6.Term Debt and Line of Credit

ABL Credit Facility

On November 18, 2015, the Company entered into a five-year revolving credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, and the other lenders party thereto (with all related loan documents, and as amended from time to time, the “ABL Credit Facility”). The ABL Credit Facility provides for a five-year, $50.0 million senior secured revolving credit facility. The ABL Credit Facility also provides that, under certain conditions, we may increase the aggregate principal amount of loans outstanding thereunder by up to $10.0 million. Borrowings under the ABL Credit Facility bear interest, at the Company’s option, at a base rate or the London interbank offered rate (“LIBOR”) plus, in each case, an applicable margin. The ABL Credit Facility will mature, and the commitments thereunder will terminate, on November 17, 2020.

Events of default under the ABL Credit Facility include customary events, such as a cross-default provision with respect to other material debt. As of September 24, 2016, the Company is in compliance with all covenants of the ABL Credit Facility.

As of September 24, 2016, there was $31.6 million outstanding under the ABL Credit Facility and the net availability thereunder was $17.3 million.

Term debt consisted of the following as of September 24, 2016 and December 26, 2015 (in thousands):


	September 24,		December 26,
	2016		2015
Term loan credit facility through November 2020	$	84,575		85,000
Equipment term loan, Goodyear, Arizona, due monthly through April 2021		2,957		2,055
Equipment term loan, Rader Farms, due monthly through August 2019		1,591		1,972
Equipment term loan, Willamette Valley Fruit Company, due monthly through August 2019		1,181		1,464
Capital lease obligations, primarily due September 2017		47		48
Long-term debt		90,351		90,539
Less: deferred financing fees, net		(5,508)		(5,413)
Less: current portion of long-term debt		(84,843)		(1,826)
Long-term debt, less current portion	$	—	$	83,300

Term Loan Credit Facility

Also on November 18, 2015 and concurrent with the execution of the ABL Credit Facility, Inventure Foods and certain of its subsidiaries entered into a five-year term loan credit agreement with BSP Agency, LLC (“BSP”), as administrative agent, and the other lenders party thereto (with all related loan documents, and as amended from time to time, the “Term Loan Credit Facility”). The Term Loan Credit Facility provides for a $85.0 million senior secured term loan that matures on November 17, 2020. The Term Loan Credit Facility also provides that, under certain conditions, we may increase the aggregate principal amount of term loans outstanding thereunder by up to $25.0 million. Borrowings under the Term Loan Credit Facility bear interest, at the Company’s option, at a base rate or LIBOR plus, in each case, an applicable margin.

The Term Loan Credit Facility contains customary negative covenants and also requires the Company, together with its subsidiaries, to comply with a Fixed Charge Coverage Ratio and a Total Leverage Ratio (each as defined in the Term Loan Credit Facility). The first Fixed Charge Coverage Ratio and Total Leverage Ratio measurement period was the end of the first quarter of fiscal 2016. On March 9, 2016, the Company entered into that certain First Amendment to Credit Agreement, dated March 9, 2016, with BSP, as administrative agent, and the other lenders party thereto (the “First Amendment”). The First Amendment amended the Term Loan Credit Facility to defer the Company’s obligation to comply with the Total Leverage Ratio until the end of the third quarter of fiscal 2016.

On September 27, 2016, the Company entered into that certain Second Amendment to Credit Agreement with BSP, as the administrative agent, and the other lenders party thereto (the “Second Amendment”). The Second Amendment defers compliance with the Company’s Total Leverage Ratio and Fixed Charge Coverage Ratio covenants until the second quarter of fiscal 2017, requires the Company to comply with a minimum EBITDA covenant commencing with the fiscal month ending April 30, 2017, and increases the Base Rate Margin and the Libor Rate Margin thereunder by 100 basis points. The Second Amendment also amends the fees payable to the lenders in the event of prepayment and restricts the Company’s ability to raise Curative Equity (as defined in the Second Amendment) until the fourth quarter of fiscal 2017.

Events of default under the Term Loan Credit Facility include customary events such as a cross-default provision with respect to other material debt. As of September 24, 2016, the Company is in compliance with all covenants of the Term Loan Credit Facility.

Equipment Loans

In August 2015, we entered into an equipment term loan with Banc of America Leasing & Capital LLC for $3.1 million to finance new kettles and related equipment for our Goodyear, Arizona facility. The equipment term loan accrues interest at a rate of 3.07% and will be repaid over 60 recurring monthly payments commencing May 2016.

In August 2014, we entered into two separate equipment term loans with Banc of America Leasing & Capital LLC. One for $2.6 million to finance equipment to be used at the Company’s Rader Farms facility, and the other for $1.9 million to finance equipment to be used at Willamette Valley Fruit Company. Both of these equipment term loans accrue interest at a rate of 2.35% and will be repaid over 60 recurring monthly payments commencing September 15, 2014.

Debt Classification

In accordance with FASB Accounting Standard Codification (“ASC”) 470-10-45 on Debt Presentation, all of the Company’s outstanding debt has been reclassified in the accompanying condensed consolidated balance sheet as a current liability as of September 24, 2016. Absent the Second Amendment, the Company would not have been in compliance with the Total Leverage Ratio as of September 24, 2016. Unless our results of operations materially improve by the second quarter of fiscal 2017, we engage in a strategic transaction that enables us to pay down our debt, or we secure a waiver or further loan amendment from our lender, there is a risk that we will not be in compliance with our financial covenants at the end of the second quarter of fiscal 2017. As previously announced, the Company commenced a comprehensive strategic and financial review of the Company’s operations and engaged Rothschild Inc. to serve as its financial advisor to assist the Company in this process, including the pursuit of value-enhancing initiatives as a standalone company, capital structure optimization, a sale of the Company, a sale of certain assets of the Company or other strategic business combination. This comprehensive strategic and financial review remains ongoing as of the date of this Quarterly Report on Form 10-Q. Accordingly, given the early stages of this review, there can be no assurances that these efforts will result in a completion of a transaction or, if one is completed, that it will be on favorable terms. A default under the Term Loan Credit Facility would trigger a default under the ABL Credit Facility and certain of our equipment lease financing arrangements, as these facilities each contain cross-default provisions. As such, we reclassified all of our outstanding debt as a current liability.