Exhibit 10.2


 


CONSENT AND SECOND AMENDMENT 


TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT


 


This CONSENT AND
SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of February 11,
2016, is by and among P&F INDUSTRIES, INC., a Delaware corporation (“P&F”), FLORIDA PNEUMATIC
MANAFUACTURING CORPORATION, a Florida corporation (“Florida Pneumatic”), HY-TECH MACHINE, INC., a
Delaware corporation (“Hy-Tech”), ATSCO HOLDINGS CORPORATION, a Delaware corporation (“ATSCO”),
and NATIONWIDE INDUSTRIES, INC., a Florida corporation (“Nationwide”, and together with P&F, Florida
Pneumatic Hy-Tech and ATSCO, collectively, “Borrowers” and each, a “Borrower”), CONTINENTAL
TOOL GROUP, INC., a Delaware corporation (“Continental”), COUNTRYWIDE HARDWARE, INC., a Delaware
corporation (“Countrywide”), EMBASSY INDUSTRIES, INC., a New York corporation (“Embassy”),
GREEN MANUFACTURING, INC., a Delaware corporation (“Green”), PACIFIC STAIR PRODUCTS, INC., a Delaware
corporation (“Pacific”), WILP HOLDINGS, INC., a Delaware corporation (“WILP”), EXHAUST
TECHNOLOGIES, INC., a Delaware corporation (“Exhaust”), and WOODMARK INTERNATIONAL, L.P., a Delaware
limited partnership (“Woodmark”, and together with Continental, Countrywide, Embassy, Green, Pacific, WILP and
Exhaust, collectively, “Guarantors” and each, a “Guarantor”), the Lenders (defined below)
party to this Agreement, CAPITAL ONE BUSINESS CREDIT CORP. (“COBC”), a New York corporation, as resigning
agent for the Lenders (“Resigning Agent”) and CAPITAL ONE, NATIONAL ASSOCIATION (“CONA”),
a national banking association, as successor agent for the Lenders (“New Agent”, and collectively with the
Resigning Agent, the “Agents”).


 


RECITALS:


 


A.           Borrowers,
Guarantors, the lenders from time to time party thereto (collectively, the “Lenders”) and Resigning Agent have
entered into an Amended and Restated Loan and Security Agreement dated as of August 13, 2014 (as heretofore amended, the “Loan
Agreement”) with COBC as the sole Lender thereunder. Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Loan Agreement.


 


B.           Countrywide
wishes to enter into a Stock Purchase and Redemption Agreement (“SPA”), dated as of February 11, 2016 and agreements,
instruments and documents related thereto (collectively, the “SPA Related Documents”), with Argosy NWI Holdings,
LLC, a Delaware limited liability company (“Purchaser”).


 


C.           Prior
to the Closing Date (as defined in the SPA), Nationwide will cause all of its outstanding 100 shares of stock to be represented
by two certificates of 30 shares and 70 shares respectively and thereafter but prior to such Closing Date, Countrywide will make
a capital contribution of the 30 shares to Nationwide (collectively, the “Share Re-issue and Contribution”).
On the Closing Date (as defined in the SPA), (i) Nationwide will issue to Purchaser, and Purchaser will purchase from Nationwide,
30 shares of the common stock of Nationwide, par value One Dollar ($1.00) per share (the “Purchased Shares”)
and (ii) simultaneously with the purchase of the Purchased Shares by Purchaser, Nationwide will redeem from Countrywide, and Countrywide
will sell to Nationwide, all of the outstanding Equity Interests of Nationwide then owned by Countrywide (the “Redeemed
Shares”), in each case of clauses (i) and (ii) above, on and subject to the terms and conditions set forth in the SPA
and other SPA Related Documents (collectively, the “Nationwide Sale and Redemption”).


 




     


     


    

 


D.          The
Borrowers have requested that the Lenders consent to the Share Re-issue and Contribution, the execution and delivery of the SPA,
the sale of the Purchased Shares and the redemption of all of the Redeemed Shares, consummation of the transactions under the SPA
Related Documents, the release of Nationwide from all its Obligations under the Loan Agreement and release of all Liens on the
assets of the Nationwide granted to Agent under and pursuant to the Loan Agreement.


 


E.           Simultaneously
with the entry into this Amendment, COBC shall transfer all of its interests in the Loans and Commitments to CONA and the Resigning
Agent will be succeeded by the New Agent.


 


F.           Subject
to the terms and conditions set forth below, the Agents and the Lenders are willing to consent to the Nationwide Sale and Redemption
and, with effect immediately after the consummation of the Nationwide Sale and Redemption, to amend the Loan Agreement as set forth
herein.


 


In furtherance of the foregoing,
the parties agree as follows:


 


Section 1.          Consents.
Subject to the covenants, terms and conditions set forth herein and in reliance upon the representations and warranties set forth
herein, each of the undersigned Lenders hereby consents to:


 


(a)          the
Share Re-issue and Contribution, Countrywide’s execution and delivery of the SPA and the SPA Related Documents, the incurrence
and performance by the Countrywide of its obligations thereunder and the consummation of the Nationwide Sale and Redemption (collectively,
the “Nationwide Transaction”).


 


(b)          Simultaneously
with the receipt of the proceeds of the sale of the Purchased Shares, Nationwide’s incurrence of debt in an amount of $8,000,000.00
under a new credit facility provided by TCF Capital Funding Division of TCF National Bank secured by Liens on all assets of Nationwide;
provided that (i) the debt is solely the obligation of Nationwide and no other Obligor is obligated (directly or indirectly, primarily
or secondarily) thereon or with respect thereto , (ii) no assets of any other Obligor are pledged in, or subject to Liens with,
respect to such debt and no other Obligor grants or is required to grant any Liens with respect to such debt and (iii) the proceeds
of such debt is immediately used to redeem the Redeemed Shares in full and remitted directly to New Agent.


 


(c)          An
amendment to the certificate of incorporation of ATSCO to change such corporation’s legal name; provided that the
New Agent shall have received within ten (10) days of the effective date of such name change, a duly authorized amendment to ATSCO’s
certificate of incorporation certified by the Secretary of State of the State of Delaware.


 


(d)          Upon
consummation of a sale of Real Estate located in Tampa, Florida in a Permitted Asset Disposition (and notwithstanding anything
in the Loan Agreement to the contrary), the holding in escrow or otherwise of a portion of the proceeds thereof, up to $400,000,
in accordance with the terms of the SPA (and the release thereof in accordance with the SPA).


 


The foregoing consents
shall be effective upon satisfaction of the conditions in clause (a) of Section 3 hereof.


 


Section 2.          AMENDMENTS.
Subject to the consummation of the Nationwide Sale and Redemption, the Loan Agreement is amended as follows:


 


(a)          Effective
upon the consummation of the Nationwide Sale and Redemption, Nationwide shall cease to be a Borrower and/or Guarantor under or
party to the Loan Agreement or other Loan Documents and Nationwide shall be deemed to be released from all Obligations under the
Loan Agreement and other Loan Documents.


 




    	 	2	 



     


    

 


(b)          Effective
upon the consummation of the Nationwide Sale and Redemption, the Lien on and security interest in the assets and property of Nationwide
granted to Agent under the Loan Agreement shall be deemed terminated and released.


 


(c)          Effective
upon the consummation of the Nationwide Sale and Redemption, all references to Nationwide in the Loan Agreement or Loan Documents
shall thereafter be deemed deleted.


 


(d)          Effective
immediately after consummation of the Nationwide Sale and Redemption and receipt of the proceeds thereof as required under Section
3(c)(iv) hereof, and subject to the covenants, terms and conditions set forth herein and in reliance upon the representations
and warranties set forth herein, the Loan Agreement is hereby amended such that, after giving effect to all such amendments, it
shall read in its entirety as attached hereto as Exhibit A, with all revisions to the Loan Agreement reflected in Exhibit
A in redlined format.


 


The amendments to the
Loan Agreement are limited to the extent specifically set forth above and no other terms, covenants or provisions of the Loan Agreement
are intended to be affected hereby.


 


Section 3.          CONDITIONS
PRECEDENT. The parties hereto agree that:


 


(a)   the
consent set forth in Section 1 above shall not be effective until the Agents shall have received a counterpart of this Amendment,
duly executed and delivered by Borrowers, Guarantors and all of the Lenders then party to the Loan Agreement and shall be
subject to receipt by New Agent, on the Closing Date (as defined in the SPA), of all proceeds of the Nationwide Sale and Redemption
to be received by Countrywide on such Closing Date;


 


(b)   the
amendments set forth in Section 2(a), (b) and (c) shall be effective upon the consummation of the Nationwide
Sale and Redemption, provided that prior thereto the Agents shall have received a counterpart of this Amendment, duly executed
and delivered by Borrowers, Guarantors and all of the Lenders then party to the Loan Agreement; and


 


(c)   the
amendments set forth in Section 2(d) above shall not be effective until immediately after the consummation of the Nationwide
Sale and Redemption and the satisfaction of each of the following conditions precedent (the date of such satisfaction, the “Second
Amendment Effective Date”):


 


		i.	New Agent shall have received a counterpart of this Amendment,
duly executed and delivered by Borrowers, Guarantors and all of the Lenders then party to the Loan Agreement.



 


		ii.	New Agent shall have received such other documents and
certificates as New Agent or its counsel may reasonably request relating to the organization, existence and good standing of Obligors,
the authorization of this Amendment and any other legal matters relating to any Obligor or the transactions contemplated hereby.



 


		iii.	On the Closing Date (as defined in the SPA), no Default
or Event of Default shall have occurred and be continuing.



