AMENDED AND RESTATED CREDIT FACILITY AGREEMENT AMENDMENT 2

(b)               Benchmark Replacement. Notwithstanding anything to the contrary herein or in the Notes or any related agreement, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, the Lender may unilaterally amend the terms hereof to replace LIBOR with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective as soon as practicable for the Lender and upon notice to the Borrower, without any further action or consent of the Borrower, except that with respect to an amendment pursuant to an Early Opt-in Election, such amendment will become effective at 5:00 p.m. on the fifth (5th) New York Business Day after the Lender has provided such proposed amendment to the Borrower, so long as the Lender has not received, by such time, written notice of objection to such amendment from the Borrower. No replacement of LIBOR with a Benchmark Replacement pursuant to this Section 3.6 will occur prior to the applicable Benchmark Transition Start Date. Borrower shall pay all out-of-pocket costs (including reasonable attorney fees) incurred by the Lender in connection with any amendment and related actions contemplated in this Agreement.

(c)               Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Lender will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any related document or agreement, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of the Borrower. The Lender shall not be liable to the Borrower for any Benchmark Replacement Conforming Changes made by the Lender in good faith.

(d)               Notices; Standards for Decisions and Determinations. The Lender will promptly notify the Borrower of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date and Benchmark Transition Start Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes and (iv) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Lender pursuant to this Section 3.6, including, without limitation, any determination with respect to a tenor, rate or adjustment, or of the occurrence or non-occurrence of an event, circumstance or date, and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in the Lender’s sole discretion and without consent from the Borrower (except, in each case, as expressly required pursuant to this Section 3.6) and shall not be a basis of any claim of liability of any kind or nature against the Lender, all such claims being hereby waived by the Borrower.

(e)               Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke (as applicable) any request for an advance/borrowing of, conversion to, or continuation of a LIBOR-based loan to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request (as applicable) into a request for an advance/borrowing of or conversion to a loan that shall accrue interest at the Prime Rate.

(f)                Certain Defined Terms. As used in this Agreement:

(i)                 “Benchmark Replacement” means the sum of: (A) the alternate benchmark rate (which may include Term SOFR) that has been selected by the Lender giving due consideration to (1) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (2) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to LIBOR for U.S. dollar-denominated syndicated or bilateral credit facilities and (B) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes hereof.

(ii)              “Benchmark Replacement Adjustment” means, with respect to any replacement of LIBOR with an Unadjusted Benchmark Replacement for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Lender giving due consideration to (A) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (B) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated or bilateral credit facilities at such time.

(iii)            “Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including, without limitation, changes to the definition of “Prime Rate,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that the Lender decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Lender in a manner substantially consistent with market practice (or, if the Lender decides that adoption of any portion of such market practice is not administratively feasible or if the Lender determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Lender decides is reasonably necessary in connection with the administration of the loan(s) evidenced hereby).

(iv)             “Benchmark Replacement Date” means the earlier to occur of the following events with respect to LIBOR:

(A)             in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of LIBOR permanently or indefinitely ceases to provide LIBOR; or

(B)              in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.

(v)               “Benchmark Transition Event” means the occurrence of one or more of the following events with respect to LIBOR:

(A)             a public statement or publication of information by or on behalf of the administrator of LIBOR announcing that such administrator has ceased or will cease to provide LIBOR, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR;

(B)              a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR, a resolution authority with jurisdiction over the administrator for LIBOR or a court or an entity with similar insolvency or resolution authority over the administrator for LIBOR, which states that the administrator of LIBOR has ceased or will cease to provide LIBOR permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR; or

(C)              a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR announcing that LIBOR is no longer representative.

(vi)             “Benchmark Transition Start Date” means (A) in the case of a Benchmark Transition Event, the earlier of (1) the applicable Benchmark Replacement Date and (2) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 180th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 180 days after such statement or publication, the date of such statement or publication) and (B) in the case of an Early Opt-in Election, the date specified by the Lender by notice to the Borrower, so long as the Lender has not received, by such date, written notice of objection to such Early Opt-In Election from the Borrower.

(vii)          “Benchmark Unavailability Period” means, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to LIBOR and solely to the extent that LIBOR has not been replaced with a Benchmark Replacement, the period (A) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced LIBOR for all purposes hereunder in accordance with this Agreement and (B) ending at the time that a Benchmark Replacement has replaced LIBOR for all purposes hereunder pursuant to this Agreement.

(viii)        “Early Opt-in Election” means the occurrence of:

(A)             a determination by the Lender that currently outstanding U.S. dollar-denominated syndicated or bilateral credit facilities at such time contain (as a result of amendment or as originally executed) as a benchmark interest rate, in lieu of LIBOR, a new benchmark interest rate to replace LIBOR, and

(B)              the election by the Lender to declare that an Early Opt-in Election has occurred and the provision by the Lender of written notice of such election to the Borrower.

(ix)             “Federal Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇, or any successor source.

(x)               “Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

(xi)             “SOFR” with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.

(xii)          “Term SOFR” means the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

(xiii)        “Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.

3.7              Increased Cost.

(c)(a)               Change in Law. If the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), treatment of the transactions contemplated by the Loan Documents as highly leveraged transactions, or any Change in Law shall:

(i)                 impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, Lender (except any reserve requirement reflected in the LIBOR Rate);

(ii)              subject Lender to any Tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, or any LIBOR Loan made by it, or change the basis of taxation of payments to Lender in respect thereof, except with respect to the imposition or any change in the rate of any Excluded Tax payable by Lender and except with respect to Other Taxes; or

(iii)            impose on Lender or the London interbank market any other condition, cost or expense affecting this Agreement or LIBOR Loans made by Lender or any Letter of Credit;

and the result of any of the foregoing shall be to increase the cost to Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation to make any such LIBOR Loan), or to increase the cost to Lender of issuing or maintaining any Letter of Credit (or of maintaining its obligation to issue any Letter of Credit), or to reduce the amount of any sum received or

receivable by Lender hereunder (whether of principal, interest or any other amount) then, upon request of Lender, the Borrower will pay to Lender on demand such additional amount or amounts as will compensate Lender for such additional costs incurred or reduction suffered.

(d)(b)               Capital Requirements. If Lender determines that any Change in Law affecting Lender or any lending office of Lender or Lender’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on Lender’s capital or on the capital of Lender’s holding company, if any, as a consequence of this Agreement, the Revolving Credit Commitment of Lender, the Loans made by Lender, or the Letters of Credit issued by the Lender, to a level below that which Lender or Lender’s holding company could have achieved but for such Change in Law (taking into consideration Lender’s policies and the policies of Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to Lender such additional amount or amounts as will compensate Lender or Lender’s holding company for any such reduction suffered.

(e)(c)               Certificates for Reimbursement. A certificate of Lender setting forth the amount or amounts necessary to compensate Lender or its holding company as specified in paragraph (a) or (b) of this Section 3.6 and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

3.63.8              Funding Loss Indemnification (Breakage Costs). In the event of:

(a)               any payment of a LIBOR Loan on a date other than the last day of the Interest Period for such Loan including, but not limited to acceleration of the Loans; or

(b)               any failure by Borrower to borrow a LIBOR Loan on the date for borrowing, continuation or conversion specified in the relevant notice under Section 3.1(f), as the case may be; or

(c)               any failure by Borrower to pay a LIBOR Loan on any date for payment specified in Borrower’s written notice of intention to pay such LIBOR Loan;

(d)               other event pursuant to which a LIBOR Loan is converted to a Prime Rate Loan, or

(e)               an event covered by Section 10.1(h) or 10.1(i) occurs, then

upon notice to Borrower from the Lender, Borrower shall pay to Lender on demand, the higher of $250.00 or the actual amount of the liabilities, expenses, costs or funding losses that are a direct or indirect result of such prepayment or other condition described above, whether such liability, expense, cost or loss is by reason of (a) any reduction in yield, by reason of the liquidation or reemployment of any deposit or other funds acquired by the Lender, (b) the fixing of the interest rate payable on any LIBOR-based loan or (c) otherwise (collectively, the “Breakage Costs”). The determination by the Lender of the foregoing amount shall, in the absence of manifest error, be conclusive and binding upon Lender.

3.73.9              Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Lender and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Lender (whether outside counsel or the allocated costs of its internal legal department), in connection with the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Lender, including the fees, charges and disbursements of any counsel for the Lender (whether outside counsel or the allocated costs of its internal legal department), in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section 3.83.9, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. Expenses being reimbursed by the Borrower under this Section 3.83.9 include, without limiting the generality of the foregoing, costs and expenses incurred in connection with the following, provided that Borrower shall be responsible for expenses under Section 3.83.9(a) and 3.83.9(b) only if incurred after the occurrence and during the continuance of a Default:

(a)               appraisals;

(b)               field examinations and the preparation of Reports based on the fees charged by a third party retained by the Lender or the internally allocated fees for each Person employed by the Lender with respect to each field examination;

(c)               lien searches;

(d)               taxes, fees and other charges for filing financing statements and continuations, and other agreements, documents and actions to perfect, protect, and continue the Lender’s Liens;

(e)               sums paid or incurred to take any action required of any Loan Party under the Loan Documents that such Loan Party fails to pay or take; and

(f)                forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the accounts and lock boxes pursuant to separate agreements between Borrower and Lender, and costs and expenses of preserving and protecting the Collateral as provided in any Security Document.

All of the foregoing costs and expenses may be charged to the Borrower as Revolving Credit Loans or to another deposit account. All payments due under this Section 3.83.9 shall be due not later than five Business Days after demand therefor.

3.83.10          Interest Computations. Interest shall be calculated on the basis of a 360-day year for the actual number of days of each year (365 or 366).

3.93.11          Default Interest Rate. Upon the occurrence of an Event of Default for so long as such Event of Default is continuing, notwithstanding anything else herein, if the Lender so requires (i) the Borrower’s right to renew, elect, or continue LIBOR Loans shall cease and all renewals, elections, or continuations shall be to Prime Rate Loans, and in the Lender’s sole discretion (ii) the rate of interest on all Loans shall be increased to a rate at all times equal to three percentage points (3%) above the higher of the LIBOR Rate (computed in the same manner as for LIBOR Loans with an Interest Period of one month) and the Prime Rate, and fees applicable to Letters of Credit shall be increased by three percentage points (3%), such increased rate and fees to remain in effect through and including the satisfaction and payment in full of all of the Obligations and the termination of the Revolving Credit Commitment, or written waiver of such Event of Default by the Lender. The imposition of such Default Rate is without prejudice to any other rights and remedies the Lender may have.

3.103.12          Late Payments. Payments of principal and/or interest not made in full before the date ten (10) days after the date due shall, in the sole discretion of the Lender, be subject to a processing charge of five percent (5%) of the payment due. The imposition of such fee is without prejudice to any other rights and remedies the Lender may have.

3.113.13          Payment of Fees. Borrower hereby authorizes the Lender to withdraw an amount equal to the fees which are due and payable hereunder from any of its accounts with the Lender if not paid on the due date for such fees. The Lender shall give the Borrower notice of any such withdrawals, provided, however, that failure by the Lender to give the Borrower notice shall not prevent the Lender from making any such withdrawals under this Section 3.123.13.

