Debt and Capital Lease Obligations

Long-term debt and capital lease obligations consisted of the following (in thousands):



	December 31,
	2017			2016
Term loan, due September 30, 2023	$	9,244		$	9,653
Line of credit, due November 30, 2020	22,199			17,975
Capital lease obligations for equipment	1,855			1,635
	33,298			29,263
Less current portion	(699		)	(1,317		)
	$	32,599		$	27,946

Required principal payments on outstanding debt obligations as of December 31, 2017 for the next five years and thereafter are as follows (in thousands):



	Term Loan		Line of Credit		Capital Lease Obligations
2018	$	422	$	—	$	333
2019	442		—		529
2020	459		22,199		333
2021	477		—		266
2022	496		—		199
Thereafter	6,948		—		399
	$	9,244	$	22,199	2,059
Amount representing interest					(204		)
					$	1,855

Term Loan and Line of Credit

We have a loan agreement (as amended, the “Loan Agreement”) with Bank of America, N.A. ("BofA"), which presently comprises a $40.0 million revolving line of credit (“Line of Credit”), including provisions for cash borrowings and up to $2.5 million notional amount of letters of credit, and a term loan (the “Term Loan”) with an original balance of $10.8 million. We may draw upon the Line of Credit for working capital and general corporate purposes until expiration on November 30, 2020. The maturity date of the Term Loan is September 30, 2023. At December 31, 2017, we had $9.2 million outstanding on our Term Loan and $22.2 million outstanding under the Line of Credit.

Under the Loan Agreement, interest accrues at an annual rate based on the London Inter-Bank Offered Rate (“LIBOR”) Daily Floating Rate plus a marginal rate. The marginal rate varies from 0.75% to 1.75% for the Line of Credit and Term Loan based on our funded debt ratio. At December 31, 2017, our marginal rate was 0.75% resulting in an annual interest rate of 2.26%.

The Loan Agreement authorizes acquisitions within the same line of business as long as we remain in compliance with the financial covenants of the Loan Agreement and there is at least $5.0 million of availability remaining on the Line of Credit following the acquisition.

Under the Loan Agreement, a quarterly fee on the unused portion of the Line of Credit, including the undrawn amount of the related standby letter of credit, varies from 0.15% to 0.30% based upon our funded debt ratio.

At December 31, 2017, the quarterly fee was 0.15% and the fee totaled the following (in thousands):



	Year Ended December 31,
	2017		2016		2015
Loan Agreement fee	$	37	$	36	$	24

An annual fee is payable in advance on the notional amount of each standby letter of credit issued and outstanding multiplied by an applicable rate ranging from 0.75% to 1.75%. We had no letters of credit outstanding during 2017, 2016 or 2015.

We were in compliance with all applicable contractual financial covenants of the Loan Agreement at December 31, 2017. These financial covenants under the Loan Agreement are measured on a trailing four-quarter basis. We are required to maintain a funded debt ratio of up to 3.5 to 1 and a fixed charge coverage ratio above 1.20 to 1. The funded debt ratio maximum is reduced to 3.0 to 1 on January 1, 2018.

The Loan Agreement is secured by substantially all of our personal property and fixtures and by our Oregon brewery. In addition, we are permitted to declare or pay dividends, repurchase outstanding common stock or incur additional debt, subject to limitations. We are restricted from entering into any agreement that would result in a change in control.