 




    	 	3	 



     


    

 


		iv.	The Closing Date (as defined in the SPA) shall have occurred
on or before the date that is one day after the date of this Amendment (or such later date agreed to by the New Agent) and, unless
otherwise agreed by the New Agent, all proceeds of the Nationwide Sale and Redemption to be received by Countrywide on such Closing
Date shall be remitted directly to the New Agent for application to the Obligations, with so much of such proceeds being applied
to prepay the principal balance of the Term Loans then outstanding (other than $100,000 of Tranche A Term Loans), with any remainder
applied to the Revolving Loans then outstanding until such Revolving Loans are paid in full.



 


		v.	The Nationwide Sale and Redemption is consummated on the
terms and conditions of the unexecuted SPA delivered to the New Agent in final form without giving effect to any waivers, amendments,
supplements or other modifications thereto unless such waivers, amendments, supplements or other modifications are approved by
the Agent in writing.



 


		vi.	The Nationwide Sale and Redemption is consummated in accordance
with all Applicable Laws, rules or regulations and all requisite approvals and consents (regulatory, governmental or otherwise)
have been obtained.



 


		vii.	The receipt by New Agent of a certified true copy of the
fully executed SPA (within 3 Business Days after the execution thereof or such later date as agreed by the New Agent), SPA Related
Documents and other final, execution copies of the other documents, instruments and agreements executed in connection therewith
or executed or to be executed in connection with the Nationwide Transaction, in each case, in form and substance reasonably satisfactory
to New Agent and such other documents, instruments, agreements and opinions as the New Agent shall reasonably request.



 


		viii.	Prior to the Closing Date (as defined in the SPA), the
Borrowers shall furnish to the Agents such other material documentation and information relating to the Nationwide Transaction,
as reasonably requested by either Agent.



 


		ix.	All fees and expenses of counsel to Agent estimated to
date shall have been paid in full (without prejudice to final settling of accounts for such fees and expenses).



 


Section 4.          ADDITIONAL
AGREEMENT. Borrowers shall direct (and shall cause any related agreement to provide) that all proceeds to be received by or
returned to any Obligor under or pursuant to any escrow agreement or escrow arrangement under or pursuant to the SPA to be remitted
directly to the Dominion Account or such other Deposit Account acceptable to the Agent.


 


Section 5.          REPRESENTATIONS
AND WARRANTIES.


 


(a)          In
order to induce the Agents and the Lenders to enter into this Amendment, each Borrower represents and warrants to the Agents and
the Lenders as follows:


 




    	 	4	 



     


    

 


(i)          The
representations and warranties made by such Borrower in Section 9 of the Loan Agreement are true and correct on and as of
the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date in which case
such representations and warranties are true and correct on and as of such earlier date.


 


(ii)         No
Default or Event of Default has occurred and is continuing or will exist after giving effect to this Amendment.


 


(b)          In
order to induce the Agents and the Lenders to enter into this Amendment, each Borrower and each Guarantor represents and warrants
to the Agents and the Lenders that (i) this Amendment has been duly authorized, executed and delivered by it and constitutes its
legal, valid and binding obligation and (ii) the execution, delivery and performance by each Borrower of this Amendment (w) do
not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or third
party, except for (A) such as have been obtained or made and are in full force and effect or (B) the failure of which to obtain
would not reasonably be expected to result in a Material Adverse Effect, (x) do not and will not violate any Applicable Law or
the Organic Documents of such Borrower, except to the extent that such violation would not reasonably be expected to result in
a Material Adverse Effect, (y) do not and will not violate or result in a default under any indenture or any other agreement, instrument
or other evidence of Material Indebtedness, except to the extent that such default would not reasonably be expected to result in
a Material Adverse Effect, and (z) do not and will not result in the creation or imposition of any Lien on any asset of any Obligor,
except Liens created under the Loan Documents.


 


Section 6.          MISCELLANEOUS.


 


(a)         Ratification
and Confirmation of Loan Documents. Each Borrower and each Guarantor hereby consents, acknowledges and agrees to the amendments
set forth herein and hereby confirms and ratifies in all respects the Loan Documents to which such Person is a party (including
without limitation, with respect to each Guarantor, the continuation of its payment and performance obligations under the guaranties
set forth in Section 15 of the Loan Agreement upon and after the effectiveness of the amendments contemplated hereby and,
with respect to each Borrower and each Guarantor, the continuation and extension of the liens granted under the Loan Agreement
and Security Documents to secure the Obligations). Except as expressly set forth herein, neither this Amendment nor any release
of Nationwide or any Liens on Nationwide assets (in each case, whether hereunder or by separate agreement, document or instrument)
or under any separate agreement or document) (i) shall not by implication or otherwise limit, impair, constitute a waiver of,
or otherwise affect the rights and remedies of the Lenders, any Agent or the Obligors under the Loan Agreement or any other Loan
Document, and (ii) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Loan Agreement or any other Loan Document, all of which are ratified and affirmed in all respects
and shall continue in full force and effect. Without limiting the generality of the foregoing, the Security Documents and all
of the Collateral described therein do and shall continue to secure the payment of all Obligations of the Obligors under the Loan
Documents, in each case, as amended by this Amendment. This Amendment shall for all purposes constitute a Loan Document.


 


(b)         Fees
and Expenses. Borrowers shall pay on demand all reasonable costs and expenses of the Agents in connection with the preparation,
reproduction, execution, and delivery of this Amendment and any other documents prepared in connection herewith, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agents.


 




    	 	5	 



     


    

 


(c)         Headings.
Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute
a part of this Amendment for any other purpose or be given any substantive effect.


 


(d)         Governing
Law; Waiver of Jury Trial. This Amendment shall be governed by and construed in accordance with the laws of the State of New
York, and shall be further subject to the provisions of Sections 14.13, 14.14 and 14.15 of the Loan Agreement.


 


(e)         Counterparts.
This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart
of a signature page of this Amendment by facsimile, PDF format or other electronic transmission shall be effective as delivery
of a manually executed counterpart of this Amendment.


 


(f)         Notices.
All communications and notices hereunder shall be given as provided in the Loan Agreement as amended hereby.


 


(g)         Entire
Agreement. This Amendment, together with all the Loan Documents (collectively, the “Relevant Documents”),
sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes
any prior negotiations and agreements among the parties relating to such subject matter. No promise, condition, representation
or warranty, express or implied, not set forth in the Relevant Documents shall bind any party hereto, and no such party has relied
on any such promise, condition, representation or warranty. Each of the parties hereto acknowledges that, except as otherwise expressly
stated in the Relevant Documents, no representations, warranties or commitments, express or implied, have been made by any party
to the other. None of the terms or conditions of this Amendment may be changed, modified, waived or canceled orally or otherwise
except in a writing signed by Agent for such purpose.


 


(h)         Enforceability;
Severability. Should any one or more of the provisions of this Amendment be determined to be illegal or unenforceable as to
one or more of the parties hereto, all other provisions nevertheless shall remain effective and binding on the parties hereto.
Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction.


 


(i)         Successors
and Assigns. This Amendment shall be binding upon and inure to the benefit of each Borrower, each Guarantor, each Agent, each
Lender and their respective successors and assigns (subject to Section 13 of the Loan Agreement).


 


(j)         Guarantor
Acknowledgement. Each Guarantor hereby: (i) consents to this Amendment and to the changes to the Loan Agreement to be
effected by this Amendment; (ii) acknowledges that this Amendment does not in any way modify, limit, or release any of its
obligations under the Loan Agreement; and (iii)  acknowledges that its consent to any other modification to any Loan Document
will not be required as a result of the consent set forth in this Section 5 having been obtained, except to the extent, if
any, required by the specific terms of that Loan Document.


 


[Remainder of Page Intentionally Left
Blank; Signature Pages Follow]


 




    	 	6	 



     


    

 


The following parties
have caused this Consent and Second Amendment to Amended and Restated Loan and Security Agreement to be executed as of the date
first written above.


 





	 	BORROWERS:
	 	 
	 	P&F INDUSTRIES, INC.
	 	FLORIDA PNEUMATIC MANUFACTURING
	 	CORPORATION
	 	HY-TECH MACHINE, INC.
	 	ATSCO HOLDINGS CORPORATION
	 	NATIONWIDE INDUSTRIES, INC.
	 	 
	 	By:	/s/ Joseph A. Molino, Jr.
	 	Name:	Joseph A. Molino, Jr.
	 	Title:	Vice President
	 	 
	 	GUARANTORS:
	 	 
	 	CONTINENTAL TOOL GROUP, INC.
	 	COUNTRYWIDE HARDWARE, INC.
	 	EMBASSY INDUSTRIES, INC.
	 	GREEN MANUFACTURING, INC.
	 	PACIFIC STAIR PRODUCTS, INC.
	 	EXHAUST TECHNOLOGIES, INC.
	 	WILP HOLDINGS, INC.
	 	 
	 	By:	/s/ Joseph A. Molino, Jr.
	 	Name:	Joseph A. Molino, Jr.
	 	Title:	Vice President
	 	 
	 	WOODMARK INTERNATIONAL, L.P.
	 	 
	 	By: 	Countrywide Hardware, Inc.
	 	 