3.123.14          Swap Obligations. Any costs incurred by the Lender or its Affiliates in connection with Swap Obligations, including any interest, expenses, fees, premiums, penalties or other charges associated with any obligations undertaken by the Lender or its Affiliates to hedge or offset the Lender’s or its Affiliates’ obligations pursuant to such agreement, or the termination of any such obligations, shall be (i) deemed additional interest and/or a related expense (to be determined in the sole discretion of the Lender) and due as part of the Obligations and secured by all Collateral and covered by all Loan Guarantees to the full extent thereof, and included in any judgment in any proceeding instituted by the Lender.

3.133.15          Taxes.

(a)               Payments Free of Taxes. Any and all payments by or on account of any Obligation shall be made free and clear of and without reduction or withholding for any Taxes, and Loan Parties shall hold Lender harmless therefor.

(b)               Other Taxes. Without limiting the provisions of Section 3.143.15(a) above, the Loan Parties shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c)               Tax Indemnity. The Loan Parties shall jointly and severally indemnify the Lender, within ten days after demand therefor, for the full amount of any Indemnified Taxes paid or payable by the Lender on or with respect to an amount payable by the Loan Parties under or in respect of this Agreement or under any other Loan Document (or required to be withheld or

deducted from any such amount paid to the Lender), together with any reasonable expenses arising in connection therewith and with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate from the Lender as to the amount of such payment or liability delivered to the Loan Parties shall be conclusive absent manifest error.

3.143.16          Indemnity for Returned Payments. If after receipt of any payment which is applied to the payment of all or any part of the Obligations, the Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Lender and the Borrower shall be liable to pay to the Lender. The provisions of this Section 3.153.16 shall be and remain effective notwithstanding any contrary action which may have been taken by the Lender in reliance upon such payment or application of proceeds. The provisions of this Section 3.153.16 shall survive the termination of this Agreement.

ARTICLE 4 - REPRESENTATIONS OF BORROWER

The Borrower and each of the Loan Parties represents and warrants to the Lender as follows:

4.1              Organization and Power.

(a)               Each of the Loan Parties is duly organized, validly existing and in good standing under the laws of its state of organization and is duly qualified to transact business and in good standing in all other states and jurisdictions in which it is required to qualify or in which failure to qualify could reasonably be expected to have a Material Adverse Effect. As of the Closing Date, the jurisdictions of formation and qualification for each of the Loan Parties are described in Schedule 4.1.

(b)               Each of the Loan Parties has full power and authority to own its properties, to carry on its business as now being conducted, to execute, deliver and perform the Agreement and all related documents and instruments, and to consummate the transactions contemplated hereby.

4.2              Proceedings of Loan Parties.

(a)               All necessary action on the part of the Loan Parties relating to authorization of the execution and delivery of the Loan Documents, and the performance of the Obligations of the Loan Parties, hereunder and thereunder has been taken. The Loan Documents constitute legal, valid and binding obligations of the Loan Parties, as applicable, enforceable in accordance with their respective terms except as enforcement thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and except to the extent enforcement thereof may be limited by the application of general principles of equity.

(b)               The execution and delivery by the Loan Parties of the Loan Documents, and the performance by each of the Loan Parties of their respective obligations under the Loan Documents will not violate any provision of law or their respective Organizational Documents. The execution, delivery and performance of this Agreement and the Loan Documents, and the consummation of the transactions contemplated hereby will not violate, be in conflict with, result in a breach of, or constitute a default under any agreement to which any of the Loan Parties is a party or by which any of its properties is bound if such violation or conflict could reasonably be expected to have a Material Adverse Effect, or any order, writ, injunction, or decree of any court or Governmental Authority, and will not result in the creation or imposition of any Lien, charge or encumbrance upon any of its properties.

4.3              Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for those that have otherwise been obtained or made on or prior to the date of this Agreement or as otherwise required hereby and which remain in full force and effect on the date of this Agreement), or exemption by, any Governmental Authority, is required to be obtained or made by, or on behalf of, any Loan Party to authorize, or is required to be obtained or made by, or on behalf of, any Loan Party in connection with, the execution, delivery and performance of any Loan Document or the legality, validity, binding effect or enforceability of any such Loan Document.

4.4              Capitalization. Schedule 4.4 sets forth, as of the dates described therein, the capital structure of each Loan Party, including classes and, in the case of Subsidiaries, the identity of the registered and beneficial owner of the Equity Interests of each. All of the outstanding Equity Interests of Loan Parties are duly authorized, validly issued and fully paid. The Borrower or another Loan Party, as the case may be, has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive all Restricted Payments with respect to, all Equity Interests indicated on Schedule 4.4 as owned by the Borrower, or such Loan Party. All Equity Interests and all existing (as of the date hereof) contracts, debentures, securities, rights, options, warrants, calls or similar commitments of any character calling for or relating to the issuance of, purchase or receipt of, or redemption or retirement of, Equity Interests of the Loan Parties are shown on Schedule 4.4. There is no agreement of holders of Equity Interests, repurchase or redemption agreement, contract, debenture, security, right, option, warrant, call or similar commitment of any character calling for or relating to the issuance of, purchase or receipt of, or redemption or retirement of, Equity Interests of any of the Loan Parties except as described in Schedule 4.4.

4.5              Litigation. Except as set forth on Schedule 4.5, as of the date hereof there is no action, suit or proceeding at law or in equity by or before any court or any Governmental Authority pending or, to the knowledge of the Loan Parties threatened against or affecting the Loan Parties.

4.6              Financial Condition.

(a)               The audited consolidated financial statements of Borrower as of the Fiscal Year ended March 31, 2017, as included in the Borrower’s Annual Report on Form 10-K filed with the SEC, and the Borrower’s consolidated quarterly financial statements for the Fiscal Quarter ending on or about June 30, 2017, as included in the Borrower’s Quarterly Report on Form 10-Q filed with the SEC (collectively, the “Financial Statements”), all heretofore furnished to the Lender, have been prepared in accordance with GAAP (except in the case of quarterly statements,

absent customary year-end adjustments) consistently applied throughout the periods indicated are all true and correct in all material respects and present fairly the financial condition at the date of said financial statements and the results of operations for the fiscal period then ending. The Borrower as of June 30, 2017, on a consolidated basis, did not have any significant liabilities, contingent or otherwise, including liabilities for Taxes or any unusual forward or long-term commitments which were not disclosed by or reserved against in the Financial Statements, and at the present time there are no material unrealized or anticipated losses from any unfavorable commitments of the Loan Parties. Except as disclosed on Schedule 4.6, as of the date of this Agreement, the Loan Parties do not know of any basis for the assertion against any of the Loan Parties of any liability or obligation of any nature whatsoever that is not fully disclosed in the financial statements delivered pursuant to this Section 4.6 that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(b)               On and as of the date of this Agreement, and after giving effect to all Indebtedness (including the Loans) and Liens created by the Loan Parties in connection herewith, (i) the sum of the assets, at a fair valuation, of the Borrower (standing alone) and the Loan Parties (taken as a whole) will exceed its debts, (ii) the Borrower (standing alone) and the Loan Parties (taken as a whole) has and have not incurred and does or do not intend to incur, and does or do not believe that it or they will incur, debts beyond its or their ability to pay such debts as such debts mature, and (iii) the Borrower (standing alone) and the Loan Parties (taken as a whole) will have sufficient capital with which to conduct its and their respective businesses. For purposes of this Section 4.6(b), “debt” means any liability on a claim, and “claim” means (i) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, legal, equitable, secured, or unsecured or (ii) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, secured or unsecured. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

4.7              Material Adverse Changes. As of the date of this Agreement, since June 30, 2017 there has been no Material Adverse Effect on, and no change or condition that could reasonably be expected to have a Material Adverse Effect on, the Borrower or the Loan Parties taken as a whole.

4.8              Taxes. Each of the Loan Parties have filed or caused to be filed when due all federal tax returns or extensions and all material state and local tax returns or extensions that are required to be filed, and have paid or caused to be paid all Taxes as shown on said returns or any assessment received other than those that are being contested in good faith and adequately disclosed and fully provided for in the consolidated financial statements of the Borrower in accordance with GAAP. To the knowledge of the Loan Parties, the filed returns accurately reflect in all material respects all liability for Taxes of the Loan Parties, as applicable, for the periods covered thereby. Except as set forth on Schedule 4.8, none of the Loan Parties’ tax returns are being audited on the date of this Agreement and as of the date of this Agreement none of the Loan Parties, have been notified of any intention by any taxing authority to conduct such an audit.

4.9              Properties; Liens. The Loan Parties have good title to all of their properties and assets, including without limitation, the properties and assets reflected in the Financial Statements free and clear of all Liens, except for Liens permitted by Section 7.2. The Loan Parties have a valid leasehold estate and undisturbed peaceable possession under all leases under which they are operating, which are not owned by them, none of which contain unusual or burdensome provisions that may materially and adversely affect the operations of the Loan Parties, and, as of the date of this Agreement, all such leases are in full force and effect and no material default of any party thereto exists. All locations at which any Loan Party operates or at which a Loan Party’s equipment or inventory is kept are listed on Schedule 4.9, together with the owner or landlord thereof.

4.10          Indebtedness. Except for Indebtedness permitted by Section 7.1, the Loan Parties have no outstanding Indebtedness.

4.11          Franchises; Permits. The Loan Parties possesses all franchises, permits, licenses and other authority as are material to the conduct their business as now being conducted. The Loan Parties are not in default under any such franchise, permit, license or authority such that it would have a Material Adverse Effect.

4.12          Margin Securities. No proceeds of the Obligations have been or will be used for the purpose of purchasing or carrying Margin Securities as defined in Regulation U of the Federal Reserve Board.

4.13          Compliance With Law.

(a)               None of the Loan Parties is in violation of any laws, ordinances, governmental rules, requirements, or regulations, or any order, writ, injunction or decree of any court or Governmental Authority, to which it is subject which violation could reasonably be expected to have a Material Adverse Effect. Each of the Loan Parties has obtained and is in compliance with all licenses, permits, franchises, and Governmental Authority authorizations necessary for the ownership of its properties and the conduct of its business, for which failure to comply could reasonably be expected to have a Material Adverse Effect.

(b)               To the extent applicable and to the best of the Loan Parties’ knowledge, each of the Loan Parties is not (i) in violation of the Trading with the Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended; (ii) on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (“OFAC”), Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation; (iii) in violation of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001 (“USA Patriot Act”); (iv) a Person designated under Section 1(b), (c) or (d) or Executive Order No. 13224 (September 23, 2001), any related enabling legislation or any other similar Executive Orders; or (v) engaging in any dealings or transactions, or is otherwise associated, with any of the foregoing blocked Persons.

(c)               Neither the Borrower nor any of the Loan Parties, nor, to the knowledge of the Borrower, any director, officer, agent, employee (whether full time or contract), representative or other person acting on behalf of the Loan Parties has, in the course of its actions for, or on behalf

of, the Loan Parties, (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government Person or employee (whether full time or contract) from corporate funds, (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government Person or employee (whether full time or contract).

