Debt

Long-term debt, net consists of the following (in thousands):

	August 26, 2018			May 27, 2018
Term loan with JPMorgan Chase Bank (“JPMorgan”), BMO Harris Bank N.A. (“BMO”), and City National Bank; due in quarterly principal and interest payments of $1,250 beginning December 1, 2016 through September 23, 2021 with the remainder due on maturity, with interest based on the Company’s leverage ratio at a per annum rate of the Eurodollar rate plus a spread of between 1.25% and 2.25%	$	41,250		$	42,500
Total principal amount of long-term debt		41,250			42,500
Less: unamortized debt issuance costs		(185	)		(200	)
Total long-term debt, net of unamortized debt issuance costs		41,065			42,300
Less: current portion of long-term debt, net		(4,940	)		(4,940	)
Long-term debt, net	$	36,125		$	37,360

September 23, 2016,

the Company entered into a Credit Agreement with JPMorgan, BMO, and City National Bank, as lenders (collectively, the “Lenders”), and JPMorgan as administrative agent, pursuant to which the Lenders provided the Company with a

$100.0

million revolving line of credit (the “Revolver”) and a

$50.0

million term loan facility (the “Term Loan”), guaranteed by each of the Company’s direct and indirect subsidiaries and secured by substantially all of the Company’s assets, with the exception of the Company’s investment in Windset.

Both the Revolver and the Term Loan mature in

five

years (on

September 23, 2021),

with the Term Loan providing for quarterly principal payments of

$1.25

million commencing

December 1, 2016,

with the remainder due at maturity.

Interest on both the Revolver and the Term Loan is based on either the prime rate or Eurodollar rate, at the Company’s discretion, plus a spread based on the Company’s leverage ratio (generally defined as the ratio of the Company’s total indebtedness on such date to the Company’s consolidated EBITDA for the period of

four

consecutive fiscal quarters ended on or most recently prior to such date). The spread is at a per annum rate of (i) between

0.25%

and

1.25%

if the prime rate is elected or (ii) between

1.25%

and

2.25%

if the Eurodollar rate is elected.

The Credit Agreement provides the Company the right to increase the Revolver commitments and/or the Term Loan commitments by obtaining additional commitments either from

one

or more of the Lenders or another lending institution at an amount of up to

$75.0

million.

The Credit Agreement contains customary financial covenants and events of default under which the obligation could be accelerated and/or the interest rate increased. The Company was in compliance with all financial covenants as of

August 26, 2018.

November 1, 2016,

the Company entered into an interest rate swap contract (the

“2016

Swap”) with BMO at a notional amount of

$50

million. The

2016

Swap has the effect of changing the Company’s Term Loan obligation from a variable interest rate to a fixed

-day LIBOR rate of

1.22%.

As of

August 26, 2018,

the interest rate on the Term Loan was

4.09%.

For further discussion regarding the Company’s use of derivative instruments, see the Financial Instruments section of Note

– Organization, Basis of Presentation, and Summary of Significant Accounting Policies.

June 25, 2018,

the Company entered into an interest rate swap contract (the

“2018

Swap”) with BMO at a notional amount of

$30.0

million. The

2018

Swap has the effect of converting the Company’s Revolver obligation from a variable interest rate to a fixed

-day LIBOR rate of

2.74%.

In connection with the Credit Agreement, the Company incurred lender and

third

-party debt issuance costs of

$897,000,

of which

$598,000

and

$299,000

was allocated to the Revolver and Term Loan, respectively.

As of

August 26, 2018,

$36.0

million was outstanding on the Revolver, at an interest rate of

4.09%

under the Eurodollar option, and

$3.0

million was outstanding under the Prime option.