	 	By:	/s/ Joseph A. Molino, Jr.
	 	Name:	Joseph A. Molino, Jr.
	 	Title:	Vice President







 


CONSENT AND SECOND AMENDMENT TO AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT


Signature Page



 






     


     


    

 





	 	AGENT AND LENDERS:
	 	 
	 	CAPITAL ONE BUSINESS CREDIT CORPORATION, as Resigning Agent and assigning Lender
	 	 
	 	By:	/s/ Julianne Low
	 	Name:	Julianne Low
	 	Title:	Senior Director
	 	 
	 	CAPITAL ONE, NATIONAL ASSOCIATION, as successor Agent and assuming Lender
	 	 
	 	By:	/s/ Julianne Low
	 	Name:	Julianne Low
	 	Title:	Senior Director







 


CONSENT AND SECOND AMENDMENT TO AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT


Signature Page


 



     


     


    









 


	Execution Copy



 


	EXHIBIT A TO CONSENT AND SECOND AMENDMENT TO

 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


P&F
INDUSTRIES, INC.,


FLORIDA
PNEUMATIC MANAFUACTURING CORPORATION,


HY-TECH
MACHINE, INC.,


and


ATSCO
HOLDINGS CORPORATION,


 


and


NATIONWIDE
INDUSTRIES, INC., as Borrowers,


CONTINENTAL TOOL GROUP, INC.,


COUNTRYWIDE HARDWARE, INC.,


EMBASSY INDUSTRIES, INC.,

GREEN MANUFACTURING, INC.,


PACIFIC STAIR PRODUCTS, INC.,


WILP HOLDINGS, INC.,


EXHAUST TECHNOLOGIES, INC.,


and


WOODMARK INTERNATIONAL, L.P.,


as Guarantors,


 


AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT


 


Dated
as of August 13, 2014


 


$33,656,758.4011,600,000.00


 


CERTAIN
FINANCIAL INSTITUTIONS,


as Lenders


 


and


 


CAPITAL
ONE BUSINESS CREDIT CORPORATION,
NATIONAL ASSOCIATION,


as Agent


 




     


     


    

 


TABLE
OF CONTENTS


 





	 	 	Page
	 	 	 
	SECTION 1.	DEFINITIONS; RULES OF CONSTRUCTION	2
	 	 	 
	1.1	Definitions	2
	 	 	 
	1.2	Accounting Terms	30
	 	 	 
	1.3	Uniform Commercial Code	30
	 	 	 
	1.4	Certain Matters of Construction	30
	 	 	 
	SECTION 2.	CREDIT FACILITIES	31
	 	 	 
	2.1	Revolver Commitment	31
	 	 	 
	2.2	Term Loan Commitment	32
	 	 	 
	2.3	Letter of Credit Facility	34
	 	 	 
	SECTION 3.	INTEREST, FEES AND CHARGES	37
	 	 	 
	3.1	Interest	37
	 	 	 
	3.2	Fees	38
	 	 	 
	3.3	Computation of Interest, Fees, Yield Protection	38
	 	 	 
	3.4	Reimbursement Obligations	39
	 	 	 
	3.5	Illegality	39
	 	 	 
	3.6	Inability to Determine Rates	39
	 	 	 
	3.7	Increased Costs; Capital Adequacy	40
	 	 	 
	3.8	Mitigation	41
	 	 	 
	3.9	Funding Losses	41
	 	 	 
	3.10	Maximum Interest	41
	 	 	 
	SECTION 4.	LOAN ADMINISTRATION	41
	 	 	 
	4.1	Manner of Borrowing and Funding Revolver Loans	41
	 	 	 
	4.2	Defaulting Lender	43
	 	 	 
	4.3	Number and Amount of LIBOR Loans; Determination of Rate	43
	 	 	 
	4.4	Borrower Agent	43
	 	 	 
	4.5	One Obligation	44
	 	 	 
	4.6	Effect of Termination	44
	 	 	 
	SECTION 5.	PAYMENTS	44
	 	 	 
	5.1	General Payment Provisions	44
	 	 	 
	5.2	Repayment of Revolver Loans	44
	 	 	 
	5.3	Repayment of Term Loans	45
	 	 	 
	5.4	Payment of Other Obligations	46




 




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TABLE OF CONTENTS


(continued)


 





	 	 	Page
	 	 	 
	5.5	Marshaling; Payments Set Aside	46
	 	 	 
	5.6	Post-Default Allocation of Payments	46
	 	 	 
	5.7	Application of Payments	47
	 	 	 
	5.8	Loan Account; Account Stated	47
	 	 	 
	5.9	Taxes	48
	 	 	 
	5.10	Lender Tax Information	48
	 	 	 
	5.11	Nature and Extent of Each Borrower’s Liability	49
	 	 	 
	SECTION 6.	CONDITIONS PRECEDENT	51
	 	 	 
	6.1	Conditions Precedent to Initial Loans	51
	 	 	 
	6.2	Conditions Precedent to All Credit Extensions	52
	 	 	 
	SECTION 7.	COLLATERAL	53
	 	 	 
	7.1	Grant of Security Interest	53
	 	 	 
	7.2	Lien on Deposit Accounts; Cash Collateral	54
	 	 	 
	7.3	Real Estate Collateral	54
	 	 	 
	7.4	Investment Property and other Equity Interests	55
	 	 	 
	7.5	Other Collateral; New Subsidiaries	55
	 	 	 
	7.6	No Assumption of Liability	56
	 	 	 
	7.7	Further Assurances	56
	 	 	 
	7.8	Foreign Subsidiary Stock	57
	 	 	 
	SECTION 8.	COLLATERAL ADMINISTRATION	57
	 	 	 
	8.1	Borrowing Base Certificates	57
	 	 	 
	8.2	Administration of Accounts	57
	 	 	 
	8.3	Administration of Inventory	58
	 	 	 
	8.4	Administration of Equipment	58
	 	 	 
	8.5	Administration of Deposit Accounts	59
	 	 	 
	8.6	General Provisions	59
	 	 	 
	8.7	Power of Attorney	61
	 	 	 
	SECTION 9.	REPRESENTATIONS AND WARRANTIES	61
	 	 	 
	9.1	General Representations and Warranties	61
	 	 	 
	9.2	Complete Disclosure	66
	 	 	 
	SECTION 10.	COVENANTS AND CONTINUING AGREEMENTS	66
	 	 	 
	10.1	Affirmative Covenants	66







 




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TABLE OF CONTENTS


(continued)


 





	 	 	Page
	 	 	 
	10.2	Negative Covenants	69
	 	 	 
	10.3	Financial Covenants	73
	 	 	 
	SECTION 11.	EVENTS OF DEFAULT; REMEDIES ON DEFAULT	74
	 	 	 
	11.1	Events of Default	74
	 	 	 
	11.2	Remedies upon Default	75
	 	 	 
	11.3	License	76
	 	 	 
	11.4	Setoff	76
	 	 	 
	11.5	Remedies Cumulative; No Waiver	77
	 	 	 
	SECTION 12.	AGENT	77
	 	 	 
	12.1	Appointment, Authority and Duties of Agent	77
	 	 	 
	12.2	Agreements Regarding Collateral and Field Examination Reports	78
	 	 	 
	12.3	Reliance By Agent	79
	 	 	 
	12.4	Action Upon Default	79
	 	 	 
	12.5	Ratable Sharing	79
	 	 	 
	12.6	Indemnification of Agent Indemnitees	80
	 	 	 
	12.7	Limitation on Responsibilities of Agent	80
	 	 	 
	12.8	Successor Agent and Co-Agents	80
	 	 	 
	12.9	Due Diligence and Non-Reliance	81
	 	 	 
	12.10	Replacement of Certain Lenders	81
	 	 	 
	12.11	Remittance of Payments and Collections	81
	 	 	 
	12.12	Agent in its Individual Capacity	82
	 	 	 
	12.13	Agent Titles	82
	 	 	 
	12.14	Bank Product Providers	82
	 	 	 
	12.15	No Third Party Beneficiaries	82
	 	 	 
	SECTION 13.	BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS	83
	 	 	 
	13.1	Successors and Assigns	83
	 	 	 
	13.2	Participations	83
	 	 	 
	13.3	Assignments	83
	 	 	 
	SECTION 14.	MISCELLANEOUS	84
	 	 	 
	14.1	Consents, Amendments and Waivers	84
	 	 	 
	14.2	Indemnity	85
	 	 	 
	14.3	Notices and Communications	85




 




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TABLE OF CONTENTS


(continued)


 





	 	 	Page
	 	 	 
	14.4	Performance of Borrowers’ Obligations	86
	 	 	 
	14.5	Credit Inquiries	86
	 	 	 
	14.6	Severability	86
	 	 	 
	14.7	Cumulative Effect; Conflict of Terms	86
	 	 	 
	14.8	Counterparts	86
	 	 	 
	14.9	Entire Agreement	86
	 	 	 
	14.10	Relationship with Lenders	86
	 	 	 
	14.11	No Control; No Advisory or Fiduciary Responsibility	87
	 	 	 
	14.12	Confidentiality	87
	 	 	 
	14.13	GOVERNING LAW	87
	 	 	 
	14.14	Consent to Forum	88
	 	 	 
	14.15	Waivers by Obligors	88
	 	 	 
	14.16	Patriot Act Notice	88
	 	 	 
	SECTION 15.	GUARANTY OF OBLIGATIONS	88
	 	 	 
	15.1	Guaranty; Limitation of Liability	88
	 	 	 
	15.2	Guaranty Absolute	89
	 	 	 
	15.3	Waivers and Acknowledgments	91
	 	 	 
	15.4	Subrogation	92







 




    	 	-iv-	 



     


    

 


 


 


AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT


 


This AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT is dated as of August 13, 2014 (this “Agreement”), among P&F
INDUSTRIES, INC., a Delaware corporation (“P&F”), FLORIDA PNEUMATIC MANAFUACTURING CORPORATION,
a Florida corporation (“Florida Pneumatic”), HY-TECH MACHINE, INC., a Delaware corporation (“Hy-Tech”),
and ATSCO HOLDINGS CORPORATION, a Delaware corporation (“ATSCO”),
and NATIONWIDE INDUSTRIES, INC., a Florida corporation (“Nationwide”,
and together with P&F, Florida Pneumatic and Hy-Tech
and ATSCO, collectively, “Borrowers” and each, a “Borrower”), CONTINENTAL
TOOL GROUP, INC., a Delaware corporation (“Continental”), COUNTRYWIDE HARDWARE, INC., a Delaware
corporation (“Countrywide”), EMBASSY INDUSTRIES, INC., a New York corporation (“Embassy”),
GREEN MANUFACTURING, INC., a Delaware corporation (“Green”), PACIFIC STAIR PRODUCTS, INC., a Delaware
corporation (“Pacific”), WILP HOLDINGS, INC., a Delaware corporation (“WILP”), EXHAUST
TECHNOLOGIES, INC., a Delaware corporation, and WOODMARK INTERNATIONAL, L.P., a Delaware limited partnership (“Woodmark”,
and together with Continental, Countrywide, Embassy, Green, Pacific and WILP, collectively, “Guarantors” and
each, a “Guarantor”) the financial institutions party to this Agreement from time to time as lenders (collectively,
“Lenders”), and CAPITAL ONE BUSINESS CREDIT CORPORATION,
a New York corporation, NATIONAL ASSOCIATION,
a national banking association, as agent for the Lenders (“Agent”).


 


RECITALS:


 


A.           Reference
is hereby made to that certain Loan and Security Agreement, dated as of October 25, 2010 (as amended, restated, supplemented or
otherwise modified prior to the date hereof, the “Existing Agreement”), by and among the Borrowers and Guarantors
party thereto, the Lenders (as defined therein) and the Agent;


 


B.           The Borrowers, the Lenders and the Administrative Agent have agreed to enter into this Agreement in order to (i) amend and restate
the Existing Agreement in its entirety; (ii) re-evidence the “Obligations” under, and as defined in, the Existing Agreement,
which shall be repayable in accordance with the terms of this Agreement; and (iii) set forth the terms and conditions under which
the existing Loans shall be re-evidenced as Loans (as defined below) owing to the Lenders under this Agreement on a Pro Rata basis;


 


C.           It
is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities of the parties
under the Existing Agreement or be deemed to evidence or constitute full repayment of such obligations and liabilities, but that
this Agreement amend and restate in its entirety the Existing Agreement and re-evidence the obligations and liabilities of the
Obligors outstanding thereunder, which shall be payable in accordance with the terms hereof; and


 


D.           It
is also the intent of the Borrowers and Guarantors to confirm that all obligations under the Existing Agreement and the “Loan
Documents” (as referred to and defined in the Existing Agreement) shall continue in full force and effect but only as modified
and/or restated hereby and that, from and after the Restatement Effective Date, all references to the “Agreement” contained
in any such existing “Loan Documents” shall be deemed to refer to this Agreement.


 


NOW, THEREFORE,
IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree that the Existing Agreement is hereby amended and restated as follows


 




    	 	-1-	 



     

    

 


NOW, THEREFORE,
for valuable consideration hereby acknowledged, the parties agree as follows:


 


SECTION 1.          DEFINITIONS;
RULES OF CONSTRUCTION


 


1.1           Definitions.
As used herein, the following terms have the meanings set forth below:


 


Account: as
defined in the UCC, including all rights to payment for goods sold or leased, or for services rendered.


 


Account Debtor:
a Person who is obligated under an Account, Chattel Paper or General Intangible.


 


Accounts Formula
Amount: 85% of the Value of Eligible Accounts.


 


Acquisition:
any transaction or series of related transactions resulting in the (a) acquisition of all or substantially all of the Property
or business of any Person, or of any business unit, line of business or division of any Person or Property constituting a business
unit, line of business or division of any other Person, (b) acquisition of in excess of 50% of the Equity Interests of any Person
or otherwise causing a person to become a Subsidiary of the acquiring Person, or (c) merger, consolidation, amalgamation or other
combination, whereby a Person becomes a Subsidiary of the acquiring Person.


 


Adjusted EBITDA:
for any period, with respect to the Obligors on a consolidated basis, net income (as that term is determined in accordance with
GAAP) for such period, plus:


 


(a)          without
duplication and to the extent already deducted (and not added back) in arriving at such consolidated net income, the sum of the
following amounts for such period:


 


(i)          the
amount of depreciation and amortization of fixed and intangible assets deducted in determining such net income for such period;


 


(ii)         all
interest expense and all fees for the use of money or the availability of money, including commitment, facility and like fees and
charges upon indebtedness (including Debt to Agent and Lenders) paid or payable during such period;


 


(iii)        all
tax liabilities paid or accrued during such period;


 


(iv)        non-cash
compensation charges and expenses including, but limited to, charges and expenses related to the management incentive plans and
employee bonus plans (to the extent deducted in determining net income for such period);


 


(v)         any
non-cash charges related to impairment of intangible assets;


 


(vi)        other
non-cash charges;


 


minus
(b)          without duplication and to the extent included in arriving at
such consolidated net income, the following amounts for such period:


 


(i)          the
amount of all gains realized during such period upon the sale or other disposition of property or assets that are sold or otherwise
disposed of outside the Ordinary Course of Business and any income for such period attributable to the early extinguishment of
Debt;


 




    	 	-2-	 



     

    

 


(ii)         all
other non-cash gains or extraordinary non-recurring income added in determining consolidated net income.


 


Notwithstanding the above,
no more than 10% of Adjusted EBITDA shall be attributable to Universal.


 


Affiliate: with
respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled
by or is under common Control with the Person specified. “Control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. “Controlling” and “Controlled” have correlative meanings.


 


Agent Indemnitees:
Agent and its officers, directors, employees, Affiliates, agents and attorneys.


 


Agent Professionals:
attorneys, accountants, appraisers, auditors, business valuation experts, environmental engineers or consultants, turnaround consultants,
and other professionals and experts retained by Agent.


 


Allocable Amount:
as defined in Section 5.11.3.


 


Anti-Terrorism Laws:
any laws relating to terrorism or money laundering, including OFAC requirements and the Patriot Act.


 


Applicable Law:
all laws, rules, regulations and governmental guidelines applicable to the Person, conduct, transaction, agreement or matter in
question, including all applicable statutory law, common law and equitable principles, and all provisions of constitutions, treaties,
statutes, rules, regulations, orders and decrees of Governmental Authorities.


 


Applicable Margin:
(a) with respect to Tranche A Term Loans, (i) 2.000.50%
with respect to Base Rate Term Loans and (ii) 3.001.50%
with respect to LIBOR Term Loans; (b) with respect to Tranche B TermCapex
Loans, (i) 2.250.50%
with respect to Base Rate TermCapex
Loans and (ii) 3.251.50%
with respect to LIBOR TermCapex
Loans; and (c) with respect to Capex
Loans, (i) 2.00% with respect to Base Rate Capex Loans and (ii) 3.00% with respect to LIBOR Capex Loans; and (d) with respect to
Revolver Loans, the marginmargins
set forth below, as determined by the Leverage Ratio for the Measurement Period ending as of the most recently ended month:


 


	Level	 	[Leverage
    Ratio]	 	Base Rate
    

Revolver 

Loans	 	LIBOR 

Revolver
    

Loans
	I	 	> 2.50 to 1.00	 	1.501.00%	 	2.502.00%
	II		> 2.00 to 1.00 and < 2.50 to 1.00	 	1.250.75%	 	2.251.75%
	III		>1.40 to 1.00 and < 2.00 to 1.00	 	1.000.50%	 	2.001.50%
	IV		>1.10 to 1.00 and < 1.40 to 1.00	 	0.75%	 	1.75%
	V	 	< 1.10 to 1.00	 	0.50%	 	1.50%



 


The margins shall be subject to increase
or decrease upon receipt by Agent pursuant to Section 10.1.2 of the financial statements and corresponding Compliance Certificate
for the last month, which change shall be effective on the first day of the calendar month following receipt; provided,
however, that Level IVIII
shall apply at any time prior to Agent’s receipt pursuant to Section 10.1.2 of the financial statements and corresponding
Compliance Certificate for the month ending June 30, 2014.March
31, 2016. If, by the first day of a month, any financial statements and Compliance Certificate due in the preceding
month have not been received, then, at the option of Agent or Required Lenders, the margins shall be determined as if Level I were
applicable, from such day until the first day of the calendar month following actual receipt.


 




    	 	-3-	 



     

    

 


Approved Fund:
any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans
and similar extensions of credit in its ordinary course of activities, and is administered or managed by a Lender, an entity that
administers or manages a Lender, or an Affiliate of either.


 


Asset Disposition:
a sale, lease, license, consignment, transfer or other disposition of Property of an Obligor, including a disposition of Property
in connection with a sale-leaseback transaction or synthetic lease.


 


Assignment and Acceptance:
an assignment agreement between a Lender and Eligible Assignee, in the form of Exhibit C.


 


ATSCO Acquisition:
the Acquisition by ATSCO of all or substantially all of the assets of Air Tool Services Company, an Ohio corporation, pursuant
to the ATSCO Purchase Agreement.


 


ATSCO Purchase Agreement:
the Asset Purchase Agreement dated as of August 13, 2014 by and among Air Tool Services Company as seller, ATSCO as buyer and Hy-Tech
with respect to the ATSCO Acquisition.


 


Availability:
the Borrowing Base minus the principal balance of all Revolver Loans
and Tranche A Term Loans.