4.14          Intellectual Property and Authorizations. The Loan Parties own, possess or have licenses for all of the Intellectual Property necessary to the conduct of their business as now conducted. A complete list of all such Intellectual Property (including property licensed to a Loan Party) with respect to which registrations have been issued by the U.S. Patent and Trademark Office, the U.S. Copyright Office, or any comparable Governmental Authority is set forth on Schedule 4.14. To the knowledge of the Loan Parties, no product, process, method, substance, part or other material presently contemplated to be sold by or employed by any of the Loan Parties in connection with its business infringes or may infringe any Intellectual Property owned by any other Person which infringement could reasonably be expected to have a Material Adverse Effect. There is no pending or, to the Borrower’s knowledge, threatened claim or litigation against or affecting any of the Loan Parties contesting their right to sell or use any such product, process, method, substance, part or other material. There is not pending or proposed any patent, invention, device application or principle or any statute, law, rule, regulation, standard or code which would prevent, inhibit or render obsolete the production or sale of any products of, or substantially reduce the projected revenues of or otherwise have a Material Adverse Effect on the Loan Parties.

4.15          Contracts and Agreements. None of the Loan Parties is a party to any contract or agreement that has or could reasonably be expected to have a Material Adverse Effect, and each the Loan Parties is in compliance in all material respects with all material contracts and agreements to which it is a party except for any non-compliance that could not reasonably be expected to have a Material Adverse Effect.

4.16          Subsidiaries; Affiliates; Joint Ventures. On the Closing Date, except for Subsidiaries shown on Schedule 4.16, or thereafter permitted by Section 6.9 below, Borrower has no direct or indirect Subsidiaries and none of the Loan Parties has any Investment in any Affiliate (other than such Subsidiaries). Except for joint ventures shown on Schedule 4.16, neither Borrower nor any of the Loan Parties has any interest in any joint venture.

4.17          ERISA. Except as set forth on the Schedule 4.17:

(a)               Compliance. Each Plan has at all times been maintained, by its terms and in operation, in accordance with all applicable laws, except such noncompliance (when taken as a whole) that will not have a Material Adverse Effect;

(b)               Liabilities. Neither any of the Loan Parties, nor any ERISA Affiliate, is currently, and has not been obligated in the last six (6) years to make contributions (directly or indirectly) to a Multiemployer Plan, and is not currently subject to any liability (including withdrawal liability), Tax or penalty whatsoever to any person whomsoever with respect to any Plan including, but not limited to, any Tax, penalty or liability arising under Title I or Title IV or

ERISA or Chapter 43 of the Code, except such liabilities (when taken as a whole) as will not have a Material Adverse Effect; and

(c)               ERISA Events. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.

4.18          Employment and Labor Relations. None of the Loan Parties is engaged in any unfair labor practice that could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against and of the Loan Parties or, to the knowledge of the Borrower, threatened against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against any of the Loan Parties or, to the knowledge of the Borrower, threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against any of the Loan Parties or, to the knowledge of the Borrower, threatened against any of the Loan Parties, (iii) no equal employment opportunity charges or other claims of employment discrimination are pending or, to the Borrower’s knowledge, threatened against any of the Loan Parties, and (iv) no wage and hour department investigation has been made of any of the Loan Parties, except (with respect to any matter specified in clauses (i) through (iv) above, either individually or in the aggregate) such as could not reasonably be expected to have a Material Adverse Effect.

4.19          Security Documents. The Security Documents are effective to create in favor of the Lender legal, valid and enforceable (subject to bankruptcy and creditors’ rights generally) security interests in all non-real estate property and assets of the Loan Parties, all of which are part of the Collateral. When (i) financing statements in appropriate form are filed in the applicable offices required by the Uniform Commercial Code and (ii) upon the taking of possession or control by the Lender of any Collateral in which a security interest may be perfected only by possession or control (which possession or control shall be given to the Lender to the extent possession or control by the Lender is required by the Security Documents), the Lender shall have a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in the Collateral to the extent such Lien and security interest can be perfected by the filing of a financing statement pursuant to the UCC or by possession or control by the Lender, in each case prior and superior in right to any other Person, other than any holder of Permitted Liens and Permitted Consignment Inventory. Without limitation to the foregoing, no consent of any Person including any other general or limited partner, any other member of a limited liability company, any other shareholder or any other trust beneficiary is necessary in connection with the creation, perfection or first priority status of the security interest of the Lender in any Equity Interests pledged to the Lender under the Security Documents or the exercise by the Lender of the voting or other rights provided for in the Security Documents or the exercise of remedies in respect thereof.

4.20          Affiliate Transactions; Intercompany Indebtedness. Except for transactions permitted under Section 7.9 or as set forth on Schedule 4.20, as of the date of this Agreement, there are no existing or proposed agreements, arrangements, understandings, or transactions between any Loan Party and any of the officers, members, managers, directors, shareholders, parents, other interest holders, employees, or Affiliates (other than Subsidiaries) of any Loan Party or any members of their respective immediate families, and none of the foregoing Persons are directly or

indirectly indebted to any Affiliate of any Loan Party. As of the Closing Date, there is no intercompany Indebtedness between or among any of the Loan Parties or any Subsidiaries.

4.21          Common Enterprise. Each Loan Party expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive benefit), directly and indirectly, from (i) successful operations of each of the other Loan Parties and (ii) the credit extended by the Lenders to the Borrower hereunder, both in their separate capacities and as members of the group of companies. Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Loan Party is within its purpose, will be of direct and indirect benefit to such Loan Party, and is in its best interest.

4.22          Full Disclosure. Neither any Loan Document nor any other document, certificate or statement furnished to the Lender by or on behalf of any Loan Party in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading, if, in either case, such fact is material to an understanding of the financial condition, performance or prospects of the Loan Parties, taken as a whole or their business or operations, taken as a whole, or the ability of the Loan Parties to fulfill their obligations under this Agreement or by any Loan Documents to which they are parties.

ARTICLE 5 - CONDITIONS OF LENDING

5.1              Initial Loans. The following conditions must be satisfied before the Lender shall have any obligation to make or continue Loans on the Closing Date under this Agreement:

(a)               Performance. The Loan Parties shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by them prior to or at the time the Loans are made.

(b)               Opinion of Counsel. The Borrower and Loan Parties shall have delivered favorable customary opinions of their counsel, in form and substance satisfactory to the Lender.

(c)               Documents to be Delivered. The Loan Parties shall have caused to be duly executed and delivered to the Lender all Loan Documents, including all Security Documents (or as applicable, reaffirmations of them), all in form and substance satisfactory to Lender, which Loan Documents shall be in full force and effect, and such other documents, instruments, and agreements as the Lender and its legal counsel may reasonably require in connection with the transactions contemplated hereby. Among others, the Lender shall have received (i) the certificates representing the shares of Equity Interests pledged pursuant to the Security Documents, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the Lender pursuant to the Security Documents endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.

(d)               Certified Resolutions. The Loan Parties shall have delivered the certificates of their respective corporate secretaries or authorized officers certifying as to (i) resolutions duly adopted by their boards of directors or other respective governing bodies authorizing the execution,

delivery and performance of the Loan Documents and the consummation of the transactions contemplated hereby and thereby, as applicable, which resolutions shall remain in full force and effect so long as any of the Obligations are outstanding and the Revolving Credit Commitment has not been terminated, (ii) their Organizational Documents and (iii) the incumbency of the officers authorized to execute, deliver and perform this the Loan Documents.

(e)               Fees and Taxes. The Loan Parties shall have paid (i) all filing fees and Taxes related to the Obligations and the perfection of any interests hereunder and under the Security Documents and (ii) all other fees and expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the Closing Date.

(f)                Insurance. The Loan Parties shall have delivered evidence satisfactory to the Lender of the existence of insurance required hereby.

(g)               Certificates of Good Standing; Searches. The Loan Parties shall have delivered to the Lender (i) certificates of good standing from appropriate governmental officials to the effect that they respectively are in good standing in the jurisdictions of formation as well as in all other jurisdictions in which qualification is necessary to carry on their business as presently conducted, (ii) UCC, judgment, bankruptcy and Tax searches against the Loan Parties in all jurisdictions deemed necessary by the Lender, all of which shall be reasonably satisfactory to the Lender in all respects, and (iii) Intellectual Property Searches reasonably satisfactory to the Lender in all respects.

(h)               Representations. The representations and warranties of the Loan Parties contained herein shall be true and correct in all material respects.

(i)                 Consents and Approvals. The Lender shall have received evidence of receipt of all Governmental Authority, organizational and governing body, and other, if any, consents and approvals necessary in connection with the transactions contemplated under this Agreement.

(j)                 Filings. Each document required by the Security Documents or under law or reasonably requested by the Lender to be filed, registered or recorded in order to create in favor of the Lender, a perfected Lien on the Collateral described therein, shall be delivered to Lender in proper form for filing, registration or recordation.

(k)               Litigation. No suit, investigation or proceeding pending in any court or before any arbitrator or Governmental Authority that can reasonably be expected to have a Material Adverse Effect on the Loan Parties shall be pending or overtly threatened.

(l)                 Subordination Agreements. The Lender shall have received subordination agreements, in form satisfactory to Lender, covering all obligations of any Loan Party to holders of any of their Equity Interests, officers, employees, and Affiliates, if any.

(m)             Certificate as to Leverage Ratio. The Lender shall have received a certificate signed by Chief Financial Officer of the Borrower, on a consolidated basis with its Subsidiaries, certifying the Leverage Ratio calculated for the Fiscal Quarter ending on or about June 30, 2017.

5.2              Subsequent Loans and Letters of Credit. The obligation of the Lender to make any Revolving Credit Loans and issue any Letters of Credit shall at all times be subject to the following continuing conditions:

(a)               Representations and Warranties. The representations and warranties of the Loan Parties contained herein shall be true and correct in all material respects as of the date of each such Loan (except those which are specific as to a date certain), with the same effect as if made on and as of such date.

(b)               No Material Adverse Effect. Since the date of this Agreement, there has been no change, circumstance, or occurrence that has had a Material Adverse Effect.

(c)               No Defaults. There shall exist no Default at the time each Loan is to be made or the Letter of Credit is to be issued.

(d)               No Litigation. No suit, investigation or proceeding pending in any court or before any arbitrator or Governmental Authority that can reasonably be expected to have a Material Adverse Effect on the Loan Parties shall be pending or overtly threatened.

(e)               Landlord Waivers. The Borrower shall have delivered to the Lender a waiver in form and substance satisfactory to Lender from each landlord of premises in excess of 1,500 square feet on which the Collateral is located and that is not owned by a Loan Party, unless otherwise agreed by Lender.

5.3              Notice of Loan Representation. Each Request given by a Borrower in accordance with Section 3.1 hereof and the acceptance by Borrower of the proceeds of a Revolving Credit Loan or Letter of Credit, as the case may be, shall constitute a representation and warranty by the Borrower, made as of the time of the making or continuation of such Revolving Credit Loan or Letter of Credit, as the case may be, that the conditions specified in Section 5.1 (solely with respect to the Term Loan B outstanding on the Amendment 1 Effective Date, and the outstanding Revolving Credit Loans and Letters of Credit on the Closing Date) and Section 5.2 (with respect to all other Revolving Credit Loans and Letter of Credit issuances) have been fulfilled as of such time.

