Exhibit 10.70

 

CREDIT AND SECURITY AGREEMENT

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THIS CREDIT AND SECURITY AGREEMENT (this “Agreement”), dated as of December 29,
2017, is between MICRON PRODUCTS INC., a Massachusetts corporation (“Borrower”)
and ROCKLAND TRUST COMPANY, a Massachusetts trust company (“Lender”). Except as
set forth in Section 7.1, capitalized terms used and not otherwise defined in
this Agreement shall have the meanings given to them in Schedule A annexed
hereto.

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The parties agree as follows:

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ARTICLE I

CREDIT TERMS

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SECTION 1.1    LINE OF CREDIT.

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(a)    Advances. Subject to the terms and conditions of this Agreement, Lender
shall make Advances to Borrower under this Section 1.1 from time to time up to
and including the Termination Date, in a total amount at any time outstanding
not to exceed the lesser of (i) the Maximum Revolver Amount and (ii) the
Borrowing Base. In no event shall the aggregate outstanding Advances exceed the
Maximum Revolver Amount.

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(b)    Determination of Borrowing Base. The Borrowing Base will be determined by
Lender upon receipt and review of all collateral reports required under this
Agreement pursuant to Schedule E attached hereto.

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(c)    Borrowing and Repayment. Borrower may from time to time prior to the
Termination Date request Advances, partially or wholly repay amounts outstanding
under the Line of Credit, and request to re-borrow the same, subject to all of
the limitations, terms and conditions contained in this Agreement. Any request
for an Advance must be received by Lender no later than 10:00 a.m. (Eastern
time) on the Business Day immediately preceding the Business Day that funding is
requested. If Lender has received a timely request for an Advance in accordance
with the provisions hereof, and subject to the satisfaction of the applicable
terms and conditions set forth herein, Lender shall fund such Advance on the
requested funding date; otherwise if such request is after 10:00 a.m. (Eastern
time) on a Business Day, the next succeeding Business Day. All Advances will be
repaid by Borrower even if the Person requesting the Advance on behalf of
Borrower lacks authorization.

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(d)    Protective Advances: Advances to Pay Obligations Due. Lender may make
Advances under the Line of Credit in its sole discretion without request of
Borrower and without Borrower's compliance with any of the conditions of this
Agreement, to (i) pay third Persons in order to protect Lender's interest in
Collateral or to perform any of Borrower's obligations under this Agreement, or
(ii) pay any Obligations then due and payable.

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SECTION 1.2    REAL ESTATE TERM LOAN.

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(a)    Subject to the terms and conditions of this Agreement, on the Closing
Date Lender agrees to make a term loan (the “Real Estate Term Loan”) to Borrower
in an amount equal to the Real Estate Term Loan Amount. The Real Estate Term
Loan shall be repaid in equal monthly payments of $8,333.33, payable on the
first day of each month commencing February 1, 2018. As set forth in Section
1.7(a), the outstanding principal balance of the Real Estate Term Loan shall be
due and payable on the Termination Date.

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(b)    Any prepayment of the Real Estate Term Loan shall be accompanied by a
prepayment premium equal to 3% of the principal amount prepaid during the period
from the Closing Date until the first anniversary thereof, 2% of the principal
amount prepaid during the period thereafter until the second anniversary
thereof, and 1% of the principal amount prepaid during the period thereafter
until the third anniversary thereof. Each prepayment of the Real Estate Term
Loan shall be accompanied by all interest thereon and shall be applied to
principal in the inverse order of maturity.

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SECTION 1.3    M&E TERM LOAN.

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(a)    Subject to the terms and conditions of this Agreement, on the Closing
Date Lender agrees to make a term loan (the “M&E Term Loan”) to Borrower in an
amount equal to the M&E Term Loan Amount. The M&E Term Loan shall be repaid in
equal monthly payments of $29,761.90, payable on the first day of each month
commencing February 1, 2018. As set forth in Section 1.7(a), the outstanding
principal of the M&E Term Loan shall be due and payable on the Termination Date.

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(b)    Any prepayment of the M&E Term Loan shall be accompanied by a prepayment
premium equal to 3% of the principal amount prepaid during the period from the
Closing Date until the first anniversary thereof, 2% of the principal amount
prepaid during the period thereafter until the second anniversary thereof, and
1% of the principal amount prepaid during the period thereafter until the third
anniversary thereof. Each prepayment of the M&E Term Loan shall be accompanied
by all interest thereon and shall be applied to principal in the inverse order
of maturity.

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SECTION 1.4    PAYMENTS AND COLLECTIONS.

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(a)    Collection Accounts, Etc. All payments by Borrower will be made as
specified in the Loan Documents or as otherwise directed by Lender, without
setoff, counterclaim or defense. Within 30 days of the Closing Date, Borrower
shall establish and maintain at Lender, at the expense of Borrower, such blocked
accounts or such lockboxes and related blocked accounts with Lender may specify
(collectively, the “Collection Accounts”). Borrower shall use commercially
reasonable efforts to cause all payments of Accounts and other Collateral to be
remitted, and Borrower shall instruct and use commercially reasonable efforts to
cause all Account Debtors obligated in respect of such Accounts to remit all
payments, to the Collection Accounts or as otherwise directed by Lender. Without
prior written consent of Lender, Borrower shall (i) not withdraw any funds from
any Collection Account, (ii) cause all funds on deposit in or deposited into the
Collection Accounts to be remitted to Lender, on a daily basis, at Lender's
Account and (iii) execute and deliver to Lender, in form and substance
satisfactory to Lender, a deposit account control agreement with respect to each
Collection Account (collectively, the “Deposit Account Control Agreements”),
including each Collection Account existing at the Closing Date and whether or
not maintained at Lender. Each Deposit Account Control Agreement shall provide
for remittance to Lender at Lender's Account, on a daily basis, of all funds on
deposit in or deposited into the Collection Accounts. Lender is irrevocably
authorized, at any time, to give instructions pursuant to such Deposit Account
Control Agreements directing the disposition of funds in the Collection Accounts
to Lender's Account or to such other account(s) as Lender may determine. If any
Obligor receives payment or the proceeds of Collateral directly, Borrower shall
or shall cause such other Obligor, as applicable, to promptly deposit, and in
any event on or before the next Business Day following receipt thereof, such
payment or proceeds into a Collection Account (or, prior to the opening of such
Collection Accounts, to Lender's Account or as otherwise directed by Lender).
Until so deposited, Borrower shall hold, or as applicable shall cause such
Obligor to hold, all such payments and proceeds in trust for Lender without
commingling with other funds or property. Borrower shall, at the request of
Lender, deliver to Lender bank statements for the Collection Accounts and grant
Lender access, including by all available electronic means, to such Collection
Accounts.

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(b)    Application of Payments. All payments of and proceeds of Collateral
received by Lender, in immediately available funds, will be applied (i) so long
as no Event of Default has occurred and is continuing, to reduce the balance of
the Advances then outstanding and, thereafter, to Borrower or such other Person
entitled thereto under applicable law and (ii) if an Event of Default has
occurred and is continuing, to reduce the Obligations then due in such manner as
Lender determines in its sole discretion. After payment in full in cash of all
Obligations, any remaining balance shall be paid to Borrower or such other
Person entitled thereto under applicable law. For purposes of calculating
Availability, each payment will be applied to the Obligations as of the first
Business Day following receipt by Lender in Lender's Account of such payment in
immediately available funds, provided such payment is received in accordance
with Lender's usual and customary practices as in effect from time to time. Any
payment received by Lender that is not a transfer of immediately available funds
will be considered provisional until the item or items representing such payment
have been finally paid under applicable law. Should any payment item not be
honored when presented for payment, then Borrower will be deemed not to have
made such payment, and that portion of Borrower's outstanding Obligations
corresponding to the amount of such dishonored payment item will be deemed to
bear interest as if the dishonored payment item had never been received by
Lender. Each reduction in outstanding Obligations resulting from the application
to such Obligations of payments of Accounts will be accompanied by an equal
reduction in the amount of outstanding Accounts.

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(c)    Loan Account; Clearance Charge. Lender will record in the Loan Account
all Advances made by Lender, the Real Estate Term Loan, the M&E Term Loan and
all other payment Obligations, and the Revolver Note, the Real Estate Term Loan
Note and the M&E Term Loan Note also shall evidence the Advances, the Real
Estate Term Loan the M&E Term Loan, respectively. Borrower authorizes Lender to
collect all principal, interest and fees due under the Line of Credit and with
respect to the Real Estate Term Loan and M&E Term Loan by charging the Loan
Account and, any contrary provision of this Agreement or any other Loan Document
notwithstanding, the charging thereof will be deemed to be an Advance and will
bear interest at the rate per annum applicable thereto. All Collections received
by Lender will be applied as provided in Section 1.4(b).  All postings to the
Loan Account shall be subject to subsequent adjustment by Lender but shall,
absent manifest error, be conclusively presumed to be correct and accurate. All
monthly statements relating to the Loan Account or such account will be
conclusively presumed to be

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correct and accurate and constitute an account stated between Borrower and
Lender unless Borrower delivers written objection to Lender within 45 days after
receipt by Borrower. Advances paid with Collections will continue to accrue
interest at the rate then applicable to Advances for the number of Settlement
Days following the Business Day that such Collections were applied to the
Obligations. Any such clearance charge on Collections is acknowledged by the
parties to constitute an integral aspect of the pricing of the financing of
Borrower. The parties acknowledge and agree that the economic benefit of these
provisions will accrue exclusively to Lender.

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(d)    Mandatory Payment of Advances. If at any time an Overadvance Amount is
outstanding, then Borrower shall immediately upon demand by Lender repay the
Advances in an aggregate amount equal to such Overadvance Amount.

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SECTION 1.5    INTEREST/FEES.

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(a)    Interest. Except as provided in Section 1.5(b) or Section 1.5(c), the
outstanding principal balances of Advances, the Real Estate Term Loan, and the
M&E Term Loan (collectively, the “Loans”) will bear interest on the Daily
Balance of such Loans, as applicable, at a variable per annum rate equal to the
Contract Prime Rate.

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(b)    LIBOR Option. In lieu of having interest charged at the Contract Prime
Rate, Borrower shall have the option (the “LIBOR Option”) to have interest on
all of the Loans be charged at a rate of interest equal to the Contract LIBOR
Rate. On the last day of each applicable month, unless Borrower properly has
exercised the LIBOR Option with respect to the outstanding balances of the
Loans, the interest rate applicable to such principal balances automatically
shall convert to the Contract Prime Rate. At any time that an Event of Default
has occurred and is continuing, Borrower no longer shall have the option to
request that the outstanding principal balances of the Loans bear interest at a
rate based upon Daily One Month LIBOR and Lender shall have the right to convert
the interest rate on such outstanding principal balances to the Contract Prime
Rate. Borrower may, at any time and from time to time, so long as no Event of
Default has occurred and is continuing, elect to exercise the LIBOR Option by
notifying Lender prior to 2:00 p.m. Eastern Time at least two Business Days
prior to the commencement of any month (the “LIBOR Deadline”). Notice of
Borrower's election of the LIBOR Option shall be made by delivery to Lender of
LIBOR Notice, received by Lender in writing, or by telephonic notice received by
Lender before the LIBOR Deadline (to be confirmed by delivery to Lender of a
LIBOR Notice received by Lender prior to 3:00 p.m. on the same day).

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(c)    Default Rate. During a Default Period, and at any time following the
Termination Date, the outstanding principal balances of the Loans will, at the
sole discretion of Lender, bear interest on the Daily Balance of such
Obligations at the Default Rate. Lender may assess the Default Rate commencing
as of the date of the occurrence of an Event of Default or as of any date after
the occurrence of an Event of Default regardless of the date of reporting or
declaration of such Event of Default.

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(d)    Payment of Interest. Interest will be payable monthly in arrears on the
first day of each month and on the Termination Date, commencing February 1,
2018. After the Termination Date, interest will be payable on demand.

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(e)    Payment of Fees. Borrower will pay to Lender the fees set forth in
Schedule B-2, all of which shall be fully earned and payable when due, may be
charged by Lender to the Loan Account and shall not be subject to refund, rebate
or proration for any reason whatsoever.

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(f)    Computation of Interest and Fees. Interest and fees will be computed on
the basis of a three hundred sixty (360) day year for the actual number of days
elapsed.

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SECTION 1.6    ADDITIONAL COSTS.

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(a)    Capital Requirements. Borrower will pay Lender, on demand, for Lender's
costs or losses arising from any Change in Law which are allocated to this
Agreement or any credit outstanding under this Agreement. The allocation will be
made as determined by Lender, using any reasonable method. The costs include,
without limitation, (i) any reserve or deposit requirements (excluding any
reserve requirement already reflected in the calculation of the interest rate in
this Agreement), and (ii) any capital requirements relating to Lender's assets
and commitments for credit.

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(b)    Illegality; Impractibility; Increased Costs. In the event that (i) any
change in market conditions or any Change in Law makes it unlawful or
impractical for Lender to fund or maintain extensions of credit with

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interest based upon Daily One Month LIBOR or to continue to so fund or maintain,
or to determine or charge interest rates based upon Daily One Month LIBOR, (ii)
Lender determines that by reasons affecting the London Interbank Eurodollar
market, adequate and reasonable means do not exist for ascertaining Daily One
Month LIBOR, or (iii) Lender determines that the interest rate based on the
Daily One Month LIBOR will not adequately and fairly reflect the cost to Lender
of maintaining or funding Loans at the interest rate based upon Daily One Month
LIBOR, Lender will give notice of such changed circumstances to Borrower and
interest on the principal amount of such extensions of credit will then accrue
interest at a rate equal to the Contract Prime Rate until Lender determines that
the conditions described in clauses (i) through (iii) no longer exist.

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SECTION 1.7    TERM AND TERMINATION.

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(a)    Termination Date. On the Termination Date, (i) the Line of Credit will
terminate,(ii) Borrower shall have no right to request further Advances or other
extensions of credit under this Agreement, (iii) all of the Obligations
including without limitation, the Termination Fee, if any, will immediately
become due and payable without notice or demand, and (iv) Borrower will
immediately repay all of the Obligations in full. No termination of this
Agreement will relieve or discharge the Obligors of their duties, obligations,
or covenants under this Agreement or under any other Loan Document. Lender may
require cash collateralization of Obligations with respect to any then existing
Bank Product in an amount determined by Lender as sufficient to satisfy the
reasonably estimated credit exposure therefor.

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(b)    Termination of Liens, etc. Upon satisfaction of the Lien Release
Conditions, Lender will, at Borrower's expense, release or terminate any filings
or other agreements that perfect the Liens granted to Lender under the Loan
Documents in the Collateral.

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(c)    Termination by Borrower. Subject to payment of any prepayment premium
provided hereunder, Borrower may terminate the Line of Credit at any time prior
to any Maturity Date, if it (i) pays to Lender the applicable termination fee
specified in this Agreement, and (ii) pays the Obligations in full. Any such
termination will be irrevocable.

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(d)    Termination by Lender. Lender may terminate the Line of Credit,
immediately and without any advance notice to Borrower, upon the occurrence of
an Event of Default or at any time when a Default Period exists.

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ARTICLE II

SECURITY INTERESTS

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SECTION 2.1    GRANT OF SECURITY INTEREST. As security for the Obligations,
Borrower hereby grants to Lender a continuing security interest in and Lien upon
all of the Collateral.

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SECTION 2.2    PERFECTION. Borrower shall take, and shall cause each other
Obligor to take, all actions reasonably requested by Lender from time to time to
cause the attachment, perfection and, subject to Permitted Liens, first priority
of, and Lender's ability to enforce, Lender's security interest in and Lien upon
any and all of the Collateral. Borrower irrevocably and unconditionally
authorizes Lender (or Lender's agent) to complete and file, and Borrower
ratifies such filing, at any time and from time to time, without notice to
Borrower, such financing statements with respect to the Collateral naming Lender
as the secured party and Borrower as debtor, as Lender may reasonably require,
together with all amendments and continuations with respect thereto. Any such
financing statements may indicate the Collateral as “all assets of the Debtor”
or words of similar effect, or as being of an equal or lesser scope, or with
greater detail, all in Lender's discretion.

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SECTION 2.3    OTHER COLLATERAL.

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(a)    Commercial Tort Claims. Borrower shall promptly notify Lender in writing
if it has a Commercial Tort Claim (other than, as long as no Default or Event of
Default exists, a Commercial Tort Claim for less than $50,000) and shall take
such actions as Lender deems appropriate to subject such claim to a duly
perfected, first priority Lien in favor of Lender.

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(b)    Certain After-Acquired Collateral. Borrower shall promptly notify Lender
in writing if, after the Closing Date, it obtains any interest in any Collateral
consisting of Deposit Accounts, Chattel Paper (with a face value greater than
$25,000), Documents, Instruments (with a face value greater than $25,000),
Intellectual Property, Investment Property or Letter-of-Credit Rights (with a
face value greater than $25,000) and, upon Lender's request,

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shall promptly take such actions as Lender deems appropriate to effect Lender's
duly perfected, first priority Lien upon such Collateral, including obtaining
any appropriate possession or control agreement.

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(c)    Real Estate Collateral. On the Closing Date, to secure the Obligations,
Borrower will grant to Lender mortgages, assignments of rents, and security
interests, in form and substance satisfactory to Lender, in the Real Estate
Collateral.

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SECTION 2.4    FURTHER ASSURANCES. Borrower shall, at its own cost and expense,
promptly and duly take, execute, acknowledge and deliver (or cause such other
applicable Person to take, execute, acknowledge and deliver) all such acts,
documents, agreements and instruments as may from time to time be necessary or
desirable as determined by Lender or as Lender may from time to time reasonably
require in order to (a) carry out the intent and purposes of the Loan Documents
and the transactions contemplated thereby, (b) establish, create, preserve,
protect and perfect a first priority Lien (subject only to Permitted Liens) in
favor of Lender in all real and personal property (wherever located) from time
to time owned by any Corporate Obligors and in all Stock and from time to time
issued by Corporate Obligors (other than Borrower), (c) cause each Subsidiary of
Borrower or other Corporate Obligor which is not a CFC to guarantee all of the
Obligations, all pursuant to documentation that is in form and substance
reasonably satisfactory to Lender, and (d) facilitate the collection of the
Collateral. Without limiting the foregoing, Borrower shall, and shall cause each
other Obligor to, at its own cost and expense, promptly and duly take, execute,
acknowledge and deliver (or cause such other applicable Person to take, execute,
acknowledge and deliver) to Lender all promissory notes, security agreements,
agreements with landlords, mortgagees and processors and other bailees,
subordination and intercreditor agreements and other agreements, instruments and
documents, in each case in form and substance reasonably acceptable to Lender,
as Lender may request from time to time to perfect, protect, and maintain
Lender's security interests in the Collateral, including the required priority
thereof, and to fully carry out the transactions contemplated by the Loan
Documents.

