Exhibit 10.1
 

CREDIT AGREEMENT
 
 
by and between
 
 
 
FitLife Brands, Inc.
 
 
and
 
 
Mutual of Omaha Bank
 
 
 
Dated
 
as of
 
September 24, 2019
 
 

 
CREDIT AGREEMENT
 
THIS CREDIT AGREEMENT (this "Agreement") dated as of September 24, 2019, is
entered into by and between FitLife Brands, Inc., a Nevada Corporation
(“Borrower”) and Mutual of Omaha Bank ("Bank"). In consideration of the premises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
 
Article I.
DEFINITIONS AND ACCOUNTING MATTERS
 
Section 1.01 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
 
“Accounts Receivable” means all of Borrower’s “Accounts”, as such term is
defined in the UCC, including, without limitation, the aggregate unpaid
obligations of customers and other account debtors to Borrower arising out of
the sale or lease of goods or rendition of services by such Borrower on an open
account or deferred payment basis.
 
"Accounts Receivable Debtor" means a Person obligated to pay Borrower the amount
of any Accounts Receivable.
 
"Advances" means loans made pursuant to the Revolving Line of Credit under
Section 2.01.
 
"Affiliate" means, as to any Person, any other Person (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, such Person, (b) that directly or indirectly
beneficially owns or holds five percent (5%) or more of any class of voting
stock of such Person, or (c) five percent (5%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person in
question. The term "control" means the possession, directly or indirectly, of
the power to direct or cause direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise; provided, however, in no event shall Bank be deemed an Affiliate of
Borrower or any of their Subsidiaries.
 
"Agreement" has the meaning specified in the introduction hereto.
 
“Bank’s Office” means Bank's address and, as appropriate, account as set forth
in Section 7.02, or such other address or account as Bank may from time to time
notify to Borrower.
 
"Borrower" has the meaning specified in the introduction hereto.
 
"Borrowing Base" means:
 
(a)           Seventy-five percent (75%) of Eligible Accounts Receivable; plus
 
(b)         Fifty percent (50%) of Inventory. For purposes of this calculation,
Inventory shall be the lesser of (i) fifty percent (50%) of Eligible Accounts
Receivable or (ii) fifty percent (50%) of the maximum amount of the Revolving
Line of Credit.
 
"Borrowing Base Certificate" means the certificate in the form of Exhibit A
hereto, properly completed and duly executed by any authorized officer of
Borrower, who is authorized to deliver the Borrowing Base Certificate on behalf
of Borrower.
 
 
 
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"Business Day" means any day other than a Saturday, Sunday, or other day on
which commercial banks are authorized to close under the Laws of Nebraska, or
are in fact closed in, the state where Bank's Office is located and, if such day
relates to any LIBOR Rate, means any such day on which dealings in dollar
deposits are conducted by and between banks in the applicable offshore dollar
interbank market.
 
"Closing Date" means September 24, 2019.
 
"Collateral" means the property in which Liens or security interests have been
granted pursuant to the Security Agreement and any other Collateral, now or
hereafter, executed by Borrower.
 
"Compliance Certificate" means a certificate, in substantially the form attached
hereto as Exhibit B, properly completed and executed by the chief financial
officer of Borrower.
 
"Contractual Obligation" means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
 
"Debt Service" means the amount of cash required to make payments on the
principal and interest on all Indebtedness of Borrower.
 
"Default Rate" has the meaning specified in Section 2.04(c).
 
"Disposition" or "Dispose" means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.
 
"Distribution" means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other equity
interest of Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other equity interest or of any option,
warrant or other right to acquire any such capital stock or other equity
interest.
 
"EBITDA" means for any period, the sum of the following determined in accordance
with GAAP, (a) net income plus (b) the following to the extent deducted in
calculating such net income (without duplication): (i) interest expense, (ii)
any provision for federal, state, local and foreign income taxes payable, and
(iii) depreciation and amortization expense.
 
“Eligible Accounts Receivable” means Accounts Receivable, which meet the
following requirements:
 
(a)           
it is not represented by a promissory note, any chattel paper or any other
instrument and is not payable on an installment basis;
 
(b)           
it arises in the ordinary course of Borrower’s business and is genuine and in
all respects what it purports to be;
 
(c)           
it arises from the providing of services by Borrower or the sale of goods by
Borrower, which goods comply with such Account Receivable Debtor’s
specifications (if any) and have been delivered to and accepted by, such Account
Receivable Debtor and Borrower has possession of shipping and delivery receipts
evidencing such shipment;
 
 
 
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(d)            
it is evidenced by an invoice rendered to the Account Receivable Debtor with
respect thereto which (A) is dated not earlier than the date of shipment or
delivery, (B) has payment terms not unacceptable to Bank in its reasonable
credit judgment exercised in a manner consistent with Bank's normal credit
practices; (C) which does not provide for a payment more than ninety (90) days
after the invoice date; (D) is not unpaid on the date that is thirty (30) days
after the due date set forth in the invoice evidencing the Accounts Receivable,
provided, however, that Accounts Receivable evidenced by invoices stating that
payment is "Due Upon Receipt" shall be deemed for purposes of determining
eligibility to have a due date based on the historical payment experience with
respect to such Account Receivable Debtor provided that the payment experience
can reasonably be determined and the payment terms are not in excess of 90 days
after receipt of invoice by such Account Receivable Debtor and (E) contains a
legend in form and substance acceptable to Bank directing the Account Receivable
Debtor to pay the amount due under the invoice directly to Bank in the event of
Default by Debtor;
 
(e)           
it is subject to a first priority security interest in favor of Bank and is not
subject to any assignment, claim or Lien;
 
(f)           
it is a valid, legally enforceable and unconditional obligation of the Accounts
Receivable Debtor with respect thereto, and is not subject to setoff,
counterclaim, credit or allowance (except any credit or allowance which has been
deducted in computing the net amount of the applicable invoices shown in the
original schedule or Borrowing Base Certificate furnished to Bank identifying or
including such Accounts Receivable) or adjustment by the Accounts Receivable
Debtor with respect thereto, or to any claim by such Accounts Receivable Debtor
denying liability thereunder in whole or in part;
 
(g)           
there are not proceedings or actions which are then threatened or pending
against the Accounts Receivable Debtor with respect thereto or to which such
Accounts Receivable Debtor is a party which are likely to result in any material
adverse change in such Accounts Receivable Debtor’s financial condition or in
its ability to pay any Accounts Receivable in full when due;
   
(h)           
it does not arise out of a contract which, by its terms, forbids, restricts or
makes void or unenforceable the assignment by Borrower to Bank of the Accounts
Receivable arising with respect thereto;
 
(i)           
the Accounts Receivable Debtor with respect thereto is not a Subsidiary or
Affiliate of Borrower, or a director, officer, employee or agent of Borrower or
a Subsidiary or Affiliate of Borrower;
 
(j)           
the Accounts Receivable Debtor with respect thereto is a resident or citizen of,
and is located within, the United States of America, Jamaica, Bahamas or
Trinidad, unless the sale of goods giving rise to the Accounts Receivable is on
letter of credit, banker’s acceptance or other credit support terms satisfactory
to Bank;
 
(k)           
it is not an Accounts Receivable arising from a “sale on approval”, “sale or
return” or “consignment”, or subject to any other repurchase or return
agreement;
 
(l)           
it is not an Accounts Receivable with respect to which possession and/or control
of the goods sold giving rise thereto is held, maintained or retained by
Borrower or any Subsidiary (or by any agent or custodian of Borrower or any
Subsidiary) for the account of or subject to further and/or future direction
from the Accounts Receivable thereof;
 
(m)           
it is not an Accounts Receivable which in any way fails to meet or violates any
warranty, representation or covenant contained in this Agreement or any Loan
Document relating directly or indirectly to Accounts Receivable;
 
 
 
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(n)            
if the Accounts Receivable Debtor is the United States of America or any state
or local governmental entity, or any department, agency or instrumentality
thereof, Borrower has assigned its rights to payment of such Accounts Receivable
to Bank, pursuant to the Assignment of Claims Act of 1940, as amended, or
pursuant to any similar state or local law, regulation or requirement;
 
(o)           
it is not owing by an Accounts Receivable Debtor with respect to which
twenty-five percent (25%) or more of the aggregate Accounts Receivable owing by
such Accounts Receivable Debtor to Borrower are not Eligible Accounts Receivable
for any reason; and
 
(p)           
if Bank, in its reasonable credit judgment exercised in a manner consistent with
Bank's normal credit practices, has established a credit limit for an Accounts
Receivable, the aggregate dollar amount of Accounts Receivable due from such
Accounts Receivable Debtor, including such Accounts Receivable, does not exceed
such credit limit.
 