ARTICLE 6 - AFFIRMATIVE COVENANTS

So long as any Obligations shall be outstanding or this Agreement remains in effect, unless the Lender otherwise consents in writing, the Loan Parties shall, directly or indirectly:

6.1              Financial Statements; Other Information.

(a)               Provide to the Lender within ninety (90) days after the end of each Fiscal Year of the Borrower, (i) its Annual Report on Form 10-K filed with the SEC for such Fiscal Year (which shall be deemed delivered to Lender upon Borrower’s filing of the same with the SEC), or (ii) its audited consolidated balance sheet and related statements of operations, shareholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by independent public accountants acceptable to the Lender (without a “going concern” or like qualification or exception and without

any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants.

(b)               Provide to the Lender within forty-five (45) days after the end of each of the first three Fiscal Quarters of the Borrower, either (i) its Quarterly Report on Form 10-Q filed with the SEC for such Fiscal Quarter (which shall be deemed delivered to Lender upon Borrower’s filing of the same with the SEC), or (ii) its consolidated balance sheet and related statements of operations, shareholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the Fiscal Year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes.

(c)               Provide to the Lender Compliance Certificates within forty-five (45) days after the close of each Fiscal Quarter (including the fourth Fiscal Quarter of each Fiscal Year).

(d)               Provide to the Lender annual projections for the upcoming Fiscal Year of profits and loss statements, cash flow, and balance sheet, in form and detail reasonably satisfactory to Lender, with assumptions, as soon as available but in any event by the end of each Fiscal Year of the Borrower, and the Lender acknowledges that such projections shall be “Information” subject to Section 11.10.

(e)               Provide to the Lender, promptly after any request therefor, copies of all tax returns of the Loan Parties and their other Subsidiaries, and copies of all requests for extension, promptly, but in any event within thirty (30) days, after filing the same.

(f)                Provide to the Lender, promptly after any request therefor, copies of all periodic and other reports, proxy statements and other materials (i) filed by the Borrower or any Subsidiary with (A) the SEC, (B) any Governmental Authority succeeding to any or all of the functions of the SEC, or (C) with any national securities exchange (which in the case of (A) and (B) shall be deemed delivered to Lender upon Borrower’s filing of same), or (ii) distributed by the Borrower to its shareholders generally, as the case may be.

(g)               Provide to the Lender promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the Lender may reasonably request.

(h)               Permit any representatives designated by the Lender (including employees of the Lender or any consultants, accountants, lawyers and appraisers retained by the Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, including environmental assessment reports and Phase I or Phase II studies,

and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested. The Loan Parties acknowledge that the Lender, after exercising its rights of inspection, may prepare certain Reports pertaining to the Loan Parties’ assets for internal use by the Lender, and the Lender acknowledges that such Reports shall be “Information” subject to Section 11.10.

(i)                 Notify the Lender promptly upon addition of any new location not owned by a Loan Party at which Collateral is located, and provide a landlord waiver or bailee agreement in connection therewith within sixty (60) days of such notice.

6.2              Taxes. Pay and discharge all Taxes upon the Loan Parties and Subsidiaries, their income and property, prior to the date on which penalties are attached thereto; provided, however, that the Loan Parties and Subsidiaries may in good faith contest any such Taxes so long as (a) such contest is diligently pursued, (b) such Loan Party or Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, and (c) no Lien (other than Permitted Liens) or execution exists or is levied against any of the Loan Parties’ or Subsidiaries’ assets related to the contested items.

6.3              Insurance. Maintain or cause to be maintained insurance, of kinds and in amounts satisfactory to the Lender, with reputable insurance companies on all of the Loan Parties’ and Subsidiaries real and personal properties in such amounts and against such risks as are commercially reasonable, including, but not limited to, full-risk extended coverage hazard insurance to the full insurable value of real property, all-risk coverage for personal property, business interruption coverage, worker’s compensation insurance, and comprehensive general liability and products liability insurance. Co-insurance is not permitted and in no event shall the deductible related to liability and products liability insurance exceed an amount reasonably satisfactory to Lender. The Loan Parties also shall maintain flood insurance covering any real properties located in flood zones. The Loan Parties shall provide to the Lender, upon its request and no less often than annually, a detailed list and evidence satisfactory to the Lender of their insurance carriers and coverage. Insurance policies shall name the Lender as additional insured with respect to liability policies and mortgagee and/or lender loss payee on other policies, as its interests may appear, and all policies shall provide for prior notice of cancellation to the Lender.

6.4              Maintenance of Business Assets. At all times maintain, preserve, protect, and keep the Loan Parties’ and Subsidiaries’ material properties and assets in good repair, working order, and condition and, from time to time, make all needful and proper repairs, renewals, replacements, betterments and improvements thereto, in each case in the ordinary course of business and consistent with past practices and subject to ordinary wear and tear and asset dispositions permitted by this Agreement.

6.5              Performance and Payment of Obligations. Pay or discharge all Material Indebtedness and all other material liabilities and obligations, for which each Loan Party and Subsidiary is obligated before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect. Perform, and cause their

Subsidiaries to perform, all of their respective obligations under the terms of each agreement, contract or instrument by which they are bound (taking into account any grace, notice, or cure periods applicable thereto), except in each case such non-performances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

6.6              Notification of Material Changes, Judgments. Notify the Lender promptly, but in any event within five (5) Business Days or such shorter period as specified below, with respect to them or their Subsidiaries of:

(a)               any event, circumstance, or condition that has had or could reasonably be expected to have a Material Adverse Effect;

(b)               receipt of any notice of any investigation by any Governmental Authority or any litigation commenced or threatened against any Loan Party that (i) seeks damages in excess of $100,000, (ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental Laws; (vi) contests any tax, fee, assessment, or other governmental charge in excess of $100,000, or (vii) involves any product recall;

(c)               the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

(d)               any Lien (other than Permitted Encumbrances) or claim made or asserted against any of the Collateral, other than claims asserted in the ordinary course of business, which do not in any one instance or the aggregate exceed $200,000;

(e)               any loss, damage, or destruction to, or taking by eminent domain of, the Collateral, in one occurrence or a series of occurrences, in the amount of $200,000 or more, whether or not covered by insurance;

(f)                any and all default notices received under or with respect to any leased location or public warehouse where a material amount of Collateral is located (which shall be delivered within two Business Days after receipt thereof);

(g)               any amendment to the Borrower’s written distribution agreements that has or could reasonably be expected to have a Material Adverse Effect, together with a copy of each such amendment;

(h)               the fact that a Loan Party or Subsidiary has entered into a Swap Agreement or an amendment to a Swap Agreement, together with copies of all agreements evidencing such Swap Agreement or amendments thereto (which shall be delivered within two Business Days);

(i)                 the existence of any Default of which any Loan Party has actual knowledge;

(j)                 the filing of any patents or trademark registrations by any Loan Party or Subsidiary;

(k)               any change in any Loan Party’s or Subsidiary’s respective name, identity, jurisdiction of organization, organizational structure, or Organizational Documents;

(l)                 any change in the ownership of any Subsidiary’s Equity Interests; and/or

(m)             the acquisition or formation of any new Subsidiary and, in each such case, its name, jurisdiction of formation, and the ownership of its Equity Interests.

6.7              Existence; Franchises; Permits; Laws.

(a)               Preserve and keep in full force and effect their and their Subsidiaries’ existence and all franchises, permits, licenses and other authority as are necessary to enable them to conduct each of their business as being conducted on the date of this Agreement; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 7.3.

(b)               Comply and cause their Subsidiaries to comply in all material respects with all laws, regulations and requirements now in effect or hereafter promulgated by any properly constituted Governmental Authority having jurisdiction over them.

6.8              Business Activities. Engage in such businesses so that, taken as a whole, they and their Subsidiaries remain principally engaged in the activities of the Loan Parties and Subsidiaries as of the date hereof or any business or activity that is reasonably similar thereto or a reasonable extension, development, or expansion thereof or ancillary thereto.

6.9              Subsidiaries.

(a)               Subject to applicable law and Section 6.9(b), each Loan Party shall, unless the Lender otherwise consents, cause each of its Domestic Subsidiaries formed or acquired after the date of this Agreement in accordance with the terms of this Agreement and each Subsidiary that acquires sufficient assets to become a Domestic Subsidiary after the date of this Agreement to become a Loan Party by executing a Loan Guaranty and security agreements in form and content reasonably acceptable to Lender. Upon execution and delivery thereof, each such Person (i) shall automatically become a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Loan Documents and (ii) will grant Liens to the Lender, in any property of such Loan Party which constitutes Collateral.

(b)               Each Loan Party will cause (i) 100% of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries and (ii) 65% (or such greater percentage that, due to a change in applicable law after the date hereof, (A) could not reasonably be expected to cause the undistributed earnings of such foreign Subsidiary as determined for U.S. federal income tax purposes to be treated as a deemed dividend to such foreign Subsidiary’s U.S. parent and (B) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2) in each foreign Subsidiary directly owned by the Borrower or any Domestic Subsidiary to be subject at all times to a first priority, perfected Lien in

favor of the Lender pursuant to the terms and conditions of the Loan Documents or other security documents as the Lender shall reasonably request.

(c)               Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Lender such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture filings and other documents and such other actions or deliveries of the type required by Section 5.1, as applicable), which may be required by law or which the Lender may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens against such Loan Party’s Collateral, created or intended to be created by the Security Documents, all at the expense of the Loan Party which owns such Collateral.

6.10          Shareholder and Officer Loans. Provide to the Lender subordination agreements in form satisfactory to the Lender covering any loans or other similar financial accommodations to any Loan Party from any of their shareholders, employees, officers, directors, of other Affiliates; provided, however, nothing in this Section 6.10 shall be deemed to be a consent to any transaction made in violation of Section 7.3.

6.11          Use of Proceeds and Letters of Credit. The proceeds of the Loans will be used only for purposes described herein. No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, (i) for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X or (ii) to make any Acquisition other than Permitted Acquisitions.

6.12          Further Assurances. Cooperate with the Lender and execute such further instruments and documents as the Lender shall reasonably request to carry out the transactions contemplated by this Agreement and the other Loan Documents, including all documents, agreements, notices and other items necessary or desirable to assure that the Lender shall have at all times a Lien with a first priority, subject to exceptions permitted by this Agreement, in all properties and assets of the Loan Parties. If any material assets (other than any real property or improvements thereto or any interest therein) are acquired by a Loan Party after the Closing Date (other than assets constituting Collateral under the Security Documents that become subject to the Lien in favor of the Lender upon acquisition thereof), the Borrower will notify the Lender, and, if requested by the Lender, the Borrower will cause such assets to be subjected to a Lien securing the Obligations and will take, and cause the Loan Parties to take, such actions as shall be necessary or reasonably requested by the Lender to grant and perfect such Liens, all at the expense of the Borrower.

6.13          Deposits; Banking Services. The Loan Parties will cause the Lender to be their principal depository and disbursement bank and maintain Lender as such thereafter, including for the maintenance of operating, administrative, cash management, collection activity, and other deposit accounts for the conduct of its business subject, however, to Lender’s ability to provide such services on commercially reasonable terms.