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SECTION 2.5    WAIVERS. Borrower waives any right to require Lender to (a)
proceed against any Obligor or any other Person, (b) marshal assets or proceed
against or exhaust any security from any Obligor or any other Person, (c)
perform any obligation of any Obligor with respect to any Collateral, and (d)
make any presentment or demand, or give any notice of nonpayment or
nonperformance, protest, notice of protest or notice of dishonor hereunder or in
connection with any Collateral.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

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Borrower makes the following representations and warranties to Lender, which
representations and warranties will survive the execution of this Agreement.

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SECTION 3.1    LEGAL STATUS. Each Corporate Obligor is duly organized, validly
existing and in good standing under the laws of the State of its organization
and is qualified or licensed to do business and is in good standing in all
jurisdictions in which such qualification or licensing is required or in which
the failure to so qualify or to be so licensed could reasonably be expected to
cause a Material Adverse Change. Each Corporate Obligor possesses, and will
hereafter possess, all permits, consents, approvals, franchises and licenses
required and rights to all trademarks, trade names, patents, and fictitious
names, if any, necessary to enable it to conduct the business in which it is now
engaged in compliance with applicable law, except where the failure to so
possess the same could not reasonably be expected to cause a Material Adverse
Change.

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SECTION 3.2    AUTHORIZATION AND VALIDITY. The Loan Documents have been duly
authorized and constitute legal, valid and binding agreements and obligations of
each Obligor party thereto, enforceable in accordance with their respective
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally. The execution, delivery and performance
by each Obligor of each of the Loan Documents to which it is a party do not (a)
violate any provision of any law or regulation, (b) contravene any provision of
any Obligor's organizational documents, (c) result in any breach of or default
under any material contract, obligation, indenture or other instrument to which
any Obligor is a party or by which any Obligor or its assets may be bound, (d)
contravene, conflict or violate any applicable order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority by
which Borrower or any of its Subsidiaries or any of their property or assets may
be bound or affected, or (e) require any action by, filing, registration, or
qualification with, or Governmental Approval from, any Governmental Authority
except to the extent related to the perfection of Lender's Liens in the
Collateral and to compliance with the Assignment of Claims Act.

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SECTION 3.3    LITIGATION. There are no pending, or to Borrower's knowledge on
the Closing Date threatened, actions, claims, investigations, suits or
proceedings by or before any Governmental Authority, arbitrator, court or
administrative agency which could reasonably be expected to cause a Material
Adverse Change other than those disclosed in Schedule C.

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SECTION 3.4    FINANCIAL STATEMENTS. The annual financial statements of Borrower
and its Subsidiaries dated for such Borrower's most recent fiscal year ended,
and all interim financial statements delivered to Lender since such date and
prior to the date of this Agreement (a) are complete and correct and present
fairly the financial condition of Borrower and its Subsidiaries, (b) disclose
all liabilities of Borrower and its Subsidiaries that are required to be
reflected or reserved against GAAP, whether liquidated or unliquidated, fixed or
contingent, and (c) have been prepared in accordance with GAAP consistently
applied except, in the case of internally prepared statements, for year-end
adjustments and the lack of footnotes).

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SECTION 3.5    TAXES. Each Obligor has timely filed (taking into account any
requested extension) all tax returns and reports of such Obligor required to be
filed by it, and paid when due all taxes (including payroll taxes) shown on such
tax returns to be due and payable and all assessments, fees and other
governmental charges upon such Obligor and its assets, income, businesses and
franchises that are due and payable except taxes, assessments, fees and
governmental charges which are subject to Permitted Protests. Borrower is not
aware of any unpaid material tax (including payroll tax) or assessment or
proposed tax (including payroll tax) or assessment against any Obligor except
(a) as set forth in Schedule C and (b) taxes (including payroll taxes) owing for
current or future periods that are not yet due and payable.

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SECTION 3.6    SOLVENCY. Corporate Obligors, taken as a whole, are solvent, are
able to pay their debts as they mature, have capital sufficient to carry on
their businesses and all businesses in which they are about to engage and the
fair saleable value of their assets (calculated on a going concern basis) is in
excess of their liabilities.

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SECTION 3.7    COMPLIANCE WITH LAWS, ETC. Each Corporate Obligor operates its
business in material compliance with all applicable local, state and federal
laws, except to the extent non-compliance therewith could not reasonably be
expected to cause a Material Adverse Change.

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SECTION 3.8    ACCURACY OF INFORMATION. All of the written information submitted
by Obligors to Lender and all written disclosures, representations, and
warranties made by Obligors to Lender, including in any certification of
officers, are true, complete, correct and accurate in all material respects as
of the date submitted or made by Obligors to Lender.

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SECTION 3.9    NO EVENT OF DEFAULT. No Default or Event of Default has occurred
or is continuing under this Agreement.

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SECTION 3.10    TITLE; NO OTHER LIENS. Each Obligor has good title to the
Collateral and the Real Estate Collateral that is pledged by it pursuant to this
Agreement or the other Loan Documents and has exclusive right to grant a
security interest in the Collateral and the Real Estate Collateral. The
Collateral and the Real Estate Collateral are not subject to any Liens except in
favor of Lender and except for Permitted Liens.

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SECTION 3.11    ACCOUNTS. Each Eligible Account and Credit Insured Account of
Borrower set forth in a borrowing base certificate delivered to Lender, as of
the date of such certificate: (a) evidences an absolute, bona fide sale and
delivery of goods or rendition of services in the applicable Borrower's ordinary
course of business and such goods or services have been accepted by the Account
Debtor obligated thereon; (b) is genuine, valid and enforceable against the
Account Debtor obligated thereon in the full amount set forth on the invoice
evidencing such Account, without offset, defense, counterclaim, deduction,
recoupment or contra account (except to the extent the same has reduced the
amount thereof in accordance with the definition of “Eligible Accounts”); (c) is
owing by an Account Debtor located in the United States of America (or, with
respect to each Eligible Credit Insured Account, is insured pursuant to credit
insurance in all respects satisfactory to Lender) and is payable in United
States dollars; (d) is owing by an Account Debtor that is not an Affiliate of
any Obligor; (e) does not represent goods delivered upon “bill and hold,”
“consignment,” “guaranteed sale,” “sale or return,” “payment on reorder” or
similar terms; (f) the invoice evidencing such Account and all other documents
delivered to Lender in connection therewith are genuine and valid and are not
mistaken, misleading, fraudulent, incorrect, incomplete or erroneous in any
respect (subject to a materiality qualifier with respect to “incorrect,”
“incomplete” and “erroneous”); (g) if arising from the sale of Inventory, such
Inventory was owned by Borrower and was not subject to any consignment
arrangement, encumbrance, security interest or Lien other

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than in favor of Lender; and (h) has been issued in the name of Borrower or a
trade style of Borrower specifically disclosed by Borrower in writing and
acknowledged by Lender in writing.

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SECTION 3.12    ELIGIBLE INVENTORY.  All Eligible Inventory and Eligible
Consigned Inventory of Borrower set forth in a borrowing base certificate
delivered to Lender, as of the date of such certificate, is of good and
merchantable quality, free from defects. As to each item of such Inventory, it
is: (a) owned by a Borrower free and clear of all Liens other than Liens in
favor of Lender (and third party carriers' Liens or custom brokers' Liens
arising in the ordinary course of business); (b) not located on real property
leased by a Borrower or in a contract warehouse, in each case, unless subject to
a Collateral Access Agreement executed by the lessor, the warehouseman, or other
third party or otherwise constitutes Eligible Consigned Inventory, as the case
may be, and unless segregated or otherwise separately identifiable from goods of
others, if any, stored on the premises; (c) not goods that have been returned or
rejected by Borrower's customers; and (d) not goods that are obsolete or slow
moving, that constitute spare parts, packaging and shipping materials, supplies
used or consumed in Borrower's business, bill and hold goods, defective goods,
“seconds,” or Inventory acquired on consignment. Except as disclosed on Schedule
C, the Inventory of Borrower is not stored with a bailee, warehouseman, or
similar party; and the Inventory of Borrower is located only at, or in-transit
between the locations disclosed on Schedule C (as such Schedule may be updated
pursuant to Section 5.8).

﻿

SECTION 3.13    ERISA.

﻿

(a)    Each Pension Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Internal Revenue Code and other Federal or
state laws. Each Pension Plan that is intended to be a qualified plan under
Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the Internal Revenue Service to the effect that the
form of such Plan is qualified under Section 401(a) of the Internal Revenue Code
and the trust related thereto has been determined by the Internal Revenue
Service to be exempt from federal income tax under Section 501(a) of the
Internal Revenue Code, an application for such a letter is currently being
processed by the Internal Revenue Service, or the Plan is entitled to rely on a
favorable determination letter issued to a prototype or volume submitter plan
sponsor. To the best knowledge of Borrower, nothing has occurred that would
prevent or cause the loss of such tax-qualified status.

﻿

(b)    There are no pending or, to the best knowledge of Borrower, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to cause a Material
Adverse Change. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Change.

﻿

(c)    (i) Other than as disclosed in Schedule C, no ERISA Event has occurred,
and neither Borrower nor any ERISA Affiliate is aware of any fact, event or
circumstance that could reasonably be expected to constitute or result in an
ERISA Event with respect to any Plan, (ii) Borrower and each ERISA Affiliate
have met all applicable requirements under the Pension Funding Rules in respect
of each Pension Plan, and no waiver of the minimum funding standards under the
Pension Funding Rules has been applied for or obtained, (iii) neither Borrower
nor any ERISA Affiliate has incurred any liability to the PBGC other than for
the payment of premiums, and there are no premium payments which have become due
that are unpaid, (iv) neither Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or Section 4212(c) of ERISA,
and (v) no Pension Plan has been terminated by the plan administrator thereof
nor by the PBGC, and no event or circumstance has occurred or exists that could
reasonably be expected to cause the PBGC to institute proceedings under Title IV
of ERISA to terminate any Pension Plan.

﻿

SECTION 3.14    ADDITIONAL REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Borrower contained in this Agreement and in the other Loan
Documents shall be true and correct in all material respects on and as of the
Closing Date and on and as of the date of each request by Borrower thereafter
for any Advance, except to the extent such representations and warranties
expressly relate to an earlier date. Without limiting the foregoing, Borrower
represents that no Default or Event of Default shall exist on the Closing Date
and on the date of any request by Borrower thereafter for an Advance. The
absence of a Default or Event of Default is a condition precedent to any
obligation of Lender to make any Advance or other Loan hereunder.

﻿

SECTION 3.15    ENVIRONMENTAL COMPLIANCE.

﻿

(a)    Except as disclosed in Schedule C, to the knowledge of Borrower, neither
it nor any other Obligor (i) has failed to comply with any Environmental Law or
to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has

﻿

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received notice of any claim with respect to any Environmental Liability or (iv)
has been advised in writing of any basis for any Environmental Liability,
except, in each case, as could not, individually or in the aggregate, reasonably
be expected to cause a Material Adverse Change.

﻿

(b)    Except as disclosed in Schedule C, none of the properties currently or
formerly owned or operated by Borrower or any other Obligor is listed or
proposed for listing on the NPL, the CERCLIS or any analogous federal, state or
local list.

﻿

(c)    Except as disclosed in Schedule C, neither Borrower nor any other Obligor
is undertaking, or has completed, either individually or together with other
potentially responsible parties, any material investigation or assessment or
remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at any site, location or operation,
either voluntarily or pursuant to the order of any Governmental Authority or the
requirements of any Environmental Law.

﻿

SECTION 3.16    LABOR MATTERS. There are no strikes, lockouts, slowdowns or
other material labor disputes against any Corporate Obligor pending or, to the
knowledge of Borrower, threatened in writing. The hours worked by and payments
made to employees of Corporate Obligors comply with the Fair Labor Standards Act
and any other applicable federal, state, local or foreign Law dealing with such
matters except to the extent that any such violation could not reasonably be
expected to cause a Material Adverse Change. No Corporate Obligor has incurred
any liability or obligation under the Worker Adjustment and Retraining Act or
similar state law. All payments due from Corporate Obligors, or for which any
claim may be made against Corporate Obligors, on account of wages and employee
health and welfare insurance and other benefits, have been paid or properly
accrued in accordance with GAAP as a liability on books of the applicable
Corporate Obligor. Except as disclosed in Schedule C, no Corporate Obligor is
party to or bound by any collective bargaining agreement, management agreement,
employment agreement, bonus, restricted stock, stock option, or stock
appreciation plan or agreement or any similar plan, agreement or arrangement.
There are no representation proceedings pending or, to Borrower's knowledge,
threatened to be filed with the National Labor Relations Board, and no labor
organization or group of employees of any Corporate Obligor has made a pending
demand for recognition. There are no complaints, unfair labor practice charges,
grievances, arbitrations, unfair employment practices charges or any other
claims or complaints against any Corporate Obligor pending or, to the knowledge
of Borrower, threatened in writing to be filed with any Governmental Authority
or arbitrator based on, arising out of, in connection with, or otherwise
relating to the employment or termination of employment of any employee of any
Corporate Obligor. The consummation of the transactions contemplated by the Loan
Documents will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which any Corporate Obligor is bound.

﻿

SECTION 3.17    MATERIAL CONTRACTS.  Schedule C sets forth all Material
Contracts to which any Corporate Obligor is a party or is bound as of the
Closing Date. Borrower has delivered true, correct and complete copies of such
Material Contracts to Lender on or before the Closing Date. No Corporate Obligor
is in breach or in default in any material respect of or under any Material
Contract or has received any notice of default under, or of the intention of any
other party thereto to terminate, any Material Contract.

﻿

SECTION 3.18    TITLED VEHICLES.  Schedule C sets forth a description of all
vehicles subject to a certificate of title statute which are owned by any
Obligor as of the Closing Date.

﻿

SECTION 3.19    CAPITALIZATION.  Schedule C sets forth a complete and accurate
description of the authorized capital Stock of Borrower and each of its
Subsidiaries, by class, and as of the Closing Date, a description of the number
of shares of each such class that are issued and outstanding and the legal and
beneficial owners thereof. Except as set forth on Schedule C, there are no
options, warrants or calls relating to any such shares.

﻿

ARTICLE IV

AFFIRMATIVE COVENANTS

﻿

Borrower covenants that prior to satisfaction, as determined by Lender, of the
Lien Release Conditions, Borrower will:

﻿

SECTION 4.1    FINANCIAL STATEMENTS. Provide to Lender the financial information
set forth in Schedule D, in form and detail satisfactory to Lender, within the
time periods set forth in Schedule D.

﻿

SECTION 4.2    COLLATERAL REPORTING AND RECORDS. (i) Maintain, and cause each
Obligor to maintain, complete and accurate records in all material respects
regarding the Collateral, and (ii) provide to Lender all of

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the information set forth in Schedule E, in form and detail satisfactory to
Lender, within the time periods set forth in Schedule E.

﻿

SECTION 4.3    FINANCIAL COVENANTS. Comply with the Financial Covenants.

﻿

SECTION 4.4    ACCOUNTING RECORDS; INSPECTIONS. Maintain a system of accounting
that enables Borrower to produce financial statements in accordance with GAAP,
and permit Lender from time to time, subject (except when a Default or Event of
Default exists) to reasonable notice and normal business hours, to visit and
inspect the properties of any Corporate Obligor, inspect, audit and make
extracts from Borrower's or any other Corporate Obligor's books and records, and
discuss with its and their officers, employees, agents, advisors and independent
accountants Borrower's and other Corporate Obligors' business, financial
condition, assets, prospects and results of operations. Lender shall not have
any duty to Borrower to make any inspection, nor to share any results of any
inspection, appraisal or report with Borrower. Borrower acknowledges that all
inspections, appraisals and reports are prepared by Lender for its purposes, and
Borrower shall not be entitled to rely upon them; Borrower shall reimburse
Lender for all reasonable charges, costs and expenses of Lender in connection
with examinations of any Corporate Obligor's books and records or any other
financial or Collateral matters (including inspections, field exams and
appraisals) as Lender deems appropriate. Borrower agrees to pay Lender's then
standard charges for examination activities, including the standard charges of
Lender's internal examination and appraisal groups, as well as the charges of
any third party used for such purposes, provided,  however, so long as no
Default or Event of Default exists, Borrower shall not be responsible to pay for
more than 1 appraisal of Collateral and 2 field exams conducted by Lender in any
calendar year.

﻿

SECTION 4.5    COMMUNICATIONS WITH CUSTOMERS; NOTICES OF ASSIGNMENT. Permit
Lender

(in Lender's name or in the name of a nominee of Lender) to, and Borrower hereby
irrevocably authorizes Lender (in Lender's name or in the name of a nominee of
Lender) to, communicate with any Account Debtor obligated on an Account, by
mail, telephone, facsimile transmission or otherwise, to verify the validity,
amount or any other matter relating to any Account and to confirm Borrower's
sale of goods or rendition of services to such Account Debtor. Borrower agrees
to take such actions as may be reasonably requested by Lender in connection with
such verifications. Without limiting the foregoing, Borrower irrevocably
authorizes Lender to, at any time, notify Account Debtors of the interest of
Lender in Accounts, including pursuant to a Notice of Assignment of Accounts.

﻿

SECTION 4.6    COMPLIANCE. Preserve and maintain, and cause each other Corporate
Obligor to preserve and maintain, all licenses, permits, governmental approvals,
rights, privileges and franchises necessary for the conduct of its business, and
comply with the provisions of all documents under which such Obligor is
organized and/or which govern such Obligor's continued existence, and with the
requirements of all laws, rules, regulations and orders of any Governmental
Authority applicable to each such Obligor and/or its business, the failure to
maintain or comply with which could reasonably be expected to cause a Material
Adverse Change.

