Note 4.

DEBT

Long-term debt consists of the following as of September 30, 2016 and December 31, 2015 (amounts in thousands):

	September 30, 2016			December 31, 2015

Revolving loans payable	$	18,203		$	23,969
Second Lien existing term loan - convertible		26,285			24,713
Second Lien 3rd & 4th amendment term loan		6,616			-
Debt issuance costs		(3,806	)		(2,135	)
Total debt		47,298			46,547
Less revolving loans payable, classified as current		(18,203	)		(23,969	)
Less current maturities		(6,616	)		(1,800	)
Less current debt issuance costs		1,963			657
Long-term debt	$	24,442		$	21,435

First Lien Credit Agreement

On February 19, 2014, the Company and BMO Harris Bank N.A. (“BMO”) entered into a Credit and Security Agreement (the “Original BMO Credit Agreement or, as subsequently amended, the “BMO Credit Agreement”), which provided the Company a $27.0 million revolving credit facility, including a $3.0 million sub-limit for letters of credit. The proceeds of the Company’s initial borrowing under the BMO Credit Agreement were used to repay the Company’s prior credit facility, finance the acquisition of FTW Holdings, Inc., and pay certain fees and expenses related to the negotiation and consummation of the Original BMO Credit Agreement. All extensions of credit under the BMO Credit Agreement are collateralized by a first priority security interest in and lien upon substantially all present and future assets and properties of the Company.

On April 7, 2015, the Company, Continental Commercial Products, LLC, a Delaware limited liability company, 2155735 Ontario Inc., an Ontario corporation, CCP Canada Inc., an Ontario corporation, FTW Holdings, Inc., a Delaware corporation, and Fort Wayne Plastics, Inc., an Indiana corporation, wholly owned direct or indirect subsidiaries of the Company (the foregoing, including the Company, the “Borrowers”), and BMO, as lender entered into Amendment No. 1 to the Original BMO Credit Agreement (“Amendment No. 1”) to amend the Original BMO Credit Agreement and to obtain the consent of BMO for the acquisition of a manufacturing facility in Tiffin, Ohio.

Pursuant to Amendment No. 1, the revolving credit facility under the Original BMO Credit Agreement was increased from an amount not to exceed $27.0 million to an amount not to exceed $33.0 million. The revolving credit facility under the BMO Credit Agreement continues to include a $3.0 million sub-limit for letters of credit. The proceeds advanced under the BMO Credit Agreement on April 7, 2015 were used to pay certain fees and expenses related to the negotiation and consummation of Amendment No. 1 and the acquisition of our Tiffin, Ohio manufacturing facility (as described in Note 10). Subject to the terms of an Intercreditor and Subordination Agreement, dated as of April 7, 2015 (the “Intercreditor Agreement”), between BMO and the SL Agent (as defined below), all extensions of credit under the BMO Credit Agreement are collateralized by a first priority security interest in and lien upon substantially all present and future assets and properties of the Borrowers.

The Original BMO Credit Agreement was further amended pursuant to Amendment No. 1 to extend the maturity date of the credit facility from February 17, 2017 to April 7, 2018. The borrowing base continues to be determined by eligible inventory, accounts receivable, machinery and equipment and owned real estate amounting to $20.4 million at September 30, 2016 and $27.3 million at December 31, 2015, respectively. The borrowing base under the BMO Credit Agreement is reduced by the outstanding amount of standby and commercial letters of credit. Currently, the Company’s largest letters of credit relate to its casualty insurance programs. Total outstanding letters of credit were $1.6 million and $1.1 million at September 30, 2016 and December 31, 2015, respectively.

Borrowings under the BMO Credit Agreement continue to bear interest at a per annum rate equal to, at the Borrower’s option, (a) the Base Rate plus applicable Base Rate Margin, which varies from 0.50% to 1.00% based on average excess availability, or (b) reserve adjusted Eurodollar Rate plus the applicable Eurodollar Rate Margin, which varies from 1.50% to 2.00% based on average excess availability. The Base Rate is the greatest of (i) BMO Harris’ prime commercial rate as in effect on such day, (ii) the sum of the Fed Funds rate for such day plus 0.5%, and (iii) the Eurodollar Rate for one month plus 1.50%. The Eurodollar Rate is the British Bankers Association LIBOR Rate, as published by Reuters (or other commercially available source) with a term equivalent to the applicable one, two, three or nine month interest period. An unused commitment fee of 25 basis points per annum is payable quarterly on the average unused amount under the BMO Credit Agreement.