ARTICLE 7 - NEGATIVE COVENANTS

So long as any Obligations shall be outstanding, or this Agreement shall remain in effect, unless the Lender otherwise consents in writing, none of the Loan Parties shall, or permit any Subsidiary to, directly or indirectly:

7.1              Indebtedness. Create, incur or suffer to exist any Indebtedness, except:

(a)               the Obligations incurred by it;

(b)               Indebtedness existing on the date hereof and set forth in Schedule 7.1 and extensions, renewals and replacements of any such Indebtedness in accordance with Section 7.1(f);

(c)               Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary, provided that (i) Indebtedness of any Subsidiary that is not a Loan Party to the Borrower or to any Subsidiary that is a Loan Party shall be subject to Section 7.4(e), (ii) Indebtedness of the Borrower to any Subsidiary and Indebtedness of any Subsidiary that is a Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Obligations on terms reasonably satisfactory to the Lender, and (iii) Indebtedness of any Subsidiary to any Loan Party or the Borrower shall be evidenced by an intercompany note (which may be a master grid note) delivered to the Lender with an endorsement or allonge, as Collateral;

(d)               Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary, provided that (i) the Indebtedness so Guaranteed is permitted by this Section 7.1, (ii) Guarantees by the Borrower or any Subsidiary that is a Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to the provision to Section 7.4(f) and (iii) Guarantees permitted under this Section 7.1(d) shall be subordinated to any Obligations of the applicable Subsidiary on the same terms as the Indebtedness so Guaranteed is subordinated to the Obligations;

(e)               Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with Section 7.1(f); provided that (i) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this Section 7.1(e) shall not exceed $100,000 in principal amount or, when combined with the principal amount of the Indebtedness permitted by Section 7.1(b), $200,000 in principal amount, in each case at any time outstanding;

(f)                Indebtedness which represents an extension, refinancing, or renewal of any of the Indebtedness described in Sections 7.1(b) and 7.1(e); provided that, (i) the principal amount or interest rate of such Indebtedness is not increased above the maximum amount of such Indebtedness then or previously permitted hereunder, (ii) any Liens securing such Indebtedness are not extended to any additional property of any Loan Party, (iii) no Loan Party that is not originally obligated with respect to repayment of such Indebtedness is required to become

obligated with respect thereto, (iv) such extension, refinancing or renewal does not result in a shortening of the average weighted maturity of the Indebtedness so extended, refinanced or renewed, (v) the terms of any such extension, refinancing, or renewal are not less favorable to the obligor thereunder than the original terms of such Indebtedness and (iv) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension Indebtedness must include subordination terms and conditions that are at least as favorable to the Lender as those that were applicable to the refinanced, renewed, or extended Indebtedness;

(g)               Indebtedness owed to any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such person, in each case incurred in the ordinary course of business; and

(h)               Indebtedness of the Borrower or any Subsidiary in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business.

7.2              Liens. Create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

(a)               Liens created pursuant to any Loan Document;

(b)               Permitted Encumbrances;

(c)               any Lien on any property or asset of the Borrower or any Subsidiary existing on the Closing Date and set forth in Schedule 7.2; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof, above the maximum amount of such Indebtedness then or previously permitted hereunder;

(d)               Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by Section 7.1(e), (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Borrower or Subsidiary;

(e)               Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon;

(f)                Liens arising out of sale and leaseback transactions permitted by Section 7.6; and

(g)               Liens granted by a Subsidiary that is not a Loan Party in favor of the Borrower or another Loan Party in respect of Indebtedness owed by such Subsidiary.

7.3              Fundamental Changes.

(a)               Merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing (i) any Person may merge into the Borrower in a transaction in which the surviving entity is the Borrower, (ii) any Person (other than Borrower) may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary and, if any party to such merger is a Subsidiary that is a Loan Party, is or becomes a Subsidiary that is Loan Party concurrently with such merger, and (iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lender; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 7.4; or

(b)               Engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.

7.4              Investments, Loans, Advances, Guarantees and Acquisitions. Purchase, hold or acquire (including pursuant to any merger with any Person that was not a Loan Party and a wholly owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:

(a)               Permitted Investments, subject to control agreements in favor of the Lender or otherwise subject to a perfected security interest in favor of the Lender;

(b)               Permitted Acquisitions, subject to Lender’s receipt of any Loan Guarantees and security agreements in favor of the Lender required pursuant to Section 6.9;

(c)               investments in existence on the date of this Agreement and described in Schedule 7.4;

(d)               investments by the Borrower and the Subsidiaries in Equity Interests in their respective Subsidiaries, provided that (i) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Security Documents (subject to the limitations applicable to common stock of a foreign Subsidiary referred to in Section 6.9) and (ii) the aggregate amount of investments by Loan Parties in Subsidiaries that are not Loan Parties (together with outstanding intercompany loans permitted under clause (ii) to the proviso to Section 7.4(e) and outstanding Guarantees permitted under the proviso to Section 7.4(f)) shall not exceed $100,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs);

(e)               loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary, provided that (i) any such loans and advances made by a Loan Party shall be subject to the Security Documents and shall be evidenced by a promissory note, endorsed and delivered to the Lender and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (together with outstanding investments permitted under clause (ii) to the proviso to Section 7.4(d) and outstanding Guarantees permitted under the proviso to Section 7.4(f)) shall not exceed $100,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs);

(f)                Guarantees constituting Indebtedness permitted by Section 7.1, provided that the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party shall (together with outstanding investments permitted under clause (ii) to the proviso to Section 7.4(d) and outstanding intercompany loans permitted under clause (ii) to the proviso to Section 7.4(e)) shall not exceed $100,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs);

(g)               loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes;

(h)               investments in the form of Swap Agreements permitted by Section 7.7;

(i)                 investments of any Person existing at the time such Person becomes a Subsidiary of the Borrower or consolidates or merges with the Borrower or any of the Subsidiaries (including in connection with a Permitted Acquisition) so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

(j)                 investments received in connection with the dispositions of assets permitted by Section 7.5;

(k)               investments constituting deposits described in clauses (c) and (d) of the definition of the term “Permitted Encumbrances”,

(l)                 investments of funds held pursuant to employee deferred compensation plans, and

(m)             capital stock or other securities with a maximum aggregate value or face amount not exceeding $100,000 at any time, acquired in connection with the compromise, settlement or collection of accounts receivable and provided there exists no Event of Default at such time.

7.5              Asset Sales. Sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will the Loan Parties permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other than to the Borrower or another Subsidiary in compliance with Section 7.4), except:

(a)               sales, transfers and dispositions of (i) inventory in the ordinary course of business and (ii) used, obsolete, worn out or surplus equipment or property in the ordinary course of business;

(b)               sales, transfers and dispositions to the Borrower or any Subsidiary, provided that any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 7.9;

(c)               sales, transfers and dispositions of accounts receivable in connection with the compromise, settlement or collection thereof;

(d)               sales, transfers and dispositions of investments permitted Section 7.4;

(e)               sale and leaseback transactions permitted by Section 7.6; and

(f)                dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary;

provided that all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by Sections 7.5(b) and 7.5(f)) shall be made for fair value and for at least 75% cash consideration.

7.6              Sale and Sale Leaseback Transactions. Enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for any such sale of any fixed or capital assets by the Loan Parties or any Subsidiary that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated within 90 days after the Loan Party or such Subsidiary acquires or completes the construction of such fixed or capital asset.

7.7              Swap Agreements. Enter into any Swap Agreement, except (a) Swap Agreements entered into with or arranged by the Lender to hedge or mitigate risks to which the Loan Party or any Subsidiary has actual exposure (other than those in respect of Equity Interests of the Loan Parties or any of their Subsidiaries), and (b) Swap Agreements entered into with or arranged by the Lender in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary.

7.8              Restricted Payments; Certain Payments of Indebtedness.

(a)               Declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

(i)                 the Borrower may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its

preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock,

(ii)              Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests,

(iii)            the Borrower may make Restricted Payments, during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries and ,

(iv)             provided no Default has occurred that has not been waived in writing by the Lender, from and after September 30, 2020, at any time the Leverage Ratio, calculated at end of the immediately preceding Fiscal Quarter is less than 3:00 to 1:00, the Borrower may purchase stock of the Borrower and pay cash dividends; provided, however, (A) such purchases and cash dividends (along with any purchases or cash dividends made pursuant to Section 7.8(a)(iv)(A)) shall not exceed (A1) an aggregate amount of $10,000,000 from and after the Closing Date, and (B2) an aggregate of $3,000,000 in any Fiscal Year., and (B) any shares repurchased from the “net share” calculations under the Borrower’s 2003 Incentive Plan (including stock options and LTIP share awards) up to an amount of $2,500,000 during any Fiscal Year shall be excluded from this covenant,

(b)               Make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:

(i)                 payment of Indebtedness created under the Loan Documents;

(ii)              payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness, other than payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof;

(iii)            refinancings of Indebtedness to the extent permitted by Section 7.1; and

(iv)             payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness.

7.9              Transactions with Affiliates. Sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except:

(a)               transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties,

(b)               transactions between or among the Borrower and any Subsidiary that is a Loan Party not involving any other Affiliate,

(c)               any investment permitted by Section 7.4,

(d)               any Indebtedness permitted under Section 7.1,

(e)               any Restricted Payment permitted by Section 7.8,

(f)                loans or advances to employees permitted under Section 7.4,

(g)               the payment of reasonable fees to directors of the Borrower or any Subsidiary who are not employees of the Borrower or any Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers, employees or former employees of the Borrower or its Subsidiaries in the ordinary course of business, and

(h)               any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by the Borrower’s board of directors.

7.10          Restrictive Agreements. Directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon: (a) the ability of such Loan Party or any of its Subsidiaries to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 7.10 (and shall not apply to any extension or renewal of, or any amendment or modification that does not expand the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.

7.11          Amendment of Material Documents. Amend, modify or waive any of its rights under (a) agreement relating to any Subordinated Indebtedness, (b) its Organizational Documents or (c) any written distribution agreement of the Borrower to the extent any such amendment, modification or waiver would be adverse to the Lender.

ARTICLE 8 - FINANCIAL COVENANTS

So long as any Obligations shall be outstanding or this Agreement remains in effect, unless the Lender otherwise consents in writing:

8.1              Leverage Ratio. The Borrower will not permit as of the end of each Fiscal Quarter, the Leverage Ratio (with Total Funded Indebtedness measured at the end of such Fiscal Quarter and EBITDA determined for the period of four consecutive Fiscal Quarters then ending), to be equal to or greater than 3.00 to 1.00.the ratios set forth below for the time periods indicated:

8.2              Fixed Charge Coverage Ratio. The Borrower will not permit as of the end of each Fiscal Quarter, the Fixed Charge Coverage Ratio, determined for:

(a)               For the trailing twelve-month period ending September 30, 2020, to be less than 0.65:1.00,

(b)               For the period commencing October 1, 2020 and ending December 31, 2020, to be less than 1.25:1.00,

(c)               For each of the four Fiscal Quarters thencommencing January 1, 2021 and ending December 31, 2021, and measured solely for each such Fiscal Quarter, to be less than 1.15 to 1.001.50:1.00. and

(d)               For each Fiscal Quarter thereafter, measured on a trailing twelve (12) month basis, to be less than 1.15:1.00.

(a)8.3        Capital Expenditures. The Borrower will not make Capital Expenditures in excess of $5,500,000 for the Fiscal Year ending March 31, 2021.