﻿

SECTION 4.7    USA PATRIOT ACT. (a) Ensure, and cause each Obligor and each
Subsidiary of each Corporate Obligor to ensure, that none of its equity owners
shall be listed on the Specially Designated Nationals and Blocked Person List or
other similar lists maintained by the Office of Foreign Assets Control, the
Department of the Treasury or included in any Executive Orders of the President
of the United States, (b) not use or permit the use of the proceeds of any
Advance hereunder or any other financial accommodation from Lender to violate
any of the foreign asset control regulations of the Office of Foreign Assets
Control or other applicable law, rule or regulation, (c) comply, and cause each
other Obligor and each Subsidiary of each Corporate Obligor to comply, with all
applicable Bank Secrecy Act laws and regulations, as amended from time to time,
and (d) otherwise comply with the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) as required by federal law and Lender's
policies and practices.

﻿

SECTION 4.8    MAINTENANCE OF PROPERTIES. Keep all properties useful or
necessary to each Obligor's business in good repair and condition (ordinary wear
and tear and casualty excepted), and from time to time make all repairs,
renewals and replacements in respect of such properties as determined to be
necessary by Borrower using commercially reasonable business judgment.

﻿

SECTION 4.9    TAXES. Pay and discharge when due, and cause each Obligor to pay
and discharge when due, any and all assessments and taxes, both real or
personal, including without limitation federal and state income taxes and state
and local property taxes and assessments, and payroll taxes, except to the
extent the validity of any such assessment or tax shall be subject to a
Permitted Protest.

﻿

﻿

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SECTION 4.10    NOTICE TO LENDER. Promptly (but in no event more than five (5)
days after the occurrence of each such event or matter except for clause (b)
below, in respect of which such period shall be ten (10) days, give written
notice to Lender in reasonable detail of: (a) the occurrence of any Default or
Event of Default; (b) any known material dispute (including, without limitation,
any known Commercial Dispute) between an Account Debtor and Borrower, or of the
return by or repossession of Goods by Borrower from any Account Debtor other
than returns for warranty repair in the ordinary course of business; and (c) the
commencement of an Insolvency Proceeding with respect to any Account Debtor of
Borrower owing more than $50,000.

﻿

SECTION 4.11    INSURANCE. Maintain, and cause each Obligor to maintain,
insurance customary for the business in which it is engaged and maintain all
risk property insurance coverage covering the full replacement cost of the
Collateral, together with general liability insurance, business interruption
insurance and credit insurance, in each case, in form, substance, amounts, under
agreements and with insurers reasonably acceptable to Lender. The insurance
policies must be issued by an insurance company acceptable to Lender and contain
a lender loss payable endorsement acceptable to Lender, naming Lender hereunder
with respect to assets as lender loss payee with regard to property coverage and
as additional insured with regard to liability coverage and collateral assignee
or as lender loss payee, as applicable, with regard to business interruption
insurance and credit insurance. Borrower shall give Lender prompt notice of any
loss exceeding $50,000 covered by the casualty, business interruption or credit
insurance of any Obligor. Upon the occurrence and during the continuance of an
Event of Default, Lender shall have the sole right to file claims under any
property, general liability insurance and credit insurance policies in respect
of the Collateral and under any business interruption insurance policy, to
receive and give acquittance for any payments that may be payable thereunder,
and to execute any and all endorsements, receipts, releases, assignments,
reassignments or other documents that may be necessary to effect the collection,
compromise or settlement of any claims under any such insurance policies.

﻿

SECTION 4.12    COOPERATION. Take, and cause each Obligor to take, such actions
and execute and deliver to Lender such instruments and documents as Lender
reasonably requests (including obtaining collateral access and other agreements
from third parties as Lender deems necessary) to create, maintain, preserve and
protect Lender's (a) first priority security interests in the Collateral other
than the Closing Date Equipment (subject only to Permitted Liens), (b) the
Lender’s first priority Lien in the Real Property Collateral, and (c) Lender's
rights in the Collateral (including the Real Property Collateral), and to carry
out the intent of this Agreement and the other Loan Documents.

﻿

SECTION 4.13    SUBSIDIARY GUARANTORS. At any time that any Corporate Obligor
forms or acquires any direct or indirect domestic Subsidiary at any time after
the Closing Date, and such Corporate Obligor is the direct or indirect holder of
more than 50% of the Stock in such Subsidiary, such Corporate Obligor shall,
within ten (10) days of such formation or acquisition, cause such new Subsidiary
to execute in favor of Lender a Guaranty, together with a general security
agreement, in form and substance satisfactory to Lender, granting to Lender a
Lien on all assets and properties of such Subsidiary other than assets and
properties that would constitute Excluded Collateral.

﻿

SECTION 4.14    CERTAIN BANK ACCOUNTS. Borrower shall deliver to Lender, within
ninety (90) days of the Closing Date, evidence, reasonably acceptable to Lender,
of the closure of all Deposit Accounts of Borrower and each other Corporate
Obligor not at Lender.

﻿

SECTION 4.15    ENVIRONMENTAL COMPLIANCE.

﻿

(a)    Borrower shall and shall cause each other Obligor to:

﻿

(i)    Comply with, and cause all operators, tenants, subtenants, licensees and
occupants of any Mortgage Property to comply with, in all material respects all
applicable Environmental Laws and shall obtain and comply with, and cause all
operators, tenants, subtenants, licensees and occupants of any Mortgage Property
to obtain and comply with, in all material respects all permits, licenses and
approvals required by Environmental Laws;

﻿

(ii)    At reasonable times, allow Lender and its officers, employees, agents,
representatives, contractors and subcontractors reasonable access after
reasonable prior notice to any Mortgage Property for the purposes of
ascertaining compliance with Environmental Laws and site conditions, including
subsurface conditions;

﻿

﻿

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(iii)    Deliver promptly to Lender notice of any Environmental Claim pending or
overtly threatened against Borrower or other Obligor or any past or present
acts, omissions, events or circumstances (including but not limited to any
dumping, leaching, deposition, removal, abandonment, escape, emission, discharge
or release of any Hazardous Materials, at, on or under any facility or property
now or previously owned, operated or leased by any Obligor that could form the
basis of such Environmental Claim, which Environmental Claim, if adversely
resolved, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect).

﻿

(b)    If at any time Lender obtains any reasonable evidence or information
which suggests that a material environmental problem may exist with respect to
any Obligor or any Mortgage Property, at Lender’s request, provide or cause the
applicable Obligor to provide to Lender an environmental inspection and audit
report regarding alleged or actual material noncompliance with Environmental
Laws prepared by an environmental engineer or other qualified person reasonably
acceptable to Lender at Borrower’s or other applicable Obligor’s expense. If
such audit report indicates the presence of any Hazardous Materials not in
compliance with Environmental Laws in all material respects, or the threat of a
release of any Hazardous Materials, on at or from any Mortgage Property or any
other location controlled by Borrower or any other Obligor, the applicable
Obligor 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 such Obligor that is otherwise qualified to make such recommendations, and
all of which actions shall be acceptable under Environmental Laws.

﻿

(c)    Indemnify, defend and hold harmless Lender and cause each other Obligor
to defend and hold harmless 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 Lender (or any other Person
affiliated with Lender or representing or acting for Lender or at Lender’s
behest, or with a claim on Lender or to whom Lender has liability or
responsibility of any sort related to this Section 4.15) relating to, resulting
from or arising out of (i) the use of any Mortgage Property or any other
location controlled by any Obligor for the storage, treatment, generation,
transportation, processing, handling, production or disposal of any Hazardous
Materials or as a landfill or other waste disposal site, (ii) the presence of
any Hazardous Materials or a release or the threat of a release of any Hazardous
Materials on, at or from any Mortgage Property or any other location controlled
by any Obligor, (iii) 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 Materials on, at or from any
Mortgage Property or any other location controlled by any Obligor, (iv) human
exposure to any Hazardous Materials or nuisances of whatever kind to the extent
the same arise from the condition of any Mortgage Property or any other location
controlled by any Obligor, or the ownership, use, operation, sale, transfer or
conveyance thereof, (v) a violation of or non-compliance with any applicable
Environmental Laws, or (vi) a material misrepresentation or inaccuracy in any
representation or warranty, or a material breach of or failure to perform any
covenant made by any Obligor or respecting any location controlled by any
Obligor, in this Agreement. Such costs or other liabilities incurred by Lender
or other Person described in this Section 4.15 shall be deemed to include any
sums which Lender deems necessary or desirable to expend to protect its Liens.

﻿

(d)    The liability of Borrower under this Section 4.15 shall in no way be
limited, abridged, impaired or otherwise affected by (i) any amendment or
modification of this Agreement or any other Loan Document by or for the benefit
of any Obligor or any subsequent owner of any Mortgage Property except for an
amendment or modification which expressly refers to this Section 4.15, (ii) any
extensions of time for payment or performance required by this Agreement or any
other Loan Document, (iii) the release of any Obligor 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 Loan Document by operation
of law, Lender’s voluntary act or otherwise, (iv) the invalidity or
unenforceability of any of the terms or provisions of this Agreement or any
other Loan Document, (v) any exculpatory provision contained in this Agreement
or any other Loan Document limiting Lender’s recourse to property encumbered by
any mortgage or to any other security or limiting Lender’s rights to a
deficiency judgment against any Obligor, (vi) any applicable statute of
limitations, (vii) any investigation or inquiry conducted by or on behalf of
Lender or any information which Lender may have or obtain with respect to the
environmental or ecological condition of any Mortgage Property, (viii) the sale,
assignment or foreclosure of any interest in the Collateral or Real Estate
Collateral, (ix) the sale, transfer or conveyance of all or part of any Mortgage
Property, (x) the dissolution and liquidation of any Obligor, (xi) the release
or discharge, in whole or in part, of any Obligor in any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or similar
proceeding, or (xii) any other circumstances which might otherwise constitute a
legal or equitable release or discharge of any Obligor, in whole or in part.

﻿

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(e)    Notwithstanding anything to the contrary contained herein, the liability
and obligations of Borrower under this Section 4.15 shall survive the payment in
full of all of the Obligations, unless such liability and obligations are
terminated by Lender with express reference to this Section 4.15.

﻿

SECTION 4.16    POST-CLOSING OBLIGATIONS. The obligation of Lender to continue
to make Advances after the Closing Date, in addition to the other conditions set
forth in this Agreement, is subject to the fulfillment by Borrower, on or before
the date applicable thereto, of each of the conditions subsequent set forth
below (the failure by Borrower to so fulfill any such subsequent condition shall
constitute an Event of Default):

﻿

(a)    within 30 days of the Closing Date, deliver to Lender endorsements (or,
if applicable, collateral assignments) in form and substance reasonably
satisfactory to Lender with respect to insurance required by Section 4.11;

﻿

(b)    within 60 days of the Closing Date, deliver to Lender an ALTA survey of
the property described in the Mortgage together with an endorsement to the title
insurance policy deleting the survey exception, in each case in form and
substance satisfactory to Lender in its discretion;

﻿

(c)    provided the survey set forth in clause (c) above is satisfactory to the
Lender as set forth therein, within 30 days after delivery to Lender of such
survey Borrower also shall submit a new perimeter plan, prepared by the surveyor
and based upon such survey together with a new legal description based on said
perimeter plan, in each case in form and substance satisfactory to Lender in its
sole discretion, and shall execute and deliver to Lender an amendment to the
Mortgage, in form and substance satisfactory to Lender in its sole discretion,
amending the legal description in such Mortgage to be as set forth in said
perimeter plan, as well as an endorsement from the title insurance company
amending the description in the title policy to conform to the perimeter plan;

﻿

(d)    on or before January 5, 2018, deliver to Lender evidence that all
obligations in respect of the Parent Subordinated Debt have been paid in full
and the holders thereof have acknowledged the same in writing; and

﻿

(e)    on or before January 5, 2018, deliver to Lender the original stock
certificate representing the Stock of Borrower owned by Parent, together with an
undated stock power executed in blank.

﻿

ARTICLE V

NEGATIVE COVENANTS

﻿

Borrower covenants that, prior to satisfaction, as determined by Lender, of the
Lien Release Conditions:

﻿

SECTION 5.1    USE OF FUNDS. No Obligor will use any of the proceeds of any Loan
or any other credit extended under this Agreement, as the case may be, for
purposes other than (a) to pay Lender Expenses incurred in connection with this
Agreement and the other Loan Documents; (b) to refinance outstanding principal,
accrued interest and accrued fees and expenses owing to UniBank for Savings; (c)
to fully repay the Parent Subordinated Debt and accrued and unpaid interest
thereon; or (d) thereafter, consistent with the terms of this Agreement, for
lawful purposes. Borrower will not use the proceeds of any extension of credit
to purchase or carry margin stock or for any other purpose that violates the
terms of Regulation T, U, or X of the Board of Governors of the Federal Reserve
System.

﻿

SECTION 5.2    MERGER, CONSOLIDATION, TRANSFER OF ASSETS, TRANSACTIONS OUTSIDE
THE ORDINARY COURSE OF BUSINESS. No Corporate Obligor will (a) merge with or
consolidate with any other Person (except that a Corporate Obligor may merge
with and into Borrower provided Borrower is the surviving entity); (b) make any
substantial change in the nature of any of its business as conducted as of the
Closing Date; (c) become a member or partner in a joint venture, partnership or
limited liability company; (d) acquire all or substantially all of the assets of
any other Person (or any division, business unit or line of business of any
other entity), or acquire any assets outside the ordinary course of such
Corporate Obligor's business; (e) sell, lease, transfer or otherwise dispose of
any of its assets, except for Permitted Dispositions; (f) create or acquire any
Subsidiary; (g) enter into any other transaction outside the ordinary course of
business (including any sale and leaseback transaction); or (h) liquidate, wind
up, or dissolve itself or suspend or cease operation of a substantial portion of
its business.

﻿

SECTION 5.3    LOANS, ADVANCES, INVESTMENTS. No Corporate Obligor will make any
investment in any Person, whether in the form of loans, advances, guarantees,
capital contributions or other investment, other than Permitted Investments.

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SECTION 5.4    DIVIDENDS, DISTRIBUTIONS. No Corporate Obligor will declare or
pay any dividend or distribution either in cash or any other property in respect
of any Stock in any Corporate Obligor, or redeem, retire, repurchase or
otherwise acquire any Stock of any Corporate Obligor; provided,  that any
Subsidiary of a Corporate Obligor may pay dividends or distributions to such
Corporate Obligor.

﻿

SECTION 5.5    LIENS. No Corporate Obligor will mortgage, pledge, grant or
permit to exist a security interest in, or Lien upon, all or any portion of any
Corporate Obligor's assets now owned or subsequently acquired, except Permitted
Liens.

﻿

SECTION 5.6    INDEBTEDNESS.  No Corporate Obligor will incur Indebtedness other
than Permitted Indebtedness.

﻿

SECTION 5.7    AFFILIATE TRANSACTIONS. No Corporate Obligor will, directly or
indirectly, enter into, or permit to exist, any transaction with any Affiliate
of such Obligor, except for (a) transactions expressly permitted by this
Agreement, (b) transactions existing on the Closing Date and set forth in
Schedule C, (c) transactions that are in the ordinary course of such Obligor's
business, and are on fair and reasonable terms that are no less favorable to
such Obligor than would be obtained in an arm's length transaction with a
non-affiliated Person, and (d) to the extent not otherwise permitted by this
Section 5.7, the payment of reasonable compensation, severance, or employee
benefit arrangements to employees, officers, and directors of such Corporate
Obligor who are Affiliates in the ordinary course of business and consistent
with industry practice.

﻿

SECTION 5.8    ORGANIZATIONAL CHANGES AND LOCATIONS OF INVENTORY. Without giving
Lender at least 30 days prior written notice, (a) no Corporate Obligor will
change its name, chief executive office, principal residence, organizational
documents, organizational identification number, state of organization,
organizational identity, or “location” as defined in Section 9-307 of the Code
and (b) no Obligor that is a natural Person will change its name as set forth on
such Obligor's driver's license or other special identification card issued by
any state. Borrower will not permit Inventory to be located at any location such
that the representations and warranty in the last sentence of Section 3.12 no
longer shall be true, provided that Borrower may amend Schedule C as it pertains
to Inventory locations so long as such amendment occurs by written notice to
Lender not less than 10 days prior to the date on which such Inventory is moved
to a new location and so long as Lender, in its sole discretion, has consented
to such amendment.

﻿

SECTION 5.9    CHANGE OF ACCOUNTING METHOD. No Obligor will modify or change its
fiscal year or its method of accounting (other than as may be required to
conform to GAAP).

﻿

SECTION 5.10    PAYMENTS OF SUBORDINATED DEBT. No Obligor will make any payment
of Subordinated Debt except to the extent no Default or Event of Default then
exists and such payment is otherwise permitted by the applicable subordination
agreement.

﻿

SECTION 5.11    SUBORDINATED DEBT DOCUMENTS. No Obligor will enter into or
execute any amendment or modification to any Subordinated Debt Document except
(a) extensions of the maturity date of any Subordinated Debt or (b) with the
prior written consent of Lender.

﻿

ARTICLE VI

EVENTS OF DEFAULT

﻿

SECTION 6.1    EVENTS OF DEFAULT. Any one of the following shall constitute an
“Event of Default” under this Agreement:

﻿

(a)    Borrower fails to pay when due any Obligation.

﻿

(b)    Any financial statement or certificate furnished by an Obligor to Lender
in connection with, or any representation or warranty made or deemed made by an
Obligor under, this Agreement or any other Loan Document proves to be incorrect,
false or misleading in any material respect when furnished or made (or deemed
made).

﻿

(c)    Borrower fails to perform or observe any covenant or other agreement
contained in this Agreement other than Section 4.8 and Section 4.1 (with respect
only to each clause (a) and (b) in Schedule D).

﻿

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(d)    Borrower fails to perform or observe any covenant or other agreement
contained in (i) Section 4.8 and such failure continues for a period of ten (10)
days after the earlier of (x) the date on which such failure shall first become
known to any officer of Borrower or (y) written notice thereof is given to
Borrower by Lender, and (ii) Section 4.1 (with respect only to each clause (a)
and (b) in Schedule D) and such failure continues for a period of five (5) days.

