Debt

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

	May 28 , 2017			May 29, 2016
Term loan with JPMorgan Chase Bank (“ JPMorgan”), BMO Harris Bank N,A. (“BMO”), and City National Bank (“CNB”); 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%	$	47,500		$	—
Real property loan agreement with General Electric Capital Corporation (“GE Capital”); due in monthly principal and interest payments of $133,060 through May 1, 2022 with interest based on a fixed rate of 4.02% per annum		—			14,167
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $175,356 through May 1, 2019 with interest based on a fixed rate of 4.39% per annum		—			5,904
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $95,120 through July 17, 2019 with interest based on a fixed rate of 3.68% per annum		—			5,558
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $55,828 through December 1, 2019 with interest based on a fixed rate of 3.74% per annum		—			3,375
Capital equipment loan with Bank of America (“ BofA”); due in monthly principal and interest payments of $68,274 through June 28, 2020 with interest based on a fixed rate of 2.79% per annum		—			3,158
Real property loan agreement with GE Capital ; due in monthly principal payments of $46,000 through March 1, 2026, plus interest payable monthly at LIBOR plus 2.25% per annum		—			7,622
Capital equipment loan with GE Capital; due in monthly principal payments of $122,000 through March 1, 2021, plus interest payable monthly at LIBOR plus 2.25% per annum		—			8,873
Capital equipment loan with BofA; due in monthly principal and interest payments of $75,000 through November 27, 2020 with interest based on a fixed rate of 2.92% per annum		—			3,940
Industrial revenue bonds (“ IRBs”) issued by Lifecore; due in annual payments through 2020 with interest at a variable rate set weekly by the bond remarketing agent		—			2,065
Total principal amount of long-term debt		47,500			54,662
Less: unamortized debt issuance costs		(261	)		(817	)
Total long-term debt, net of unamortized debt issuance costs		47,239			53,845
Less: current portion of long-term debt, net		(4,940	)		(7,873	)
Long-term debt, net	$	42,299		$	45,972

The future minimum principal payments of the Company

’s debt for each year presented are as follows (in thousands):

	Term Loan
Fiscal year 2018	$	5,000
Fiscal year 2019		5,000
Fiscal year 2020		5,000
Fiscal year 2021		5,000
Fiscal year 202 2		27,500
Thereafter		—
Total	$	47,500

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

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

$50

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 matu

rity.

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 earnings before interest, taxes, depreciation, and amortization (“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 obta

ining additional commitments either from

one

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

$75

million.

The Credit Agreement contains customary financial covenants and events of default under which the obligation could be acc

elerated and/or the interest rate increased. The Company was in compliance with all financial covenants as of

May 28, 2017.

November 1, 2016,

the Company entered into an interest rate swap agreement (“

Swap”) with BMO at a notional amount of

$50

million. The 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

May 28, 2017,

the interest rate on the Term Loan was

2.72%.

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.

In connection with the Credit

Agreement, the Company incurred in fiscal year

2017

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. During fiscal years

2016

and

2015,

Apio capitalized

$200,000

and

$397,000,

respectively, of debt issuance costs from new real property and equipment loans and/or amendments with General Electric Capital Corporation and Bank of America. Amortization of loan origination fees for fiscal years

2017,

2016

and

2015

were

$142,000,

$293,000

and

$206,

000

respectively.

Concurrent with the close of the Credit Agreement, all of the proceeds of the Term Loan, and

$1.5

million of the Revolver, was used by the Company to repay all then existing debt. Accordingly, the Company recognized a loss on debt refinancing of

$1.2

mill

ion, which included

$233,000

of payments for early debt extinguishment penalties and

$1.0

million from the write-off of unamortized debt issuance costs on the Company’s then existing debt as of

September 23, 2016.

As of

May 28, 2017,

$3.0

million was outstanding on the Revolver. As of

May 28, 2017,

the interest rate on the Revolver was

2.57%.