ARTICLE 9 - ENVIRONMENTAL MATTERS; INDEMNIFICATION

9.1              Environmental Representations. Except as set forth in Schedule 9.1:

(a)               to the best knowledge of the Loan Parties, the Improvements are not being and have not been used for, and none of the Loan Parties is engaged in, the storage, treatment, generation, transportation, processing, handling, production or disposal of any Hazardous Substance except in compliance with all Environmental Laws such that there is no Material Adverse Effect;

(b)               to the best knowledge of the Loan Parties, underground storage tanks are not and have not been located on the Improvements except in compliance with all Environmental Laws;

(c)               to the best knowledge of the Loan Parties, the soil, subsoil, bedrock, surface water and groundwater of the Improvements are free of any Hazardous Substances;

(d)               to the best knowledge of the Loan Parties, there has been no Release, nor is there the threat of a Release, of any Hazardous Substance on, at or from the Improvements or any property adjacent to the Improvements which through soil, subsoil, bedrock, surface water or groundwater migration could come to be located on the Improvements, and no Loan Party has received any form of notice or inquiry from any federal, state or local governmental agency or authority, any operator, tenant, subtenant, licensee or occupant of the Improvements or any property adjacent to or within the immediate vicinity of the Improvements or any other Person with regard to a Release or the threat of a Release of any Hazardous Substance on, at or from the Improvements or any property adjacent to the Improvements;

(e)               all Environmental Permits relating to the Loan Parties and the Improvements have been obtained and are in full force and effect, and no event has occurred with respect to any of the Loan Parties or the Improvements which, with the passage of time or the giving of notice, or both, would constitute a violation of any applicable Environmental Law or non-compliance with any Environmental Permit; there are no agreements, consent orders, decrees, judgments, license or permit conditions or other orders or directives of any federal, state or local court, governmental agency or authority relating to the past, present or future ownership, use, operation, sale, transfer or conveyance of the Improvements which require any change in the present condition of the Improvements or any work, repairs, construction, containment, clean up, investigations, studies, removal or other remedial action or capital expenditures with respect to the Improvements; and

(f)                there are no actions, suits, claims or proceedings, pending or, to the knowledge of Loan Parties, threatened, which could cause the incurrence of expenses or costs of any name or description or which seek money damages, injunctive relief, remedial action or any other remedy that arise out of, relate to or result from (i) a violation or alleged violation by any Loan Party of any applicable Environmental Law or non-compliance or alleged non-compliance with any Environmental Permit, (ii) the presence of any Hazardous Substance or a Release or the threat of a Release of any Hazardous Substance on, at or from the Improvements or any property adjacent to the Improvements or (iii) exposure to any Hazardous Substance to the extent the same arises from the Improvements or business or operations of any Loan Party.

9.2              Environmental Compliance. The Loan Parties shall:

(a)               comply with, and shall cause all operators, tenants, subtenants, licensees and occupants of the Improvements to comply with, in all material respects all applicable Environmental Laws and shall obtain and comply with, and shall cause all operators, tenants, subtenants, licensees and occupants of the Improvements to obtain and comply with, in all material respects all Environmental Permits;

(b)               promptly provide Lender with a copy of all notifications which any Loan Party gives or receives with respect to any past or present material Release or the threat of a material Release of a Hazardous Substance on, at or from the Improvements or any property adjacent to the Improvements or by any Loan Party, except where such Release or threat of Release is in compliance in all material respects with Environmental Laws or Environmental Permits;

(c)               at reasonable times allow the Lender and its officers, employees, agents, representatives, contractors and subcontractors reasonable access after reasonable prior notice to the Improvements for the purposes of ascertaining compliance with Environmental Laws and site conditions, including, but not limited to, subsurface conditions;

(d)               deliver promptly to the Lender: (i) copies of any documents regarding alleged material, or actual, noncompliance with or liability under Environmental Permits or Environmental Laws received from the United States Environmental Protection Agency, or any other Governmental Authority concerning the operations of any of the Loan Parties or the Improvements; and (ii) copies of any documents regarding alleged material, or actual, noncompliance with Environmental Permits or Environmental Laws submitted by any of the Loan Parties to the United States Environmental Protection Agency, or any other Governmental Authority concerning its operations or the Improvements; and,

(e)               if at any time the Lender obtains any reasonable evidence or information which suggests that a material environmental problem may exist with respect to any of the Loan Parties or any of the Improvements, at the Lender’s request provide to the Lender an environmental inspection and audit report regarding alleged or actual material noncompliance with Environmental Permits or Environmental Laws prepared by an environmental engineer or other qualified person reasonably acceptable to the Lender at Borrower’s expense. If such audit report indicates the presence of any Hazardous Substance or a Release or the threat of a Release of any Hazardous Substance by any of the Loan Parties or on, at or from the Improvements, the Loan Parties shall promptly undertake and diligently pursue to completion all legally required investigative, containment, removal, clean up and other remedial actions, using methods recommended by the engineer or other person who prepared said audit report or a person that is reasonably acceptable to Lender selected by the Loan Parties that is otherwise qualified to make such recommendations, and all of which actions shall be acceptable under Environmental Laws.

9.3              Indemnity. Borrower agrees to, and agrees to cause the Loan Parties to, indemnify, defend and hold harmless the Lender from and against any and all liabilities, claims, damages, penalties, expenditures, losses or charges, including, but not limited to, all costs of investigation, monitoring, legal representation, remedial response, removal, restoration or permit acquisition of any kind whatsoever, which may now or in the future be undertaken, suffered, paid, awarded, assessed, or otherwise incurred by the Lender (or any other Person affiliated with the Lender or representing or acting for the Lender or at the Lender’s behest, or with a claim on the Lender or to whom the Lender has liability or responsibility of any sort related to this Section 9.3) relating to, resulting from or arising out of (a) the use of the Improvements for the storage, treatment, generation, transportation, processing, handling, production or disposal of any Hazardous Substance or as a landfill or other waste disposal site, (b) the presence of any Hazardous Substance or a Release or the threat of a Release of any Hazardous Substance on, at or from the Improvements, (c) the failure to promptly undertake and diligently pursue to completion all

reasonably appropriate or legally required investigative, containment, removal, clean up and other remedial actions with respect to a Release or the threat of a Release of any Hazardous Substance on, at or from the Improvements, (d) human exposure to any Hazardous Substance, noises, vibrations or nuisances of whatever kind to the extent the same arise from the condition of the Improvements or the ownership, use, operation, sale, transfer or conveyance thereof, (e) a violation of any applicable Environmental Law, (f) non-compliance with any Environmental Permit or (g) a material misrepresentation or inaccuracy in any representation or warranty or a material breach of or failure to perform any covenant made by Borrower in this Agreement. Such costs or other liabilities incurred by the Lender or other Person described in this Section 9.3 shall be deemed to include, without limitation, any sums which the Lender deems necessary or desirable to expend to protect its Liens.

9.4              No Limitation. The liability of the Borrower and Loan Parties under this Article 9 shall in no way be limited, abridged, impaired or otherwise affected by (a) any amendment or modification of this Agreement or any other document relating to the Obligations by or for the benefit of the Loan Parties or any subsequent owner of the Improvements except for an amendment or modification which expressly refers to this Article 9, (b) any extensions of time for payment or performance required by this Agreement or any other document relating to the Obligations, (c) the release of any of the Loan Parties or any other person from the performance or observance of any of the agreements, covenants, terms or conditions contained in this Agreement or any other document relating to the Obligations by operation of law, the Lender’s voluntary act or otherwise, (d) the invalidity or unenforceability of any of the terms or provisions of this Agreement or any other document relating to the Obligations, (e) any exculpatory provision contained in this Agreement or any other document relating to the Obligations limiting the Lender’s recourse to property encumbered by any mortgage or to any other security or limiting the Lender’s rights to a deficiency judgment against any Loan Party, (f) any applicable statute of limitations, (g) any investigation or inquiry conducted by or on behalf of the Lender or any information which the Lender may have or obtain with respect to the environmental or ecological condition of the Improvements, (h) the sale, assignment or foreclosure of any interest in collateral for the Obligations, (i) the sale, transfer or conveyance of all or part of the Improvements, (j) the dissolution and liquidation of any Loan Party, (k) the death or legal incapacity of any individual, (l) the release or discharge, in whole or in part, of any Loan Party in any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or similar proceeding, or (m) any other circumstances which might otherwise constitute a legal or equitable release or discharge of any Loan Party, in whole or in part.

9.5              Survival. Notwithstanding anything to the contrary contained herein, the liability and obligations of the Loan Parties under Section 9.3 shall survive the discharge, satisfaction or assignment of this Agreement and the payment in full of all of the Obligations, unless such liability and obligations are terminated with express reference to this Section 9.5.

9.6              Investigations. If a Default occurs pursuant to this Agreement or any other Loan Document, the Lender or its designee shall have the right, upon reasonable notice to the Borrower, to enter upon the Improvements and conduct such tests, investigation and sampling, including, but not limited to, installation of monitoring ▇▇▇▇▇, as shall be reasonably necessary for the Lender to determine whether any disposal of Hazardous Substances has occurred on, at or near the Improvements. The costs of all such tests, investigations and samplings shall be considered as

additional Obligations secured by the Collateral and shall become immediately due and payable without notice and with interest thereon at the highest rate then borne by any of the Obligations.

9.7              No Warranty Regarding Information. Borrower agrees that Lender has no duty to warn any of the Loan Parties or any other Person about any actual or potential environmental contamination or other problem that may have become apparent or will become apparent to the Lender.