﻿

(e)    Borrower or any other Obligor fails to perform or observe any covenant or
other agreement in any of the other Loan Documents, and such failure continues
for a period of ten (10) days after the earlier of (i) the date on which such
failure shall first become known to any officer of Borrower or (ii) written
notice thereof is given to Borrower by Lender.

﻿

(f)    Any breach or default by a Corporate Obligor under any document,
instrument or agreement to which it is a party or by which such Corporate
Obligor or any of its properties is bound, relating to Indebtedness (other than
Subordinated Debt) in excess of $25,000, if the maturity of or any payment with
respect to such Indebtedness may be accelerated or demanded due to such breach
or default.

﻿

(g)    There shall be issued or filed against a Corporate Obligor any
attachment, injunction, order, writ, or judgment (not covered by insurance),
involving an amount in excess of $50,000.

﻿

(h)    Any Corporate Obligor is enjoined, restrained or in any way prevented by
any Governmental Authority from conducting any material part of its business.

﻿

(i)    Any Obligor becomes the subject of an Insolvency Proceeding, or any
Corporate Obligor suspends or ceases operation of all or a material portion or
line of its business.

﻿

(j)    The dissolution or liquidation of any Corporate Obligor or the death or
incapacity of any Obligor that is a natural Person, or any time a Change of
Control occurs.

﻿

(k)    (i) An ERISA Event occurs subsequent to the Closing Date with respect to
a Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of Borrower under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$250,000 which could reasonably likely cause a Material Adverse Change, or (ii)
Borrower or any ERISA Affiliate fails to pay when due, after the expiration of
any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of $250,000 or which could reasonably likely cause
in a Material Adverse Change.

﻿

(l)    Any Obligor or any senior management of any Corporate Obligor is, or at
any time has been, criminally indicted or convicted of a state or federal felony
criminal offense.

﻿

(m)    The results of any background investigation or report conducted by Lender
with respect to any of a Corporate Obligor's senior management or senior
financial personnel who becomes an employee after the Closing Date fail to be
satisfactory to Lender, in Lender's reasonable discretion.

﻿

(n)    Any Obligor repudiates or revokes or purports to repudiate or revoke any
obligation under its Guaranty or under any other Loan Document to which it is a
party.

﻿

SECTION 6.2    REMEDIES.

﻿

Upon the occurrence and during the continuation of an Event of Default, Lender
may (a) declare the Obligations (including the Revolver Note, Real Estate Term
Loan Note, and M&E Term Loan Note) to be immediately due and payable, at which
time such Obligations shall be immediately due and payable and Borrower shall be
obligated to immediately repay all of such Obligations in full, without
presentment, demand, protest, notice of dishonor, or other notice of any kind or
other requirement of any kind, all of which are hereby expressly waived by
Borrower, (b) terminate the Line of Credit and decline to make further Advances
or other extensions of credit under this Agreement and any of the Loan
Documents, and (c) exercise any or all rights, powers and remedies available
hereunder and under each of the other Loan Documents, or accorded by law or
equity, provided,  however, upon the occurrence of an Event of Default specified
in Section 6.1(i), the Obligations (and the Revolver Note, Real Estate Term Loan
Note, and M&E Term Loan Note) automatically shall become due and payable without
any further act of Lender. All rights, powers and remedies of Lender may be
exercised at any time by Lender and from time to time after the occurrence and
during the

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continuation of an Event of Default, and the same are cumulative and not
exclusive, and will be in addition to any other rights, powers or remedies
provided by law or equity.

﻿

SECTION 6.3    REMEDIES WITH RESPECT TO COLLATERAL.

﻿

Without limiting any rights or remedies Lender may have pursuant to this
Agreement, the other Loan Documents, under applicable law or otherwise, upon the
occurrence and during the continuation of an Event of Default:

﻿

(a)    Lender may take any and all actions and avail itself of any and all
rights and remedies available to Lender under this Agreement, any other Loan
Document, under law or in equity (including all rights of a secured creditor
under the Code), and the rights and remedies herein and therein provided shall
be cumulative and not exclusive of any rights or remedies provided by applicable
law or otherwise.

﻿

(b)    Lender may but shall be under no obligation to (i) notify all appropriate
parties that the Collateral, or any part thereof, has been assigned to Lender;
(ii) demand, sue for, collect and give receipts for and take all necessary or
desirable steps to collect any Collateral or Proceeds in its or any Obligor's
name, and apply any such collections against the Obligations as Lender may
elect; (iii) take control of any Collateral and any cash and non-cash Proceeds
of any Collateral; (iv) enforce, compromise, extend, renew, settle or discharge
any rights or benefits of each Obligor with respect to or in and to any
Collateral, or deal with the Collateral as Lender may deem advisable; and (v)
make any compromises, exchanges, substitutions or surrenders of Collateral as
Lender deems necessary or proper in its reasonable discretion, including
extending the time of payment, permitting payment in installments, or otherwise
modifying the terms or rights relating to any of the Collateral, all of which
may be effected without notice to, consent of, or any other action of any
Obligor and without otherwise discharging or affecting the Obligations, the
Collateral or the security interests granted to Lender under this Agreement or
any other Loan Document.

﻿

(c)    Lender may file proofs of loss and claim with respect to any of the
Collateral with the appropriate insurer, and may endorse in its own and
Borrower's name any checks or drafts constituting Proceeds of insurance. Any
Proceeds of insurance received by Lender may be applied by Lender against
payment of all or any portion of the Obligations as Lender may elect in its
reasonable discretion.

﻿

(d)    Lender may take possession of the Collateral and, without removal, render
Borrower's Equipment unusable. Upon Lender's request, each Obligor shall
assemble the Collateral and make it available to Lender at a place or places to
be designated by Lender.

﻿

(e)    Lender may and without any notice to, consent of or any other action by
Borrower's (such notice, consent or other action being expressly waived),
set-off or apply (i) any and all deposits (general or special, time or demand,
provisional or final) at any time held by or for the account of Lender or any
Affiliate of Lender, and (ii) any Indebtedness at any time owing by Lender or
any Affiliate of Lender to or for the credit or the account of Borrower, to the
repayment of the Obligations irrespective of whether any demand for payment of
the Obligations has been made.

﻿

(f)    (i) Lender may, without demand, advertising or notice, all of which
Borrower hereby waives (except as the same may be required by the Code or other
applicable law and is not waivable under the Code or such other applicable law),
at any time or times in one or more public or private sales or other
dispositions, for cash, on credit or otherwise, at such prices and upon such
terms as determined by Lender (provided such price and terms are commercially
reasonable within the meaning of the Code to the extent such sale or other
disposition is subject to the Code requirements that such sale or other
disposition must be commercially reasonable), (A) sell, lease, license or
otherwise dispose of any and all Collateral, or (B) deliver and grant options to
a third party to purchase, lease, license or otherwise dispose of any and all
Collateral. Lender may sell, lease, license or otherwise dispose of any
Collateral in its then-present condition or following any preparation or
processing deemed necessary by Lender in its reasonable discretion. To the
extent permitted by applicable law, Lender may be the purchaser at any such
public or private sale or other disposition of Collateral, and in such case
Lender may make payment of all or any portion of the purchase price therefor by
the application of all or any portion of the Obligations due to Lender to the
purchase price payable in connection with such sale or disposition. Lender may,
if it deems it reasonable, postpone or adjourn any public sale of any Collateral
from time to time by an announcement at the time and place of the sale to be so
postponed or adjourned without being required to give a new notice of sale or
disposition; provided,  however, that Lender shall provide Borrower with written
notice of the time and place of such postponed or adjourned sale. Borrower
hereby acknowledges and agrees that Lender's compliance with any requirements of
applicable law in connection with a sale, lease, license or other disposition of
Collateral will not be considered to adversely affect the commercial
reasonableness of any sale, lease, license or other disposition of such
Collateral.

﻿

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(ii)    Borrower shall remain liable for all amounts of the Obligations
remaining unpaid as a result of any deficiency of the Proceeds of the sale,
lease, license or other disposition of Collateral after such Proceeds are
applied to the Obligations as provided in this Agreement.

﻿

(iii)    Lender may sell, lease, license or otherwise dispose of the Collateral
without giving any warranties and may specifically disclaim any and all
warranties, including warranties of title, possession, merchantability and
fitness for a particular purpose. Borrower hereby acknowledges and agrees that
Lender's disclaimer of any and all warranties in connection with a sale, lease,
license or other disposition of Collateral will not be considered to adversely
affect the commercial reasonableness of any such disposition of the Collateral.
If Lender sells, leases, licenses or otherwise disposes of any of the Collateral
on credit, Borrower will be credited only with payments actually made in cash by
the recipient of such Collateral and received by Lender and applied to the
Obligations. If any Person fails to pay for Collateral acquired pursuant this
Section 6.3(f) on credit, Lender may re-offer the Collateral for sale, lease,
license or other disposition.

﻿

(g)    (i) All rights of Borrower to exercise any of the voting and other
consensual rights which it would otherwise be entitled to exercise in accordance
with the terms hereof with respect to any Investment Property, and to receive
any dividends, payments, and other distributions which it would otherwise be
authorized to receive and retain in accordance with the terms hereof with
respect to any Investment Property, shall immediately, at the election of Lender
(without requiring any notice) cease, and all such rights shall thereupon become
vested solely in Lender, and Lender (personally or through an agent) shall
thereupon be solely authorized and empowered, without notice, to (a) transfer
and register in its name, or in the name of its nominee, the whole or any part
of the Investment Property, it being acknowledged by Borrower that any such
transfer and registration may be effected by Lender through its irrevocable
appointment as attorney-in-fact pursuant to Section 6.3(g)(ii), (b) exchange
certificates and/or instruments representing or evidencing Investment Property
for certificates and/or instruments of smaller or larger denominations, (c)
exercise the voting and all other rights as a holder with respect to all or any
portion of the Investment Property (including all economic rights, all control
rights, authority and powers, and all status rights of Borrower as a member or
as a shareholder (as applicable) of the issuer of such Investment Property), (d)
collect and receive all dividends and other payments and distributions made
thereon, (e) notify the parties obligated on any Investment Property to make
payment to Lender of any amounts due or to become due thereunder, (f) endorse
instruments in the name of Borrower to allow collection of any Investment
Property, (g) enforce collection of any of the Investment Property by suit or
otherwise, and surrender, release, or exchange all or any part thereof, or
compromise or renew for any period (whether or not longer than the original
period) any liabilities of any nature of any Person with respect thereto, (h)
consummate any sales of Investment Property or exercise any other rights as set
forth in Section 6.3(f), (i) otherwise act with respect to the Investment
Property as though Lender were the outright owner thereof, and (j) exercise any
other rights or remedies Lender may have under the other Loan Documents, the
Code, other applicable law, or otherwise.

﻿

(ii)    BORROWER HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS LENDER AS ITS PROXY
AND ATTORNEY-IN-FACT FOR SUCH OBLIGOR WITH RESPECT TO ALL OF BORROWER'S
INVESTMENT PROPERTY WITH THE RIGHT, DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, WITHOUT NOTICE, TO TAKE ANY OF THE FOLLOWING ACTIONS: (A) TRANSFER AND
REGISTER IN LENDER'S NAME, OR IN THE NAME OF ITS NOMINEE, THE WHOLE OR ANY PART
OF THE INVESTMENT PROPERTY, (B) VOTE THE INVESTMENT PROPERTY, WITH FULL POWER OF
SUBSTITUTION TO DO SO, (C) RECEIVE AND COLLECT ANY DIVIDEND OR ANY OTHER PAYMENT
OR DISTRIBUTION IN RESPECT OF, OR IN EXCHANGE FOR, THE INVESTMENT PROPERTY OR
ANY PORTION THEREOF, TO GIVE FULL DISCHARGE FOR THE SAME AND TO INDORSE ANY
INSTRUMENT MADE PAYABLE TO BORROWER FOR THE SAME, (D) EXERCISE ALL OTHER RIGHTS,
POWERS, PRIVILEGES, AND REMEDIES (INCLUDING ALL ECONOMIC RIGHTS, ALL CONTROL
RIGHTS, AUTHORITY AND POWERS, AND ALL STATUS RIGHTS OF BORROWER AS A MEMBER OR
AS A SHAREHOLDER (AS APPLICABLE) OF THE ISSUER OF SUCH INVESTMENT PROPERTY) TO
WHICH A HOLDER OF THE INVESTMENT PROPERTY WOULD BE ENTITLED (INCLUDING, WITH
RESPECT TO THE INVESTMENT PROPERTY, GIVING OR WITHHOLDING WRITTEN CONSENTS OF
MEMBERS OR SHAREHOLDERS, CALLING SPECIAL MEETINGS OF MEMBERS OR SHAREHOLDERS,
AND VOTING AT SUCH MEETINGS), AND (E) TAKE ANY ACTION AND EXECUTE ANY INSTRUMENT
WHICH LENDER MAY DEEM NECESSARY OR ADVISABLE TO ACCOMPLISH THE PURPOSES OF THIS
AGREEMENT.

﻿

(iii)    In order to further effect the foregoing transfer of rights in favor of
Lender, during the continuance of an Event of Default, Borrower hereby
authorizes and instructs each issuer of Investment Property pledged by Borrower
to comply with any instruction received by such issuer from Lender without any
other or further instruction from Borrower, and Borrower acknowledges and agrees
that each such issuer shall be fully protected in so

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complying, and to pay any dividends, distributions, or other payments with
respect to any of the Investment Property directly to Lender.

﻿

(iv)    Upon exercise of the proxy set forth herein, all prior proxies given by
Borrower with respect to any Investment Property, as applicable (other than to
Lender), are hereby revoked, and no subsequent proxies (other than to Lender)
will be given with respect to any Investment Property, unless Lender otherwise
subsequently agrees in writing. Lender, as proxy, will be empowered and may
exercise the irrevocable proxy to vote the other Investment Property at any and
all times during the existence of an Event of Default, including at any meeting
of shareholders or members, as the case may be, however called, and at any
adjournment thereof, or in any action by written consent, and may waive any
notice otherwise required in connection therewith. To the fullest extent
permitted by applicable law, Lender shall have no agency, fiduciary, or other
implied duties to Borrower, any issuer of Investment Property, or any other
Person when acting in its capacity as such proxy or attorney-in-fact. Borrower
hereby waives and releases any claims that it may otherwise have against Lender
with respect to any breach, or alleged breach, of any such agency, fiduciary, or
other duty.

﻿

(v)    Any transfer to Lender or its nominee, or registration in the name of
Lender or its nominee, of the whole or any part of the Investment Property shall
be made solely for purposes of effectuating voting or other consensual rights
with respect to the Investment Property in accordance with the terms of this
Agreement and is not intended to effectuate any transfer of ownership of any of
the Investment Property. Notwithstanding the delivery by Lender of any
instruction to any issuer of Investment Property or any exercise by Lender of an
irrevocable proxy or otherwise, Lender shall not be deemed the owner of, or
assume any obligations or any liabilities whatsoever of the owner or holder of,
any Investment Property unless and until Lender expressly accepts such
obligations in a duly authorized and executed writing and agrees in writing to
become bound by the applicable organizational documents or otherwise becomes the
owner thereof under applicable law (including through a sale as described in
Section 6.3(f)). The execution and delivery of this Agreement shall not subject
Lender to, or transfer or pass to Lender, or in any way affect or modify, the
liability of Borrower under the organizational documents of any issuer or any
related agreements, documents, or instruments or otherwise. In no event shall
the execution and delivery of this Agreement by Lender, or the exercise by
Lender of any rights hereunder or assigned hereby, constitute an assumption of
any liability or obligation whatsoever of Borrower to, under, or in connection
with any of the issuer or any related agreements, documents, or instruments or
otherwise.

﻿

(h)    Lender shall have the right in Lender's sole discretion to determine
which rights, security, Liens or remedies Lender may at any time pursue,
foreclose upon, relinquish, subordinate, modify or take any other action with
respect to, without in any way impairing, modifying or affecting any of Lender's
other rights, security, Liens or remedies with respect to such Property, or any
of Lender's rights or remedies under this Agreement or any other Loan Document.

﻿

(i)    Borrower agrees that Lender shall not have any obligation to preserve
rights to any Collateral against prior parties or to marshal any Collateral of
any kind for the benefit of any other creditor of Borrower or any other Person.
Lender shall not be responsible to Borrower or any other Person for loss or
damage resulting from Lender's failure to enforce its Liens or collect any
Collateral or Proceeds or any monies due or to become due under the Obligations
or any other liability or obligation of Borrower to Lender.

﻿

(j)    Except as otherwise expressly provided for in this Agreement or by
non-waivable applicable law, Borrower waives: (a) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Lender on which Borrower may in any way be liable, and
hereby ratifies and confirms whatever Lender may do in this regard, (b) to the
extent permitted by applicable law, all rights to notice and a hearing prior to
Lender's taking possession or control of, or to Lender's replevy, attachment or
levy upon, the Collateral or any bond or security which might be required by any
court prior to allowing Lender to exercise any of its remedies and (c) the
benefit of all valuation, appraisal, marshalling and exemption laws.

﻿

ARTICLE VII

MISCELLANEOUS

﻿

SECTION 7.1    UCC TERMS. When used herein, unless otherwise indicated herein,
the terms “Account,” “Account Debtor,” “Chattel Paper,” “Commercial Tort Claim,”
“Deposit Account,” “Document,” “Electronic Chattel Paper,” “Equipment,” “General
Intangible,” “Goods,” “Instrument,” “Inventory,” “Investment Property,”
“Letter-of-Credit Right,” “Proceeds,” “Record” and “Supporting Obligation” shall
have their respective meanings set forth in the Code.

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SECTION 7.2    NO WAIVER. No delay, failure or discontinuance of Lender in
exercising any right, power or remedy under any of the Loan Documents will
affect or operate as a waiver of such right, power or remedy; nor will any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Lender of any breach of or default (including any Default or Event of
Default) under any of the Loan Documents must be in writing and will be
effective only to the extent set forth in such writing.

