Note

: Debt

Debt is comprised of the following (in thousands):

	12/31/2019		6/30/2019
Short-term and current maturities
Loan and Security Agreement (Bytewise)	$	1,805	$	1,765
Brazil Loans		2,349		2,300
		4,154		4,065
Long-term debt (net of current portion)
Loan and Security Agreement (Bytewise)		1,728		2,641
Loan and Security Agreement (Line of Credit)		16,900		14,900
		18,628		17,541
	$	22,782	$	21,606

December 31, 2019,

the Company entered into the Tenth Amendment of its Loan and Security Agreement “Tenth Amendment”. Under the revised agreement, the credit limit for the Revolving Loan was increased from

$23.0

million to

$25.0

million. In addition, the Company entered into a new

$10.0

million

-year Term Loan with a fixed interest rate of

4.0%.

The Company did

not

drawdown additional funds under the Tenth Amendment during the

three

-month period ended

December 31, 2019.

The new Term Loan will require interest only payments for

months and will convert to a term loan requiring both interest and principal payments commencing

January 1, 2021.

Also, under the Tenth Amendment, the credit limit for external borrowing was increased from

$2.5

million to

$5.0

million. The new Term Loan will be used to retire the outstanding balance, beginning in

2020,

of approximately

$3.5

million of the

$15.5

million Bytewise term loan (

November, 2011),

resulting in an available balance of approximately

$6.5

million.

The financial covenants under the new agreement are:

) a Fixed Charge Coverage Ratio must exceed

1:15.

The Fixed Charge Coverage Ratio is based upon EBITDA less dividends, unfunded Capital Expenditures, less required pension payments divided by the current portion of term loans, excluding, the Line of Credit and external debt; and

) maintain consolidated Cash and available Credit Line of

not

less than

$7.5

million on the closing date of any quarter. The Company was in compliance with the covenants of the new Loan Agreement as of

December 31, 2019.

The obligations under the Tenth Amendment are unsecured unless a triggering event occurs. A triggering event would be failure on a quarterly basis to meet the thresholds of the Fixed Charge Coverage Ratio described above.

Prior to Tenth Amendment, the Line of Credit and a Term Loan (“Credit Facility”), was last amended in

January 2018.

Borrowings under the Line of Credit were

not

to exceed

$23.0

million. The Line of Credit had an interest rate of LIBOR plus

1.5%,

and was to expire on

April 30, 2021.

The Tenth Amendment moved the expiration date to

April 30, 2022.

The effective interest rate on the Line of Credit under the Loan and Security Agreement for the

three

months ended

December 31, 2019

and

2018

was

3.7%

and

3.9%,

respectively. As of

December 31, 2019,

$16.9

million was outstanding on the Line of Credit.

Availability under the Line of Credit remains subject to a borrowing base comprised of accounts receivable and inventory. The Company believes that the borrowing base will consistently produce availability under the Line of Credit of

$25.0

million. A

0.25%

commitment fee is charged on the unused portion of the Line of Credit.

The financial covenants of the previous Loan and Security Agreement “Credit Facility” were:

) funded debt to EBITDA, excluding non-cash and retirement benefit expenses (“maximum leverage”),

not

to exceed

2.25

1.00,

) annual capital expenditures

not

to exceed

$15.0

million,

) maintain a Debt Service Coverage Rate of a minimum of

1.25

1.00,

and

) maintain consolidated cash of

not

less than

$10.0

million at any time. As of

December 31, 2019,

the Company was in compliance with all the financial debt covenants related to its Loan and Security Agreement.

The obligations under the previous Credit Facility were unsecured. In the event of certain triggering events, such obligations would have become secured by the assets of the Company’s domestic subsidiaries. A triggering event would have occurred when the Company failed to achieve any of the financial covenants noted above in consecutive quarters.

November 22, 2011,

in conjunction with the Bytewise acquisition, the Company entered into a

$15.5

million term loan (the “Term Loan”) under the then existing Loan and Security Agreement. The Term Loan is a

ten

-year loan bearing a fixed interest rate of

4.5%

and is payable in fixed monthly payments of principal and interest of

$160,640.

The Term Loan had a balance of

$3.5

million at

December 31, 2019.

December 2017,

the Company’s Brazilian subsidiary entered into

two

short-term loans with local banks in order to support the Company’s strategic initiatives. The loans backed by the entity’s US dollar denominated export receivables were made with Santander Bank and Bradesco Bank. In

February 2019,

the Company’s Brazilian subsidiary, again, began refinancing debt among Santander, Bradesco and Brazil Bank as follows as of

12/31/2019

(in thousands):

Lending Institution	Interest Rate	Beginning Date	Ending Date	Outstanding Balance
Santander	5.30%	February 2019	February 2020	$	157
Bradesco	4.27%	March 2019	March 2020		124
Bradesco	4.00%	April 2019	April 2020		783
Brazil Bank	3.11%	September 2019	September 2020		500
Santander	10.76%	Overdraft	account		785
				$	2,349