Exhibit
10.1


 


SECOND
AMENDMENT TO LOAN AND SECURITY AGREEMENT


 


THIS SECOND AMENDMENT
TO LOAN AND SECURITY AGREEMENT (“Amendment”)
is entered into as of April 3, 2017 (“Effective Date”), between NANOFILM, LTD., an Ohio
limited liability company (“Borrower”) and MACKINAC COMMERCIAL CREDIT ABL DIVISION OF MBANK, a Michigan
banking corporation and successor in interest to Mackinac Commercial Credit, LLC, a Michigan limited liability company (together
with its successors and assigns, the “Lender”).


 


RECITALS


 


A.
Lender and Borrower entered into a Loan and Security Agreement dated April 4, 2014, as amended by a First Amendment to Loan and
Security Agreement dated effective as of April 4, 2015 (as amended, the “Loan Agreement”). All capitalized
terms not defined herein shall have the same meanings ascribed to such terms in the Loan Agreement.


 


B.
Lender and Borrower have agreed to modify the terms and conditions of the Loan Agreement and Borrower and Lender wish to set forth
their agreement regarding the foregoing in this Amendment.


 


NOW,
THEREFORE, in consideration of the mutual covenants, conditions, and provisions as hereinafter set forth, the parties hereto
agree as follows:


 


1.
Restated Note. Concurrently with the execution and delivery of this Amendment, the Borrower shall execute and deliver
to the Lender an Amended and Restated Revolving Credit Loan Note, evidencing the Revolving Credit Loan in the principal amount
of $1,500,000 in form and substance satisfactory to the Lender (the “Restated Note”). Upon receipt by the Lender
of the Restated Note, the Revolving Credit Loan and all accrued and unpaid interest on that certain Revolving Credit Loan Note
dated April 4, 2014 in the original principal amount of $1,500,000 (the “Existing Revolving Note”) shall thereafter
be evidenced by the Restated Note; and all references to the “Revolving Credit Loan Note” or “Note” evidencing
the Revolving Credit Loan in the Loan Documents relating thereto shall thereafter be deemed to refer to the Restated Note. Without
duplication, the Restated Note shall not constitute a novation and shall in no way extinguish the Borrower’s unconditional
obligation to repay all indebtedness, including accrued and unpaid interest, evidenced by the Existing Revolving Note.


 


2.
Interest Rate. The definition of “Interest Rate” as set forth in Paragraph 2(c) of the Term Sheet to the
Loan Agreement is hereby amended to the “Prime Rate plus 3.0%”.


 


(a)
The following definition of “Prime Rate” is hereby added to Section 1 of the Loan Agreement in appropriate alphabetical
sequence:


 


“Prime
Rate” shall mean the U.S. prime rate of interest as published in the Money and Investing Section of the Wall Street
Journal (or other comparable publication if the Wall Street Journal is no longer being published, as determined by the Lender).
The Prime Rate is not necessarily the lowest rate of interest which may be available from the Lender on fluctuating rate loans.


 


3.
Maturity Date. The definition of “Maturity Date” as set forth in Paragraph 2(e) of the Term Sheet to the
Loan Agreement is hereby amended to the earlier of demand or April 4, 2018.


 


4.
Renewal. Section 2(e) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:


 


(e)
Term; Automatic Renewal. The term of this Agreement and of the Loan shall be on Demand, but if Demand is not made, then
no later than the date set forth on the Term Sheet (the “Maturity Date”). Notwithstanding anything to the contrary
or inconsistent contained herein, provided no Default exists, the Maturity Date, as extended to April 4, 2018 pursuant to the
Second Amendment to Loan and Security Agreement dated April 3, 2017 will automatically be further extended one time for one (1)
year (“Renewal Term”), unless either party notifies the other party in writing of its intent not to so extend
the Maturity Date at least sixty (60) days prior to the original Maturity Date. If the Maturity Date is extended, Borrower shall
pay to Lender a renewal fee in the amount of one percent (1.0%) of the Maximum Loan Amount, which shall be due and payable on
or before the beginning of the Renewal Term.