﻿

SECTION 7.3    NOTICES. All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the address for such
party set forth below each party's name on the signature pages of this Agreement
or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand will be deemed given or made
as follows: (a) if sent by hand delivery or overnight courier, upon delivery;
(b) if sent by mail, upon the earlier of the date of receipt or three (3) days
after deposit in the U.S. mail, first class and postage prepaid; (c) if sent by
telecopy, upon receipt; and (d) if sent by electronic mail, upon sender's
receipt of an acknowledgment from the intended recipient (such as by “return
receipt requested” function, as available, return email or other written
acknowledgment).

﻿

SECTION 7.4    COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower will pay to Lender
immediately upon demand the full amount of all then outstanding and invoiced
Lender Expenses. All such costs, fees and expenses shall be payable on demand
and, with respect to Lender, may be charged by Lender to the Loan Account.
Borrower's obligations set forth in this Section 7.4 will survive any
termination of this Agreement or repayment of the Obligations and will for all
purposes continue in full force and effect.

﻿

SECTION 7.5    TAXES. All payments made by Borrower hereunder or under any note
or other Loan Document will be made without setoff, counterclaim, or other
defense. In addition, all such payments will be made free and clear of, and
without deduction or withholding for, any present or future Taxes, and in the
event any deduction or withholding of such Taxes is required, Borrower agrees to
pay the full amount of such Taxes. This provision shall apply only if Lender has
delivered to Borrower a completed Form W-9 that is effective prior to any
payment.

﻿

SECTION 7.6    GENERAL. This Agreement will be binding upon and inure to the
benefit of the successors and assigns of the parties; provided that Borrower may
not assign or transfer any of its interests, rights or obligations under this
Agreement without Lender's prior written consent. Lender reserves the right to
sell, assign, transfer, negotiate or grant participations in all or any part of,
or any interest in, Lender's rights and benefits under this Agreement and the
other Loan Documents. In the event of any assignment by Lender of all of its
rights and obligations as “Lender” under this Agreement and the other Loan
Documents, Borrower agrees that Lender shall have no ongoing obligations in such
capacity hereunder and thereunder and shall look only to assignee for
performance after such assignment of the obligations of “Lender” hereunder and
thereunder. This Agreement and the other Loan Documents constitute the entire
agreement between Borrower and Lender with respect to each credit subject hereto
and supersede all prior negotiations, communications, discussions and
correspondence concerning the subject matter of this Agreement. This Agreement
may be amended or modified only in writing signed by each party to this
Agreement. This Agreement is made and entered into for the sole protection and
benefit of the parties hereto and their respective permitted successors and
assigns, and no other Person will be a third party beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any other of the Loan Documents to which it is not a party. Time is of the
essence of each and every provision of this Agreement and each other of the Loan
Documents. If any provision of this Agreement or any other Loan Document will be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
Agreement or the other Loan Documents. This Agreement may be executed in any
number of counterparts, each of which when executed and delivered will be deemed
to be an original, and all of which when taken together will constitute one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
facsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement and
any party's failure to deliver an original executed counterpart shall not affect
the validity, enforceability, and binding effect of this Agreement.

﻿

SECTION 7.7    INDEMNITY. Borrower indemnifies Lender and its Affiliates,
Subsidiaries, directors, officers, employees, representatives, agents, and
attorneys, and holds them harmless from and against any and all claims, debts,
liabilities, demands, obligations, actions, causes of action, penalties, costs
and expenses (including reasonable attorneys' fees), of every kind, which they
may sustain or incur based upon or arising out of any of the Obligations, this
Agreement, any of the Loan Documents, or the Collateral or any relationship or
agreement between Lender and the Obligors, provided that this indemnity will not
extend to damages that a court of competent jurisdiction finally determines in a
non-appealable judgment to have been caused by the indemnitee's own gross
negligence or willful misconduct. Regardless of any provision in this Agreement
to the contrary, the indemnity agreement set forth in

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this Section will survive any termination of this Agreement or repayment of the
Obligations and will for all purposes continue in full force and effect.

﻿

SECTION 7.8    GOVERNING LAW. The validity of this Agreement and the other Loan
Documents (unless otherwise expressly provided in such Loan Document) and the
construction, interpretation, and enforcement of this Agreement and the other
Loan Documents, and the rights of the parties, as well as all claims,
controversies or disputes arising under or related to this Agreement and the
other Loan Documents will be determined under, governed by and construed in
accordance with the laws of the Applicable State, without regard to conflicts of
laws principles.

﻿

SECTION 7.9    CONSEQUENTIAL DAMAGES. No claim may be made by Borrower against
Lender, or any Affiliate, Subsidiary, director, officer, employee,
representative, agent, attorney or attorney-in-fact of any of them for any
special, indirect, consequential, or punitive damages in respect of any claim
for breach of contract or other theory of liability arising out of or related to
the transactions contemplated by this Agreement or any other Loan Document or
any related act, omission, or event, and Borrower waives, releases, and agrees
not to sue upon any claim for such damages, whether or not accrued and whether
or not known or suspected to exist in its favor.

﻿

SECTION 7.10    SAVINGS CLAUSE.

﻿

(a)    No provision of this Agreement or of any other Loan Document shall
require the payment or the collection of interest in excess of the maximum
amount permitted by applicable law. If any excess of interest in such respect is
hereby provided for, or shall be adjudicated to be so provided, in this
Agreement or any other Loan Document or otherwise in connection with this
Agreement, the provisions of this Section shall govern and prevail and neither
Borrower nor the sureties, guarantors, successors, or assigns of Borrower shall
be obligated to pay the excess amount of such interest or any other excess sum
paid for the use, forbearance, or detention of sums owed pursuant hereto. In the
event Lender ever receives, collects, or applies as interest any such sum, such
amount which would be in excess of the maximum amount permitted by applicable
law shall be applied as a payment and reduction of the principal of the
Obligations of Borrower hereunder; if the principal of such Obligations has been
paid in full, any remaining excess shall forthwith be paid to Borrower. In
determining whether or not the interest paid or payable exceeds the maximum rate
permitted by applicable law, Borrower and Lender shall, to the extent permitted
by applicable law, (i) characterize any non-principal payment as an expense,
fee, or premium rather than as interest, (ii) exclude voluntary prepayments and
the effects thereof, and (iii) amortize, prorate, allocate, and spread in equal
or unequal parts the total amount of interest throughout the entire contemplated
term of this Agreement so that interest for the entire term does not exceed the
maximum rate permitted by law.

﻿

(b)    If at any time the rate of interest applicable to the Obligations of
Borrower hereunder,  together with any other fees and other amounts payable
pursuant to this Agreement and the other Loan Documents and deemed interest
under applicable law, exceeds that amount that would have accrued at the maximum
rate permitted by applicable law, then the amount of interest and any such fees
and other amounts to accrue to Lender pursuant to this Agreement and the other
Loan Documents shall be limited, notwithstanding anything to the contrary in
this Agreement or any other Loan Document, to that amount that would have
accrued at the maximum rate permitted by applicable law, but to the extent
permitted by applicable law, any subsequent reductions, as applicable, shall not
reduce the interest to accrue to Lender pursuant to this Agreement and the other
Loan Documents below the maximum rate permitted by applicable law until the
total amount of interest accrued pursuant to this Agreement and the other Loan
Documents and such fees and other amounts deemed to be interest equals the
amount of interest, fees and other amounts that would have accrued to Lender but
for the effect of this Section 7.10.

﻿

SECTION 7.11    RIGHT OF SETOFF; DEPOSIT ACCOUNTS. Upon and after the occurrence
of an Event of Default which is continuing, (a) Borrower authorizes Lender, at
any time and from time to time, without notice, which is hereby expressly waived
by Borrower, and whether or not Lender will have declared any extension of
credit under this Agreement to be due and payable in accordance with the terms
of this Agreement, to set off against, and to appropriate and apply to the
payment of, the Obligations then owing, any and all amounts then owing by Lender
to any Borrower (whether payable in U.S. dollars or any other currency, whether
matured or unmatured, and in the case of deposits, whether general or special
(except trust, escrow and payroll accounts), time or demand and however
evidenced), and (b) pending any such action, to the extent necessary, to hold
such amounts as collateral to secure such the Obligations and to return as
unpaid for insufficient funds any and all checks and other items drawn against
any deposits so held as Lender, in its sole discretion, may elect. Borrower
grants to Lender a security interest in all deposits and accounts maintained
with Lender to secure the payment of all Obligations.

﻿

SECTION 7.12    CONFIDENTIALITY. Lender agrees that material, non-public
information regarding Borrower, its operations, assets, and existing and
contemplated business plans will be treated by Lender in a

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confidential manner, and will not be disclosed by Lender to Persons who are not
parties to this Agreement, except (i) to Lender's Affiliates, attorneys,
representatives, agents and other advisors to the extent such Persons are
directed not to disclose such information as required under this Agreement and
to officers, directors and employees of Lender, (ii) as required by law or by
any court, governmental or regulatory authority, (iii) as agreed by Borrower,
(iv) if such information becomes generally available to the public, (v) in
connection with any litigation or adversary proceeding involving claims related
to this Agreement or the assignment, participation or pledge of Lender's
interest in this Agreement, provided that any prospective participant or
assignee has been directed not to disclose such information as required under
this Agreement, (vi) to equity owners of any Obligor (other than equity owners
of Parent who are not officers of any Obligor), or (vii) in connection with the
exercise by Lender of any right or remedy under this Agreement, any other Loan
Document or at law. Lender may use the name, logos, and other insignia of
Borrower and the maximum amount of the credit facilities provided under this
Agreement in any “tombstone” or comparable advertising, on its website or in
other marketing materials of Lender.

﻿

SECTION 7.13    DATA TRANSMISSION. Lender assumes no responsibility for privacy
or security risks as a result of the method of data transmission selected by
Borrower or any other Obligor. Lender only assumes responsibility for data
transmitted from Borrower once the data is received within Lender's internal
network. Lender assumes no responsibility for privacy or security for data
transmitted from Lender to any Obligor once the data is dispensed from internal
network.

﻿

SECTION 7.14    PATRIOT ACT NOTICE. Lender hereby notifies Borrower that
pursuant to the requirements of the Patriot Act, Lender is required to obtain,
verify and record information that identifies Borrower and each other Obligor,
which information includes the name and address of such Obligor and other
information that will allow Lender to identify each Obligor in accordance with
the Patriot Act. In addition, if Lender is required by law or regulation or
internal policies to do so, it shall have the right to periodically conduct (a)
Patriot Act searches, OFAC/PEP searches, and customary individual background
checks for each Obligor, and (b) OFAC/PEP searches and customary individual
background checks of each Corporate Obligor's senior management and key
principals, and Borrower agrees to cooperate, and to cause each other Obligor to
cooperate, in respect of the conduct of such searches and further agree that the
reasonable costs and charges for such searches shall constitute Lender Expenses.

﻿

SECTION 7.15    VENUE. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE TRIED AND
LITIGATED IN THE APPLICABLE STATE (AS DEFINED BELOW) AND, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE DISTRICT OF
MASSACHUSETTS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER'S OPTION, IN THE COURTS
OF ANY JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER AND LENDER WAIVE, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 7.15.

﻿

SECTION 7.16    WAIVER OF JURY TRIAL. BORROWER AND LENDER HEREBY WAIVE TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO WHICH BORROWER AND LENDER MAY BE PARTIES,
ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS AGREEMENT OR (B) THE LOAN
DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF
TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS,
INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT. THIS
WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER AND LENDER, AND
BORROWER AND LENDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION
HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN
ANY WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER AND LENDER FURTHER REPRESENT THAT
EACH HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF
THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND
THAT EACH OF BORROWER AND LENDER HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER
WITH COUNSEL.

﻿

SECTION 7.17    CONSTRUCTION.

﻿

(a)    Any reference herein or in any other Loan Document to the satisfaction,
repayment, or payment in full of the Obligations shall mean: (i) the payment or
repayment in full in immediately available funds of (x) the principal amount of,
and interest accrued and unpaid with respect to, all outstanding Loans together
with the payment of any premium applicable to the repayment of the Loans, (y)
all Lender Expenses that have accrued and are

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unpaid regardless of whether demand has been made therefor and (z) all fees or
charges that have accrued hereunder or under any other Loan Document and are
unpaid; (ii) in the case of obligations with respect to Bank Products (other
than in respect of Hedge Agreements), providing Lender cash collateral for such
Bank Products in an amount determined by Lender as sufficient to satisfy the
reasonably estimated credit exposure therefor; (iii) the receipt by Lender of
cash collateral in order to secure any other contingent Obligations for which a
claim or demand for payment has been made on or prior to such time or in respect
of matters or circumstances known to Lender at such time that are reasonably
expected to result in any loss, cost, damage, or expense (including attorneys'
fees and legal expenses), such cash collateral to be in such amount as Lender
reasonably determines is appropriate to secure such contingent Obligations; and
(iv) the payment or repayment in full in immediately available funds of all
other outstanding Obligations (including the payment of any termination amount
then applicable (or which would or could become applicable as a result of the
repayment of the other Obligations) under Hedge Agreements) other than (x)
unasserted contingent indemnification Obligations, (y) any obligations in
respect of Bank Products (other than Hedge Agreements) that, at such time, are
allowed by Lender to remain outstanding without being required to be repaid and
(z) any obligations under Hedge Agreements that, at such time, are allowed by
the applicable provider of such Hedge Agreements to remain outstanding without
being required to be repaid.

﻿

(b)    The terms “herein,” “hereof,” “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision. Any pronoun used shall be deemed to cover all genders.
In the computation of periods of time from a specified date to a later specified
date, “from” means “from and including,” and “to” and “until” each mean “to but
excluding.” The terms “including” and “include” shall mean “including, without
limitation.” Section titles appear as a matter of convenience only and shall not
affect the interpretation of any Loan Document. All references to (a) laws
include all related regulations, interpretations, supplements, amendments and
successor provisions; (b) any document, instrument or agreement include any
amendments, waivers and other modifications, extensions or renewals (to the
extent not prohibited by the Loan Documents); (c) any section mean, unless the
context otherwise requires, a section of this Agreement; (d) any exhibits or
schedules mean, unless the context otherwise requires, exhibits and schedules
attached hereto, which are hereby incorporated by reference; and (e) any Person
include successors and assigns.

﻿

[Signature page follows]

﻿

﻿

﻿

﻿

 

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﻿

The parties have caused this Agreement to be executed effective as of the
Closing Date.

﻿

﻿

 

 

 

 

BORROWER

 

ADDRESS FOR BORROWER

﻿

 

 

 

 

MICRON PRODUCTS INC.

 

Micron Products Inc.

﻿

 

 

 

25 Sawyer Passway

By

/s/ SALVATORE EMMA, JR.

 

Fitchburg, Massachusetts 01420

﻿

Name:

SALVATORE EMMA, JR.

 

Attention: Salvatore Emma, Chief Executive Officer

﻿

Title:

PRESIDENT & CEO

 

Fax No.: 978-342-0168

﻿

 

 

 

Email: SEMMA@MICRONPRODUCTS.COM

﻿

 

 

 

 

﻿

 

 

 

 

﻿

 

 

 

 

LENDER

 

ADDRESS FOR LENDER

﻿

 

 

 

 

ROCKLAND TRUST COMPANY

 

Rockland Trust Company

﻿

 

 

 

120 Liberty Street

By

/s/ Thomas Meehan

 

Brockton, MA 02301

﻿

Name:

Thomas Meehan

 

Attention: Thomas Meehan, Relationship Manager

﻿

Title:

Relationship Manager

 

Phone: 781.982.6389

﻿

 

 

 

Facsimile: 508.732.7627

﻿

 

 

 

Email: Thomas.Meehan@RocklandTrust.com

﻿

﻿

﻿

 

Signature Page to Credit Agreement

--------------------------------------------------------------------------------

 

Schedule A

to

Credit and Security Agreement

﻿

DEFINITIONS

﻿

"Advances" means advances made or deemed made by Lender to Borrower pursuant to
Section 1.1(a) or otherwise in accordance with this Agreement.  

"Affiliate" means, as applied to any Person, any other Person who controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" means the possession, directly or indirectly through
one or more intermediaries, of the power to direct the management and policies
of a Person, whether through the ownership of Stock, by contract, or otherwise;
provided,  however, that, for purposes of the definition of Eligible Accounts
and Section 5.6, (a) any Person which owns directly or indirectly 10% or more of
the Stock having ordinary voting power for the election of the board of
directors or equivalent governing body of a Person or 10% or more of the
partnership or other ownership interests of a Person (other than as a limited
partner of such Person) shall be deemed an Affiliate of such Person, (b) each
director (or comparable manager) of a Person shall be deemed to be an Affiliate
of such Person, and (c) each partnership in which a Person is a general partner
shall be deemed an Affiliate of such Person.

"Applicable State" means the Commonwealth of Massachusetts.

"Assignment of Claims Act" means the Assignment of Claims Act, 31 USC §3727, as
amended from time to

time.

"Availability" means, as of any date of determination, the amount by which the
lesser of the Borrowing Base and the Maximum Revolver Amount exceeds the then
outstanding Advances.  

"Bank Products" means any one or more of the following financial products or
accommodations extended to any Obligor by a Lender: (a) commercial credit cards,
(b) commercial credit card processing services, (c) debit cards, (d) stored
value cards, (e) purchase cards (including so-called "procurement cards" or
"P-cards"), or (f) cash management and related services (including treasury,
depository, return items, overdraft, controlled disbursement, merchant stored
value cards, e-payables services, electronic funds transfer, interstate
depository network, automatic clearing house transfer and other cash management
arrangements).

"Bankruptcy Code" means Title 11 of the United States Code as in effect from
time to time.

"Borrower" has the meaning set forth in the preamble to this Agreement.

"Borrowing Base" has the meaning set forth in Schedule B-1.  

"Business Day" means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close under the rules and regulations
of the Federal Reserve System.

"Capital Expenditures" means, with respect to any Person, all liabilities
incurred or expenditures made by such Person for the acquisition of fixed
assets, or any improvements, replacements, substitutions or additions thereto
with a useful life of more than one year.

"Capitalized Lease" means any lease which is or should be capitalized on the
balance sheet of the lessee thereunder in accordance with GAAP.

