2.	Debt, Capital Leases and Notes Payable

Debt, capital leases and notes payable are summarized as follows at December 31:

	December 31, 2011			December 31, 2010

Senior revolving credit facility	$	14,500		$	17,912
Notes payable and capital leases		58			44
		14,558			17,956
Less current portion		(14,514	)		(11	)
Long-term Debt, notes payable and capital leases, net of current portion	$	44		$	17,945

We entered into a senior revolving credit facility in November 2010 that was amended in April 2011, September 2011, November 2011 and March 2012 (“Senior Revolving Credit Facility”) that replaced our previous loan agreement. Our Senior Revolving Credit Facility provides for availability of up to $14,660 subject to borrowing base limits. The Senior Revolving Credit Facility matures on April 30, 2012 and is secured by substantially all of our assets.

At December 31, 2011, our availability under our Senior Revolving Credit Facility (based on borrowing base availability) was $142 (after giving effect to the outstanding balance of $14,500 and the $1,239 of outstanding standby letters of credit). For the quarter ended December 31, 2011, we were not in compliance with our financial covenants. On March 15, 2012 we entered into an amendment and waiver to the Senior Revolving Credit which waived our failure to comply with the financial conenants until the April 30, 2012 maturity date and limits our borrowing availability to $14,660. While we are not currently in compliance with the financial covenants in our Senior Revolving Credit Facility, we anticipate refinancing our Senior Revolving Credit Facility to provide for greater capital availability. We expect that a portion of our borrowing facility will include debt at higher interest rates than our current Senior Revolving Credit Facility. We currently expect this refinance will be complete by April 30, 2012. If we are unable to refinance our Senior Revolving Credit Facility, we may be forced to reduce our capital expenditures and delay our growth plans.

Interest on the outstanding borrowings under the Senior Revolving Credit Facility is payable at our option at either a floating base rate plus an interest rate spread or a floating rate of LIBOR plus an interest rate spread. Both the interest rate spreads and the commitment fee rate are determined from a pricing grid based on our total leverage ratio. The Senior Revolving Credit Facility also provides for letters of credit issued to our vendors, which reduce the amount available for cash borrowings. We are required to pay a commitment fee on the unused amounts of the commitments under the Senior Revolving Credit Facility. At December 31, 2011, the interest rate for our outstanding balance was 5.50%.

The amended Senior Revolving Credit Facility contains various restrictive covenants and the following financial covenants: (a) minimum earnings before interest, taxes, depreciation and amortization (calculated on a trailing four quarter basis) for the period beginning January 1, 2012 and ending March 31, 2012 shall be at least $1,000,000 and (b) our capital expenditures shall be no more than (x) $1,000,000 for the period beginning January 1, 2012 and ending March 31, 2012 and (y) $100,000 for the period beginning April 1, 2012 and ending April 30, 2012. The foregoing restriction does not apply to capital expenditures for the purchase of bottles.

We paid and capitalized $2,109 of fees related to the Senior Revolving Credit Facility that are being amortized on a straight-line basis as part of interest expense over the remaining term of the Senior Revolving Credit Facility. During the fourth quarter of 2011, we immediately recognized expense for $459 in deferred loan costs associated with the Senior Revolving Credit Facility, due to the decrease in availability from $40,000 to $25,000 in the amended Senior Revolving Credit Facility. We continue to amortize, over the remaining term of the related debt, $1,014 in deferred loan costs related to the Senior Revolving Credit Facility. At December 31, 2011, accumulated amortization related to deferred loan costs was $1,095.

In December 2009 and September 2010, we issued Subordinated Convertible Promissory Notes (“Notes”) that had a total face value of $15,000 and $3,418, respectively, and were subordinated to borrowings under the Senior Loan Agreement. The September 2010 Notes related to borrowings outstanding at September 2010 were closed in October 2010. The Notes paid quarterly interest at 14% and were paid in full in November 2010 using the proceeds from our IPO and closing of the Senior Revolving Credit Facility.

The Notes were accompanied by detachable warrants with a value at issuance equal to 4% of the face amount of the corresponding Notes. The total number of shares of common stock issuable under the warrants is 131. The initial fair value of the warrants was $737, of which $137 is attributable to the Notes issued in the third quarter of 2010, and resulted in an original issue discount on the Notes that was amortized into interest expense over the term of the Notes with the unamortized balance being expensed when the Notes were paid in full in November 2010. The fair value of the warrants was initially included in other long-term liabilities in the consolidated balance sheet based upon estimated fair value as adjusted periodically until such time that the exercise price became fixed at the IPO date, at which time the then fair value was reclassified as a component of stockholders' equity (deficit). In connection with our IPO the exercise price per share of the warrants was fixed at $9.60, or 80% of the initial public offering price per share of our common stock.

In January 2009, we entered into a Loan and Security Agreement with our primary bank that was subordinated to the Senior Loan Agreement (the “Prior Subordinated Loan Agreement”), pursuant to which a $10,000 term loan was provided (the “Prior Subordinated Loan”). The bank acted as syndication agent and provided $4,100 of the facility. Twelve existing investors in Primo (including our CEO and CFO) funded the $5,900 balance of the facility. The proceeds of the Prior Subordinated Loan Agreement were used to repay the then outstanding balance on the Revolver and for working capital purposes. Interest on the Prior Subordinated Loan was at the bank's prime rate plus 10.0%, payable monthly. The Prior Subordinated Loan had an original maturity of January 6, 2010; however, the balance was paid in full in December 2009. In connection with the Prior Subordinated Loan, we paid fees totaling approximately $575, which were deferred and amortized as a component of interest expense.

We periodically enter into notes for purchases of delivery vehicles for field operations and had three such notes outstanding at December 31, 2011.

The aggregate future maturities of debt, capital leases and notes payable as of December 31, 2011 were as follows:

2012	$	14,514
2013		16
2014		16
2015		7
2016		5
	$	14,558
Less: amounts representing interest		–
	$	14,558