Accounts Receivable which have not been paid in full within ninety (90) days
from the invoice date will be ineligible. The entire balance of any Account
Receivable of any single Accounts Receivable Debtor will be ineligible whenever
the portion of the Account Receivable which has not been paid within ninety (90)
days from the invoice date is in excess of twenty-five percent (25%) of the
total amount outstanding on the Account.
 
Bank further reserves the right, in its reasonable credit judgment exercised in
a manner consistent with Bank's normal credit practices, from time to time
hereafter upon ten (10) days prior written notice to Borrower, to designate
specific ineligible Accounts Receivable; provided, that such designation shall
be immediately effective upon the occurrence of an Event of Default or if an
Event of Default is in existence at the time of such designation.
 
"Eligible Pre-Sold Inventory" means Inventory in transit subject to a Forward
Priced Contract and for which Borrower has provided to Bank such documents or
information as requested by Bank.
 
"Environmental Laws" means all laws and regulations relating to environmental,
health, safety and land use matters applicable to any property.
 
"ERISA" means the Employee Retirement Income Security Act of 1974.
 
"Events of Default" has the meaning specified in Section 6.01.
 
"Fixed Charge Coverage Ratio" means (a) the ratio of EBITDA plus all rental and
lease expenses of Borrower less all unfinanced capital expenditures of Borrower
less all Distributions made by Borrower less all cash taxes paid by Borrower, to
(b) Borrower's Debt Service plus all rental and lease expenses of Borrower, as
calculated by Bank.
 
"Forward Priced Contract" means a contract between Borrower and any Person for
the purchase of Inventory by Borrower for which the price to be paid by Borrower
has been established and which Inventory has been contracted to be sold by
Borrower to another Person.
 
"GAAP" means generally accepted accounting principles.
 
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
 
 
 
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"Indebtedness" means, as to any Person at a particular time, all of the
following, (without duplication) whether or not included as indebtedness or
liabilities in accordance with GAAP:
 
(a)           all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements, letters of credit or other similar instruments;
 
(b)           all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank
guarantees, surety bonds and similar instruments;
 
(c)           all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business);
 
(d)           indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse;
 
(e)           capital leases; and
 
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person.
 
"Interest Period" means with respect to each Advance, the period commencing on
the date such Advance is established, and ending on the numerically
corresponding day in the first calendar month thereafter, except that each such
Interest Period which commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing, (a) each
Interest Period which would otherwise end on a day which is not a Business Day
shall end on the next succeeding Business Day, and (b) any Interest Period which
would otherwise extend beyond any Termination Date shall end on any Termination
Date.
 
“Inventory” means any and all of Borrower’s goods (including, without limitation
goods in transit) wheresoever located, which are held for sale and are in
salable condition, the sale of which will give rise to an Accounts Receivable
and which are not returned to and/or repossessed and/or stopped in transit by
Borrower.
 
"Investment" means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, guaranty or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
 
"Laws" means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
 
"LIBOR Margin" means 2.75% per annum.
 
 
 
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"LIBOR Rate" for any Advance and any Interest Period therefor, means an interest
rate per annum equal at all times during such Interest Period to the quotient of
(i) the rate per annum conclusively determined by Bank for such Interest Period
at which deposits in U.S. dollars in immediately available funds are offered,
which appearing on Bloomberg L.P. (the "Service") Page BBAM1 (Official BBA USD
Dollar LIBOR Fixings) (or any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service as
determined by Bank from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in an amount equal to the relevant
Advance in the London interbank market) as of 11:00 A.M. (London time) on the
first Business Day of such Interest Period, for delivery on the first day of
such Interest Period in an amount equal to the principal amount of the Advance
outstanding on the first day of such Interest Period for a period equal to such
Interest Period divided by (ii) the remainder of one (1) minus the applicable
LIBOR Reserve Percentage.
 
"LIBOR Reserve Percentage" means, with respect to each Interest Period, a
percentage (expressed as a decimal) equal to the daily average during such
Interest Period of the percentages in effect on each day of such Interest
Period, as prescribed by the Board of Governors of the Federal Reserve System
(or any successor thereto), for determining the maximum reserve requirements
applicable to "Eurocurrency Liabilities" pursuant to Regulation D of the Board
of Governors of the Federal Reserve System or any other then applicable
regulation of the Board of Governors which prescribes reserve requirements
applicable to "Eurocurrency Liabilities" as presently defined in Regulation D.
 
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
 
"Loan Documents" means this Agreement, the Note, the Security Agreement, and all
other agreements, documents, instruments, and certificates of Borrower delivered
to, or in favor of, Bank under this Agreement or in connection herewith or
therewith, including, without limitation, all agreements, documents,
instruments, certificates and delivered in connection with the extension of
Advances by Bank hereunder.
 
"Loan Obligations" means all obligations, indebtedness, and liabilities of
Borrower, to Bank arising pursuant to any of the Loan Documents, whether now
existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several, including, without limitation, the obligation of Borrower to repay the
Advances, interest on the Advances, and all fees, costs, and expenses (including
attorneys' fees and expenses) provided for in the Loan Documents.
 
“Material Adverse Effect” means any set of circumstances or events which (i) has
or could reasonably be expected to have any material adverse effect upon the
validity or enforceability of any Loan Documents; (ii) is or could reasonably be
expected to be material and adverse to the condition (financial or otherwise),
of the business assets, operations, or property of Borrower or (iii) materially
impairs or would reasonably be expected to materially impair the ability of
Borrower to perform the obligations under the Loan Documents.
 
"Maximum Rate" has the meaning specified in Section 2.04(a).
 
"Non-Excluded Taxes" has the meaning specified in Section 2.09.
 
"Note" means a promissory note executed by Borrower in a form as provided by
Bank.
 
"Obligations" means all Loan Obligations.
 
 
 
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"Ordinary Trade Payable Dispute" means trade accounts payable, in an aggregate
amount not in excess of $200,000 with respect to Borrower, with respect to which
(a) there exists a bona fide dispute between Borrower and the vendor,
(b) Borrower is contesting the same in good faith by appropriate proceedings,
and (c) Borrower has established appropriate reserves on its financial
statements.
 
"Organizational Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation and operating agreement; and (c) with respect to any partnership,
joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation and any agreement,
instrument, filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in the
jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity.
 
"Outstanding Credit" means, at any time of determination, the sum of the
aggregate amount of Advances pursuant to the Revolving Line of Credit then
outstanding.
 
"Permitted Encumbrances" means the items listed in Section 5.02(a)(i) through
(x).
 
"Person" means any individual, corporation, business trust, association,
company, partnership, joint venture, Governmental Authority, or other entity.
 
"Request for Advance" has the meaning specified in Section 2.02(a)(i).
 
"Revolving Line of Credit" means $2,500,000.00.
 
"Security Agreement" means a security agreement, in a form as provided by Bank.
 
"Service" has the meaning specified in the definition of LIBOR Rate.
 
"SOFR" with respect to any day means the secured overnight financing rate
published for such day by the Federal Reserve Bank of New York, as the
administrator of the benchmark, (or a successor administrator) on the Federal
Reserve Bank of New York's Website.
 
"Subordinated Debt" means any Indebtedness subordinated in form and substance
acceptable to Bank.
 