 


Availability Reserve:
the sum (without duplication of any other Reserve or items that are otherwise addressed or excluded through eligibility criteria)
of (a) the Rent and Charges Reserve; (b) the LC Reserve; (c) the Bank Product Reserve; and (d) the aggregate amount of liabilities
at any time (i) secured by Liens upon Collateral that are senior to Agent’s Liens or (ii) for which Agent and Lenders may
be obligated to third parties in connection with this Agreement for which claims may be reasonably expected to be asserted against
the Collateral, Agent or Lenders (but imposition of any such reserve shall not waive an Event of Default arising therefrom).


 


Bank Product:
any of the following products, services or facilities extended to any Obligor or Subsidiary by a Lender or any of its Affiliates:
(a) Cash Management Services; (b) products under Hedging Agreements; (c) commercial credit card and merchant card services; and
(d) other banking products or services as may be requested by any Borrower or other Obligor, other than Letters of Credit.


 


Bank Product Debt:
Debt and other obligations of an Obligor relating to Bank Products.


 


Bank Product Reserve:
the aggregate amount of reserves established by Agent from time to time in its reasonable discretion in respect of Secured Bank
Product Obligations.


 


Bankruptcy Code:
Title 11 of the United States Code.


 


Base Rate: for
any day, a per annum rate equal to the greatest of (a) the Prime Rate for such day; (b) the annualized rate for 90-day dealer commercial
paper which normally appears in the “Money Rates” section of The Wall Street Journal; and (c) LIBOR for a 30 day interest
period as determined on such day, plus 1.00 %.


 


Base Rate Capex
Loan: a Capex Loan that bears interest based on the Base Rate.


 




    	 	-4-	 



     

    

 


Base Rate Loan:
any Loan that bears interest based on the Base Rate.


 


Base Rate Revolver
Loan: a Revolver Loan that bears interest based on the Base Rate.


 


Base Rate Term Loan:
a Term Loan that bears interest based on the Base Rate.


 


Beneficial Owner:
without duplication, any Person who, directly or indirectly, through any contract, arrangement, understanding relationship or otherwise
has or shares (a) voting power, which includes the power to vote, or to direct the voting of, such security; and/or (b) investment
power, which includes the power to dispose, or to direct the disposition, of such security.


 


Board of Governors:
the Board of Governors of the Federal Reserve System.


 


Borrowed Money:
with respect to any Obligor, without duplication, its (a) Debt that (i) arises from the lending of money by any Person to such
Obligor, (ii) is evidenced by notes, drafts, bonds, debentures, credit documents or similar instruments, (iii) accrues interest
or is a type upon which interest charges are customarily paid (excluding trade payables owing in the Ordinary Course of Business),
or (iv) was issued or assumed as full or partial payment for Property; (b) Capital Leases; (c) reimbursement obligations with respect
to letters of credit; and (d) guaranties of any Debt of the foregoing types owing by another Person.


 


Borrower Agent:
as defined in Section 4.4.


 


Borrowing: a
group of Loans of one Type that are made on the same day or are converted into Loans of one Type on the same day.


 


Borrowing Base:
on any date of determination, an amount equal to the lesser of (a) the aggregate amount of Revolver Commitments, minus the
Availability Reserve, and (b) the sum of the Accounts Formula Amount, plus the Inventory Formula Amount, plus
the Equipment Formula Amount, minus the Borrowing Base Reserve.


 


Borrowing Base Certificate:
a certificate, in form and substance satisfactory to Agent, by which Borrowers certify calculation of the Borrowing Base.


 


Borrowing Base Reserve:
the sum (without duplication of any other Reserve or items that are otherwise addressed or excluded through eligibility criteria)
of (a) the Inventory Reserve; (b) the Rent and Charges Reserve; (c) the LC Reserve; (d) the Bank Product Reserve; (e) the Dilution
Reserve; (f) the aggregate amount of liabilities secured by Liens upon Revolving Credit Collateral that are senior in priority
to Agent’s Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); and (g) such
additional reserves, in such amounts and with respect to such matters, as Agent in its reasonable credit judgment exercised in
good faith may elect to impose from time to time.


 


Business Day:
any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are
in fact closed in, New York, and if such day relates to a LIBOR Loan, any such day on which dealings in Dollar deposits are conducted
between banks in the London interbank Eurodollar market.


 


Capex Loan:
a term loan made pursuant to Section 2.2B.


 




    	 	-5-	 



     

    

 


Capex Loan Commitment:
for any Lender, its obligation to make Capex Loans up to the maximum principal amount shown on Schedule 1.1, or as hereafter
determined pursuant to each Assignment and Acceptance to which it is a party.


 


Capex Loan Commitments:
means the aggregate amount of such commitments of all Lenders in an aggregate amount up to $2,123,425.1,600,000.


 


Capex Loan Note:
a promissory note to be executed by Borrowers in favor of a Lender in the form of Exhibit B-2, which shall be in the amount
of such Lender’s Capex Loan Commitment and shall evidence the Capex Loans made by such Lender.


 


Capex Loan Termination
Date: the earliest to occur of (a) December 19, 2017[January
__, 2019]; (b) the date on which Borrowers terminate the Revolver Commitments pursuant to Section 2.1.4;
and (c) the date on which the Capex Loan Commitments are terminated pursuant to Section 11.2.


 


Capital Expenditures:
without duplication, all liabilities incurred, expenditures made or payments due (whether or not made) by a Borrower or Subsidiary
for the acquisition of any fixed assets, or any improvements, replacements, substitutions or additions thereto with a useful life
of more than one year, including the principal portion of Capital Leases.


 


Capital Lease:
any lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.


 


Capital One:
Capital One, N.A.National
Association, a national banking association, and its successors and assigns.


 


Capital One Indemnitees:
Capital One and its officers, directors, employees, Affiliates, agents and attorneys.


 


Cash Collateral:
cash and Cash Equivalents, and any interest or other income earned thereon, that is delivered to Agent to Cash Collateralize any
Obligations.


 


Cash Collateral
Account: a demand deposit, money market or other account with Agent or an Affiliate of Agent, which account shall be subject
to Agent’s Liens for the benefit of Secured Parties.


 


Cash Collateralize:
the delivery of cash to Agent, as security for the payment of Obligations, in an amount equal to (a) with respect to LC Obligations,
105% of the aggregate LC Obligations, and (b) with respect to any inchoate, contingent or other Obligations (including Secured
Bank Product Obligations), Agent’s good faith estimate of the amount due or to become due, including all fees contracted
for and other amounts relating to such Obligations. “Cash Collateralization” has a correlative meaning.


 


Cash Equivalents:
(a) marketable obligations issued or unconditionally guaranteed by, and backed by the full faith and credit of, the United States
government, maturing within 12 months of the date of acquisition; (b) certificates of deposit, time deposits and bankers’
acceptances maturing within 12 months of the date of acquisition, and overnight bank deposits, in each case which are issued by
Capital One or a commercial bank organized under the laws of the United States or any state or district thereof, rated A-1 (or
better) by S&P or P-1 (or better) by Moody’s at the time of acquisition, and (unless issued by a Lender) not subject
to offset rights; (c) repurchase obligations with a term of not more than 30 days for underlying investments of the types described
in clauses (a) and (b) entered into with any bank meeting the qualifications specified in clause (b); (d) commercial paper issued
by Capital One or rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and maturing within nine months of the
date of acquisition; and (e) shares of any money market fund that has substantially all of its assets invested continuously in
the types of investments referred to above, has net assets of at least $500,000,000 and has the highest rating obtainable from
either Moody’s or S&P.


 




    	 	-6-	 



     

    

 


Cash Management
Services: any services provided from time to time by Capital One, N.A. or
any of its Affiliates to any Obligor or Subsidiary in connection with operating, collections, payroll, trust, or other depository
or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement,
overdraft, depository, information reporting, lockbox and stop payment services.


 


CERCLA: the
Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. § 9601 et seq.).


 


Change in Law:
the occurrence, after the date hereof, of (a) the adoption or taking effect of any law, rule, regulation or treaty; (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority;
or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental
Authority.


 


Change of Control:
(a) P&F ceases to own and control, beneficially and of record, directly or indirectly, all Equity Interests in all other Obligors
(other than Immaterial Subsidiaries); (b) the Horowitz Percentage is less than twenty-five percent (25%); (c) the current Board
of Directors of P&F, or any of them, together with any director approved or nominated by the then majority of the Board of
Directors of P&F, or any of them, does not constitute a majority of the Board of Directors of P&F; (d) all or substantially
all of any Borrower’s assets are sold or transferred, other than sale or transfer to another Borrower; or (e) Richard A.
Horowitz at any time ceases to be the chief executive officer of P&F, whether because of death, disability or otherwise, unless
the replacement chief executive officer of P&F appointed by the Board of Directors of P&F within 120 days is reasonably
acceptable to Agent and Required Lenders.


 


Claims: all
liabilities, obligations, losses, damages, penalties, judgments, proceedings, interest, costs and expenses of any kind (including
remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any time (including after Full Payment
of the Obligations, resignation or replacement of Agent, or replacement of any Lender) incurred by or asserted against any Indemnitee
in any way relating to (a) any Loans, Letters of Credit, Loan Documents, or the use thereof or transactions relating thereto, (b)
any action taken or omitted to be taken by any Indemnitee in connection with any Loan Documents, (c) the existence or perfection
of any Liens, or realization upon any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable
Law, or (e) failure by any Obligor to perform or observe any terms of any Loan Document, in each case including all costs and expenses
relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency Proceeding or appellate proceedings),
whether or not the applicable Indemnitee is a party thereto.


