to (i) permit up to $325.0 million of incremental term loan facilities to be in the form of term A loans, and (ii) permit the incremental revolving commitment capacity to be increased by the amount of all prior voluntary terminations of revolving commitments, (2) an amendment to the definition of "change of control" in the Existing Credit Agreement to remove the "continuing director" prong (clause (b)) from such defined term, and (3) certain amendments related to the acquisition of Vitesse. In connection with Amendment No. 6, Bank of America, N.A., replaced Royal Bank of Canada as administrative agent and as collateral agent under the Amended Credit Agreement.

On April 28, 2015, we entered into an Incremental Joinder Agreement with respect to an incremental term A loan of $325.0 million and incremental revolving commitments of $225.0 million under our Amended Credit Agreement (as supplemented by the Incremental Joinder Agreement, the "Credit Agreement"). The term A loan and incremental revolving commitments each mature in August 2019. Beginning with the quarter ending September 27, 2015, and each quarter thereafter, we are required to make quarterly principal payments of $8.1 million on term A loan borrowings. The incremental term A loan and incremental revolving commitments initially bear interest at an interest rate margin of 2.00% for Eurodollar Rate loans and 1.00% for Base Rate loans, and the incremental revolving commitments are subject to an undrawn commitment fee of 0.35%. The interest rate margins and commitment fee are subject to step-downs based on our Consolidated Leverage Ratio (as defined in the Credit Agreement).

On April 28, 2015, we borrowed $325.0 million of incremental term A loan and $100.0 million under incremental revolving commitments to fund the acquisition of Vitesse, to repay a portion of term B loan principal, and for general corporate purposes.

Our term B loan facility matures in February 2020 and as of September 27, 2015, 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") (as defined in the Credit Agreement). The first ECF application date was measured as of the end of fiscal year 2015 and the ECF percentage will be 50% if the Consolidated Leverage Ratio as of the last day of the fiscal year is equal to or greater than 3.00 to 1.00 and 0% otherwise.

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. For term B loans, Eurodollar Rate loans are also subject to a Eurodollar Floor. At September 27, 2015, the principal amounts outstanding were Eurodollar Rate loans and interest rate information as of September 27, 2015, were as follows (amounts in millions, except percentages):



	Principal Outstanding		Base Rate		Base Rate Margin		Eurodollar Rate Margin		Eurodollar Floor		Applicable Rate
Revolving and swingline loans	$	100.0	3.25	%	1.00	%	2.00	%	—	%	2.15	%
Term A loan	$	325.0	3.25	%	1.00	%	2.00	%	—	%	2.15	%
Term B loan	$	573.0	3.25	%	1.50	%	2.50	%	0.75	%	3.25	%

Debt issuance costs recorded as a reduction to principal outstanding in the consolidated balance sheets were $4.7 million as of September 28, 2014 and $11.7 million as of September 27, 2015. The fair value of our outstanding loans was $995.9 million at September 27, 2015 and $693.0 million at September 28, 2014. We classify this valuation as a Level 2 fair value measurement and determined the fair value based on a mid-market valuation reported to us by a participant in the credit facility.

Our Credit Agreement includes financial covenants requiring a maximum leverage ratio and minimum fixed charge coverage ratio and also contains other customary affirmative and negative covenants and events of default. We were in compliance with our covenants as of September 27, 2015.

Interest Rate Swap Agreement

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 last interest rate swap agreement expired in January 2015. We classified 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 agreements. We reflect the change in fair value of the swaps through other income (expense), net and recorded income of $0.6 million in 2014 and income of $1.3 million in 2013.