"Cash Taxes" means, for the applicable period, for Borrower and its Subsidiaries
on a consolidated basis, the aggregate of all income taxes of such Persons as
determined in accordance with GAAP, to the extent the same are paid in cash.

"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. § 9601 et seq.

"CERCLIS" means the Comprehensive Environmental Response, Compensation, and
Liability Information System maintained by the United States Environmental
Protection Agency.

"CFC" means a controlled foreign corporation (as that term is defined in the
Internal Revenue Code of 1986,

as in effect from time to time).

"Change in Law" means the occurrence, after the date of this Agreement, of the
adoption or taking effect of any new or changed law, rule, regulation or treaty,
or the issuance of any request, rule, guideline or directive (whether or

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--------------------------------------------------------------------------------

 

not having the force of law) by any Governmental Authority; provided that (x)
the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives issued in connection with that Act, and (y) all
requests, rules, guidelines or directives promulgated by Lender for
International Settlements, the Basel Committee on Banking Supervision (or any
successor authority) or the United States regulatory authorities, in each case
pursuant to Basel III, will in each case be deemed to be a "Change in Law,"
regardless of the date enacted, adopted or issued.

"Change of Control" means (a) Micron Solutions, Inc., a Delaware corporation,
ceases to own beneficially and of record 100% of the Stock of Borrower, (b)
Borrower ceases to own beneficially and of record 100% of the Stock of any of
its Subsidiaries, or (c) a change in the majority of directors of Micron
Solutions, Inc., a Delaware corporation, during any 12 month period, unless
approved by the majority of directors serving at the beginning of such period.

"Closing Date" means the date on which Lender executes this Agreement as set
forth below Lender's signature block on the signature page of this Agreement.

"Code" means the Uniform Commercial Code, as in effect from time to time in the
Applicable State. To the extent that defined terms set forth in this Agreement
have different meanings under different Articles under the Uniform Commercial
Code, the meaning assigned to each such defined term under Article 9 of the
Uniform Commercial Code will control.

"Collateral" means, collectively, (a) all properties, assets and rights of
Borrower, wherever located, whether now owned or hereafter acquired or arising,
and all Proceeds and products thereof, including: all Accounts, Chattel Paper
(including Electronic Chattel Paper), Commercial Tort Claims, Deposit Accounts,
Documents, General Intangibles, Goods, Inventory (including all merchandise and
other Goods, and all additions, substitutions and replacements thereof, together
with all Goods and materials used or usable in manufacturing, processing,
packaging or shipping such Inventory), Equipment, Instruments, Investment
Property, Letter-of-Credit Rights, returned Goods, and Supporting Obligations;
all reserves, matured funds, credit balances and other property of Borrower in
Lender's possession; all rights of stoppage in transit, replevin, repossession,
reclamation and all other rights and remedies of an unpaid vendor; all of
Borrower's Records; and all insurance policies and Proceeds and rights relating
thereto, and (b) all other assets and properties of any Obligor in or upon which
Lender is granted or holds a Lien pursuant to the Loan
Documents.  Notwithstanding the foregoing, or anything to the contrary herein,
the Collateral shall not include the Excluded Collateral.

"Collateral Access Agreement" means an agreement reasonably satisfactory in form
and substance to Lender executed by (a) a bailee or other Person in possession
of Collateral, and (b) any landlord of real estate leased by Borrower, pursuant
to which such Person (i) acknowledges Lender's Lien on the Collateral, (ii)
releases or subordinates such Person's Liens in the Collateral held by such
Person or located on such real estate, (iii) provides Lender with access to the
Collateral held by such bailee or other Person or located in or on such real
estate, (iv) as to any landlord, provides Lender with a reasonable time to sell
and dispose of the Collateral from such real estate, and (v) makes such other
agreements with Lender as Lender may reasonably require.

"Collection Account" has the meaning set forth in Section 1.4(a).  

"Collections" means cash, checks, notes, instruments, and other items of payment
(including insurance proceeds, cash proceeds of asset sales, rental proceeds,
and tax refunds) received by Lender in respect of Collateral.  

"Commercial Dispute" means any written dispute or claim in any respect
regardless of merit (including, without limitation, any alleged dispute as to
price, invoice terms, quantity, quality or late delivery and claims of release
from liability, counterclaim or any alleged claim of deduction, offset, or
counterclaim or otherwise) arising out of or in connection with an Account or
any other transaction related thereto.

"Commodity Exchange Act" means the Commodity Exchange Act (7 U.S.C. §1 et seq.),
as amended from time

to time.

"Compliance Certificate" means a certificate in the form of Schedule F delivered
by the chief financial officer of Borrower to Lender.

"Consignee Customers" means AMBU Sdn. Bhd., Cardinal Health Germany Covidien
Deutschland GmbH) and 3M Canada.

"Contract LIBOR Rate" has the meaning set forth in Schedule B-1.  

"Contract Prime Rate" has the meaning set forth in Schedule B-1.  

"Corporate Obligor" means an Obligor that is not a natural Person.

"Cost" means Borrower's standard cost of Inventory. 

"Daily Balance" means, as of any date of determination and with respect to any
Obligation, the amount of such Obligation owed at the end of such day.

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"Daily One Month LIBOR" means, for any date of determination, the rate per annum
for United States dollar deposits with a maturity of one (1) month as reported
on Reuters LIBOR01 Screen (or any successor page) at approximately 11:00 am
London time on such date of determination or, if such day is not a London
business day, then on the immediately preceding London business day.  If such
rate is not so reported, such rate shall be as determined by Lender from another
recognized source or interbank quotation.  When interest or any fee hereunder is
determined in relation to Daily One Month LIBOR, each change in such interest
rate or fee shall become effective each Business Day that Lender determines that
Daily One Month LIBOR has changed.

"Default" means an event, condition or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.

"Default Period" means each period commencing upon the occurrence and during the
continuation of an Event of Default.

"Default Rate" means the Default Rate set forth in Schedule B-1 annexed hereto.

"Deposit Account Control Agreements" has the meaning set forth in Section
1.4(a).  

"Dilution" means, with respect to any Person for any period of determination
selected by Lender, a percentage that is the result of dividing the dollar
amount of the aggregate of all bad debt write-downs, discounts, allowances,
credits, deductions and other dilutive items for such period as determined by
Lender with respect to such Person's Accounts for such period, by such Person's
billings with respect to Accounts for such period.

"Eligible Accounts" mean Accounts created by Borrower, in the ordinary course of
Borrower's business, that arise out of the sale of goods or the rendition of
services, that comply with each of the representations and warranties in all
material respects respecting Eligible Accounts made in the Loan Documents and
that are not excluded as ineligible by virtue of one or more of the excluding
criteria set forth below; provided that such criteria may be revised from time
to time by Lender in the exercise of its Permitted Discretion.  Eligible
Accounts shall not include the following:

﻿

(i) any Account that (x) is unpaid more than 90 days from the original invoice
date;

(ii) any Account that is unpaid for more than 60 days after the original due
date;

(iii) 25% or more of the Accounts owing by the Account Debtor are not Eligible
Accounts under the foregoing clause (ii); 

(iv) any Account for which there exists any right of setoff, defense, dispute or
discount (except regular discounts allowed in the ordinary course of business to
promote prompt payment) or for which any defense or counterclaim has been
asserted, to the extent of such setoff, defense, dispute or discount; 

(v) Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not solvent, has gone out of business, or as to which
any Obligor has received notice of an imminent Insolvency Proceeding or a
material impairment of the financial condition of such Account Debtor; 

(vi) any Account with respect to which the Account Debtor is a Governmental
Authority unless such Governmental Authority has approved funding for goods or
services relating to such Account and (A) if such Governmental Authority is the
United States of America or any department, agency or instrumentality of the
United States of America, Borrower shall have complied in all respects, to the
satisfaction of Lender, with the Assignment of Claims Act, (B) if such
Governmental Authority is any state of the United States of America, or any
municipality, political subdivision or other governmental entity of any such
state, Borrower shall have complied in all respects, to the satisfaction of
Lender, with any statute in effect in such state that is substantially similar
to the Assignment of Claims Act, as determined by Lender and (C) if such
Governmental Authority is a Person not described in the foregoing clauses (A) or
(B), Borrower shall deliver or cause to be delivered to such Person, in form and
content acceptable to Lender, a written Notice of Assignment of Accounts in
favor of Lender with respect to all Accounts owing by such Governmental
Authority to Borrower; 

(vii) any Account which represents an obligation of an Account Debtor located in
a foreign country; 

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(viii) any Account which arises from the sale or lease to or performance of
services for, or represents an obligation of, an employee, Affiliate, partner,
member, parent or Subsidiary of an Obligor; 

(ix) that portion of any Account which represents interim or progress billings
or title retention rights on the part of the Account Debtor; 

(x) Accounts representing "C.O.D." sales; 

(xi) Accounts arising in a transaction where Goods are placed on consignment
(other than consignments with Consignee Customers) or are sold pursuant to a
guaranteed sale, a sale or return, a sale on approval, or any other terms by
reason of which the payment by the Account Debtor may be conditional or
contingent; 

(xii) that portion of Accounts which has been restructured, extended, amended or
otherwise modified; 

(xiii) Accounts that are not payable in U.S. dollars; 

(xiv) bill and hold invoices, except those with respect to which Lender shall
have received an acceptable agreement in writing from the Account Debtor
confirming the unconditional obligation of the Account Debtor to take the goods
related to the Account and pay such invoice, so long as such Accounts satisfy
all other criteria for Eligible Accounts; 

(xv) Accounts, the collection of which, Lender, in its Permitted Discretion,
believes to be doubtful by reason of the Account Debtor's financial condition; 

(xvi) Accounts that are subject to any Lien other than Liens in favor of Lender
or Liens subordinate in priority to the Liens of Lender pursuant to a
subordination, intercreditor or other similar agreement, in form and substance
satisfactory to Lender, duly executed by the holder of such other Lien;

(xvii) that portion of any Account which represents finance charges, service
charges, sales taxes, or excise taxes; 

(xviii) unless Lender otherwise agrees in its discretion, Accounts, (A) the
payment of which is not remitted directly to the Collection Accounts or (B) due
from Account Debtors who do not remit all payments thereof directly to the
Collection Accounts; provided,  that, subsection (xviii) shall not apply during
the ninety (90) days after the Closing Date; or 

(xix) Accounts or that portion of Accounts otherwise deemed ineligible by Lender
in its Permitted Discretion. 

“Eligible Credit Insured Accounts” means Accounts of Borrower which, but for the
subsection (vii) of the definition of “Eligible Accounts,” would constitute
Eligible Accounts, provided such Accounts are insured pursuant to credit
insurance satisfactory to Lender in all respects.

"Eligible Inventory" means items of Inventory of Borrower that are finished
goods, merchantable and readily saleable to the public in the ordinary course of
Borrower's business, raw materials or work-in-process, that comply with each of
the representations and warranties respecting Inventory made by Borrower in the
Loan Documents, and are not excluded as ineligible by virtue of one or more of
the criteria set forth below.  The following items of Inventory shall not be
included in Eligible Inventory:

(i)Inventory that is subject to any Lien other than in favor of Lender (other
than third party carriers' Liens or customs brokers' Liens arising in the
ordinary course of business);

(ii)Inventory that is leased by or is on consignment to Borrower; 

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(iii)Inventory that is not located in the United States of America (excluding
territories or possessions of the United States) or at a location that is owned
or leased by Borrower, except (A) Inventory in transit between such owned or
leased locations, or (B) to the extent that Borrower has furnished Lender with
(i) any UCC financing statements or other documents that Lender may determine to
be necessary to perfect its security interest in such Inventory at such
location, and (ii) a Collateral Access Agreement executed by the Person owning
any such location;

(iv)Inventory that is comprised of goods which (A) are damaged, defective,
"seconds," or otherwise unmerchantable, (B) are to be returned to the vendor,
(C) are obsolete or slow moving, or that constitute samples, spare parts,
promotional, marketing, labels, bags and other packaging and shipping materials
or supplies used or consumed in Borrower's business, (D) are not in compliance
with all standards imposed by any Governmental Authority having regulatory
authority over such Inventory, its use or sale, or (E) are bill and hold goods;

(v)Inventory that is not subject to a perfected first-priority security interest
in favor of Lender, excluding third party carriers' liens or customs brokers'
liens arising in the ordinary course of business;

(vi)Inventory that is not insured in compliance with the provisions of Section
4.11;  

(vii)Inventory that has been sold but not yet delivered or as to which Borrower
has accepted a deposit; 

(viii)Inventory that is subject to any licensing, patent, royalty, trademark,
trade name or copyright agreement with any third party from which Borrower or
any of its Subsidiaries has received notice of a dispute in respect of any such
agreement; or 

(ix)Inventory otherwise deemed ineligible by Lender in its Permitted Discretion.

“Eligible Consigned Inventory” means Inventory of Borrower which, but for
subsections (ii) and (iii) (with respect to subsection (iii), on account of such
Inventory being located outside of the United States (including territories or
possessions of the United States)) of the definition of “Eligible Inventory,”
would constitute Eligible Inventory, provided such Inventory is located at or in
transit to the premises of a Consignee Customer and is subject to a consignment
or similar arrangement in all respects satisfactory to Lender.

“Environmental Claim” means, with respect to any Person, any action, suit,
proceeding, investigation, notice, claim, complaint or demand (written or oral)
by any Governmental Authority, alleging, asserting or claiming any actual or
potential (a) violation of any Environmental Law, (b) liability under any
Environmental Law or (c) liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
the presence, or release into the environment, of any Hazardous Materials at any
location, whether or not owned by such Person.

"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

"Environmental Liability" means any liability, obligation, damage, loss, claim,
action, suit, judgment, order, fine, penalty, fee, expense, or cost, contingent
or otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of Borrower directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal or presence of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

"ERISA" means the Employee Retirement Income Security Act of 1974.

"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with Borrower within the meaning of Section 414(b) or (c)
of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal
Revenue Code for purposes of provisions relating to Section 412 of the Internal
Revenue Code).

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"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan, (b)
the withdrawal of Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which such entity was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or a cessation of operations
that is treated as such a withdrawal under Section 4062(e) of ERISA, (c) a
complete or partial withdrawal by Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization, (d) the filing of a notice of intent to terminate, or the
treatment of a Pension Plan amendment as a termination, under Section 4041 or
4041A of ERISA. (e) the institution by the PBGC of proceedings to terminate a
Pension Plan, (f) any event or condition which constitutes grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan,(g) the determination that any Pension Plan is
considered an at-risk plan or a plan in endangered or critical status within the
meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of
ERISA, or (h) the imposition of any liability under Title IV of ERISA, other
than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
Borrower or any ERISA Affiliate.

"Event of Default" has the meaning set forth in Section 6.1.  

"Excluded Collateral" means (a) voting Stock of any CFC, solely to the extent
that such Stock represents more than 65% of the outstanding voting Stock of such
CFC, (b) any rights or interest in any contract, lease, permit, license, or
license agreement covering real or personal property of Borrower if under the
terms of such contract, lease, permit, license, or license agreement, or
applicable law with respect thereto, the grant of a security interest or lien
therein is prohibited as a matter of law or under the terms of such contract,
lease, permit, license, or license agreement and such prohibition or restriction
has not been waived or the consent of the other party to such contract, lease,
permit, license, or license agreement has not been obtained (provided,  that,
(A) the foregoing exclusions of this clause (b) shall in no way be construed (1)
to apply to the extent that any described prohibition or restriction is
unenforceable under Section 9-406, 9-407, 9-408, or 9-409 of the Code or other
applicable law, or (2) to apply to the extent that any consent or waiver has
been obtained that would permit Lender's security interest or lien
notwithstanding the prohibition or restriction on the pledge of such contract,
lease, permit, license, or license agreement and (B) the foregoing exclusions of
clauses (i) and (ii) shall in no way be construed to limit, impair, or otherwise
affect any of Lender's continuing security interests in and liens upon any
rights or interests of Borrower in or to (1) monies due or to become due under
or in connection with any described contract, lease, permit, license, license
agreement, or Stock (including any Accounts or Stock), or (2) any proceeds from
the sale, license, lease, or other dispositions of any such contract, lease,
permit, license, license agreement, or Stock), (c) any United States
intent-to-use trademark applications to the extent that, and solely during the
period in which, the grant of a security interest therein would impair the
validity or enforceability of such intent-to-use trademark applications under
applicable federal law, provided,  that, upon submission and acceptance by the
United States Patent and Trademark Office of an amendment to allege use pursuant
to 15 U.S.C. Section 1060(a) (or any successor provision), such intent-to-use
trademark application shall be considered Collateral, and (d) any vehicle
subject to a certificate of title statute having an initial acquisition price of
less than $20,000.

"Excluded Obligations" means with respect to any Obligor, each Swap Obligation
as to which, and only to the extent that, such Obligor's guaranty of or grant of
a Lien as security for such Swap Obligation is or becomes illegal under the
Commodity Exchange Act because such Obligor does not constitute an "eligible
contract participant" as defined in the act (determined after giving effect to
any keepwell, support or other agreement for the benefit of such Obligor and all
guarantees of Swap Obligations by other Obligors) when such guaranty or grant of
Lien becomes effective with respect to the Swap Obligation.  If a Hedge
Agreement governs more than one Swap Obligation, only the Swap Obligation(s) or
portions thereof described in the foregoing sentence shall be Excluded Swap
Obligation(s) for the applicable Obligor.

"Financial Covenants" mean the financial covenants set forth in Schedule B-3
hereto.

"GAAP" means generally accepted accounting principles as in effect from time to
time in the United States of America, consistently applied.

"Governmental Authority" means any federal, state, local, or other governmental
or administrative body, instrumentality, board, department, or agency or any
court, tribunal, administrative hearing body, arbitration panel, commission, or
other similar dispute-resolving panel or body.

"Guarantors" means (a) the Person or Persons set forth on the Schedule B-1
annexed hereto, (b) each Subsidiary of a Corporate Obligor, and (c) each Person
that now or hereafter executes a Guaranty in favor of Lender.  The Guarantors
are each from time to time individually referred to as a "Guarantor".  

"Guaranty" means each guaranty of payment of the Obligations executed by a
Guarantor for the benefit of Lender, as amended, restated, renewed, replaced,
substituted, supplemented or otherwise modified.

