Note

Senior Credit Facility and other Long Term Debt

As of

September 30, 2019

and

June 30, 2019,

the Company had the following debt outstanding:

	Principal Amount						Interest Rate			Maturity Date
	As of September 30, 2019			As of June 30, 2019
Revolving advances under Senior Credit
Facility with PNC Bank, National Association	$	4,799		$	5,834			*		5/15/2024
Installment Note with PNC Bank		3,069			3,542			*		5/15/2024
Installment Note with PNC Equipment Finance		-			8			4.57	%	7/29/2019
Capitalized lease obligations		209			269			4.01% - 9.38	%	11/01/2019 - 2/1/2021
Total outstanding debt		8,077			9,653
Less: Revolving Advances		(4,799	)		(5,834	)
Prepaid financing costs		(48	)		(50	)
Current portion of long term debt, net		(1,053	)		(1,047	)
Long term debt, net	$	2,177		$	2,722

* See table below

SENIOR CREDIT FACILITY

May 15, 2019,

the Company, MDC, AgroLabs, IHT, IHT Properties Corp. (“IHT Properties”) and Vitamin Factory (collectively, the “Borrowers”) amended the Revolving Credit, Term Loan and Security Agreement (the “Amended Loan Agreement”) with PNC Bank, National Association as agent and lender (“PNC”) and the other lenders party thereto entered into on

June 27, 2012,

as amended on

February 19, 2016

and

May 15, 2019.

The Amended Loan Agreement provides for a total of

$11,585

in senior secured financing (the “Senior Credit Facility”) as follows: (i) discretionary advances (“Revolving Advances”) based on eligible accounts receivable and eligible inventory in the maximum amount of

$8,000

(the “Revolving Credit Facility”), and (ii) a term loan in the amount of

$3,585

(the “Term Loan”). The Senior Credit Facility is secured by all assets of the Borrowers, including, without limitation, machinery and equipment, real estate owned by IHT Properties, and common stock of iBio owned by the Company. Revolving Advances bear interest at PNC’s Base Rate or the Eurodollar Rate, at Borrowers’ option, plus

2.50%.

The Term Loan bears interest at PNC’s Base Rate or the Eurodollar Rate at Borrowers’ option, plus

3.00%.

As of

September 30, 2019

and

June 30, 2019,

the Company had amounts outstanding utilizing the Eurodollar Rate of

$4,000

and

$4,250

under the Revolving Advances and

$2,674

and

$3,455

under the Term Note, respectively, with interest rates as of

September 30, 2019

and

June 30, 2019

as follows (based on the respective base rate plus

2.50%

on Revolving Advances and

3.00%

on the Term Note in effect as of the respective dates):

	September 30,			June 30,
	2019			2019

Revolving Credit Facility:
Base Rate Interest		5.00	%		5.50	%
Eurodollar Rate		4.554	%		4.881	%
Term Loan:
Base Rate Interest		5.25	%		5.75	%
Eurodollar Rate	5.05363% and 5.04588%			5.381% and 5.3838%

Upon and after the occurrence of any event of default under the Amended Loan Agreement, and during the continuation thereof, interest shall be payable at the interest rate then applicable plus

2%.

The Senior Credit Facility matures on

May 15, 2024 (

the “Senior Maturity Date”).

The principal balance of the Revolving Advances is payable on the Senior Maturity Date, subject to acceleration, based upon a material adverse event clause, as defined, subjective accelerations for borrowing base reserves, as defined or upon the occurrence of any event of default under the Amended Loan Agreement or earlier termination of the Amended Loan Agreement pursuant to the terms thereof. The Term Loan shall be repaid in

eighty-four

(

) consecutive monthly installments of principal, the

first

eighty-three

(

) of which shall be in the amount of

$43,

commencing on the

first

business day of

June, 2019,

and continuing on the

first

business day of each month thereafter, with a final payment of any unpaid balance of principal and interest payable on the Senior Maturity Date. The foregoing is subject to customary mandatory prepayment provisions and acceleration upon the occurrence of any event of default under the Amended Loan Agreement or earlier termination of the Amended Loan Agreement pursuant to the terms thereof.

The Revolving Advances are subject to the terms and conditions set forth in the Amended Loan Agreement and are made in aggregate amounts at any time equal to the lesser of (

)

$8,000

or (y) an amount equal to the sum of: (i) up to

85%,

subject to the provisions in the Amended Loan Agreement, of eligible accounts receivables (“Receivables Advance Rate”), plus (ii) up to the lesser of (A)

75%,

subject to the provisions in the Amended Loan Agreement, of the value of the eligible inventory (“Inventory Advance Rate” and together with the Receivables Advance Rate, collectively, the “Advance Rates”), (B)

85%

of the appraised net orderly liquidation value of eligible inventory (as evidenced by the most recent inventory appraisal reasonably satisfactory to PNC in its sole discretion exercised in good faith) and (C) the inventory sublimit in the aggregate at any

one

time (“Inventory Advance Rate” and together with the Receivables Advance Rate, collectively, the “Advance Rates”), minus (iii) the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, minus (iv) such reserves as PNC

may

reasonably deem proper and necessary from time to time.

The Amended Loan Agreement contains customary mandatory prepayment provisions, including, without limitation the requirement to use any sales proceeds from the sale of iBio Stock to repay the Term Loan and to prepay the outstanding amount of the Term Note in an amount equal to

twenty-five

percent (

25%

) of Excess Cash Flow for each fiscal year commencing with the fiscal year ended

June 30, 2016,

payable upon delivery of the financial statements to PNC referred to in and required by the Amended Loan Agreement for such fiscal year but in any event

not

later than

one hundred twenty

(

120

) days after the end of each such fiscal year, which amount shall be applied ratably to the outstanding principal installments of the Term Loan in the inverse order of the maturities thereof. The Amended Loan Agreement also contains customary representations and warranties, covenants and events of default, including, without limitation, (i) a fixed charge coverage ratio maintenance requirement and (ii) an event of default tied to any change of control as defined in the Amended Loan Agreement. As of

September 30, 2019,

the Company was in compliance with the fixed charge coverage ratio maintenance requirement and with the required annual payments of

25%

of the Excess Cash Flow for each fiscal year commencing with the fiscal year ended

June 30, 2016.

In connection with the Senior Credit Facility, the following loan documents were executed: (i) a Stock Pledge Agreement with PNC, pursuant to which the Company pledged to PNC the iBio Stock; (ii) a Mortgage and Security Agreement with PNC with IHT Properties; and (iii) an Environmental Indemnity Agreement with PNC.

OTHER LONG TERM DEBT

Capitalized Lease Obligations.

November 1, 2019,

the capitalized lease obligation entered into by the Company on

December 22, 2017

with First American Equipment Finance in the amount of

$143,

which lease was secured by certain machinery and equipment, was satisfied with all payments being made under the capitalized lease obligation. The monthly lease payment was approximately

and had an imputed interest rate of

6.56%.