Subordination Agreement" means an agreement in form and substance acceptable to
Bank between Bank and the holder of any Subordinated Debt.
 
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
Borrower.
 
"Termination Date" means September 23, 2020 or the date of the termination in
whole of the Revolving Line of Credit pursuant to Section 6.02.
 
 
 
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Section 1.02 Accounting Matters. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistently applied, except as otherwise stated herein. To enable
the ready and consistent determination of compliance by Borrower with its
obligations under this Agreement, Borrower will not change the manner in which
either the last day of its fiscal year or the last days of the first three
fiscal quarters of its fiscal years is calculated.
 
Section 1.03 Construction. Wherever herein the singular number is used, the same
shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate. The headings, captions or
arrangements used in any of the Loan Documents are, unless specified otherwise,
for convenience only and shall not be deemed to limit, amplify or modify the
terms of the Loan Documents, nor affect the meaning thereof.
 
Article II.
AMOUNTS AND TERMS OF THE REVOLVING LINE OF CREDIT
 
Section 2.01 The Revolving Line of Credit. Bank agrees, on the terms and
conditions hereinafter set forth, to extend a Revolving Line of Credit to
Borrower from time to time during the period from the Closing Date to and
including the Termination Date (this and certain other capitalized terms are
defined in Section 1.01) by making loans to Borrower on a revolving basis from
time to time provided, however, at no time shall the Outstanding Credit exceed
the lesser of the Borrowing Base as reflected on the most recent Borrowing Base
Certificate, or the Revolving Line of Credit. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, Borrower may
borrow, prepay, and reborrow hereunder the amount of the Revolving Line of
Credit under this Section 2.01.
 
Section 2.02 Making Advances Pursuant to the Revolving Line of Credit.
 
(a) Advances Pursuant to the Revolving Line of Credit.
 
(i) Advances. Each Advance under the Revolving Line of Credit shall be made, to
the extent that Bank is so obligated under Section 2.01, on notice from Borrower
(a "Request for Advance") to Bank delivered before 12:00 P.M. Central Daylight
Time ("CDT") on a Business Day prior to the date of such Advance, specifying the
amount of such Advance, and the Interest Period therefor; provided that, no
Advances shall be established while an Event of Default exists or if the
interest rate for such Advances would exceed the Maximum Rate. Any Request for
Advance received after 12:00 P.M. CDT shall be deemed to have been received and
be effective on the next Business Day. The amount of such Advance shall, subject
to the terms and conditions of this Agreement, be made available to Borrower as
set forth in the Request for Advance by (i) depositing the same, in same day
funds, in an account of Borrower maintained with Bank or (ii) wire transferring
such funds to the Person or Persons designated in the Request for Advance. Each
Request for Advance will be accompanied by a most recently reviewed Borrowing
Base Certificate.
 
(b) Requests for Advances Irrevocable. Each Request for Advance shall be
irrevocable and binding on Borrower and Borrower shall indemnify Bank against
any loss or expense any one of them may incur as a result of any failure to
borrow any Advance after a Request for Advance (including any failure resulting
from the failure to fulfill on or before the date specified for such Advance the
applicable conditions set forth in Article III), including, without limitation,
any loss (including loss of anticipated profits) or expense actually incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
Bank to fund such Advance when such Advance, as a result of such failure, is not
made on such date.
 
(c) Use of Proceeds. The proceeds of the Advances shall be used by Borrower to
finance its working capital requirements.
 
 
 
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Section 2.03 Note; Repayment of Principal.
 
(a) Advances. The Advances shall be evidenced by the Note, delivered to Bank
pursuant to Article II, in the amount of its Revolving Line of Credit. Borrower
shall repay to Bank the aggregate unpaid principal amount of all Advances on the
Termination Date.
 
Section 2.04 Pricing.
 
(a) Advances. Borrower shall pay interest on the unpaid principal amount of the
Advances during the period from the date of each Advance until the date due at a
fluctuating rate per annum equal to the LIBOR Rate applicable thereto, plus the
LIBOR Margin; provided, however, that in no event shall the applicable rate
exceed the maximum nonusurious interest rate, if any, that at any time, or from
time to time, may be contracted for, taken, reserved, charged, or received under
applicable state or federal laws (the "Maximum Rate"). In the event that Bank
shall at any time determine that the accrual of interest on the basis of the
LIBOR Rate is or has become unlawful or infeasible by reason of the Bank's
compliance with any new law, rule, regulation, guideline or order, or any new
interpretation of any present law, rule, regulation, guideline or order, or (ii)
there ceases to be any published LIBOR Rate, then Bank shall give telephonic
notice thereof (confirmed in writing) to Borrower, in which event any Advance
bearing interest at the LIBOR Rate shall thereupon immediately accrue interest
at the SOFR.
 
(b) Payment of Interest. Borrower shall pay accrued and unpaid interest the last
day of each calendar month and on the Termination Date.
 
(c) Default Interest. Upon the occurrence of an Event of Default, at the option
of Bank exercised by delivering a written notice to Borrower, all principal and,
to the extent permitted by applicable law, interest, fees and other amounts
owing hereunder, shall bear interest, from the date of Borrower's receipt of
such notice, until the date Bank, in writing, acknowledge that such Event of
Default is waived or cured or all Obligations are paid in full, at the Default
Rate. The term "Default Rate", as used herein, means the lesser of (i) the
Maximum Rate, or (ii) the rate per annum which shall from day-to-day be equal to
five percent (5%) in excess of the sum of the LIBOR Rate plus the LIBOR Margin.
Interest payable at the Default Rate shall be payable from time to time on
demand or, if not sooner demanded, on the last day of each calendar month.
 
(d) Fees. Borrower agrees to pay to Bank in arrears at the end of each calendar
quarter and on the Termination Date an annual fee (payable in quarterly
installments) on the unused portion of the Revolving Line of Credit equal to
0.15 percent (as calculated on an annual basis from the date hereof), with the
unused portion of the Revolving Line of Credit calculated as the difference
between the Revolving Line of Credit and the average daily outstanding amount of
the Advances.
 
Section 2.05 Mandatory Prepayments or Collateralization; Optional Prepayments.
 
(a) Borrower shall, within five (5) days following the earlier of the delivery
of each Borrowing Base Certificate hereof or the day upon which such Borrowing
Base Certificate was due, either (i) prepay the Advances in the amount, if any,
by which the Outstanding Credit on the date of prepayment under this
Section 2.05(a) exceeds the Borrowing Base at such time, together with accrued
interest to the date of such prepayment on the amount prepaid, or (ii) pledge
and assign to Bank additional collateral acceptable to Bank, in Bank's sole
discretion, and deliver all documentation that Bank, in its sole discretion, may
require in connection with such pledge and assignment and the perfection of a
first-priority security interest in such additional collateral, so that the
Borrowing Base plus the value assigned by Bank, in its sole discretion, to such
additional collateral equals or exceeds the Outstanding Credit.
 
(b) Borrower may, by notice to Bank, prepay the outstanding amount of the
Advance in whole or in part with accrued interest to the date of such prepayment
on the amount prepaid.
 
 
 
-9-

 
Section 2.06 Increased Costs.
 
(a) If either (i) the introduction of or any change (including, without
limitation, any change by way of imposition or increase of reserve requirements)
in or in the interpretation of any law or regulation or (ii) the compliance by
Bank with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), shall result in any increase
in the cost to Bank of making, funding or maintaining any Advance, then Borrower
shall, from time to time, upon demand by Bank, pay to Bank additional amounts
sufficient to indemnify Bank against such increased cost. A certificate as to
the amount of such increased cost, submitted to Borrower by Bank, shall, in the
absence of manifest error, be conclusive and binding for all purposes.
 