"Hazardous Materials" means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

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"Hedge Agreement" means any "swap agreement" as that term is defined in Section
101(53B)(A) of the United States Bankruptcy Code.

"Indebtedness" means, with respect to any Person, the following, whether secured
or unsecured, matured or unmatured, liquidated or unliquidated, joint or
several: (a) all obligations for borrowed money (including recourse and other
obligations to repurchase accounts or chattel paper under factoring, receivables
purchase or similar financing arrangement or for the deferred purchase price of
property or services), (b) all obligations in respect of surety bonds and
letters of credit, (c) all obligations evidenced by notes, bonds, debentures or
other similar instruments, (d) all obligations under Capitalized Leases, (e) all
obligations or liabilities of others secured by a Lien on any asset of any of
such Person, whether or not such obligation or liability is assumed, (f) all
obligations to pay the deferred purchase price of assets (other than trade
payables incurred in the ordinary course of business and repayable in accordance
with customary trade practices), (g) all guaranties of the obligations of
another Person, and (h) all Swap Obligations (which amounts will be calculated
based on the amount that would be payable by such Person if the underlying Hedge
Agreement were terminated on the date of determination).

"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended.

"Insolvency Proceeding" means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors,
receiverships, formal or informal moratoria, compositions, extensions generally
with creditors, or proceedings seeking reorganization, arrangement, or other
similar relief.

"Interest Expense" means, for the applicable period, for Borrower and
Subsidiaries on a consolidated basis, total interest expense (including interest
attributable to capital leases in accordance with GAAP) and fees with respect to
outstanding Indebtedness.

"Lender" has the meaning set forth in the preamble to this Agreement.

"Lender Expenses" means, collectively, all payments, advances, charges, costs
and expenses, including, without limitation, reasonable attorneys' fees (to
include outside counsel fees but excluding costs of Lender's in-house counsel),
appraisal fees, consultant fees, audit fees, and exam fees expended or incurred
by Lender in connection with (a) the negotiation and preparation of this
Agreement and the other Loan Documents, perfection of Lender's Liens in the
Collateral, Lender's continued administration of this Agreement and the other
Loan Documents, and the preparation of any amendments, waivers or other
agreements, instruments or documents relating to this Agreement or the other
Loan Documents, or in connection with any "workout" or restructuring, (b) the
enforcement of Lender's rights and/or the collection of any amounts which become
due to Lender under any of the Loan Documents, and (c) the prosecution or
defense of any action in any way related to any of the Obligors or any of the
Loan Documents, including, without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the above incurred in connection
with any Insolvency Proceeding (including, without limitation, any adversary
proceeding, contested matter or motion brought by Lender or any other Person)
relating to any of the Obligors or any other Person, and (d) any of the
Collateral and other examinations, appraisals, evaluations, audits and
inspections.

"Lender's Account" means such bank account owned and maintained by Lender, in
its name and for its benefit, and designated from time to time by Lender as
Lender's Account hereunder.  The Lender's Account shall be as follows:

 

For Rockland Trust Company:

Rockland Trust Company

ABA# 011304478

Acct # 2483300

Reference:  Micron Products

 

"LIBOR Deadline" has the meaning set forth in Section 1.5(b).  

"LIBOR Notice" means the notice in the form of Schedule G.  

"LIBOR Option" has the meaning set forth in Section 1.5(b).  

"Lien" means, with respect to any property, any security interest, mortgage,
pledge, lien, claim, charge or other encumbrance in, of, or on such property or
its income, including, without limitation, the interest of a vendor or lessor
under a conditional sale agreement, capital lease or other title retention
agreement.  

"Lien Release Conditions" means Lender's receipt of each of the following, in
form and content satisfactory to Lender: (a) cash payment in full of all
Obligations; (b) evidence that the Line of Credit has been terminated; and (c) a
general release by Obligors of all claims against Lender and its Affiliates
relating to the Line of Credit and Lender's performance and obligations under
the Loan Documents (other than with respect to obligations pertaining to any
continuing cash management arrangements).

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"Line of Credit" means the line of credit provided under this Agreement.

"Loan Account" means one or more accounts maintained by Lender on its books and
records in the name of Borrower.

"Loan Documents" means (a) this Agreement, and (b) each contract, instrument,
agreement and other document with or in favor of Lender to which Borrower or any
other Obligor is a party or maker required by this Agreement or at any time
entered into or delivered to Lender in connection with this Agreement and the
Line of Credit, Real Estate Term Loan, or M&E Term Loan.

“Loans” has the meaning set forth in Section 1.5(a).  

“M&E Term Loan” has the meaning set forth in Section 1.3.  

“M&E Term Loan Amount” means $2,500,000.

“M&E Term Loan Note” means the M&E Term Loan Note dated the date hereof, made by
Borrower to Lender, in form and substance satisfactory to Lender.

"Material Adverse Change" means the existence or occurrence of any of the
following: (a) any event or condition that Lender in good faith and reasonably
believes impairs, or is reasonably likely to impair, the prospect of payment or
performance by Corporate Obligors, taken as a whole, of any of the Obligations,
(b) a material adverse change in the business, prospects, operations, results of
operations, assets, liabilities or condition (financial or otherwise) of the
Obligors, taken as a whole, (c) a material impairment of the ability of the
Obligors, taken as a whole, to perform their obligations under the Loan
Documents or of Lender's ability to enforce the Obligations or realize upon any
material portion of the Collateral, or (d) a material impairment of the
enforceability or priority of Lender's Liens with respect to any material
portion of the Collateral.

"Material Contracts" means, with respect to any Person, each contract to which
such Person is a party material to the business, condition (financial or
otherwise), operations, performance, properties or prospects of such Person.

"Maturity Date" has the meaning set forth in Schedule B-1.  

"Maximum Revolver Amount" has the meaning set forth in Schedule B-1.  

“Mortgage” means that Mortgage, Security Agreement and Financing Statement dated
as of the date hereof executed by Borrower in favor of Lender.

"Mortgage Property" means the real estate and improvements thereon comprising
any part of the Real Estate Collateral.

"Multiemployer Plan" means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which Borrower or any ERISA Affiliate makes or
is obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.

"Multiple Employer Plan" means a Plan which has two or more contributing
sponsors (including Borrower or any ERISA Affiliate), at least two of whom are
not under common control, as such a plan is described in Section 4064 of ERISA.

"NPL" means the National Priorities List under CERCLA.

"NOLV Percentage" means the net orderly liquidation value of Inventory,
expressed as a percentage, expected to be realized at an orderly, negotiated
sale held within a reasonable period of time, net of all liquidation expenses,
as determined from the most recent appraisal of Borrower's Inventory performed
by an appraiser and on terms satisfactory to Lender.

"Notice of Assignment of Accounts" means a Notice of Assignment of Accounts
executed and delivered by Borrower to Lender in form and substance satisfactory
to Lender in its sole discretion.

"Obligations" means (a) all loans (including the Advances, the Real Estate Term
Loan, and the M&E Term Loan), debts, principal, interest (including any interest
that accrues after the beginning of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any such
Insolvency Proceeding), premiums, liabilities (including all amounts charged to
the Loan Account), obligations (including indemnification obligations), fees,
Lender Expenses (including any fees or expenses that accrue after the
commencement of an Insolvency Proceeding,

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regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), guaranties, and all covenants and duties of any
other kind and description owing by Borrower under or evidenced by this
Agreement, any of the other Loan Documents, or under any other present or future
document, instrument or agreement, and irrespective of whether for the payment
of money, whether direct or indirect, absolute or contingent, liquidated or
unliquidated, determined or undetermined, voluntary or involuntary, due, not due
or to become due, sole, joint, several or joint and several, incurred in the
past or now existing or hereafter arising, however arising, and including all
interest not paid when due, and all other expenses or other amounts that
Borrower is required to pay or reimburse by the Loan Documents or by law or
otherwise in connection with the Loan Documents, and (b) all obligations,
indebtedness, liabilities, reimbursement obligations, fees, or expenses owing by
any Obligor to Lender with respect to any Bank Product, whether direct or
indirect, absolute or contingent, liquidated or unliquidated, determined or
undetermined, voluntary or involuntary, due, not due or to become due,  incurred
in the past or now existing or hereafter arising, however arising. Any reference
in this Agreement or in the Loan Documents to the Obligations will include all
or any portion of the Obligations and any extensions, modifications, renewals,
or alterations of the Obligations, both prior and subsequent to any Insolvency
Proceeding, but will not include, as to any Obligor, Excluded Obligations of
such Obligor. 

"Obligor" means, individually and collectively, Borrower, Guarantors and all
other Persons obligated in respect of the Obligations or whose assets are
security for the Obligations.

"OFAC" means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

"Overadvance Amount" means, as of any date of determination, the amount, if any,
by which the sum of the outstanding Advances exceeds the lesser of (a) the
Maximum Revolver Amount and (b) the Borrowing Base.

“Parent” means Micron Solutions, Inc., a Delaware corporation.

“Parent Subordinated Debt” means the Indebtedness of the Parent in the aggregate
principal amount of $450,000 subordinated to the Indebtedness of Parent to
UniBank for Savings.

"Patriot Act" means Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001).

"PBGC" means the Pension Benefit Guaranty Corporation.

"Pension Act" means the Pension Protection Act of 2006.

"Pension Funding Rules" means the rules of the Internal Revenue Code and ERISA
regarding minimum required contributions (including any installment payment
thereof) to Pension Plans and set forth in, with respect to plan years ending
prior to the effective date of the Pension Act, Section 412 of the Internal
Revenue Code and Section 302 of ERISA, each as in effect prior to the Pension
Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections
302, 303, 304 and 305 of ERISA.

"Pension Plan" means any employee pension benefit plan (including a Multiple
Employer Plan or a Multiemployer Plan) that is maintained or is contributed to
by Borrower and any ERISA Affiliate and is either covered by Title IV of ERISA
or is subject to the minimum funding standards under Section 412 of the Internal
Revenue Code.

"Permitted Discretion" means a determination made in the exercise of the
reasonable, from the perspective of a secured asset-based lender, business or
credit judgment.  

"Permitted Dispositions" means (a) sales or other dispositions of equipment that
is substantially worn, damaged, or obsolete in the ordinary course of business,
(b) so long as no Event of Default shall have occurred and be continuing, other
sales or dispositions of equipment in the ordinary course of business, which are
on an arms' length basis for at least the fair market value thereof, and (c)
sales of inventory to buyers in the ordinary course of business, (d) the use or
transfer of money or cash equivalents in a manner that is not prohibited by the
terms of the Agreement or the other Loan Documents.

"Permitted Indebtedness" means (a) the Obligations, (b) the Indebtedness
existing on the date hereof disclosed in each case along with extensions,
refinancings, modifications, amendments and restatements thereof, provided that
(i) the principal amount thereof is not increased, (ii) if such Indebtedness is
subordinated to any or all of the Obligations, the applicable subordination
terms shall not be modified without the prior written consent of Lender, and
(iii) the terms thereof are not modified to impose more burdensome terms upon
any Loan Party, (c) obligations under Capitalized Leases and purchase money
Indebtedness secured by Permitted Liens in an amount not to exceed $150,000 in
the aggregate at any one time, (d) Indebtedness incurred as a result of
endorsing negotiable instruments received in the ordinary course of business,
(e) guaranty obligations permitted hereunder, (f) obligations in respect of
performance bonds or sureties incurred in the ordinary course of business; and
(g) Indebtedness between and among Corporate Obligors.

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"Permitted Investments" means (a) investments in cash, (b) investments in
negotiable instruments for collection, (c) advances made in connection with
purchases of goods or services in the ordinary course of business, (d)
investments received in settlement of amounts due to Borrower in the ordinary
course of business or owing to Borrower as a result of any insolvency
proceedings involving an Account Debtor or upon the foreclosure or enforcement
of any Lien in favor of Borrower, (e) debt and equity investments made by any
Corporate Obligor in any other Corporate Obligor, (f) advances to employees for
travel and entertainment expenses, (g) guarantees herein and in the other Loan
Documents, and (h) loans (other than as set forth in clause (f) above) to
shareholders, directors, officers or employees in an aggregate amount not to
exceed the greater of $280,000 less any payments of principal made after the
Closing Date in respect of any such loans outstanding as of such date and
$50,000. 

"Permitted Lien" means (a) Liens in favor of Lender, (b) Liens for unpaid taxes,
assessments, or other governmental charges or levies that are not yet delinquent
or do not have priority over Lender's Liens and the underlying taxes,
assessments, charges or levies are subjected to Permitted Protests, (c) the
interests of lessors under operating leases and non-exclusive licensors under
license agreements, (d) Liens subject to an intercreditor agreement, (other than
the Intercreditor Agreement), in form and substance satisfactory to Lender, duly
executed by the holder(s) of such Liens, (e) Purchase Money Liens to the extent
that the Indebtedness in respect thereof constitutes Permitted Indebtedness, (f)
Liens arising by operation of law in favor of warehousemen, landlords, carriers,
mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course
of business and not in connection with the borrowing of money, and which Liens
either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted
Protests, (g) Liens on amounts deposited in connection with obtaining worker's
compensation or other unemployment insurance, (h) Liens on amounts deposited in
connection with public and statutory obligations in the ordinary course of
business or the making or entering into of bids, tenders, or leases in the
ordinary course of business, in each case not in connection with the borrowing
of money (but specifically permitting Liens on amounts deposited to secure
performance or payment bonds obtained in the ordinary course of business); (i)
Liens on amounts deposited as security for surety or appeal bonds in connection
with obtaining such bonds in the ordinary course of business, and (j) with
respect to any real property, easements, rights of way, and zoning restrictions
that do not materially interfere with or impair the use or operation thereof. 

"Permitted Protest" means the right of Borrower to protest any Lien (other than
any Lien that secures the Obligations), taxes, assessment or other governmental
charges (other than payroll taxes or taxes that are the subject of a United
States federal tax lien), provided that (a) a reserve with respect to such
obligation is established on Borrower's books and records in such amount as is
required under GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by Borrower in good faith and (c) such protest effectively suspends
collection of the contested obligation and, as applicable, the contested Lien.

"Person" means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and their political subdivisions.

"Plan" means any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Plan), maintained for employees of Borrower or any
ERISA Affiliate or any such Plan to which Borrower or any ERISA Affiliate is
required to contribute on behalf of any of its employees.

"Prime Rate" means a fluctuating interest rate per annum equal at all times to
the prime rate of interest as quoted daily (or such other interval of one week
or less) in The Wall Street Journal (or any successor publication if The Wall
Street Journal is no longer published); provided, that (a) should The Wall
Street Journal cease to quote the prime rate of interest at least weekly, Prime
Rate shall mean such other indication of the prevailing prime rate of interest
as may be chosen by Lender in its discretion and (b) each change in the
fluctuating interest rate shall take effect simultaneously with the
corresponding change in the Prime Rate.

"Purchase Money Lien" means a Lien upon fixed assets which secures purchase
money Indebtedness or obligations under a Capitalized Lease but only if such
Lien shall at all times be confined solely to the fixed assets the purchase
price of which was financed through the insurance of such purchase money
Indebtedness or obligations under such Capitalized Lease secured by such Lien.

"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA.

"Real Estate Collateral" means the real property and improvements subject to
mortgages in favor of the Lender, including the real property and improvements,
located at 25 and 41 Sawyer Passway, Fitchburg, Massachusetts 01420.

“Real Estate Term Loan” has the meaning set forth in Section 1.2.  

“Real Estate Term Loan Amount” means $2,000,000.

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“Real Estate Term Loan Note” means the Real Estate Term Loan Note dated the date
hereof, made by Borrower to Lender, in form and substance satisfactory to
Lender.

"Reserves" means, as of any date of determination, an amount or percentage of a
specific category or item that Lender establishes in its Permitted Discretion
from time to time to reduce availability under the Line of Credit to reflect
events, conditions, contingencies, or risks which reasonably could affect the
assets, business or prospects of any of the Obligors or any of the Collateral or
its value or the enforceability, perfection or priority of Lender's security
interest in the Collateral.  Reserves may include, without limitation, reserves
for Dilution, Bank Products, trade payables and other obligations of any Obligor
aged in excess of 60 days beyond their terms as of the end of the immediately
preceding month, and all book overdrafts and fees of Obligors, in each case as
determined by Lender in its Permitted Discretion.

"Revolver Note" means the Revolver Note dated the date hereof, made by Borrower
to Lender, in form and substance satisfactory to Lender. 

"Settlement Days" means the number of settlement days set forth in Schedule B-1
hereto.

"Stock" means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or
nonvoting, including common stock, preferred stock, or any other equity
security.

"Subordinated Debt" means Indebtedness of Borrower, the repayment of which is
subordinate to the Obligations on terms and conditions reasonably acceptable to
Lender pursuant to an agreement, in form and substance reasonably satisfactory
to Lender, executed in favor of Lender by the holder(s) of such Indebtedness.  

"Subordinated Debt Documents" means, collectively, all agreements, documents
and/or instruments evidencing Subordinated Debt or executed by any Corporate
Obligor to or for the benefit of the holder(s) of such Subordinated Debt in
relation to such Subordinated Debt.  

"Subsidiary" of a Person means a corporation, partnership, limited liability
company or other entity in which that Person directly or indirectly owns or
controls the shares of Stock having ordinary voting power to elect a majority of
the board of directors (or appoint other comparable managers) of such
corporation, partnership, limited liability company or other entity.

"Swap Obligations" means with respect to any Person, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a "swap"
within the meaning of section 1a(47) of the Commodity Exchange Act.

"Taxes" means  taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or subsequently imposed by any jurisdiction or by
any political subdivision or taxing authority, including without limitation
payroll taxes, and all related interest, penalties or similar liabilities.

"Termination Date" means the earliest of the following: (a) the Maturity Date,
(b) the date the Line of Credit is terminated by Borrower in accordance with the
terms hereof, or (c) the date this Agreement is terminated by Lender in
accordance with the terms hereof.