Amendment No. 1 amended the consolidated fixed charge coverage ratio under the Original BMO Credit Agreement and added a maximum annual capital expenditures, minimum consolidated EBITDA, minimum availability and a leverage ratio covenant. Amendment No. 1 also amended the Original BMO Credit Agreement to permit the secured second lien credit facility described below.

On December 15, 2015, the Company entered into Amendment No. 2 to the Credit and Security Agreement to amend the BMO Credit Agreement to redefine the definition of EBITDA to exclude certain non-recurring expenses associated with the Company’s former Bridgeton, Missouri facility.

On March 30, 2016, the Company entered into Amendment No. 3 to the Credit and Security Agreement and Waiver (“Amendment No. 3”) to amend the BMO Credit Agreement to provide the Borrowers with additional flexibility under certain financial covenants in future periods ending in 2016 and waive certain covenant defaults for the quarter ended December 31, 2015. Further, Amendment No. 3 replaces the consolidated fixed charge coverage ratio covenant for the test period for the fiscal quarters ending on or closest to March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016 and provides for monthly testing of the minimum consolidated EBITDA and leverage ratio financial covenants for the monthly period ending on or closest to the last day of each month from March 2016 through September 2016 in lieu of quarterly testing during such period.

Amendment No. 3 provides that a termination fee shall be payable in the event that the revolving credit commitment under the BMO Credit Agreement is terminated prior to the revolving credit maturity date. The termination fee is equal to 2% of the revolving credit commitment of $33.0 million if the revolving credit commitment is terminated on or before the first anniversary of Amendment No. 3 or 1% if the revolving credit commitment is thereafter terminated prior to the revolving credit maturity date under the BMO Credit Agreement.

The BMO Credit Agreement continues to require a lockbox agreement which provides receipts (subject to certain exceptions) to be swept daily to reduce borrowings outstanding. This provision in the BMO Credit Agreement causes the BMO Credit Agreement to be classified as a current liability, per guidance in the Accounting Standards Codification established by the Financial Accounting Standards Board. The BMO Credit Agreement does not expire or have a maturity date within one year, but rather has a final maturity date of April 7, 2018.

On August 11, 2016, the Company entered into Amendment No. 4 and Forbearance Agreement (the “Forbearance Agreement”), further amending the BMO Credit Agreement. Pursuant to the Forbearance Agreement, BMO agreed, among other things, to forbear from exercising its rights and remedies under the BMO Credit Agreement in respect of existing defaults and certain other anticipated defaults for a period of up to nine months (the “forbearance period”). BMO may terminate the forbearance period (i) if VPC SBIC I, LP (the “VPC SBIC Fund”) or its affiliates assign or grant a participation in any portion of the term notes or Second Lien Credit Facility (as discussed below), (ii) upon a bankruptcy filing or commencement of another insolvency proceeding by or against any Borrower or guarantor or (iii) the occurrence of any additional event of default under the BMO Credit Agreement. Borrowings from BMO under the Forbearance Agreement bear interest at a per annum rate equal to 6.5%.

As part of the Forbearance Agreement, the Company has retained a chief restructuring officer (the “CRO”) for the duration of the forbearance period. The Company has authorized the CRO to meet with BMO and its advisors and provide to BMO such information and reports with respect to the Company and its financial condition, businesses, assets, liabilities and prospects, as BMO may request from time to time.

At all times during the forbearance period, the Company is required to diligently pursue in good faith the consummation of the refinancing of the obligations to BMO under the BMO Credit Agreement in their entirety by February 5, 2017. The Company agreed to pay BMO the following fees in the event that all borrowings under the BMO Credit Agreement have not been paid in full on or before the following dates.

October 4, 2016	$	50,000
November 3, 2016	$	100,000
December 3, 2016	$	150,000
January 2, 2017	$	200,000
February 5, 2017	$	200,000
Each thirty day interval after February 5, 2017	$	200,000

Under the Forbearance Agreement, the Centrex earnout payments (see Note 10) may not be satisfied until the obligations to BMO under the BMO Credit Agreement are paid in full. In addition, the Company may not make any cash payments in respect of indebtedness under the Second Lien Credit Facility or any other subordinated indebtedness consisting of principal or interest, until all borrowings under the BMO Credit Agreement have been paid in full.