(b) If either (i) the introduction of or any change in or in the interpretation
of any law or regulation or (ii) compliance by Bank with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law) affects or would affect the amount of capital required
or expected to be maintained by Bank and Bank determines that the amount of such
capital, is increased by or based upon the existence of Bank's commitment to
extend credit hereunder and other commitments of this type, then, upon demand by
Bank, Borrower shall, jointly, severally and immediately pay to Bank, from time
to time as specified by Bank, additional amounts sufficient to compensate Bank
in the light of such circumstances, to the extent that Bank reasonably
determines such increase in capital to be allocable to the existence of Bank's
commitment to extend credit hereunder. A certificate as to such amounts,
submitted to Borrower by Bank, shall, in the absence of manifest error, be
conclusive and binding for all purposes.
 
Section 2.07 Changes in Law Rendering Certain Advances Unlawful. In the event
that any change in any applicable law (including the adoption of any new
applicable law) or any change in the interpretation of any applicable law by any
judicial, governmental or other regulatory body charged with the interpretation,
implementation or administration thereof, should make it (or in the good-faith
judgment of Bank should raise a substantial question as to whether it is)
unlawful for Bank to make, maintain or fund Advances, then (a) Bank shall
promptly notify each of the other parties hereto, and (b) the obligation of Bank
to make Advances of such type shall, upon the effectiveness of such event, be
suspended for the duration of such unlawfulness.
 
Section 2.08 Payments and Computations.
 
(a) Method of Payment. Except as otherwise expressly provided herein, all
payments of principal, interest, and other amounts to be made by Borrower under
the Loan Documents shall be made to Bank for the account of the party entitled
thereto in U.S. dollars and in immediately available funds, without set-off,
deduction, or counterclaim, not later than 3:00 P.M. CDT on the date on which
such payment shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Business Day).
Borrower shall, at the time of making each such payment, specify to Bank the
sums payable under the Loan Documents to which such payment is to be applied and
in the event that Borrower fails to so specify or if an Event of Default exists,
Bank may apply such payment and any proceeds of any Collateral first to the
Obligations then due and payable and then to all other outstanding Obligations
in such order and manner as it may elect in its sole discretion. Each payment
received by Bank under any Loan Document for the account of Bank shall be paid
to Bank by 3:00 P.M. CDT on the date the payment is deemed made to Bank in
immediately available funds, for the account of Bank’s Office, if any. Borrower
hereby authorizes Bank, if and to the extent payment of any amount is not made
when due under any Loan Document, to charge from time to time against any
account of Borrower with Bank any amount so due.
 
(b) Payments on a Non-Business Day. Whenever any payment under any Loan Document
shall be stated to be due on a day that is not a Business Day, such payment may
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of the payment of interest and fees, as
the case may be.
 
 
-10-

 
(c) Proceeds of Collateral. All proceeds received by Bank from the sale or other
liquidation of the Collateral when an Event of Default exists shall first be
applied as payment of the accrued and unpaid fees and expenses of Bank
hereunder, including, without limitation, under Section 7.04 and then to all
other unpaid or unreimbursed Obligations (including reasonable attorneys' fees
and expenses actually incurred, to the extent set forth in Section 7.04) owing
to Bank in its capacity as Bank only and then any remaining amount of such
proceeds shall be distributed unpaid amounts of Obligations in such order as
determined by Bank.
 
After all the Obligations, other than indemnification obligations, which survive
the termination of the Revolving Line of Credit has been paid and satisfied in
full and the Revolving Line of Credit terminated, any proceeds of Collateral
shall be delivered to the Person entitled thereto as directed by Borrower or as
otherwise determined by applicable law or applicable court order.
 
(d) Computations. All computations of interest accrued at the LIBOR Rate (but
not the Maximum Rate) hereunder and under the Note and the fees hereunder shall
be made on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) elapsed, and all
computations of interest accrued at the Maximum Rate shall be based upon a year
with 365 or 366 days, as appropriate.
 
Section 2.09 Withholding Taxes. All payments by Borrower of amounts payable
under any Loan Document shall be payable without deduction for or on account of
any present or future taxes, duties, or other charges levied or imposed by any
Governmental Authority through withholding or deduction with respect to any such
payments (but excluding any tax imposed on or measured by the net income or
profit of a Bank) (all such taxes, duties or other charges, giving effect to the
taxes excluded pursuant to the foregoing parenthetical herein the "Non-Excluded
Taxes"). If any Non-Excluded Taxes are so levied or imposed, Borrower shall,
make additional payments in such amounts so that every net payment of amounts
payable by them under any Loan Document, after withholding or deduction for or
on account of any Non-Excluded Taxes, will be equal to the amount provided for
herein or therein; provided that Borrower may withhold to the extent required by
law and shall have no obligation to pay such additional amounts to Bank to the
extent that such Non-Excluded Taxes (i) are levied or imposed by reason of the
failure or inability of Bank to comply with the provisions of Section 2.10, or
(ii) are United States withholding taxes imposed (or branch profits taxes
imposed in lieu thereof) on amounts payable to Bank at the time Bank becomes a
party to the Loan Documents, except to the extent that Bank's assignor (if any)
was entitled, at the time of assignment, to receive additional amounts from
Borrower with respect to such Non-Excluded Taxes pursuant to this Section 2.09.
Borrower shall furnish promptly to Bank for distribution to each affected Bank,
as the case may be, official receipts evidencing any such withholding or
reduction.
 
Section 2.10 Maximum Amount Limitation. Anything in this Agreement or the other
Loan Documents to the contrary notwithstanding, Borrower shall not be required
to pay unearned interest on the Note or any of the Obligations, or ever be
required to pay interest on the Note or any of the Obligations at a rate in
excess of the Maximum Rate, if any. If the effective rate of interest which
would otherwise be payable under this Agreement, the Note or any of the other
Loan Documents would exceed the Maximum Rate, if any, then the rate of interest
which would otherwise be contracted for, charged, or received under this
Agreement, the Note or any of the other Loan Documents shall be reduced to the
Maximum Rate, if any. If any unearned interest or discount or property that is
deemed to constitute interest (including, without limitation, to the extent that
any of the fees payable by Borrower for the Obligations to Bank under this
Agreement, the Note, or any of the other Loan Documents are deemed to constitute
interest) is contracted for, charged, or received in excess of the Maximum Rate,
if any, then such interest in excess of the Maximum Rate shall be deemed a
mistake and canceled, shall not be collected or collectible, and if paid
nonetheless, shall, at the option of the holder of such Note, be either refunded
to Borrower, or credited on the principal of such Note. It is further agreed
that, without limitation of the foregoing and to the extent permitted by
applicable law, all calculations of the rate of interest or discount contracted
for, charged or received by Bank under its Note, or under any of the Loan
Documents, that are made for the purpose of determining whether such rate
exceeds the Maximum Rate applicable to Bank, if any, shall be made, to the
extent permitted by applicable laws (now or hereafter enacted), by amortizing,
prorating and spreading during the period of the full terms of the Advances
evidenced by the Note, and any renewals thereof all interest at any time
contracted for, charged or received by Bank in connection therewith. This
Section 2.10 shall control every other provision of all agreements among the
parties to this Agreement pertaining to the transactions contemplated by or
contained in the Loan Documents, and the terms of this Section 2.10 shall be
deemed to be incorporated in every Loan Document and communication related
thereto.
 
 
-11-

 
Section 2.11 Bank Records. All Advances and all payments or prepayments made
thereunder on account of principal or interest may be evidenced by Bank in
accordance with its usual practice in an account or accounts evidencing such
Advances and all payments or prepayments thereunder from time to time and the
amounts of principal and interest payable and paid from time to time thereunder;
in any legal action or proceeding in respect of the Note, the entries made in
such account or accounts, in the absence of manifest error, shall be prima facie
evidence of the existence and amounts of all Advances and all payments or
prepayments made thereunder on account of principal or interest.
 
 
Article III.
CONDITIONS PRECEDENT
 
Section 3.01 Conditions Precedent to Initial Advance. The effectiveness of this
Agreement and obligations of Bank to make Advances are subject to the condition
precedent that Bank shall have received all the following, in form and substance
satisfactory to Bank:
 
(a) This Agreement, duly executed by Borrower and Bank.
 
(b) The Note, duly executed by Borrower.
 
(c) The Security Agreement duly executed by Borrower.
 