ARTICLE 10 - DEFAULTS

10.1          Defaults. The following events (hereinafter called “Events of Default”) shall constitute “Events of Default” under this Agreement:

(a)               the Borrower shall fail to pay any principal of any Loan or any Reimbursement Obligation when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b)               the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in Section 10.1(a)) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days;

(c)               any representation or warranty made or deemed made by or on behalf of any Loan Party or any Subsidiary in or in connection with this Agreement or any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been materially incorrect when made or deemed made; provided, however, if any Event of Default under this Section 10.1(c) occurs on account of a misrepresentation made in good faith under Section 4.19 hereof, the Borrower shall have 30 consecutive days from the earlier of (i) the date the Borrower becomes aware of the facts forming the basis of the Event of Default, or (ii) the date notice of such Event of Default shall have been made to the Borrower by the Lender, in which to take the steps necessary to remedy the underlying facts and render the representation or warranty true and correct;

(d)               any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 6.6(a), Section 6.7(a) (with respect to a Loan Party’s existence) or 6.11, or in Article 7;

(e)               any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those which constitute a default under another Section of this Article 10), and such failure shall continue unremedied for a period of (i) 5 days after the earlier of such breach or notice thereof from the Lender if such breach relates to terms or provisions of Section 6.1, 6.3, 6.4, 6.5, 6.6 (other than Section 6.6(a)), 6.7, or 6.9 of this Agreement or (ii) 15 days after the earlier of such breach or notice thereof from the Lender if such breach relates to terms or provisions of any other Section of this Agreement;

(f)                any Loan Party or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable, unless such failure is being contested in compliance with Section 6.5;

(g)               any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this Section 10.1(g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

(h)               an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or any Subsidiary of any Loan Party or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or any Subsidiary of any Loan Party or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)                 any Loan Party or any Subsidiary of any Loan Party shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 10.1(h), (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Loan Party or Subsidiary of any Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)                 any Loan Party or any Subsidiary of any Loan Party shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

(k)               one or more judgments for the payment of money in an aggregate amount in excess of $500,000 shall be rendered against any Loan Party, and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed or any action shall be legally taken by a judgment creditor to attach or levy upon any assets with an aggregate market value in excess of $200,000 of any Loan Party or to enforce any such judgment or any Loan Party shall fail within 30 days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;

(l)                 an ERISA Event shall have occurred that, in the opinion of the Lender, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

(m)             a Change in Control shall occur;

(n)               the occurrence of any “default”, as defined in any Loan Document (other than this Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided, provided if such default is on account of a default by a Loan Party other than the Borrower, that such default also could reasonably be expected to have a Material Adverse Effect;

(o)               any Loan Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty, or any Loan Guarantor shall fail to comply with any of the terms or provisions of the Loan Guaranty to which it is a party and such could reasonably be expected to have a Material Adverse Effect, or any Loan Guarantor shall deny that it has any further liability under the Loan Guaranty to which it is a party, or shall give notice to such effect;

(p)               any Security Document shall for any reason fail to create a valid and perfected first priority security interest in any Collateral appropriately described therein and purported to be covered thereby, after any applicable cure period as set forth in Section 10.1(c), except as permitted by the terms of any Collateral Document, or any Collateral Document shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document, or there shall exist a default under any Collateral Document beyond any applicable notice or cure period, provided if such default is on account of a default by a Loan Party other than the Borrower, that such default also could reasonably be expected to have a Material Adverse Effect;

(q)               any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms); or

(r)                any event of default occurs and is continuing beyond any applicable grace and cure periods with respect to any obligation, that is not pursuant to the Loan Documents, of any Loan Party to Lender.

10.2          Remedies.

(a)               If any one or more Events of Default listed in Section 10.1(h) or Section 10.1(i) occur and are not waived in writing by the Lender, (a) the Revolving Credit Commitment and any further obligations of the Lender shall be deemed to be automatically and without need for further action terminated, and (b) all Obligations of the Borrower to the Lender, automatically and without need for further action, shall become forthwith due and payable without presentment, demand, protest, or other notice of any kind, all of which are hereby expressly waived. If any one or more Events of Default other than those listed in Section 10.1(h) or Section 10.1(i) occur, the

Lender may, at its option, take either or both of the following actions at the same or different times: (i) terminate the Revolving Credit Commitment and any obligations of the Lender, and (ii) declare all Obligations of the Borrower to the Lender, automatically and without need for further action, to be forthwith due and payable without presentment, demand, protest, or other notice of any kind, all of which are hereby expressly waived.

(b)               In case any such Events of Default shall occur and are not waived by the Lender, the Lender shall be entitled to recover judgment against the Borrower for all Obligations of the Borrower to the Lender either before, or after, or during the pendency of any proceedings for the enforcement, of any Security Document and, in the event of realization of any funds from any security or guarantee and application thereof to the payment of the Obligations due, the Lender shall be entitled to enforce payment of and recover judgment for all amounts remaining due and unpaid on such Obligations.

(c)               The Lender shall be entitled to exercise any other legal or equitable right which it may have, and may proceed to protect and enforce its rights by any other appropriate proceedings, including action for the specific performance of any covenant or agreement contained in this Agreement and the Loan Documents.

(d)               In case any such Events of Default shall occur and not be waived by the Lender, the Lender may require the Borrower to deposit as cash collateral in a cash collateral account maintained with Lender an amount equal to one hundred five percent (105%) of the maximum amount currently or at any time thereafter available to be drawn under outstanding Letters of Credit.

ARTICLE 11 - MISCELLANEOUS

11.1          Waiver, Cumulative Rights. No delay or failure of the Lender to exercise any right, remedy, power or privilege hereunder shall impair the same or be construed to be a waiver of the same or of any Event of Default or an acquiescence therein. No single or partial exercise of any right, remedy, power or privilege shall preclude other or further exercise thereof by the Lender. All rights, remedies, powers, and privileges herein conferred upon the Lender shall be deemed cumulative and not exclusive of any others available. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by Section 11.12, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Event of Default, regardless of whether the Lender may have had notice or knowledge of such Event of Default at the time.

11.2          Survival. All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the execution and delivery of the Loan Documents. All indemnity and reimbursement obligations provided in this Agreement shall survive the discharge, satisfaction or assignment of this Agreement and the payment in full of all of the Obligations unless expressly released or waived by the Lender.

11.3          Setoff. The Lender, and each of its Affiliates, is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by Lender or any of its Affiliates to or for the credit or the account of any Loan Party against any and all of the obligations of such Loan Party now or hereafter existing under this Agreement or any other Loan Document to Lender, irrespective of whether or not Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Loan Party may be contingent or unmatured or are owed to a branch or office of Lender different from the branch or office holding such deposit or obligated on such indebtedness. The rights of Lender and its Affiliates under this Section 11.3 are in addition to other rights and remedies (including other rights of setoff) that Lender or its Affiliates may have. Lender agrees to notify the Borrower promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

11.4          Notices.

(a)               Generally. Except in the case of notices and other communications expressly permitted to be given by other means, all notices and other communications provided for in the Loan Documents shall be in writing and shall be delivered by hand, sent by overnight courier service, mailed by certified or registered mail or sent by telecopier (with a copy deposited in the mail on the date of transmission) as follows:

If to the Lender:

Manufacturers and Traders Trust Company

3 City Center, ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

Attention: J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, AdministrativeNicholas ▇▇▇▇▇, Vice President, Corporate Banking

Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇

with a copy to:

▇▇▇▇▇▇ Beach PLLC

▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

Attention: ▇▇▇▇ Ela WilkensJoshua ▇. ▇▇▇▇▇▇

Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇

If to Loan Parties:

Transcat, Inc.

▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇

▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Vice President of Finance

    and Chief Financial Officer

Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇

with a copy to:

▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP

▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇▇

▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇

Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇

Notices delivered by hand shall be deemed to have been given when received, when sent by overnight courier service shall be deemed given the Business Day after deposit with the courier marked for next Business Day delivery, when mailed by certified or registered mail shall be deemed to have been given when received, and when sent by telecopier shall be deemed to have been given when confirmation of transmission has been received (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day).

(b)               Change of Address. Any party hereto may change its address or telecopier number for notices and other communications hereunder by notice to the other parties hereto.

11.5          Successors and Assigns. The provisions of the Loan Documents shall be binding upon and inure to the benefit of, and shall be enforceable by, the parties hereto and their respective successors and assigns; provided, however, no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender. Upon any transfer of any Obligation or any interest therein any Lender may deliver or otherwise transfer or assign to the holder any Collateral or guarantees for the Obligation, which holder shall thereupon have all the rights of the Lender.

11.6          Indemnification by Borrower; Waiver of Consequential Damages.

(a)               The Borrower shall indemnify the Lender and its Affiliates, directors, officers, employees, representatives, contractors, attorneys and agents (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee including all allocated costs of in-house counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or the administration of hereof, (ii) any Loan or Letters of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Loan Party, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are

determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee, if such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. All payments due under this Section 11.6 shall be due not later than five Business Days after demand therefor.

(b)               To the fullest extent permitted by applicable law, no Loan Party shall assert, and hereby waive, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, any Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with the Loan Documents or the transactions contemplated hereby or thereby.

11.7          Usury. The Loan Documents are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration or maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to be paid to Lender for the use or the forbearance of the indebtedness evidenced hereby exceed the maximum permissible under applicable law. As used in this Section 11.7, the term “applicable law” shall mean the law in effect as of the date hereof, provided, however that in the event there is a change in the law which results in a higher permissible rate of interest, then the Loan Documents shall be governed by such new law as of its effective date. If, under or from any circumstances whatsoever, fulfillment of any provision hereof or of any of the Loan Documents at the time performance of such provision shall be due, shall involve exceeding the limit of such validity prescribed by applicable law, then the obligation to be fulfilled shall automatically be reduced to the limits of such validity, and if under or from any circumstances whatsoever the Lender should ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the principal balance evidenced hereby and not to the payment of interest, or if all principal shall have been repaid in full, refunded to Loan Party. This provision shall control every other provision of all Loan Documents.

11.8          Severability. In the event that any one or more of the provisions contained in this Agreement or any other Loan Document shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or such other Loan Document, each of which shall be enforced to the greatest legal extent originally intended.

11.9          Patriot Act. Lender hereby notifies the Loan Parties that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 signed into law October 26, 2001 and for purposes of this Section 11.9 called the “Patriot Act”), it is required to obtain, verify, and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow Lender to identify the Loan Parties in accordance with the Patriot Act. The Borrower agrees to, promptly following a request by Lender, provide all such other documentation and information that Lender requests in order to

comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.

11.10      Confidentiality. The Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any permitted assignee of or participant in, or any prospective permitted assignee of or participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 11.10 or (ii) becomes available to the Lender on a nonconfidential basis from a source other than the Borrower; provided that (A) if the Lender is required in any legal, regulatory or similar proceeding to disclose any Information, the Lender will give the Borrower prompt written notice thereof so that the Borrower may seek an appropriate protective order or waive the requirements of this Section 11.10, (B) if Borrower does not provide such protective order or waiver within the appropriate time limit, the Lender may disclose the Information to such court or other tribunal strictly in accordance with such requirement, and (C) the provisos in subclauses (A) and (B) shall not apply to requests by bank and securities examiners having or claiming to have authority to regulate or oversee the Lender’s business or that of its Affiliates in connection with the exercise of such authority or claimed authority and not involving any governmental, administrative or judicial process. For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Lender on a nonconfidential basis prior to disclosure by the Borrower. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

11.11      Counterparts; Effectiveness; Integration; Electronic Execution. The Loan Documents may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single respective agreement. Delivery of an executed counterpart of a signature page of a Loan Document by telecopy or email attachment shall be effective as delivery of a manually executed counterpart of this Agreement.

11.12      Entire Agreement; Amendment; Other Agreements. This Agreement and the Loan Documents embody the entire agreement and understanding among the parties and supersede all prior agreements and understandings relating to the subject matter hereof. This Agreement embodies all commitments to lend between the Lender and the Borrower with respect to the subject

matter hereof and supersedes any prior commitments. Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Lender, or (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Lender and the Loan Party or Loan Parties that are parties thereto.

11.13      Governing Law; Jurisdiction.

(a)               Governing Law. This Agreement and the Loan Documents, together with all of the rights and obligations of the parties hereto, shall be construed, governed and enforced in accordance with the internal laws of the State of New York, including Section 5-1401 of its General Obligations Law.

(b)               Jurisdiction. Each party irrevocably and unconditionally submits, and the Borrower shall cause each other Loan Party to irrevocably and unconditionally submit, for itself and its property, to the nonexclusive jurisdiction of the courts of the State of New York sitting in Monroe County and of the United States District Court of the Western District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees, and the Borrower shall cause each other Loan Party to unconditionally agree, that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such Federal court. The Borrower and Lender agree, and the Borrower shall cause each other Loan Party to agree, that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or any other Loan Party or its properties in the courts of any jurisdiction.

