DEBT

Debt Obligation

ICC Holdings, Inc. secured a loan with a commercial bank in

March 2017

in the amount of

$3.5

million and used the proceeds to repay ICC for the money borrowed by the ESOP. The term of the loan is

five

years bearing interest at

3.65%.

The Company pledged stock and

$1.0

million of marketable assets as collateral for the loan.

The Company also has borrowing capacity up to approximately

$33

million in the aggregate from its membership with the Federal Home Loan Bank of Chicago (FHLBC).

March 2020,

the World Health Organization declared a pandemic related to the rapidly spreading coronavirus (COVID-

) outbreak, which has led to a global health emergency. As part of the Company's response to COVID-

19,

the Company obtained, in

March 2020,

$6.0

million loan from the FHLBC as a precautionary measure to increase its cash position and compensate for potential reductions in premium receivable collections. The term of the loan is

five

years bearing interest at

1.4%.

The Company pledged

$6.8

million of fixed income securities as collateral for this loan. The Company also obtained, in

May 2020,

$4.0

million

interest,

one

-year loan from the FHLBC as an additional precautionary measure to increase its cash position and compensate for potential reductions in premium receivable collections as a result of the Company's announcement in

March 2020

to temporarily suspend all insurance premium billing for

days. The Company pledged an additional

$7.4

million of fixed income securities as collateral for both FHLBC loans.

April 2020,

the Company obtained a

$1.6

million loan (the PPP loan) from a commercial bank pursuant to the federally authorized Paycheck Protection Program (Program) administered by the Small Business Administration (the SBA). The PPP loan matures in the

second

quarter of

2022

and bears interest at a rate of

1.0%

per annum. Commencing the

fourth

quarter of

2020,

we will begin making loan payments. All or a portion of the PPP loan

may

be forgiven by the SBA upon application by us beginning

days, but

not

later than

120

days, after loan approval and upon documentation of expenditures in accordance with the SBA's requirements. Under the Paycheck Protection Program Flexibility Act of

2020

(the PPP Flexibility Act), (i) the

first

payment date for the PPP loan will be the earlier of (a)

months after the end of the “covered period” (as determined under the Program) or (b) the date the bank receives a remittance of the forgiven amount from the SBA, and (ii) the PPP loan's maturity is extended to

five

years (from

years). Pursuant to the PPP Flexibility Act, we can obtain the lender's consent for the PPP loan maturity to be extended to the

second

quarter of

2025

(from

2022

) and for the

first

payment date under the PPP loan to be extended as described in clause (i) of the previous sentence.

The total balance

of the debt agreements at

September 30, 2020

and

December 31, 2019

was $

15,097,960

and $

3,475,088

, respectively. The average interest rate on remaining debt was

1.5%

as of

September 30, 2020

and

3.7%

as of

December 31, 2019

July 30, 2020,

the Company secured through FHLBC a fixed

0.74%

borrowing rate for a future

$4.0

million loan that becomes effective

May 3, 2021,

upon the maturity of the existing

$4.0

million FHLBC loan.

collateral was pledged for this forward advance.

Revolving Line of Credit

We maintained a revolving line of credit with a commercial bank, which permitted borrowing up to an aggregate principal amount of

$1.75

million. This facility was initially entered into during

2013

and expired

August 5, 2020.

The line of credit was priced at

-day LIBOR plus

with a floor of

3.5%.

In order to secure the lowest rate possible, the Company pledged marketable securities

not

to exceed

$5.0

million in the event the Company would draw down on the line of credit. There was

interest paid on the line of credit during the

nine

months ended

September 30, 2020

and

2019

. There were

financial covenants governing this agreement.

Effective

August 3, 2020,

the Company replaced its expiring line of credit with a

$2.0

million revolving line of credit with another commercial bank, which renews annually and has a current expiration date of

August 3, 2021.

This new line of credit is priced at Prime plus

0.5%.

The Company pledged

$2.0

million of business assets in the event the Company draws down on the line of credit. There are

financial covenants governing this line of credit.