(d) Copies of UCC, tax and judgment lien search reports listing all financing
statements and other encumbrances which name Borrower (under its present name
and any previous name) and which are filed in the jurisdictions in which
Borrower is located, organized or maintains collateral, together with copies of
such financing statements (none of which shall cover the collateral purported to
be covered by the Security Agreement).
 
(e) Evidence that all other actions necessary or, in the opinion of Bank,
desirable to enable Bank to perfect and protect the security interests created
by the Security Agreement have been taken.
 
(f) The Organizational Documents.
 
(g) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of the officers of Borrower as Bank may require
evidencing the identity, authority and capacity of each officer thereof
authorized to act as an officer in connection with this Agreement and the other
Loan Documents to which Borrower is a party;
 
(h) such documents and certificates as Bank may reasonably require to evidence
that Borrower is duly organized or formed and that Borrower is, validly
existing, in good standing and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect;
 
(i) Evidence that the costs and expenses (including, without limitation,
attorneys’ fees) referred to in Section 7.04(a), to the extent incurred and
invoiced, shall have been (or will be simultaneously with the initial Advance
hereunder) paid in full.
 
(j) A satisfactory review by Bank of any pending litigation relating to
Borrower.
 
 
 
-12-

 
Section 3.02 Conditions Precedent to All Advances. The effectiveness of this
Agreement, the obligation of Bank to make each Advance shall be subject to the
further conditions precedent that on the Closing Date (with respect to the
effectiveness of this Agreement only) or on the date of such Advance:
 
(a) the following statements shall be true (and the receipt by Borrower of the
proceeds of such Advance shall be deemed to constitute a representation and
warranty by Borrower that such statements are true on such date):
 
(i) The representations and warranties contained in Section 4.01 of this
Agreement and in the Security Agreement are correct in all material respects,
except as to charges occurring after the date of this Agreement caused by
events, actions or transactions permitted under this Agreement;
 
(ii) No event has occurred and is continuing, or would result from this
Agreement, such Advance, which constitutes an Event of Default (as defined in
Section 6.01 hereof) or would constitute an Event of Default but for the
requirement that notice be given or time elapse or both; and
 
(iii) In the case of an Advance, after giving effect thereto, the aggregate
Advances do not exceed the Borrowing Base on such date; and
 
(b) Bank shall have received a completed Borrowing Base Certificate and such
other approvals, opinions or documents as Bank may reasonably request.
 
(c)     Borrower shall have established an operating deposit account with Bank
and shall use Banks' ACH treasury management service with respect to such
account.
 
 
Article IV.
REPRESENTATIONS AND WARRANTIES
 
Section 4.01 Representations and Warranties of Borrower. Borrower represents and
warrants as follows:
 
(a) Borrower. Borrower is a corporation duly incorporated, validly existing and
in good standing under the laws of the jurisdiction indicated at the beginning
of this Agreement and, except as set forth on Schedule 4.01(a), is qualified to
do business in all jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify would have a Material
Adverse Effect on its financial condition or operations. Borrower has the power
and authority to execute, deliver, and perform its obligations under the Loan
Documents to which it is or may become a party. Borrower's Subsidiaries are
listed on Schedule 4.01(a).
 
(b) The Loan Documents. The execution, delivery and performance by Borrower of
each Loan Document to which it is a party are within Borrower's powers, have
been duly authorized by all necessary action, do not contravene (i) Borrower's
charter or by-laws or (ii) any law or any contractual restriction binding on or
affecting Borrower, and do not result in or require the creation of any Lien,
security interest or other charge or encumbrance (other than pursuant to the
terms thereof) upon or with respect to any of its properties.
 
(c) Governmental Approvals. No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority or regulatory body is
required for the due execution, delivery and performance by Borrower of any Loan
Documents, except for such approvals and consents which have been made or
obtained.
 
 
 
-13-

 
(d) Enforceability. This Agreement is, and each other Loan Document to which
Borrower is a party when delivered will be, legal, valid and binding obligations
of the applicable Borrower enforceable against Borrower in accordance with their
respective terms.
 
(e) Financial Condition and Operations. The balance sheets of Borrower as of
June 30, 2019, and the related statements of income and, with respect to the
period ended June 30, 2019, the related statement of cash flow of Borrower for
the fiscal period then ended, copies of which have been furnished to Bank,
fairly present in all material respects the financial condition of Borrower as
at such date and the results of the operations of Borrower for the period ended
on such dates, all in accordance with generally accepted accounting principles
consistently applied (except for the absence of footnotes and subject to normal
year-end audit adjustments, and since June 30, 2019, there has been no material
adverse change in such condition or operations.
 
(f) Litigation. Except as described on Schedule 4.01(f), there is no pending or
threatened action or proceeding affecting Borrower or any of the other
transaction contemplated hereby before any court, governmental agency or
arbitrator, which reasonably would be expected to have a Material Adverse
Effect. As of the Closing Date there are no outstanding judgments against
Borrower.
 
(g) Use of Proceeds of Advances, etc. (i) No proceeds of any Advance will be
used to acquire any security in any transaction which is subject to Sections 13
and 14 of the Securities Exchange Act of 1934; (ii) Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System); and (iii) no proceeds of any Advance
will be used to purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any margin stock.
 
(h) Liens. There is no Lien, security interest or other charge or encumbrance,
and no other type of preferential arrangement, upon or with respect to any of
the properties or income of Borrower, which secures Indebtedness of any Person,
except for Permitted Encumbrances.
 
(i) Solvency. As of and from and after the date of this Agreement, Borrower:
(a) owns and will own assets the fair saleable value of which are (i) greater
than the total amount of liabilities (including contingent liabilities) and
(ii) greater than the amount that will be required to pay the probable
liabilities of its then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to it; (b) has capital that is not unreasonably small in relation to
its business as presently conducted or any contemplated or undertaken
transaction; and (c) does not intend to incur and does not believe that it will
incur debts beyond its ability to pay such debts as they become due.
 
(j) Office Locations; Fictitious Names; Predecessor Companies; Tax I.D. Number.
Borrower's chief place of business, its chief executive office, and its
jurisdiction of organization is located at the place identified for Borrower on
Schedule 4.01(j). Within the last four months it has not had any other chief
place of business, chief executive office, or jurisdiction of organization.
Schedule 4.01(j) also sets forth all other places where Borrower keeps its books
and records and all other locations where Borrower has a place of business.
Borrower does not do business nor has Borrower done business during the past
five (5) years under any trade-name or fictitious business name. There are no
predecessor companies of Borrower. For purposes of the foregoing, a "predecessor
company" shall mean, with respect to Borrower, any Person whose assets or equity
interests are acquired by Borrower or who was merged with or into Borrower
within the last four months prior to the date hereof. Borrower's United States
Federal Income Tax I.D. Number is identified on Schedule 4.01(j).
 
 
 
-14-

 
(k) Disclosure. All factual information furnished by or on behalf of Borrower in
writing to Bank (including, without limitation, all factual information
contained in the Loan Documents) for purposes of or in connection with this
Agreement, the other Loan Documents or any transaction contemplated herein or
therein is, and all other such factual information hereafter furnished by or on
behalf of Borrower to Bank, will be true and accurate in all material respects
on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information not
misleading in any material respect at such time in light of the circumstances
under which such information was provided.
 
(l) Operation of Business. Borrower possess all licenses, permits, franchises,
patents, copyrights, trademarks, and tradenames, or rights thereto, necessary to
conduct their respective businesses substantially as now conducted and as
presently proposed to be conducted except those that the failure to so possess
would not reasonably be expected to have a Material Adverse Effect and Borrower
is not in violation of any valid rights of others with respect to any of the
foregoing except violations that could not reasonably be expected to have such a
Material Adverse Effect.
 
(m) Investment Company Act. Borrower is not required to be registered as an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
 
(n) Environmental Compliance. Borrower, except as set forth in Schedule 4.01(n),
is in material compliance with all applicable Environmental Laws.
 