(c)               Waiver of Venue. Each of the parties irrevocably and unconditionally waives, and the Borrower shall cause each other Loan Party to irrevocably and unconditionally waive, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in Section 11.13(b). Each of the parties hereto hereby irrevocably waives, and the Borrower shall cause each other Loan Party to irrevocably waive, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)               Service of Process. Each of the parties irrevocably consents, and the Borrower shall cause each other Loan Party to irrevocably consent, to service of process in the manner provided for notices in Section 11.4. Nothing in this Agreement will affect the right of any such party to serve process in any other manner permitted by applicable law.

(e)               WAIVER OF TRIAL BY JURY. LENDER AND EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY

APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). LENDER AND EACH LOAN PARTY (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.13(e).

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives by their signatures below as of the date first above written.

[Signature Pages Follow]

MANUFACTURERS AND TRADERS TRUST COMPANY

Signature Page – Credit Facility Agreement

EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE

TRANSCAT, INC.
COMPLIANCE CERTIFICATE

As of ______________

Definitions used in this Certificate have the meanings given to them in the Amended and Restated Credit Facility Agreement (“Credit Agreement”) dated ) October 30, 2017, as amended.

In connection with the [quarterly consolidated financial statements (“Quarterly Statements”) / annual consolidated financial statements (“Annual Statements”)] delivered to the Lender for the period ended [_______________________] (“Applicable Quarter” / “Applicable Year”] / [fourth Fiscal Quarter ended [______________]), as required by Section 6.1(c) of the Credit Agreement I hereby certify that:

(a)       [Note: clause (a) not required for 4th Quarter Certificate][The Annual Statements / The Quarterly Statements, subject to the absence of footnote disclosure and normal year-end audit adjustments] (i) fairly present in all material respects the consolidated] financial condition of the Borrower as of the last day of the [Applicable Year / Applicable Quarter], and the consolidated results of operations and cash flows of the Borrower for such period and (ii) excepting the cash flows, have been prepared in accordance with GAAP (or a reconciliation statement has been delivered together therewith conforming such consolidated financial statements to GAAP).

(b)       [No Default has occurred and is continuing and no Event of Default that has not been waived in writing by the Lender has occurred. / A Default has occurred and is continuing or an Event of Default that has not been waived in writing by the Lender has occurred, the nature of such Default or Event of Default is _________________________, such Default has existed and been continuing or Event of Default has existed during the period _________________________, and the Borrower has taken and/or proposes to take the following actions with respect thereto: ______________________________.]

(c)       Set forth below is a schedule of the computations determining compliance with the covenants contained in Article 8 of the Credit Agreement, which calculations are correct and accurately reflect the consolidated financial condition of the Borrower as of the end of the date shown above:

Exhibit A

The Leverage Ratio is _____:1.00. Based upon such ratio, the Applicable Rate will be set at Level ___.

(d)       With respect to the [Annual Statements / Quarterly Statements], [there are no changes in GAAP applied in the their preparation from GAAP as previously applicable that would affect the calculation of, or compliance with, Article 8 of the Credit Agreement / changes in GAAP applied in the their preparation from GAAP as previously applicable that would affect the calculation of, or compliance with, Article 8 of the Credit Agreement are __________________________________ , reconciled as follows: _______________________.

_________________________________

Transcat, Inc.

Chief Financial Officer

Dated: ___________________________

Exhibit A

EXHIBIT B
FORM OF REVOLVING CREDIT NOTE

Second AMENDED AND RESTATED REVOLVING CREDIT NOTE

This Second Amended and Restated Revolving Credit Note (“Note”) continues and evidences in part the obligations evidenced by, and amends, replaces and restates in its entirety, the Amended and Restated Revolving Credit Note (“Prior Note”), dated August 26October 30, 20142017, made by Transcat, Inc. (“Borrower”), a corporation organized under the laws of the State of Ohio, in favor of Manufacturers and Traders Trust Company, a New York banking corporation (“Lender”). Nothing contained in this Note shall be construed to be payment of the obligations of the Borrower under the Prior Note or to extinguish, release, or discharge, or constitute, create, or effect a novation of, or an agreement to extinguish, the obligations of the Borrower with respect to the Prior Note.

Borrower, for value received, hereby promises to pay to the order of Lender, the principal sum of ThirtyForty Million Dollars ($30,000,00040,000,000) or if less, the amount of the Revolving Credit Loans loaned by the Lender to Borrower pursuant to the Credit Agreement (defined below), in lawful money of the United States of America and in immediately available funds, with interest on the unpaid principal balance hereof, for the period such balance is outstanding, at the rates of interest as provided in the Credit Agreement. Payments shall be due and payable on the dates and as provided in the Credit Agreement, with a final payment on the Revolving Credit Termination Date.

The date and amount of each Revolving Credit Loan made by the Lender to the Borrower under the Credit Agreement, and each payment of principal thereof, shall be recorded by the Lender on its books. The Lender’s records shall be presumed to be accurate absent manifest error.

This is a Revolving Credit Note referred to in that certain Amended and Restated Credit Facility Agreement, dated as of October 30, 2017 by and between Borrower and Lender (as the same has been and in the future may be modified, supplemented and replaced from time to time, the “Credit Agreement”), and evidences the Revolving Credit Loans made thereunder. All capitalized terms not defined herein shall have the meanings given to them in the Credit Agreement, and the terms of the Credit Agreement applicable to this Note are incorporated herein.

Borrower waives presentment, notice of dishonor, protest and any other notice or formality with respect to this Note.

TRANSCAT, INC.

By: __________________________

▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

Vice President of Finance

and Chief Financial Officer

Exhibit B

EXHIBIT C
FORM OF TERM LOAN B NOTE

TERM LOAN B NOTE

Transcat, Inc. (“Borrower”), a corporation organized under the laws of the State of Ohio, for value received, hereby promises to pay to the order of Manufacturers and Traders Trust Company, a New York banking corporation (“Lender”), the principal sum of Fifteen Million Dollars ($15,000,000) in lawful money of the United States of America and in immediately available funds, with interest on the unpaid principal balance hereof, for the period such balance is outstanding, at the rates of interest as provided in the Credit Agreement. Payments shall be due and payable on the dates and as provided in the Credit Agreement, with a final payment on the Term Loan B Maturity Date.

This is the Term Loan B Note referred to in that certain Credit Facility Agreement, dated as of October 30, 2017 by and between Borrower and Lender (as the same has been and in the future may be modified, supplemented and replaced from time to time, the “Credit Agreement”), and evidences the Term Loan B made thereunder. All capitalized terms not defined herein shall have the meanings given to them in the Credit Agreement, and the terms of the Credit Agreement are incorporated herein.

Borrower waives presentment, notice of dishonor, protest and any other notice or formality with respect to this Note.

TRANSCAT, INC.

By: __________________________

▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

Vice President of Finance

Chief Financial Officer

Exhibit C

SCHEDULE 1.1
SECURITY DOCUMENTS

Master Security Agreement

Master Continuing Guaranty

Pledge Agreement

Patent Security Agreement

Trademark Security Agreement, as amended

UCC Financing Statements (Borrower and Loan Guarantors)

Deposit Control Agreements

Copyright Security Agreement (if required by Lender after the Closing Date)

Any and all joinder agreements, supplements, amendments, reaffirmations, or replacements and all supporting documents and agreements such as stock powers, endorsements, control agreement, and allonges

SCHEDULE 4.1
LOAN PARTIES’ JURISDICTIONS OF FORMATION AND QUALIFICATION

Transcat, Inc. is an Ohio corporation qualified to do business in TexasArizona, New YorkCalifornia, Colorado, Florida, Idaho, Kentucky, Massachusetts, Missouri, Nebraska, New Jersey, New York, North Carolina, Missouri, Colorado, California, Massachusetts, Pennsylvania, Tennessee and Oregon, Texas, and Virginia.

United Scale & Engineering Corporation is a Wisconsin corporation qualified to do business in Michigan.

WTT Real Estate Acquisition, LLC is a New York limited liability company qualified to do business in Montana.

Anmar Metrology, Inc. is a California corporation.

SCHEDULE 4.4
EQUITY INTERESTS OF LOAN PARTIES AND RELATED MATTERS

As of June 30, 2017, 7,129,632 of the Borrower’s 30,000,000 authorized shares of common stock, par value $.50 per share, were issued and outstanding.

As of the Closing Date, the following subsidiaries are wholly-owned by the Borrower:

Transcat (Canada) Inc.

WTT Real Estate Acquisition, LLC

Anmar Metrology, Inc. (Anmar Metrology, Inc. merged with and into the Borrower effective as of March 28. 2020)

United Scale & Engineering Corporation

As of the Closing Date, ▇▇▇▇▇▇ Metrology, Inc. is wholly-owned by Transcat (Canada) Inc.

As of the Closing Date, Nordcal Calibration, Inc. is wholly-owned by ▇▇▇▇▇▇ Metrology, Inc.

SCHEDULE 4.5
LITIGATION

None

SCHEDULE 4.6
FINANCIAL CONDITION – UNDISCLOSED LIABILITIES

None

SCHEDULE 4.8
TAXES

None

SCHEDULE 4.9
locationS

[See attached]

SCHEDULE 4.14
INTELLECTUAL PROPERTY

REGISTERED PATENT (USPTO)

Application No. 11/747,352, which published as Publication No. 2008/0278493, is registered to the Borrower.

REGISTERED TRADEMARKS (USPTO)

The following trademarks are registered to the Borrower:

Registration No. 2,920,736 for ‘CALTRAK’;

Registration No. 3,812,670 for ‘TRANSCAT’; and

Registration No. 5,204,060 for ‘C3’.

Registration No. 4,946,466 for GMP SELECT

The following are trademark applications pending before the USPTO owned by Borrower:

Application Serial No. 87/432,245 for PROCISION

Application Serial No. 88/583,860 for TURBOCAL

REGISTERED TRADEMARKS (CANADA)

Registration No. ▇▇▇▇▇▇▇▇▇ for ‘TRANSCAT’; and

Registration No. TMA669617 for ‘CALTRAK’.

REGISTERED TRADEMARKS (PUERTO RICO)

Registration No. 63,356 for ‘CALTRAK’.

REGISTERED COPYRIGHTS (U.S. Copyright Office)

Copyright No. CSN0031625 for ‘Transcatalog : a handbook of calibration, temperature instrumentation & accessories’ is registered to the Borrower.

SCHEDULE 4.16
SUBSIDIARIES AND JOINT VENTURES

None except those listed on Schedule 4.4

SCHEDULE 4.17
ERISA MATTERS

None

SCHEDULE 4.20
AFFILIATE TRANSACTIONS

None

SCHEDULE 7.1
PERMITTED INDEBTEDNESS

Lien evidenced by UCC financing statement File Number OH00197096794 filed 1/29/16 with the Ohio Department of State, limited to security interests in equipment leased to Borrower by IKON Financial Services

SCHEDULE 7.2
LIENS

None

SCHEDULE 7.4
INVESTMENTS

None

SCHEDULE 7.10
RESTRICTIVE AGREEMENTS

None

SCHEDULE 9.1
ENVIRONMENTAL MATTERS

None