 


Closing Date:
as defined in Section 6.1.


 


Code: the Internal
Revenue Code of 1986.


 


Collateral:
all Property described in Section 7.1, all Property described in any Security Documents as security for any Obligations,
and all other Property that now or hereafter secures (or is intended to secure) any Obligations.


 




    	 	-7-	 



     

    

 


Commitment:
for any Lender, the aggregate amount of such Lender’s Revolver Commitment, Term Loan Commitment and Capex Loan Commitment.
“Commitments” means the aggregate amount of all Revolver Commitments, Term Loan Commitments and Capex Loan Commitments.


 


Commitment Termination
Date: the earliest to occur of (a) the Revolver Termination Date; (b) the date on which Borrowers terminate the Revolver Commitments
pursuant to Section 2.1.4; or (c) the date on which the Revolver Commitments are terminated pursuant to Section 11.2.


 


Commodity Exchange
Act: means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.


 


Compliance Certificate:
a certificate, in form and substance satisfactory to Agent, by which Borrowers (i) certify compliance
with as to whether a Default or Event of Default has
occurred and, if a Default or Event of Default has occurred, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (ii) set forth reasonably detailed calculations of the Leverage Ratio and Fixed Charge Coverage
Ratio (whether or not a Covenant Trigger Period then exists) and, to the extent then applicable, certify compliance with the provisions
of Sections 10.2.3 and 10.3,10.3
and (iiiii)
calculate the applicable Level for the Applicable Margin and (iii) with the financial statements
required under Section 10.1.2(a) and (b) with respect to a Fiscal Quarter or Fiscal Year end, calculate Excess Cash Flow for purposes
of Section 5.3.2(a).


 


Contingent Obligation:
any obligation of a Person arising from a guaranty, indemnity or other assurance of payment or performance of any Debt, lease,
dividend or other obligation (“primary obligations”) of another obligor (“primary obligor”)
in any manner, whether directly or indirectly, including any obligation of such Person under any (a) guaranty, endorsement, co-making
or sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or similar payments regardless
of nonperformance by any other party to an agreement; and (c) arrangement (i) to purchase any primary obligation or security therefor,
(ii) to supply funds for the purchase or payment of any primary obligation, (iii) to maintain or assure working capital, equity
capital, net worth or solvency of the primary obligor, (iv) to purchase Property or services for the purpose of assuring the ability
of the primary obligor to perform a primary obligation, or (v) otherwise to assure or hold harmless the holder of any primary obligation
against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be the stated or determinable amount
of the primary obligation (or, if less, the maximum amount for which such Person may be liable under the instrument evidencing
the Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto.


 


Countrywide Lease:
that certain lease agreement dated as of April 29, 2010 by and between Countrywide, as landlord, and Purification Technologies,
Inc., as tenant, as heretofore modified, supplemented or amended.


 


Covenant
Trigger Period: the period (a) commencing on the day Availability is less than $2,000,000 at any time; and (b) continuing until,
during the preceding 30 consecutive days, no Event of Default has existed and Availability has been greater than $2,000,000 at
all times.


 


CWA: the Clean
Water Act (33 U.S.C. §§ 1251 et seq.).


 


Debt: as applied
to any Person, without duplication, (a) all items that would be included as liabilities on a balance sheet in accordance with GAAP,
including Capital Leases, but excluding accrued expenses and trade payables incurred and being paid in the Ordinary Course of Business;
(b) all Contingent Obligations; (c) all reimbursement obligations in connection with letters of credit issued for the account of
such Person; and (d) in the case of an Obligor, the Obligations. The Debt of a Person shall include any recourse Debt of any partnership
in which such Person is a general partner or joint venturer (other than the discontinued operations of WMC).


 




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Default: an
event or condition that, with the lapse of time or giving of notice, would constitute an Event of Default.


 


Default Rate:
for any Obligation (including, to the extent permitted by law, interest not paid when due), 2% plus the interest rate otherwise
applicable thereto.


 


Defaulting Lender:
any Lender that (a) fails to make any payment or provide funds to Agent or any Borrower as required hereunder or fails otherwise
to perform its obligations under any Loan Document, and such failure is not cured within one Business Day, (b) has notified a Borrower,
Agent or any Lender that it does not intend to comply with its funding obligations or has made a public statement to that effect
with respect to its funding obligations hereunder or under other agreements in which it commits to extend credit, (c) has failed,
within three Business Days after request by Agent, to confirm in a manner satisfactory to Agent that it will comply with its funding
obligations, or (d) has, or has a direct or indirect parent company that has, (i) become the subject of an Insolvency Proceeding,
(ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or
indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be
a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect
parent company thereof by a Governmental Authority.


 


Deposit Account
Control Agreements: the Deposit Account control agreements to be executed by each institution maintaining a Deposit Account
(including the Dominion Account) for an Obligor, in favor of Agent, for the benefit of Secured Parties, as security for the Obligations.


 


Derivative Security:
the right to become the Beneficial Owner of any Equity Interest, including any right to acquire such Equity Interest (a) through
the exercise of any option, warrant or right or similar arrangement; (b) through the conversion of a security or similar arrangement;
(c) pursuant to the power to revoke a trust, discretionary account or similar arrangement; or (d) pursuant to the automatic termination
of a trust, discretionary account or similar arrangement.


 


Designated Jurisdiction:
any country or territory that is the subject of any Sanction.


 


Dilution Percent:
the percent, determined for Borrowers’ most recent Fiscal Quarter, equal to (a) bad debt write-downs or write-offs, discounts,
returns, promotions, credits, credit memos and other dilutive items with respect to Accounts, divided by (b) gross
sales.


 


Dilution Reserve:
at any date of determination, the percentage amount by which the Dilution Percent exceeds 5% (rounded up to the nearest whole number)
times the amount of Eligible Accounts of the Borrowers.


 


Distribution:
any declaration or payment of a distribution, interest or dividend on any Equity Interest of an Obligor (other than payment-in-kind);
any distribution, loan, management fee, advance or repayment of Debt to a holder of Equity Interests of an Obligor or of an Affiliate
of an Obligor; or any purchase, redemption, or other acquisition or retirement for value of any Equity Interest of an Obligor or
an Affiliate of an Obligor.


 


Dividend: as
defined in Section 7.4.3.


 




    	 	-9-	 



     

    

 


Dollars: lawful
money of the United States.


 


Dominion Account:
a special account established by Borrowers at Capital One, over which Agent has exclusive control for withdrawal purposes.


 


Eligible Account:
an Account owing to a Borrower that arises in the Ordinary Course of Business from the sale of goods, is payable in Dollars and
is deemed by Agent, in its reasonable discretion, to be an Eligible Account. Without limiting the foregoing, no Account shall be
an Eligible Account if (a)(i) with respect to Accounts from Sears Holdings Corp., it is unpaid for more than 30 days after the
original due date, or more than 120 days after the original invoice date, and (ii) with respect to all other Accounts, it is unpaid
for more than 60 days after the original due date; (b) Accounts representing 50% or more of all amounts owing by the Account Debtor
thereon are not Eligible Accounts under the foregoing clause; (c) when aggregated with other Accounts owing by the Account Debtor,
(i) with respect to Accounts from Sears Holdings Corp., it exceeds (A) so long as Sears Holdings Corp. is rated CCC+ (or better)
by S&P (secured bank facility rating category), 4030%
of the aggregate Eligible Accounts during the period of September 1 through November 30 of each year or (B) 3525%
of the aggregate Eligible Accounts during all other times, (ii) with respect to Accounts from The Home Depot, Inc., it exceeds
(A) so long as The Home Depot, Inc. is rated BBB- (or better) by S&P, 40% of the aggregate Eligible Accounts, (B) so long as
The Home Depot, Inc. is rated BB+ by S&P, 25% of the aggregate Eligible Accounts, and (C) so long as The Home Depot, Inc. is
rated BB- (or lower) by S&P, 20% of the aggregate Eligible Accounts, and (iii) with respect to all other Accounts, 20% of the
aggregate Eligible Accounts (or such higher percentage as Agent may establish for the Account Debtor from time to time); (d) it
does not conform with a covenant or representation herein; (e) it is owing by a creditor or supplier, or is otherwise subject to
an offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility
shall be limited to the amount thereof); (f) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the
Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, is not
Solvent, or is subject to Sanctions or any specially designated nationals list maintained by OFAC; or the Borrower is not able
to bring suit or enforce remedies against the Account Debtor through judicial process; (g) the Account Debtor is organized or has
its principal offices or assets outside the United States or Canada; (h) it is owing by a Government Authority, unless the Account
Debtor is the United States or any department, agency or instrumentality thereof and the Account has been assigned to Agent in
compliance with the Assignment of Claims Act; (i) it is not subject to a duly perfected, first priority Lien in favor of Agent,
or is subject to any other Lien except Permitted Liens permitted by Section 10.2.2(c); (j) the goods giving rise to it have
not been delivered to and accepted by the Account Debtor, the services giving rise to it have not been accepted by the Account
Debtor, or it otherwise does not represent a final sale; (k) it is evidenced by Chattel Paper or an Instrument of any kind, or
has been reduced to judgment; (l) its payment has been extended, the Account Debtor has made a partial payment, or it arises from
a sale on a cash-on-delivery basis; (m) it arises from a sale to an Affiliate, from a sale on a bill-and-hold, guaranteed sale,
sale or return, sale on approval, consignment, or other repurchase or return basis, or from a (direct) sale to a Person for personal,
family or household purposes; (n) it represents a progress billing or retainage, or relates to services for which a performance,
surety or completion bond or similar assurance has been issued; or (o) it includes a billing for interest, fees or late charges,
but ineligibility shall be limited to the extent thereof. In calculating delinquent portions of Accounts under clauses (a) and
(b), credit balances more than 90 days old will be excluded.