On November 16, 2016, all outstanding borrowings under the BMO Credit Agreement were repaid with proceeds of the Encina Credit Agreement (as described in Note 13) and the BMO Credit Agreement was terminated.

Second Lien Credit Facility

On April 7, 2015, the Company, Continental Commercial Products, LLC, a Delaware limited liability company, FTW Holdings, Inc., a Delaware corporation, and Fort Wayne Plastics, Inc., an Indiana corporation, as borrowers (the “SL Borrowers”) and 2155735 Ontario Inc., an Ontario corporation, and CCP Canada Inc., an Ontario corporation, as guarantors (the “Guarantors,” together with the SL Borrowers, the “SL Obligors”) entered into a Second Lien Credit and Security Agreement, dated as of April 7, 2015, among the SL Obligors, Victory Park Management, LLC, as Agent (the “SL Agent” or “Victory Park Management”), and the lenders party thereto (the “Second Lien Credit Agreement”).

The Second Lien Credit Agreement provides the SL Borrowers with a $24.0 million term loan. The proceeds of the term loan were used to pay certain fees and expenses related to the negotiation and consummation of the credit facility and the acquisition of our Tiffin, Ohio manufacturing facility (see Note 10). Subject to the terms of the Intercreditor Agreement, all extensions of credit under the Second Lien Credit Agreement are collateralized by a second priority security interest in and lien upon substantially all present and future assets and properties of the SL Obligors.

The term loan under the Second Lien Credit Agreement originally bore interest (i) at a cash interest rate of the LIBOR (One Month) Rate then in effect plus 9.5% per annum and (ii) a Payment in Kind (“PIK”) interest rate equal to 4.00% per annum. The PIK interest is added to long-term debt per the Second Lien Credit Agreement as it is not due until maturity. The interest rate was modified pursuant to the Fourth Amendment to the Second Lien Credit and Security Agreement, as described below. The maturity date of the credit facility under the Second Lien Credit Agreement is April 6, 2019.

Pursuant to the Second Lien Credit Agreement, the SL Borrowers are required to make quarterly amortization payments and annual excess cash flow prepayments equal to 25% of annual excess cash flow as defined in the agreement. The Second Lien Credit Agreement includes the following financial covenants: a consolidated fixed charge coverage ratio, a maximum annual capital expenditures, a minimum consolidated EBITDA, a minimum availability under the BMO Credit Agreement and a leverage ratio.

On December 15, 2015, the Company entered into Amendment No. 1 to the Second Lien Credit Agreement to amend the Second Lien Credit Agreement to redefine the definition of EBITDA to exclude certain non-recurring expenses associated with the Company’s former Bridgeton, Missouri facility.

On March 30, 2016, the SL Obligors entered into a Limited Waiver and Amendment to the Second Lien Credit Agreement (the “Second Lien Amendment No. 2”) to further amend the Second Lien Credit Agreement. The Second Lien Amendment No. 2 provides the SL Borrowers with additional flexibility under certain financial covenants in future periods ending in 2016 and waives certain covenant defaults for the quarter ended December 31, 2015. Further, the Second Lien Amendment No. 2 replaces the consolidated fixed charge coverage ratio covenant for the test period for the fiscal quarters ending on or closest to March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016 and provides for monthly testing of the minimum consolidated EBITDA and leverage ratio financial covenants for the monthly period ending on or closest to the last day of each month from March 2016 through September 2016 in lieu of quarterly testing during such period.

On July 22, 2016, the Company entered into Amendment No. 3 to the Second Lien Credit Agreement (the “Third Amendment”), pursuant to which the SL Agent extended an additional $750,000 term loan to the Company. The Third Amendment did not materially modify the terms of the Second Lien Credit Agreement.

On August 11, 2016, Victory Park Capital Advisors, LLC (“Victory Park Capital Advisors”) on behalf of entities for which it acts as investment manager, agreed to provide the Company with new senior secured second lien financing in the amount of $5,750,000 (the “New Second Lien Financing”). In connection with the New Second Lien Financing the Company, the SL Borrowers, Victory Park Management, as agent, and the lenders party thereto, entered into the Fourth Amendment to the Second Lien Credit and Security Agreement (the “Fourth Amendment”), to further amend the Second Lien Credit Agreement (as previously amended, the “Prior Second Lien Credit Agreement” and as amended by the Fourth Amendment, the “Second Lien Credit Facility”).