(o) No Default. Borrower is not in default under or with respect to any
Contractual Obligation that could either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No Event of Default
has occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.
 
(p) Ownership of Property; Liens. Borrower has good record and marketable title
in fee simple to, or valid leasehold interests in, all real and personal
property and intellectual property necessary or used in the ordinary conduct of
its business, except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. The
property of Borrower is subject to no Liens, other than Liens permitted by
Section 5.02(a).
 
(q) Absence of Undisclosed Liabilities. Except as stated or adequately reserved
against in the financial statements of Borrower, or incurred as a result of or
arising out of the transactions contemplated under the Loan Documents, Borrower
has no liability or obligation of any nature, whether accrued, absolute,
contingent or otherwise, asserted or unasserted, known or unknown, that has had
or would reasonably be expected to have a Material Adverse Effect.
 
(r) Taxes. Borrower has filed all Federal, state and other material tax returns
and reports required to be filed, and have paid all Federal, state and other
material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
Borrower or any Subsidiary that would, if made, have a Material Adverse Effect.
 
 
 
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Article V.
COVENANTS OF BORROWER
 
Section 5.01 Affirmative Covenants. So long as any Obligations remain unpaid or
Bank shall have any commitment hereunder, Borrower will, unless Bank shall
otherwise consent in writing:
 
(a) Compliance with Laws, etc. Comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include,
without limitation, (i) all employee benefit and Environmental Laws, and
(ii) paying before the same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property except to the extent
contested in good faith.
 
(b) Visitation Rights; Field Examination. At any reasonable time and from time
to time and at least once by July 1 of every year, permit Bank or any agents or
representatives thereof (such agents or representatives may or may not, at the
sole discretion of Bank and may or may not, at the sole discretion of Bank,
include employees of Bank) to examine and make copies of and abstracts from the
records, books and accounts of, and visit the properties of, and conduct
unannounced field examinations and collateral inspections at least annually at
the expense of Borrower and to discuss the affairs, finances and accounts of
Borrower with any of their respective officers or directors; provided, however,
Borrower shall pay for the cost of one (1) field examination per year, and all
visits and inspections upon and during the occurrence of an Event of Default
shall be at the expense of Borrower. In addition to the foregoing, at any
reasonable time and from time to time, Borrower also shall permit Bank or any
agents or representatives thereof, at the expense of Bank, to examine and make
copies of and abstracts from the records and books of account of, and visit the
properties of, Borrower, and to discuss the affairs, finances and accounts of
Borrower with any of their respective officers or directors.
 
(c) Reporting Requirements. Furnish to Bank:
 
(i) as soon as available and in any event within one hundred fifty (150) days
after the end of each fiscal year of Borrower, a copy of the audited financial
statements (including balance sheet, statements of income and cash flows, all
accompanying notes thereto and any management letter) for such year for
Borrower, certified, without qualification, by independent public accountants
acceptable to Bank;
 
(ii) as soon as available and in any event within 45 days after the end of each
quarter, a copy of financial statements of Borrower, for the period commencing
at the end of the previous fiscal year and ending with the end of such quarter,
signed by the chief financial officer of Borrower;
 
(iii) with the submission of the financial statements required under Section
5.01(c)(i) and (ii), a Compliance Certificate which (A) states that no Event of
Default, and no event or condition that but for the passage of time, the giving
of notice or both would constitute an Event of Default, has occurred or is in
existence and (B) certifies to Bank Borrower's compliance with, each of the
covenants set forth in the Compliance Certificate;
 
(iv) as soon as available and in any event within thirty (30) days after the end
of each month (or at such other times or with such greater frequency as is
requested by Bank), a duly completed Borrowing Base Certificate, setting forth
the Borrowing Base as of the last day of such month calculated, together with an
aging of accounts receivable and accounts payable, inventory reports and all
documents deemed necessary by Bank;
 
(v) promptly upon Bank's request therefor, copies of all reports and notices
which Borrower or any of its Subsidiaries files under ERISA with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or which Borrower or any Subsidiary receives from such
Corporation;
 
 
-16-

 
 
(vi) promptly, upon the occurrence of an Event of Default or an event or
condition that but for the passage of time or the giving of notice or both would
constitute an Event of Default, notice of such Event of Default or event;
 
(vii) promptly after the receipt thereof, a copy of any management letters or
written reports submitted to Borrower by its independent certified public
accountants with respect to the business, financial condition or operation of
Borrower; and
 
(viii) such other information respecting the condition or operations, financial
or otherwise, of Borrower or any of its respective Subsidiaries as Bank may from
time to time reasonably request.
 
(d)           Insurance. Maintain insurance with financially sound and reputable
insurance companies in such amounts and covering such risks as are usually
carried by entities engaged in similar businesses and owning similar properties
in the same general areas in which Borrower operate, provided that in any event
Borrower will maintain and cause each of its Subsidiaries to maintain workers'
compensation insurance, business interruption insurance, property insurance and
commercial general liability insurance reasonably satisfactory to Bank. Each
insurance policy covering Collateral shall be in compliance with the
requirements of the Security Agreement.
 

(e)           Keeping Books and Records. Maintain and cause each of its
Subsidiaries to, maintain proper books of record and account in which full,
true, and correct entries in conformity with generally accepted accounting
principles shall be made of all dealings and transactions in relation to its
business and activities.
 
(f)           Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage
Ratio of not less than 1.25 to 1 as tested quarterly on a trailing twelve-month
basis, starting December 31, 2019.
 
Section .02 Negative Covenants. So long as any Obligations remain unpaid or Bank
shall have any commitment hereunder, Borrower will not, without the written
consent of Bank:
 
(a) Liens.          Create, incur, assume or suffer to exist, any Lien upon any
of its property, whether now owned or hereafter acquired, other than the
following:
 
(i)           Liens in favor of Bank;
 
(ii)           Liens existing on the date hereof and listed on Schedule 5.02(a)
hereto and any renewals or extensions or refinancings or refundings thereof,
provided that the property covered thereby is not increased and any renewal or
extension or refinancings or refundings of the obligations secured or benefited
thereby is permitted hereunder;
 
(iii)           Liens (a) for taxes not yet due and payable, or (b) which are
being contested in good faith and by appropriate proceedings diligently
conducted and if adequate reserves with respect thereto are maintained on the
books of the applicable Person in accordance with GAAP;
 
(iv)           carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
or other like Liens: (a) arising in the ordinary course of business which are
not overdue for a period of more than 30 days, or (b) which are being contested
in good faith and by appropriate proceedings diligently conducted and if
adequate reserves with respect thereto are maintained on the books of the
applicable Person in accordance with GAAP;
 
 
 
-17-

 
(v)           pledges or deposits in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other social
security legislation, other than any Lien imposed by ERISA;
 
(vi)           deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
 
(vii)           easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;
 
(viii)           Liens securing judgments for the payment of money not
constituting an Event of Default under Section 6.01(h) or securing appeal or
other surety bonds relating to such judgments;
 
(ix)           Liens securing Indebtedness permitted under Section 5.02(c);
provided that (a) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (b) the Indebtedness secured
thereby does not exceed the cost or fair market value, whichever is lower, of
the property being acquired on the date of acquisition; and
 
(x)           Liens existing on assets of other Persons at the time of
acquisition of such other Persons or of such assets by Borrower or a Subsidiary.
 
(b) Investments. Make any Investments, except:
 
(i)           Investments held by Borrower in the form of cash equivalents or
short-term marketable debt securities;
 
(ii)           Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;
 
(iii)           Other Investments not to exceed in the aggregate $100,000;
provided, however, that the Bank may approve any Investment exceeding $100,000;
and
 
(iv)           Those Investments, if any, described on Schedule 5.02(b).
 