 




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5.
Change in Name. Section 10(i) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:


 





(i)
use any other corporate or fictitious name; provided however, that Borrower may change its entity name to “Pen Brands LLC”
on or prior to December 31, 2017 so long as it has provided Lender with 10 days’ prior written notice thereof. Upon the
effectiveness of such name change, any and all references herein or in the other Loan Documents to “nanoFILM, Ltd.”
or “Nanofilm, Ltd.” shall be deemed to refer to “Pen Brands, LLC.”










 


6.
Tri-Annual Exams. The first sentence of Section 5(a) of the Loan Agreement is hereby amended and restated in its entirety
to read as follows:


 


Lender
may, at all reasonable times, but no less than three times in any fiscal year, have access to, examine, audit, make extracts from
and inspect Borrower’s records, files, books of account and the Collateral.


 


7.
Conditions to Effectiveness. The effectiveness of this Amendment shall be subject to satisfaction of the following
conditions:


 


(a)
Amendment Documents. Borrower shall have executed and delivered, or cause to be executed and delivered to Lender, this
Amendment (including the acknowledgement and agreement to the amendments contained herein of the Guarantors), the Restated Note,
and all other documents and instruments required by Lender in connection with this Amendment.


 


(b)
Lender Expenses. Borrower shall have paid to Lender all of Lender’s legal fees and expenses incurred in connection
with the preparation, negotiation and closing of this Amendment.


 


8.
Effect of Amendment. Except for the amendments set forth in this Amendment, the Loan Agreement and all other Loan Documents
shall remain unchanged and in full force and effect. Nothing in this Amendment is intended, or shall be construed, to constitute
a novation or an accord and satisfaction of any of Borrower’s obligations under or in connection with the Loan Agreement
or any other Loan Document.


 


9.
Miscellaneous.


 


(a)
Entire Agreement. This Amendment, together with the Loan Agreement and other Loan Documents constitutes the entire agreement
and understanding among the parties relating to the subject matter hereof, and supersedes all prior proposals, negotiations, agreements
and understandings relating to such subject matter. In entering into this Amendment, Borrower acknowledges that it is relying
on no statement, representation, warranty, covenant or agreement of any kind made by the Lender or any employee or agent of Lender,
except for the agreements of Lender set forth herein.


 


(b)
Binding Effect. This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns, provided that no party other than Lender may assign any of its rights or obligations hereunder without
the prior written consent of Lender.


 


(c)
Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
MICHIGAN APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE.


 




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(d)
Counterparts; Facsimile or Electronic Signatures. This Amendment may be executed in multiple counterparts, each of which
shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument. A facsimile
or PDF signature shall be effective as an original signature.


 


IN
WITNESS WHEREOF,
the parties hereto have caused this Amendment to be executed and delivered as of the date first hereinabove set forth.


 


	BORROWER:	 
	 	 
	NANOFILM,  LTD.,



	 
	an
    Ohio limited liability company	 
	 	 	 
	By:	/s/
    Anne Marie Thomas 	 
	 	Anne
    Marie Thomas	 
	Title:	President	 


 


	LENDER:	 
	 	 
	MCC-ABL
    DIVISION OF MBANK,	 
	a
    Michigan banking corporation	 
	 	 	 
	By:	/s/
    Edward P. Lewan	 
	 	Edward
    P. Lewan	 
	Title:	President	 


 


ACKNOWLEDGEMENT
OF GUARANTOR


 


Scott
E. Rickert, guarantor under that certain Validity Guaranty dated April 4, 2014 in favor of Lender (the “Validity Guaranty”),
and PEN, Inc., a Delaware corporation, a guarantor under that certain Corporate Guaranty dated May 1, 2015 (the “Corporate
Guaranty”), each acknowledge the above Amendment and agrees that their respective Guaranty shall continue in full force
and effect.


 


	 	GUARANTOR:
	 	 
	 	 	/s/
    Scott E. Rickert
	 	 	 Scott
    E. Rickert, an individual
	 	 	 
	 	 PEN,
    INC.
	 	 a
    Delaware corporation
	 	 	 
	 	 By:
    	/s/
    Scott E. Rickert
	 	 	Scott
    E. Rickert
	 	 Title:	Chief
    Executive Officer


 




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