Note 8—Debt

The following table summarizes our outstanding debt (in thousands):



	June 30, 2015			December 31, 2014
Term Loan	$	93,521		$	87,360
HIE Retail Credit Agreement	28,928			22,750
Texadian Uncommitted Credit Agreement	—			26,500
Mid Pac Credit Agreement	48,958			—
Total debt, net of unamortized debt discount	171,407			136,610
Less current maturities	(43,373		)	(29,100		)
Long-term debt, net of current maturities and unamortized discount	$	128,034		$	107,510

Annual maturities of our long-term debt for the next five years and thereafter are as follows (in thousands):



Year	Amount Due
2015	$	4,226
2016	47,540
2017	8,452
2018	62,886
2019	8,452
Thereafter	39,851
	$	171,407

Additionally, as of June 30, 2015, we had approximately $16.3 million in letters of credit outstanding under the Texadian Uncommitted Credit Agreement.

Term Loan

Pursuant to the terms of our Delayed Draw Term Loan Agreement (the "Term Loan"), we were required to repay an advance of $35 million on March 31, 2015. On March 11, 2015, we entered into a Third Amendment to the Term Loan whereby we extended the repayment date of the advance to March 31, 2016. All other terms and conditions remain unchanged.

Certain lenders under the Term Loan are our stockholders. Please read Note 16—Related Party Transactions for more information.

Retail Credit Agreement

On November 14, 2013, HIE Retail, LLC (“HIE Retail”), our subsidiary, entered into a Credit Agreement (“Retail Credit Agreement”) in the form of a senior secured term loan of up to $30 million (“Retail Term Loan”) and a senior secured revolving line of credit of up to $5 million (“Retail Revolver”). Loans made under the Retail Credit Agreement are secured by a first priority security interest in substantially all of the assets of HIE Retail.

On May 15, 2015, HIE Retail entered into a Second Amendment to the Retail Credit Agreement ("Second Amendment") pursuant to which we terminated the Retail Revolver and extended the maturity date of the existing Retail Term Loans in the aggregate principal amount of $22 million until March 31, 2022. In connection with the entry into the Second Amendment, the Retail Facility lenders made additional term loans to HIE Retail in the aggregate principal amount of $7.9 million. The New Term Loans were made on the same terms as the term loans previously made under the Retail Credit Agreement, as amended by the Second Amendment. The Second Amendment also provides that if a prepayment of the amounts outstanding under the Retail Credit Agreement occurs as a result of HIE Retail obtaining refinancing from any financial institution (including from less than all of the Retail Facility Lenders), HIE Retail shall pay a prepayment fee equal to 1% of the amount prepaid. Prior to the entry into the Second Amendment, there were no revolving loans outstanding and no letters of credit issued under the Retail Credit Agreement.

The Second Amendment includes a new covenant that requires HIE Retail to maintain cash on hand of not less than $3 million at all times. In addition, the Second Amendment modifies the financial covenant relating to HIE Retail’s maximum Leverage Ratio (as defined in the Retail Credit Agreement), which is measured on a quarterly basis commencing with the fiscal quarter ending June 30, 2015 and building up to a rolling four-quarter basis, as follows for the last day of each fiscal year:



Period (during and as of the last day of)		Maximum Leverage Ratio
2015 Fiscal Year		5.00 to 1.00
2016 Fiscal Year		4.75 to 1.00
2017 Fiscal Year		4.50 to 1.00
2018 Fiscal Year		4.25 to 1.00
2019 Fiscal Year, and at all times thereafter		4.00 to 1.00

Texadian Uncommitted Credit Agreement

On February 20, 2015, Texadian Energy, Inc. ("Texadian"), and its wholly-owned subsidiary Texadian Energy Canada Limited, amended and restated the uncommitted credit agreement. The amended agreement increased the uncommitted loans and letters of credit capacity to $200 million and extended the maturity date to February 2016.

Existing Debt Obligations of Koko'oha and Mid Pac

On April 1, 2015, in connection with the acquisition of Mid Pac, we repaid certain existing debt obligations of Koko'oha and Mid Pac for $45.3 million.

