Note

Senior Credit Facility and other Long Term Debt

As of

September 30, 2020

and

June 30, 2020,

the Company had the following debt outstanding:

	Principal Amount						Interest Rate			Maturity Date
	As of September 30, 2020			As of June 30, 2020
Revolving advances under Senior Credit
Facility with PNC Bank, National Association	$	2,823		$	4,046			3.25	%	5/15/2024
Installment Note with PNC Bank		1,850			2,584			3.50	%	5/15/2024
Payroll Protection Program Loan with PNC Bank		1,639			1,639			1.00	%	4/30/2022
Capitalized lease obligations		38			75			4.01% -9.38	%	12/1/2020
Total outstanding debt		6,350			8,344
Less: Revolving Advances		(2,823	)		(4,046	)
Prepaid financing costs		(37	)		(39	)
Current portion of long term debt, net		(2,836	)		(2,823	)
Long term debt, net	$	654		$	1,436

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, Inc. ("iBio Stock") owned by the Company. Revolving Advances bear interest at PNC's Base Rate (

3.25%

as of

September 30, 2020

and

June 30, 2020)

or the Eurodollar Rate, at Borrowers' option, plus

2.50%.

The Term Loan bears interest at PNC's Base Rate (

3.50%

as of

September 30, 2020

and

June 30, 2020)

or the Eurodollar Rate at Borrowers' option, plus

3.00%.

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 (as defined in the Amended Loan Agreement) 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, 2020,

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

and used the proceeds of

$96

from the sale of iBio Stock in the

three

months ended

September 30, 2020

to repay the Term Loan.

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

Paycheck Protection Program Term Note.

April 29, 2020,

the Company entered into a Paycheck Protection Program Term Note (the “PPP Note”) with PNC Bank in the amount of

$1,639.

The PPP Note has an interest rate of

and a maturity date of

April 30, 2022.

The PPP Note was issued by PNC Bank to the Company pursuant to the Coronavirus, Aid, Relief, and Economic Security Act's (the “CARES Act”) (P.L.

116

136

) Paycheck Protection Program (the “Program”). Under the Program, all or a portion of the PPP Note

may

be forgiven in accordance with the Program requirements. On

August 20, 2020,

the PPP Note was amended to conform to the provisions under the Paycheck Protection Program Flexibility Act of

2020

(the “Flexibility Act”), which was signed into law on

June 5, 2020.

The Flexibility Act significantly modified the loan forgiveness process and provided other benefits to the PPP loan recipient. The amount of the forgiveness shall be calculated (and

may

be reduced) in accordance with the requirements of the Program, including the provisions of Section

1106

of the Cares Act and the Flexibility Act.

more than

40%

of the amount forgiven can be attributable to non-payroll costs, as defined in the Program.

There are

payments of interest or principal amortization due under the PPP Note while the PPP Note is in the Deferral Period, which is the period beginning on the date of the PPP Note,

April 29, 2020,

and ending on the Deferral Expiration Date. The Deferral Expiration Date is the date any forgiven amount is remitted to PNC Bank or the date that a final determination is made that

portion of the PPP Note will be forgiven. If the Company fails to apply for loan forgiveness, the Deferral Expiration Date will be

August 15, 2021.

Any amounts

not

forgiven under the Program will be payable in equal installments of principal plus any interest owed on the payment date from the Deferral Expiration Date through the Maturity Date. Additionally, any accrued interest that is

not

forgiven under the Program will be due on the First Payment Date, which is the

15th

of the month following the month in which the Deferral Expiration Date occurs.

If the Company fails to make timely payments under the PPP Note, the Company, PNC Bank will charge a late payment fee equal to the lesser of

of the amount of such payment or

$100.

In the event of Default, as defined in the PPP Note, the default rate of interest will

in excess of the interest rate in effect from time to time under the PPP Note.