(c) Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:
 
(i)           Indebtedness under the Loan Documents;
 
(ii)           Indebtedness outstanding on the date hereof and listed on
Schedule 5.02(c) hereto and any refinancings, refundings, renewals or extensions
thereof; provided that the amount of such Indebtedness is not increased at the
time of such refinancing, refunding, renewal or extension except by an amount
equal to a reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing and by an
amount equal to any existing commitments unutilized thereunder;
 
 
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(iii)           Indebtedness in respect to capital leases and purchase money
obligations for fixed assets; provided, however, that the aggregate amount of
all such Indebtedness at any one time outstanding shall not exceed $100,000;
 
(iv)           Indebtedness secured by Liens permitted under Section 5.02(a)
(provided that the amount of such Indebtedness does not exceed the value of the
property or interests subject to such Liens);
 
(v)           Indebtedness payable to trade creditors incurred in the ordinary
course of business;
 
(vi)           endorsement of items for deposit or collection of checks or other
commercial paper required in the ordinary course of business; and
 
(vii)           Subordinated Debt that shall not exceed $100,000.
 
(d) Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into,
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person.
 
(e) Corporate Changes.
 
(i)           Change its jurisdiction of organization and/or organization and/or
organizational identification number (if any), change its corporate name; or
 
(ii)           Without thirty (30) days prior written notice to Bank:
 
(a)           change its chief executive office, principal place of business,
corporate offices or warehouses or locations at which Collateral is held or
stored, or the location of its records concerning the Collateral;
 
(b)           engage in any material line of business substantially different
from those lines of business conducted by Borrower and its Subsidiaries on the
date hereof; and
 
(c)           change its fiscal year.
 
(f) Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except:
 
(i)           Dispositions of obsolete or worn out property, whether now owned
or hereafter acquired, in the ordinary course of business;
 
(ii)           Dispositions (a) of inventory in the ordinary course of business
and (b) in the nature of payments for property or services used or acquired by
Borrower as otherwise not prohibited hereunder;
 
(iii)           Dispositions of equipment to the extent that (a) such property
is exchanged for credit against the purchase price of similar replacement
property, or (b) the proceeds of such Disposition are reasonably promptly
applied to the purchase price of such replacement property; and provided,
however, that any Disposition pursuant to this section shall be for fair market
value.
 
 
 
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(g) Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of Borrower, whether or not in the ordinary course of business,
other than on fair and reasonable terms substantially as favorable to Borrower
or such Affiliate as would be obtainable by Borrower or such Affiliate at the
time in a comparable arm’s length transaction with a Person other than an
Affiliate.
 
(h) Margin Regulations. Use the proceeds of the Advances, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry margin stock (within the meaning of Regulation U of the Board of Governors
of the Federal Reserve System of the United States) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose.
 
(i) Distributions. Upon and during the occurrence of any Event of Default,
declare or pay any Distribution, or permit to purchase or otherwise acquire for
value any stock or interest of Borrower, provided, however, Borrower may declare
and pay Distributions payable in common stock or preferred stock.
 
(j) Subsidiary. Form any Subsidiary or Affiliate of any Person, except for the
Subsidiaries of Borrower listed on Schedule 4.01(a).
 

     

Article VI.
EVENTS OF DEFAULT AND REMEDIES
 
Section 6.01 Events of Default. Each of the following events shall be an "Event
of Default":
 
(a) Borrower shall fail to pay any principal amount payable hereunder or under
the other Loan Documents when due; or
 
(b) Borrower shall fail to pay any other amount payable hereunder, including
interest, or under the other Loan Documents within three (3) days following the
due date therefor; or
 
(c) Any representation or warranty made by Borrower (or any of its partners or
officers) under or in connection with any Loan Document shall prove to have been
incorrect in any material respect when made and as a result would have a
Material Adverse Effect; or
 
(d) Borrower shall fail to deliver the financial statements, Compliance
Certificate or Borrowing Base Certificate under Section 5.01(c) within 5 days of
the date due; or
 
(e)           
Borrower shall fail to perform or observe any term, covenant or agreement
contained in any Loan Document (other than those listed in clauses (a)
through (e) of this Section 6.01) on its part to be performed or observed (other
than the covenants to pay the Obligations) and any such failure shall remain
unremedied for ten (10) days after written notice thereof shall have been given
to Borrower by Bank, provided, however, that no Event of Default shall be deemed
to exist if, within said ten (10) day period, Borrower has commenced appropriate
action to remedy such failure and shall diligently and continuously pursue such
action until such cure is completed, unless such cure is or cannot be completed
within thirty (30) days after written notice shall have been given; or
 
(f)           
Borrower shall fail to pay any Indebtedness (either in any individual case or in
the aggregate) (excluding Indebtedness evidenced by the Note and excluding
Ordinary Trade Payable Disputes), or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace period, if
any, specified in the agreement or instrument relating to such indebtedness; or
any other default under any agreement or instrument relating to any such
indebtedness, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such indebtedness (excluding Ordinary Trade
Payable Disputes); or any such indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof (excluding Ordinary Trade
Payable Disputes); or
 
 
 
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(g)           
Borrower shall generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against Borrower seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
property, and, in the case of any such proceeding instituted against it (but not
instituted by it) either such proceeding shall remain undismissed or unstayed
for a period of 60 days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against it or
the appointment of a receiver, trustee, custodian or other similar official for
it or for any substantial part of its property) shall occur; or Borrower shall
take any corporate action to authorize any of the actions set forth above in
this subsection (g), provided, however, that the commencement by or against
Borrower of any of the foregoing proceedings shall not cause an Event of Default
so long as: (i) such proceeding does not result in the dissolution of Borrower;
and (ii) Bank is provided with a substitute guaranty or collateral for the
guaranty from such individual that is acceptable to Bank acting in good faith
within thirty (30) days from the commencement of such proceeding; or

(h)           
Any one or more judgment(s) or order(s) for the payment of money in excess of
$100,000 in excess of valid insurance coverage therefor, in the aggregate shall
be rendered against Borrower and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
 
(i)           
Any material provision of any Loan Document shall for any reason cease to be
valid and binding on Borrower or Borrower shall so state in writing; or
 
(j)           
The Security Agreement shall for any reason, except to the extent permitted by
the terms thereof, cease to create a valid security interest in any of the
property purported to be covered thereby; or
 
Section 6.02 Remedies. Upon the occurrence of an Event of Default, Bank:
 
(a) may, by notice to Borrower, declare the obligation of Bank to make Advances
to be terminated or suspended, whereupon the same shall forthwith terminate or
suspend;
 
(b) may, by notice to Borrower, declare the Note, all interest thereon and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Note, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, notice of intent to accelerate
or notice of acceleration, demand, protest or further notice of any kind, all of
which are hereby expressly waived by Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to any of
Borrower or any of its Subsidiaries under the Federal Bankruptcy Code, (x) the
obligation of Bank to make Advances shall automatically be terminated and
(y) the Note, all such interest and all such amounts shall automatically become
due and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by Borrower;
 
(c) may exercise all other rights and remedies afforded to Bank under the Loan
Documents or by applicable law or equity.
 
 
 
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Article VII. 

MISCELLANEOUS
 
Section 7.01 Amendments, etc. No amendment or waiver of any provision of any
Loan Document to which Borrower is a party, nor any consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be
agreed or consented to by Bank and Borrower, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
 
Section 7.02 Notices, etc. All notices and other communications provided for
under any Loan Document shall be in writing (including telegraphic, telex or
cable communication) and mailed, telegraphed, telexed, cabled or delivered, if
to Borrower, at its address at 5214 S. 136th Street, Omaha, NE 68137; and if to
Bank, at its address or addresses, at 3333 Farnam Street, Omaha, NE 68131; as to
each party, at such other address as shall be designated by such party in a
written notice to the other party. All such notices and communications shall,
when mailed, telegraphed, telexed or cabled, be effective when deposited in the
mails, delivered to the telegraph company, confirmed by telex answerback or
delivered to the cable company, respectively, except that notices to Bank
pursuant to the provisions of Article I shall not be effective until received by
Bank.
 
Section 7.03 No Waiver; Remedies. No failure on the part of Bank to exercise,
and no delay in exercising, any right under any Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any right under any
Loan Document preclude any other or further exercise thereof or the exercise of
any other right. The remedies provided in the Loan Documents are cumulative and
not exclusive of any remedies provided by law.
 