﻿

 

-11-

--------------------------------------------------------------------------------

 

SCHEDULE B-1

to

CREDIT AND SECURITY AGREEMENT

﻿

SELECTED ECONOMIC AND OTHER TERMS

﻿

﻿

 

Borrowing Base:

(i)  Up to 85% multiplied by the face amount of Eligible Accounts, plus

(ii)  up to 90% multiplied by the face amount of Eligible Credit Insured
Accounts, plus

(iii)  the least of (A) up to 60% of the Cost of Eligible Inventory, (B) up to
80% of the NOLV Percentage of the Cost of such Eligible Inventory or (C)
$1,500,000 minus the amount of Eligible Consigned Inventory included in the
Borrowing Base pursuant to clause (iv) below, plus

(iv)  the lesser of (A) up to 60% of the Cost of Eligible Consigned Inventory or
(B) $400,000, minus

(v)  Reserves.

Contract LIBOR Rate:

An interest rate per annum equal to the greater of the Daily One Month LIBOR in
effect from time to time or 0.0% plus (i) with respect to Advances, 3.25%, and
(ii) with respect to each of the Real Estate Term Loan and M&E Term Loan, 3.50%.

Contract Prime Rate:

An interest rate per annum equal to the Prime Rate in effect from time to time
plus (i) with respect to Advances, .50%, and (ii) with respect to each of the
Real Estate Term Loan and M&E Term Loan, .75%.

Default Rate:

An interest rate per annum equal to the then applicable Contract LIBOR Rate or
Contract Prime Rate, as applicable, plus 2.00%.

Maturity Date:

36 months after the Closing Date.

Maximum Revolver Amount:

$5,000,000.

Settlement Days:

1 day.

Guarantor:

Micron Solutions, Inc., a Delaware corporation.

﻿

﻿

 

--------------------------------------------------------------------------------

 

SCHEDULE B-2

to

CREDIT AND SECURITY AGREEMENT

﻿

FEES

﻿

﻿

On the Closing Date:

(a)  Closing Fee. A non-refundable closing fee of $30,000, which will be fully
earned and payable on such date.

Monthly:

(a)  Cash Management and Other Service Fees. Fees for cash management services
and other Bank Products and services provided to Borrower by Lender, in
accordance with the agreements entered into between any Borrower and Lender from
time to time, including Lender's customary fees and charges with respect to the
disbursement of funds or the receipt of funds to or for the account of Borrower
(whether by wire transfer or otherwise).

(b)  Unused Line Fee. An unused line fee equal to 0.25% per annum of the amount
by which the Maximum Revolving Facility Amount exceeds the average daily
outstanding principal balance of the Advances during the immediately preceding
month (or part thereof), which each such fee shall be deemed to be fully earned
and payable, in arrears, on the first day of each month until the Termination
Date.

Upon demand by Lender or as otherwise specified in this Agreement:

(a)  Collateral Exam Fees, Costs and Expenses. Subject to Section 4.4 of this
Agreement, Lender's fees, costs and expenses in connection with any collateral
exams or inspections conducted by or on behalf of Lender at the current rates
established from time to time by Lender as its fee for collateral exams or
inspections, plus all actual out-of-pocket reasonable costs and expenses
incurred in conducting any collateral exam or inspection. Borrower will
reimburse Lender for all fees and expenses related to collateral examinations or
inspections obtained prior to the Closing Date. Applicable fees related to
electronic collateral reporting will also be charged.

(b)  Appraisal Fees, Costs and Expenses. Subject to Section 4.4, Lender's
out-of-pocket reasonable fees, costs and expenses (including any fees, costs and
expenses incurred by any appraiser) in connection with any appraisal of all or
any part of the Collateral conducted at the request of Lender. In addition,
Borrower will be obligated to reimburse Lender for all out-of-pocket reasonable
fees, costs and expenses related to appraisals obtained prior to the Closing
Date.

﻿

﻿

 

--------------------------------------------------------------------------------

 

SCHEDULE B-3

to

CREDIT AND SECURITY AGREEMENT

﻿

FINANCIAL COVENANTS

﻿

﻿

1.  DEBT SERVICE COVERAGE RATIO. Borrower shall cause to be maintained a Debt
Service Coverage Ratio of not less than 1.20 to 1.0, tested as of for March 31,
2018 and as of the last day of each fiscal quarter thereafter, in each instance
(other than with respect to the fiscal quarter ended March 31, 2018), for the
trailing 12 month period then ended (and with respect to the fiscal quarter
ended March 31, 2018, for the trailing 9 month period then ended).

2.  CLOSING AVAILABILITY. As of the Closing Date and after giving effect to the
initial Advance hereunder, Borrower shall have Availability of at least
$1,000,000.

3.  AVAILABILITY GENERALLY.  After the Closing Date and after giving effect to
all Advances hereunder, Borrower shall have Availability of at least $250,000,
tested as of the first day of each month.

For purposes of this Schedule, and as used in the Agreement, the following terms
shall have the meanings given to them below:

“EBITDA” means, for any applicable period, for Parent and its Subsidiaries on a
consolidated basis, net income, calculated before interest expense, provision
for income taxes, depreciation and amortization expense, gains or losses arising
from the sale of capital assets, gains arising from the write-up of assets, and
any extraordinary gains (in each case, to the extent included in determining net
income).

“Debt Service Coverage Ratio” means, for any applicable period, for Parent and
its Subsidiaries on a consolidated basis, the ratio of (a) EBITDA minus Cash
Taxes minus distributions paid minus Unfunded Capital Expenditures, to (b)
scheduled payments of principal required to be paid in respect of Indebtedness
plus Interest Expense paid.

“Unfunded Capital Expenditures” means all Capital Expenditures of Parent and its
Subsidiaries other than those made utilizing financing provided by the
applicable seller or third party lenders. For the avoidance of doubt, Capital
Expenditures made by Borrower utilizing the Line of Credit shall be deemed
Unfunded Capital Expenditures.

 

﻿

﻿

 

--------------------------------------------------------------------------------

 

SCHEDULE C

to

CREDIT AND SECURITY AGREEMENT

﻿

DISCLOSURE SCHEDULE

﻿

﻿

3.3  LITIGATION

﻿

None

﻿

3.5  TAXES

﻿

None

﻿

3.12  ELIGIBLE INVENTORY

﻿

Locations of Eligible Inventory:

﻿

1.  Micron Products, Inc., 25 Sawyer Passway, Fitchburg, Massachusetts 01420

﻿

2.  Micron Products, Inc., 41 Sawyer Passway, Fitchburg, Massachusetts 01420

﻿

3.  Cardinal Health Manufacturing GmbH (f/k/a Covidien Deutschland GmbH),
Quedlinburger Strasse 39a, 38820 Halberstadt, Germany

﻿

4.  AMBU Sdn. Bhd., Lot 69B, Lintang Bayan Lepas 6, Phase IV, 11900, Penang
Malaysia

﻿

5.  3M Canada, Gardewine Warehouse, 60 Eagle Drive, Winnipeg, MB R2R 1V5

﻿

﻿

3.13(c) ERISA

﻿

None

﻿

3.15  ENVIRONMENTAL COMPLIANCE

﻿

3.15  (a)  1. Phase I Environmental Site Assessment of 25 and 41 Sawyer Passway,
Fitchburg, MA, dated 12/13/2017

﻿

2.  MassDEP and Micron entered into a Consent Order for violating Hazardous
Waste Management and Toxics Use Reduction Regulations related to a single
container located in short term storage, which based upon the date, should have
been moved to long term storage. The Company paid a penalty to the DEP in which
the DEP agreed to direct 60% of such penalty as a donation to the Fitchburg Fire
Department.

﻿

3.15  (b)  1. 10 Main Street, Fitchburg, Massachusetts 01420

﻿

2.  1 Summer Street, Fitchburg, Massachusetts 01420

﻿

3.  15 Summer Street, Fitchburg, Massachusetts 01420

 

--------------------------------------------------------------------------------

 

3.15  (c)  Phase I Environmental Site Assessment of 25 and 41 Sawyer Passway,
Fitchburg, MA, dated 12/13/2017

﻿

﻿

3.16  LABOR MATTERS

﻿

1.  Employment Agreement with Salvatore Emma, Jr., President & Chief Executive
Officer

﻿

2.  Employment Agreement with Derek T. Welch, Chief Financial Officer

﻿

3.  Executive Incentive Agreement

﻿

4.  2010 Equity Incentive Plan

﻿

5.  Board of Directors Stock Ownership Guidelines

﻿

6.  Directors Compensation Plan

﻿

7.  Schedule of Outstanding Stock Options

﻿

﻿

3.17  MATERIAL CONTRACTS

﻿

1.  Employment Agreement between the Company and Derek T. Welch dated as of
January 20, 2015.

﻿

2.  Employment Agreement between the Borrower and Salvatore Emma, Jr. dated as
of January 1, 2017.

﻿

3.  Employment Agreement between the Borrower and Derek T. Welch dated as of
January 1, 2017.

﻿

4.  Master Supply Agreement between the Borrower and 3M Company dated July 15,
2015.

﻿

5.  Sub-Agreement Under Master Supply Agreement between the Borrower and 3M
Canada dated July 15, 2015.

﻿

6.  VMI Agreement between the Borrower and AMBU Sdn. Bhd. dated August 8, 2016.

﻿

7.  Agreement for Consignment Stock between Borrower and Cardinal Health Germany
Manufacturing (f/k/a Covidien Deutschland GmbH).

﻿

﻿

3.18  TITLED VEHICLES

﻿

1.  2004 Chevrolet Silverado, Vehicle Identification Number 1GCHK29U64E249300;

﻿

2.  1995 GMC Sierra, Vehicle Identification Number 1GDHK34F9SE537240; and

﻿

3.  2004 Freightliner M2, Vehicle Identification Number 1FVACWAK84HM61599.

﻿

 

--------------------------------------------------------------------------------

 

3.19  CAPITALIZATION

﻿

1.  Number of Authorized Shares of Common Stock: 1,000

﻿

2.  Number of Issued and Outstanding Shares of Common Stock: 1,000

﻿

3.  Par value per share: $1.00

﻿

3.  Legal and Beneficial Ownership of Common Stock:

﻿

  Micron Solutions, Inc. – 1,000 Shares of Common Stock with Par Value

﻿

﻿

 

--------------------------------------------------------------------------------

 

﻿

SCHEDULE D

to

CREDIT AND SECURITY AGREEMENT

﻿

FINANCIAL STATEMENTS

﻿

﻿

 

As soon as available, but within 45 days after the end of each fiscal quarter: 

(a)   consolidated internally prepared financial statements of Parent and its
Subsidiaries for such quarter (such internally prepared financial statements to
include a balance sheet, income statement, statement of cash flow and statement
of owner's equity), prepared in accordance with GAAP (except for year-end
adjustments and the lack of footnotes); and

(b)   a Compliance Certificate along with the underlying calculations, including
the calculations to establish compliance with the financial and certain other
covenants set forth in this Agreement. 

As soon as available, but within 30 days after the end of each month (unless the
end of such month is also the end of the fiscal quarter): 

(a)   a Compliance Certificate along with the underlying calculations, including
the calculations to establish compliance with the minimum net Availability
financial covenant set forth in this Agreement.

As soon as available, but within 120 days after the end of each fiscal year: 

(a)   consolidated financial statements of Parent and its Subsidiaries for such
fiscal year, audited by independent certified public accountants reasonably
acceptable to Lender, prepared in accordance with GAAP (such financial
statements to include a balance sheet, income statement, statement of cash flow,
and statement of owner's equity and, if prepared, such accountants' letter to
management); and

(b)   a Compliance Certificate with the underlying calculations, including the
calculations to establish compliance with the financial and certain other
covenants set forth in this Agreement. 

As soon as available, but at least 30 days before the start of each of
Borrower's fiscal years: 

forecasted (i) balance sheets, (ii) profit and loss statements, (iii)
availability projections, and (iv) cash flow statements, all prepared for Parent
and its Subsidiaries on a consolidating and consolidated basis consistent with
Borrower's historical financial statements, together with appropriate supporting
details and a statement of underlying assumptions, in form and substance
satisfactory to Lender, in its sole discretion, for the next fiscal year, on a
monthly basis, certified by the chief financial officer of Borrower as being
Borrower's good faith estimate of the financial performance of Parent and its
Subsidiaries during the period covered. 

On request of Lender: 

such other information as Lender may reasonably request from time to time. 

﻿

﻿

 

--------------------------------------------------------------------------------

 

﻿

SCHEDULE E

to

CREDIT AND SECURITY AGREEMENT

﻿

COLLATERAL REPORTING*

﻿

﻿

 

With each request for an Advance: 

(a)   a borrowing base certificate and collateral report, with respect to
Borrower;

On Wednesday of each week (as of the immediately preceding Friday), or more
frequently if Lender requests: 

(a)   an accounts receivable roll-forward, tied to the beginning and ending
accounts receivable balances of Borrower's general ledger as of the end of the
immediately preceding roll-forward (or as of such other date as Lender may
request), with supporting details supplied from sales journals, collection
journals, credit registers and any other records;

(b)   a detailed aging by total of Borrower's Accounts, together with a
reconciliation to the accounts receivable roll-forward and supporting
documentation for any reconciling items noted; and

(c)   a detailed aging by vendor of Borrower's accounts payable, together with
supporting documentation for any reconciling items noted. 

On or before the 15th day after the commencement of each month (as of the
immediately preceding month end): 

(a)   Inventory reports specifying in-transit, slow moving (i.e., more than 12
months in inventory from the date of purchase or creation, as applicable) and
obsolete Inventory and the Cost thereof, by category.

(b)   accounts receivable aging and reconciliation to Borrower’s general ledger;
and

(c)   accounts payable aging and reconciliation to Borrower’s general ledger. 

On a semi-annual basis, each at the request of Lender: 

(a)   a detailed list of each Borrower's customers, with address and contact
information.

Upon request by Lender: 

(a)   if requested by Lender, copies of invoices and credit memos sent to
Account Debtors; and

(b)   such other reports and information as to the Collateral and as to the
Obligors, as Lender may reasonably request. 

﻿

﻿

﻿

______________________

* All of the below deliverables shall be in form and in a format reasonably
acceptable to Lender.

 

--------------------------------------------------------------------------------

 

SCHEDULE F

to

CREDIT AND SECURITY AGREEMENT

﻿

FORM OF COMPLIANCE CERTIFICATE

﻿

[on Micron Products Inc.'s Letterhead]

﻿

﻿

﻿

 

To:

[]

﻿

__________________

﻿

__________________

﻿

Attn: ______________

﻿

 

Re:

Compliance Certificate dated [___________________]

﻿

 

﻿

Ladies and Gentlemen:

﻿

Reference is made to that certain Credit and Security Agreement (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) dated as of December 29, 2017 by and between Rockland Trust Company
(“Lender”) and Micron Products Inc. (the “Borrower”). Capitalized terms used in
this Compliance Certificate have the meanings set forth in the Credit Agreement
unless specifically defined herein.

﻿

Pursuant to the Credit Agreement, the undersigned [Chief Financial Officer]
[President] of Borrower hereby certifies that:

﻿

1.    Attached to Exhibit A is the financial information of Parent and its
Subsidiaries which is required to be furnished to Lender pursuant to Section 4.1
of the Credit Agreement for the period ended ________________ (the “Reporting
Date”). Such financial information has been prepared in accordance with GAAP
(except, in the case of internally prepared financial statements, for year-end
adjustments and the lack of footnotes) and fairly presents in all material
respects the financial condition of Borrower and its Subsidiaries.

﻿

2.    Such officer has reviewed the terms of the Credit Agreement.

﻿

3.    Such review has not disclosed the existence on and as of the date of this
Certificate, and the undersigned does not have any knowledge of the existence as
of the date of this Certificate, of any existing Default or Event of Default.

﻿

4.    The representations and warranties of each of the Obligors set forth in
the Credit Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date of this Certificate (except to the
extent they relate to a specified date).

﻿

5.    As of the Reporting Date, (a) the Debt Service Coverage Ratio is ____ to
1.0, which [is] [is not] less than 1.20 to 1.0, and (b) Borrower’s Availability
is $___________, which is [less] [greater] than $250,000. The calculations with
respect to the above Financial Covenants is as demonstrated on the schedule
attached hereto.

﻿

6.    Except as set forth on Exhibit B, since the Closing Date neither Borrower
nor Parent has registered any Patents, Trademarks or Copyrights with the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable.

﻿

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned
this [____] day of [_____________].

﻿

﻿

﻿

 

 

 

﻿

 

 

 

﻿

Name:

 

 

﻿

Title:

[Chief Financial Officer] [President]

 

﻿

 

--------------------------------------------------------------------------------

 

﻿

EXHIBIT A

﻿

﻿

﻿

﻿

﻿

﻿

 

--------------------------------------------------------------------------------

 

﻿

EXHIBIT B

﻿

﻿

﻿

﻿

﻿

 

--------------------------------------------------------------------------------

 

SCHEDULE G

to

CREDIT AND SECURITY AGREEMENT

﻿

FORM OF LIBOR NOTICE

﻿

Rockland Trust Company

120 Liberty Street

Brockton, MA 02301

Attention: Thomas Meehan, Relationship Manager

﻿

Ladies and Gentlemen:

﻿

Please refer to the Credit and Security Agreement dated as of December 29, 2017
(as amended, restated or otherwise modified from time to time, the “Credit
Agreement”) between Rockland Trust Company (“Lender”) and Micron Products Inc.
(“Borrower”). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Credit Agreement. This notice is given
pursuant to Section 1.5 of the Credit Agreement and constitutes a representation
by the undersigned that (a) each of the representations and warranties set forth
in the Credit Agreement and in the other Loan Documents is true and correct in
all respects as of the date hereof (or to the extent any representations or
warranties are expressly made solely as of an earlier date, such representations
and warranties shall be true and correct as of such earlier date), both before
and after giving effect to the Loans requested hereby, and (b) no Default or
Event of Default is in existence, both before and after giving effect to the
Loans requested hereby.

﻿

This LIBOR Notice represents Borrower’s request to elect the LIBOR Option with
respect to the outstanding balance of all Loans.

﻿

﻿

﻿

 

 

 

﻿

MICRON PRODUCTS INC.

 

﻿

 

 

 

﻿

 

 

 

﻿

By:

 

 

﻿

Name:

 

 

﻿

Title:

 

 

﻿

 

--------------------------------------------------------------------------------