Mid Pac Credit Agreement

On April 1, 2015, Koko’oha and Mid Pac entered into the Mid Pac Credit Agreement in the form of a senior secured term loan in the amount of $50.0 million (“Mid Pac Term Loan”) and a senior secured revolving line of credit (“Mid Pac Revolving Credit Facility”) in the aggregate principal amount of up to $5.0 million. The lenders of the Mid Pac Credit Agreement advanced the full amount of the Mid Pac Term Loan and the Mid Pac Revolving Credit Facility at the closing. The proceeds of the loans were used to repay certain existing debt of Koko’oha and Mid Pac, pay a portion of the acquisition consideration and for general corporate purposes.

The Mid Pac Term Loan matures and is fully payable on April 1, 2022. Principal on the term loan will be repaid in 28 equal quarterly principal payments over the term. The revolving credit facility matures on April 1, 2018 and no more than five borrowings consisting of LIBOR loans may be outstanding at any time. Letters of credit issued under the revolving credit facility are not to expire beyond the maturity date of the revolving credit facility.

The Mid Pac Term Loan and advances under the Mid Pac Revolving Credit Facility will bear interest, at the Company's election, at a rate equal to (a) 30, 90 or 180 day LIBOR plus the applicable margin (as specified below), or (ii) the primary interest rate established from time to time by Bank of Hawaii plus a margin. For both LIBOR and primary interest rate loans, the margin is calculated based on the leverage ratio determined as of the last day of the immediately preceding quarter. Interest is payable at the end of the selected interest period, but no less frequently than quarterly.

The Mid Pac Term Loan applicable margin is as specified below:



Leverage Ratio	Applicable Margin for LIBOR Loans	Applicable Margin for Basis Rate Loans
	(basis points)	(basis points)
< 3.00x	200	—
3.00x - 3.50x	225	25
> 3.50x	250	50

The Mid Pac Revolving Credit Facility applicable margin is as specified below:



Leverage Ratio	Applicable Margin for LIBOR Loans	Applicable Margin for Basis Rate Loans
	(basis points)	(basis points)
< 3.00x	175	(25)
3.00x - 3.50x	200	—
> 3.50x	225	25

Mid Pac agreed to pay certain fees in connection with the Mid Pac Credit Agreement, including usage fees for trade letters of credit and commitment fees for standby letters of credit issued under the Mid Pac Revolving Credit Facility.

Pursuant to the Mid Pac Credit Agreement, Mid Pac is required to comply with various affirmative and negative covenants affecting its business and operations, including compliance with a minimum fixed charge coverage ratio of not less than 1.15 to 1.00, a minimum tangible net worth of $12.0 million, and a maximum leverage ratio determined as follows:



Period (during and as of last day of)		Maximum Leverage Ratio
June 30, 2015		5.50 to 1.00
September 30, 2015		5.25 to 1.00
December 31, 2015		5.00 to 1.00
2016 fiscal year		4.75 to 1.00
2017 fiscal year		4.25 to 1.00
2018 fiscal year		4.00 to 1.00
2019 fiscal year		3.50 to 1.00
2020 fiscal year, and at all times thereafter		3.25 to 1.00

ABL Facility

On September 25, 2013 and in connection with the acquisition of HIE, HIE and its subsidiary (“ABL Borrowers”) and Hawaii Pacific Energy entered into an asset-based senior secured revolving credit facility (“ABL Facility”) of up to $125 million, of which up to $50 million of availability under the ABL Facility was available for the issuances of letters of credit. The ABL Facility was secured by a lien on substantially all of HIE’s assets. Upon the execution of the Supply and Offtake Agreements, we repaid in full and terminated the ABL Facility and expensed $1.8 million of financing costs associated with the termination of the agreement. The expense of $1.8 million related to the termination of the ABL Facility is included within Loss on termination of financing agreements on our unaudited consolidated statements of operations for the three and six months ended June 30, 2015.

Guarantors

In connection with our shelf registration statement on Form S-3, which was filed with the SEC on June 1, 2015 and declared effective on June 23, 2015 (“Registration Statement”), we may sell non-convertible debt securities and other securities in one or more offerings with an aggregate initial offering price of up to $750 million. Any non-convertible debt securities issued under the Registration Statement may be fully and unconditionally guaranteed (except for customary release provisions), on a joint and several basis, by some or all of our subsidiaries, other than subsidiaries that are “minor” within the meaning of Rule 3-10 of Regulation S-X (the “Guarantor Subsidiaries”). The Company has no “independent assets or operations” within the meaning of Rule 3-10 of Regulation S-X, and certain of the Guarantor Subsidiaries may be subject to restrictions on their ability to distribute funds to the Company, whether by cash dividends, loans or advances.