Pursuant to the Fourth Amendment, the lenders agreed to a further extension of credit in the amount of $5,750,000. The Fourth Amendment also provides Victory Park Management the option to convert, in whole or in part, the outstanding principal amount of, and accrued but unpaid interest on, the then-existing term loans (the “Term Loans”) made pursuant to the Second Lien Credit Facility (not including the new term loans made pursuant to the Third Amendment and Fourth Amendment) into a number of shares of common stock equal to the amount of outstanding principal and accrued but unpaid interest under the Term Loans being converted, divided by approximately $0.0697 (as such amount is proportionately adjusted for stock splits, reverse stock splits, stock combinations, stock dividends and other distributions and recapitalizations affecting the capital stock of the Company). As of August 11, 2016, the Term Loans would have been convertible into up to 370,748,441 shares of common stock. The funds for the extension of credit contemplated by the Fourth Amendment were provided by the lenders party to the Second Lien Credit Agreement, including the VPC SBIC Fund. Any shares issued upon conversion of the Term Loans are required to be issued to the lenders party to the Second Lien Credit Facility pro rata in accordance with their respective commitments under the Term Loans.

The number of shares issuable upon conversion of the Term Loans exceeds the number of unissued and unreserved shares of common stock that the Company is authorized to issue, and the conversion price per share is less than the current par value per share of the common stock. The SPA provides that, upon request of the VPC SBIC Fund, the Company will take all corporate action necessary, and use reasonable best efforts, (i) to increase the number of shares that the Company is authorized to issue and to reserve a sufficient number of shares to allow Victory Park Management to exercise its conversion rights under the Second Lien Credit Facility in full; and (ii) to decrease the par value per share of common stock to nothing or to a par value equal to, or less than, the per share conversion price under the Second Lien Credit Facility.

Pursuant to the Fourth Amendment, all borrowings under the Second Lien Credit Facility bear interest at a rate equal to 12.00% per annum, payable in kind (“PIK”). The PIK interest is added to long-term debt per the Second Lien Credit Agreement as it is not due until maturity. The maturity date of the Term Loans remains April 6, 2019. The maturity date of the new term loans made pursuant to the Third Amendment and the Fourth Amendment is August 11, 2017; however, the term will be automatically extended by one year as of August 11, 2017, unless notice of cancellation is provided by Victory Park Management prior to such date.

In connection with the Fourth Amendment, Centrex, TR Plastics and Terrence L. Reinhart (the “Seller”) agreed that any earnout payment in connection with the acquisition described in Note 10 would be subordinated to payment in full of borrowings under the BMO Credit Agreement and the Second Lien Credit Facility. In addition, the Seller agreed that, to the extent that Victory Park Management exercises its right to convert all of the Term Loans into common stock, the value of the earnout payment would be calculated as of the date of such conversion and would be satisfied in full by payment in shares of common stock based upon the relative value of the earnout payment and the value of the Term Loans being converted (see Note 10). The Company recorded a deferred obligation equal to the present value of the earnout payments of $2.0 million, which was recorded in other noncurrent liabilities on the Condensed Consolidated Balance Sheets as of September 30, 2016.

On November 16, 2016, the Second Lien Credit Facility was further amended as described in Note 13.

Amortization of Debt Issuance Costs

For the three and nine months ended September 30, 2016, the Company had amortization of debt issuance costs, included within interest expense, of $0.4 million and $0.8 million, respectively. For the three and nine months ended September 25, 2015, the Company had amortization of debt issuance costs, included within interest expense, of $0.2 million and $0.5 million, respectively.

Capital Lease

In February 2016, the Company entered into a capital lease agreement to acquire certain manufacturing equipment. The Company is obligated to make sixty monthly payments of $8,818. At the inception of the lease, the Company recorded an asset and a capital lease obligation equal to the present value of minimum lease payments equal to approximately $0.5 million. At September 30, 2016, the current and long term capital lease obligation of $0.1 million and $0.3 million were recorded in accrued expenses and other noncurrent liabilities on the Condensed Consolidated Balance Sheets. Aggregate remaining scheduled maturities of the capital lease obligation as of September 30, 2016 are as follows (amounts in thousands):

Capital Lease
Three months ended December 31, 2016	$	17
Year ended December 31, 2017		106
Year ended December 31, 2018		106
Year ended December 31, 2019		106
Year ended December 31, 2020		106
Thereafter		7
Amount representing interest payments		(41	)
Total capital lease obligation	$	407