 


Eligible Assignee:
a Person that is (a) a Lender, U.S.-based Affiliate of a Lender or Approved Fund; (b) any other financial institution approved
by Agent and Borrower Agent (which approval by Borrower Agent shall not be unreasonably withheld or delayed, and shall be deemed
given if no objection is made within five Business Days after notice of the proposed assignment), that is organized under the laws
of the United States or any state or district thereof, has total assets in excess of $5 billion, extends asset-based lending facilities
in its ordinary course of business and whose becoming an assignee would not constitute a prohibited transaction under Section 4975
of the Code or any other Applicable Law; and (c) during any Event of Default, any Person acceptable to Agent in its discretion.
None of the Obligors or any Affiliates of any Obligor shall be Eligible Assignees.


 




    	 	-10-	 



     

    

 


Eligible
Equipment: Equipment that is owned by a Borrower and that Agent,
in its reasonable discretion, deems to be Eligible Equipment. Without limiting the foregoing, no
Equipment shall be Eligible Equipment unless it (a) is in good condition and is not damaged, defective, shopworn or otherwise unfit
for use and has not been subject to loss or condemnation; (b) is not obsolete or unmerchantable; (c) meets all standards imposed
by any Governmental Authority, and does not constitute hazardous materials under any Environmental Law; (d) conforms with the covenants
and representations herein; (e) is subject to Agent’s duly perfected, first priority Lien, and no other Lien; (f) is within
the continental United States, is not in transit except between locations of Borrowers, and is not consigned to any Person; (g)
is not subject to any warehouse receipt or negotiable Document; (h) is not subject to any License or other arrangement that restricts
such Borrower’s or Agent’s right to dispose of such Equipment, unless Agent has received an appropriate Lien Waiver;
and (i) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight
forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Rent and Charges Reserve
has been established.


 


If
at any time any Equipment included in the Borrowing Base ceases to be owned by a Borrower by reason of a sale or disposition thereof
or otherwise or is affected by a material casualty, such Equipment shall be excluded from the Borrowing Base and the Equipment
Formula Amount shall be reduced by the NOLV of such Equipment. Such reduction shall be permanent unless such Equipment is replaced
by new Eligible Equipment, or any such Equipment affected by a casualty is fully restored to the condition it was in prior to such
casualty, within twelve months after such removal from the Borrowing Base. If Equipment removed from the Borrowing Base by the
operation of this paragraph is replaced by new Eligible Equipment, the Equipment Formula Amount (after
giving effect to the reduction thereof by the NOLV of the replaced Equipment) shall be increased
by the lesser of (i) the NOLV of the Equipment replaced by such new Eligible Equipment and (ii) the NOLV of such new Eligible Equipment.


 


Eligible In-Transit
Inventory: Inventory owned by a Borrower that would be Eligible Inventory if it were not subject to a Document and in transit
from a foreign location to a location of the Borrower within the United States, with respect to which the Borrower maintains accurate
and complete accounting and other records in form satisfactory to Agent and that Agent, in its reasonable discretion, deems to
be Eligible In-Transit Inventory. Without limiting the foregoing, no Inventory shall be Eligible In-Transit Inventory unless it
(a) is subject to a Document showing Agent (or, with the consent of Agent, another Person acceptable to Agent) as consignee, which
Document is in the possession of Agent or such other Person as Agent shall approve; (b) is fully insured in a manner satisfactory
to Agent; (c) has been identified to the applicable sales contract and title has passed to the Borrower; (d) is not sold by a vendor
that has a right to reclaim, divert shipment of, repossess, stop delivery, claim any reservation of title or otherwise assert Lien
rights against the Inventory, or with respect to whom any Borrower is in default of any obligations; (e) is subject to purchase
orders and other sale documentation satisfactory to Agent; (f) is shipped by a common carrier that is not affiliated with the vendor
and is not subject to Sanctions or any specially designated nationals list maintained by OFAC; and (g) is being handled by a customs
broker, freight-forwarder or other handler that has delivered a Lien Waiver.


 




    	 	-11-	 



     

    

 


Eligible Inventory:
Inventory that is owned by a Borrower and that Agent, in its reasonable discretion, deems to be Eligible Inventory. Without limiting
the foregoing, no Inventory shall be Eligible Inventory unless it (a) is finished goods or raw materials, and not work-in-process,
packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) is not
held on consignment, nor subject to any deposit or downpayment; (c) is in new and saleable condition and is not damaged, defective,
shopworn or otherwise unfit for sale; (d) is not slow-moving, obsolete or unmerchantable, and does not constitute returned or repossessed
goods; (e) meets all standards imposed by any Governmental Authority, has not been acquired from an entity subject to Sanctions
or any specially designated nationals list maintained by OFAC, and does not constitute hazardous materials under any Environmental
Law; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s duly perfected, first priority
Lien, and no other Lien; (h) is within the continental United States, is not in transit except between locations of Borrowers,
and is not consigned to any Person; (i) is not subject to any warehouse receipt or negotiable Document; (j) is not subject to any
License or other arrangement that restricts such Borrower’s or Agent’s right to dispose of such Inventory, unless Agent
has received an appropriate Lien Waiver; (k) is not located on leased premises or in the possession of a warehouseman, processor,
repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or
an appropriate Rent and Charges Reserve has been established; and (l) is reflected in the details of a current perpetual inventory
report.


 


Enforcement Action:
any action to enforce any Obligations or Loan Documents or to exercise any rights or remedies relating to any Collateral (whether
by judicial action, self-help, notification of Account Debtors, exercise of setoff or recoupment, exercise of any right to vote
or act in an Obligor’s Insolvency Proceeding, or otherwise).


 


Environmental Agreement:
each agreement of Obligors with respect to any Real Estate subject to a Mortgage, pursuant to which Obligors agree to indemnify
and hold harmless Agent and Lenders from liability under any Environmental Laws.


 


Environmental Laws:
all Applicable Laws (including all programs, permits and guidance promulgated by regulatory agencies), relating to public health
(but excluding occupational safety and health, to the extent regulated by OSHA) or the protection or pollution of the environment,
including CERCLA, RCRA and CWA.


 


Environmental Notice:
a notice (whether written or oral) from any Governmental Authority or other Person of any possible noncompliance with, investigation
of a possible violation of, litigation relating to, or potential fine or liability under any Environmental Law, or with respect
to any Environmental Release, environmental pollution or hazardous materials, including any complaint, summons, citation, order,
claim, demand or request for correction, remediation or otherwise.


 


Environmental Release:
a release as defined in CERCLA or under any other Environmental Law.


 


Equipment
Formula Amount: the lesser of (a) $1,339,000 and (b) 85% of the NOLV of Eligible Equipment, which amount shall be reduced
in each case on September 1, 2014 and on the first day of each month thereafter by $22,316.67, such reductions to be permanent
and cumulative.


 


Equity Interest:
the interest of any (a) shareholder in a corporation; (b) partner in a partnership (whether general, limited, limited liability
or joint venture); (c) member in a limited liability company; or (d) other Person having any other form of equity security or ownership
interest, including any Derivative Securities.


 


ERISA: the Employee
Retirement Income Security Act of 1974.


 


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


 




    	 	-12-	 



     

    

 


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


 


Event of Default:
as defined in Section 11.


 


Excess
Cash Flow: (without duplication), with respect to P&F and its Subsidiaries on a consolidated basis for any Fiscal
Year ending after the Closing Date, Adjusted EBITDA for such period, minus (a) all payments with respect
to Capital Expenditures (except those financed with Borrowed Money other than Revolver Loans) made during such period, minus
(b) all Interest Expense and all fees for the use of money or the availability of money, including commitment, facility and like
fees and charges upon Debt paid or payable on a non-duplicative basis during such period, minus (c) all
tax liabilities paid or accrued during such period on a non-duplicative basis, minus (d) all principal
amounts of Debt (other than prepayments of Revolver Loans pursuant to Section 5.2 to the extent the Revolver Commitments
are not permanently reduced by a corresponding amount pursuant to Section 2.1.4) paid or payable during such period.


 


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


 


Excluded Tax:
with respect to Agent, any Lender, Issuing Bank or any other recipient of a payment to be made by or on account of any Obligation,
(a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of
net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized
or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located; (b)
any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which Borrower Agent
is located; (c) any backup withholding tax required by the Code to be withheld from amounts payable to a Lender that has failed
to comply with Section 5.10; (d) in the case of a Foreign Lender, any United States withholding tax that is (i) required
pursuant to laws in force at the time such Lender becomes a Lender (or designates a new Lending Office) hereunder, or (ii) attributable
to such Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 5.10, except
to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office
(or assignment), to receive additional amounts from Obligors with respect to such withholding tax; and (e) taxes imposed on it
by reason of Section 1471 or 1472 of the Code.


 




    	 	-13-	 



     

    

 


Exhaust
Acquisition: the Acquisition, by merger, of all of the Equity Interests of Exhaust Technologies, Inc., a Washington corporation,
for an adjusted purchase price of approximately $10.4 million and, in connection therewith  (i) the formation
of Flying Tiger Acquisition Corp, a Washington corporation (“Merger Sub”), (ii) the entry by Merger Sub and Florida
Pneumatic Manufacturing Corporation into the Agreement and Plan of Merger dated as of July 1, 2014 (the “Merger Agreement”)
with Exhaust Technologies, Inc. and its stockholders named therein, (iii) pursuant to the Merger Agreement, the merger of the Merger
Sub with and into Exhaust Technologies, Inc. with Exhaust Technologies, Inc. being the surviving entity and (iv) subsequent to
such merger, the conversion of Exhaust Technologies, Inc. into a Delaware corporation.