Section 7.04 Costs, Expenses and Taxes. Borrower agrees to pay on demand all
reasonable out-of-pocket costs and expenses actually incurred in connection with
the preparation, execution, delivery, filing, recording and administration of
the Loan Documents and the other documents to be delivered under the Loan
Documents, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for Bank (who may be in-house counsel), actually incurred
and local counsel who may be retained by said counsel, with respect thereto and
with respect to advising Bank as to its respective rights and responsibilities
under the Loan Documents, and all costs and expenses (including reasonable
counsel fees and expenses actually incurred) for Bank in connection with the
enforcement of the Loan Documents and the other documents to be delivered under
the Loan Documents, including, without limitation, in the context of any
bankruptcy proceedings (but with respect to Bank, only to the extent that such
costs and expenses incurred are not duplicative of those incurred by Bank). In
addition, Borrower agrees, to pay on demand the expenses described in
Section 5.01(b). In addition, Borrower shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of the Loan Documents and the other
documents to be delivered under the Loan Documents, and agrees to save Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes and fees.
 
Section 7.05 Right of Set-off. Bank is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by Bank to or for the
credit or the account of Borrower against any and all of the Loan Obligations,
irrespective of whether or not Bank shall have made any demand under such Loan
Document and although deposits, indebtedness or such obligations may be
unmatured or contingent. Bank, as the case may be, agrees promptly to notify
Borrower after any such set-off and application, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of Bank under this Section 7.05 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which Bank may
have.
 
Section 7.06 Severability of Provisions. Any provision of this Agreement or of
any other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof or
thereof or affecting the validity or unenforceability of such provision in any
other jurisdiction.
 
 
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Section 7.07 Binding Effect; Successors and Assigns; Participations.
 
(a) This Agreement shall be binding upon and inure to the benefit of Borrower
and Bank and their respective successors and assigns, except that Borrower shall
not have the right to assign or otherwise transfer its rights hereunder or any
interest herein without the prior written consent of Bank.
 
(b) Bank shall have the right at any time, without the consent of Borrower or
any other party, to assign, negotiate, hypothecate, or otherwise transfer all or
any portion of its rights in this Agreement or in its Revolving Line of Credit,
Note, participation obligations and interests, rights and security under this
Agreement and any of the other Loan Documents to either one or more of its
Affiliates which is a commercial banking or financial institution or Bank, and
in the event of the exercise of such right shall promptly notify Borrower
thereof. Furthermore, Bank shall have the right at any time, to assign all or
any portion of its rights in this Agreement or in any of its Revolving Line of
Credit, Advances, Note, participation obligations and interests, rights and
security under this Agreement and any of the other Loan Documents to any other
commercial, banking or financial institution. Borrower hereby acknowledges and
agrees that any assignment or other or arrangement described in this Section
7.07 will give rise to a direct obligation of Borrower to each assignee or
additional commercial banking or financial institution, as the case may be, and
such party shall be considered a Bank and rely on, and possess all rights under,
all opinions, certificates or other instruments delivered under or in connection
with this Agreement or any other Loan Document. Borrower shall accord full
recognition to any such assignment or other arrangement, and all rights and
remedies of Bank in connection with the interest so assigned shall be as fully
enforceable by such assignee or additional commercial, banking or financial
institution, as they were (a) by the assignor or Bank thereof before such
assignment or (b) in the case of an additional commercial, banking or financial
institution becoming a Bank under the circumstances described above in this
Section 7.07, by a Bank that was a party to this Agreement on the date hereof.
 
(c) Bank shall have the right at any time, without the consent of Borrower or
any other Person, to sell participations in all or any portion of its rights in
this Agreement or its Revolving Line of Credit, Advances, Note, participation
obligations and interests, rights and security under this Agreement and any of
the other Loan Documents to any other party; provided, however, that (i) Bank's
obligations under the Loan Documents (including, without limitation, its
Revolving Line of Credit) shall remain unchanged, (ii) Bank shall remain solely
responsible to Borrower for the performance of such obligations, (iii) Bank
shall remain the holder of its Note and owner of its participation for all
purposes of any Loan Document, (iv) Borrower shall continue to deal solely and
directly with Bank in connection with Bank's rights and obligations under the
Loan Documents, and (v) Bank shall not sell a participation that conveys to the
participant the right to vote or give or withhold consents under any Loan
Document, other than the right to vote upon or consent to (A) any increase of
the Revolving Line of Credit subject to such participation, (B) any reduction of
the principal amount of, or interest to be paid on, the Advances or other Loan
Obligations of Bank subject to such participation, (C) any reduction of any
commitment fee, or other amount payable to Bank under any Loan Document, (D) any
postponement of any date for the payment of any amount payable in respect of the
Advances subject to such participation or other Loan Obligations of Bank, or
(E) the release of any Collateral or the release of Borrower from liability
arising under the Loan Documents.
 
(d) In connection with any such proposed assignment, negotiation, hypothecation,
granting of a participation or other transfer or arrangement, Bank, may disclose
to the proposed assignee, participant or other transferee or institution any
information that Borrower is required to deliver to Bank pursuant to this
Agreement or the other Loan Documents, and Borrower agrees to cooperate fully
with Bank, as the case may be, in providing any such information to any proposed
assignee, participant or other transferee or institution.
 
 
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Section 7.08 Consent to Jurisdiction.
 
(a) Borrower hereby irrevocably submits to the jurisdiction of any State or
Federal court sitting in Omaha, Nebraska, in any action or proceeding arising
out of or relating to this Agreement or any of the other Loan Documents to which
it is a party, and Borrower hereby irrevocably agrees that all claims in respect
of such action or proceeding may be heard and determined in such Nebraska State
court or in such Federal court. Borrower hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of such action or proceeding. Borrower irrevocably consents to
the service of copies of the summons and complaint and any other process which
may be served in any such action or proceeding by the mailing of copies of such
process to Borrower at its address specified in Section 7.02. Borrower agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
 
(b) Nothing in this Section 7.08 shall affect the right of Bank to serve legal
process in any other manner permitted by law or affect the right of Bank to
bring any action or proceeding against Borrower or its property in the courts of
other jurisdictions.
 
Section 7.09 Governing Law. THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEBRASKA.
 
Section 7.10 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute but one and the
same agreement.
 
Section 7.11 WAIVER OF JURY TRIAL. BORROWER AND BANK HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENT TO WHICH IT IS A PARTY OR ANY INSTRUMENT OR
DOCUMENT DELIVERED THEREUNDER.
 
Section 7.12 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTE, AND THE OTHER LOAN
DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
THERETO.
 
Section 7.13 Survival. All covenants, agreements, representations and warranties
made by Borrower in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Advances, regardless of any investigation made
by any such other party or on its behalf and notwithstanding that Bank may have
had notice or knowledge of any Event of Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as any Obligations are outstanding and unpaid and
so long as the Revolving Line of Credit has not expired or terminated. The
expense reimbursement, additional cost, capital adequacy and indemnification
provisions of this Agreement shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Obligations, and the Revolving Line of Credit or the
termination of this Agreement or any provision hereof.
 
Section 7.14 Borrowing Base. Bank shall have the right, in sole discretion, to
adjust any values or amounts set forth in the Borrowing Base and such adjusted
values or amounts will be the values or amounts for the determination of the
Borrowing Base. No item shall be included in the Borrowing Base if such item is
subject to any Lien, claim or security interest (other than the security
interest granted to Bank).
 
 
[Remainder of Page Intentionally Blank]
 
-24-

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
 
 
FITLIFE BRANDS, INC., a Nevada corporation
 
 
________________________________________
 Dayton R. Judd, CEO
 
 
________________________________________
Susan G. Kinnaman, CFO
 
 

MUTUAL OF OMAHA BANK
 
 
By: _____________________________________
                                                                          

Name:___________________________________
 
Title:  ___________________________________
                                                     
 
 

 

               

 
 
 
 
-25-