 


Existing Agreement:
as defined in Recital A.


 


Existing Capex Loans:
as defined in Section 2.2B.


 


Existing Term Loans:
as defined in Section 2.2.1.


 


Extraordinary Expenses:
all costs, expenses or advances that Agent may incur during a Default or Event of Default, or during the pendency of an Insolvency
Proceeding of an Obligor, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance,
manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral;
(b) any action, arbitration or other proceeding (whether instituted by or against Agent, any Lender, any Obligor, any representative
of creditors of an Obligor or any other Person) in any way relating to any Collateral (including the validity, perfection, priority
or avoidability of Agent’s Liens with respect to any Collateral), Loan Documents, Letters of Credit or Obligations, including
any lender liability or other Claims; (c) the exercise, protection or enforcement of any rights or remedies of Agent in, or the
monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of any taxes, charges or Liens with respect to any Collateral;
(e) any Enforcement Action; (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance
with respect to any Loan Documents or Obligations; and (g) Protective Advances. Such costs, expenses and advances include transfer
fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees,
brokers’ fees and commissions, auctioneers’ fees and commissions, accountants’ fees, environmental study fees,
wages and salaries paid to employees of any Obligor or independent contractors in liquidating any Collateral, and travel expenses.


 


Facility Guaranty:
as defined in Section 15.1.


 


Family Trust:
in respect of any individual, any trust for the exclusive benefit of such individual, his/her spouse and lineal descendentsdescendants,
so long as such individual has the exclusive right to control such trust.


 


FASB ASC: the
Accounting Standards Codification of the Financial Accounting Standards Board.


 




    	 	-14-	 



     

    

 


Federal Funds Rate:
(a) the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers on the applicable Business Day (or on the preceding Business Day, if the applicable day is not a Business
Day), as published by the Federal Reserve Bank of New York on the next Business Day; or (b) if no such rate is published on the
next Business Day, the average rate (rounded up, if necessary, to the nearest 1/8 of 1%) charged to Capital One on the applicable
day on such transactions, as determined by Agent.


 


Fiscal Quarter:
each period of three months, commencing on the first day of a Fiscal Year.


 


Fiscal Year:
the fiscal year of P&F and its Subsidiaries for accounting and tax purposes, ending on December 31 of each year.


 


Fitch: Fitch
Ratings Ltd., a division of Fitch, Inc., and its successors.


 


Fixed Charge Coverage
Ratio: the ratio, determined on a consolidated basis for P&F and its Subsidiaries for the most recent Measurement Period,
of (a) Adjusted EBITDA minus Capital Expenditures (except those financed with Borrowed Money other than Revolver Loans)
and cash taxes paid, to (b) Fixed Charges.


 


Fixed Charges:
the sum of interest expense (other than payment-in-kind), principal payments made on Borrowed Money (other than prepayments of
Revolver Loans pursuant to Section 5.2 to the extent the Revolver Commitments are not permanently reduced by a corresponding
amount pursuant to Section 2.1.4 ), and Distributions made.


 


FLSA: the Fair
Labor Standards Act of 1938.


 


Foreign Lender:
any Lender that is organized under the laws of a jurisdiction other than the laws of the United States, or any state or district
thereof.


 


Foreign Plan:
any employee benefit plan or arrangement (a) maintained or contributed to by any Obligor or Subsidiary that is not subject to the
laws of the United States; or (b) mandated by a government other than the United States for employees of any Obligor or Subsidiary.


 


Foreign Subsidiary:
a Subsidiary that is a “controlled foreign corporation” under Section 957 of the Code, such that a guaranty by such
Subsidiary of the Obligations or a Lien on the assets of such Subsidiary to secure the Obligations would result in material tax
liability to Borrowers.


 


Full Payment:
with respect to any Obligations or Guaranteed Obligations, (a) the full and indefeasible cash payment thereof, including any interest,
fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding); (b) if such Obligations
or Guaranteed Obligations are LC Obligations or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of
a standby letter of credit acceptable to Agent in its discretion, in the amount of required Cash Collateral); and (c) a release
of any Claims of Obligors against Agent, Lenders and Issuing Bank arising on or before the payment date. No Loans shall be deemed
to have been paid in full until all Commitments related to such Loans have expired or been terminated.


 


GAAP: generally
accepted accounting principles in effect in the United States from time to time.


 


Governmental Approvals:
all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and required reports to, all
Governmental Authorities.


 




    	 	-15-	 



     

    

 


Governmental Authority:
any federal, state, municipal, foreign or other governmental department, agency, commission, board, bureau, court, tribunal, instrumentality,
political subdivision, or other entity or officer exercising executive, legislative, judicial, regulatory or administrative functions
for or pertaining to any government or court, in each case whether associated with the United States, a state, district or territory
thereof, or a foreign entity or government.


 


Guaranteed Obligations:
as defined in Section 15.1.


 


Guarantor Payment:
as defined in Section 5.11.3.


 


Guarantors:
as defined in the first paragraph of this Agreement together with each other Person who guarantees payment or performance of any
Obligations.


 


Guaranty: each
guaranty agreement, including the guaranties set forth in Section 15, now or hereafter executed by a Guarantor in favor
of Agent.


 


Hedging Agreement:
an agreement relating to any swap, cap, floor, collar, option, forward, cross right or obligation, or combination thereof or similar
transaction, with respect to interest rate, foreign exchange, currency, commodity, credit or equity risk.


 


Hedge Obligations:
means with respect to any Guarantor any obligation to pay or perform under any agreement, contract or transaction that constitutes
a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.


 


Horowitz Family:
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, sister-in-law, cousin, niece or nephew, including adoptive relationships.


 


Horowitz Group:
Richard A. Horowitz, the Horowitz Family and any Family Trust, and all Affiliates Controlled by any of the foregoing (the terms
“Affiliate” and “Control” for purposes of this definition only having the meaning ascribed to such terms
in Rule 405 promulgated by the U.S. Securities and Exchange Commission).


 


Horowitz Percentage:
(a) the sum of all Equity Interests of P&F (including all Derivative Securities) Beneficially Owned by one or more members
of the Horowitz Group divided by (b) the sum of all issued and outstanding Equity Interests of P&F (including all Derivative
Securities).


 


Immaterial Subsidiary:
each Subsidiary of P&F that has been designated by the Borrower Agent in writing to Agent as a “Designated Immaterial
Subsidiary” for purposes of this Agreement and the other Loan Documents; provided that at no time shall (a) the total
assets of all Immaterial Subsidiaries as of the end of the most recent Fiscal Quarter for which financial statements have been
delivered pursuant to Section 10.1.2 equal or exceed $250,000; (b) any Immaterial Subsidiary own assets included in the
Borrowing Base; or (c) the gross revenues of all Immaterial Subsidiaries (including any Immaterial Subsidiaries dissolved, liquidated
or otherwise disposed of during any Measurement Period) for any Measurement Period equal or exceed $250,000, in each case, as determined
in accordance with GAAP; provided further, however, that (i) an intercompany receivable owing to Embassy from
P&F of approximately $5,000,000 shall not be considered an “asset” for purposes hereof so long as such intercompany
receivable is not transferred or encumbered (except among Obligors) and if so requested by Agent, such intercompany payable shall
be represented by a note and pledged to Agent pursuant to documentation reasonably satisfactory to Agent; (ii) notes payable to
Woodmark and Pacific from WMC in the approximate amount of $7,339,648.78 shall not be considered “assets” for purposes
hereof so long as the realizable value thereof as reasonably determined by Borrower Agent is less than $250,000 (and if at any
time greater, notice thereof will be given promptly to Agent) and if so requested by Agent, such notes shall be pledged to Agent
pursuant to documentation reasonably satisfactory to Agent; and (iii) the Equity Interest of WMC held by Woodmark and Pacific shall
not be considered “assets” for purposes hereof so long as the value reasonably attributed thereto by Borrower Agent
is less than $250,000 (and if at any time greater, notice thereof will be given promptly to Agent) and if so requested by Agent,
such Equity Interests shall be pledged to Agent pursuant to documentation reasonably satisfactory to Agent. As of the Closing Date,
the Subsidiaries specified on Schedule 1.2 are the only Subsidiaries designated by the Borrower Agent as Immaterial Subsidiaries
for purposes of this Agreement and the other Loan Documents.


 




    	 	-16-	 



     

    

 


Indemnified Taxes:
Taxes other than Excluded Taxes.


 


Indemnitees:
Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Capital One Indemnitees.


 


Insolvency Proceeding:
any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person
to, (a) the entry of an order for relief under the Bankruptcy Code, or any other insolvency, debtor relief or debt adjustment law;
(b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part
of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.


 


Intellectual Property:
all intellectual and similar Property of a Person, including inventions, designs, patents, copyrights, trademarks, service marks,
trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software and databases; all embodiments
or fixations thereof and all related documentation, applications, registrations and franchises; all licenses or other rights to
use any of the foregoing; and all books and records relating to the foregoing.


 


Intellectual Property
Claim: any claim or assertion (whether in writing, by suit or otherwise) that an Obligor’s or Subsidiary’s ownership,
use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Person’s
Intellectual Property.


 


Interest Period:
as defined in Section 3.1.3.


 


Inventory: as
defined in the UCC, including all goods intended for sale, lease, display or demonstration; all work in process; and all raw materials,
and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping,
advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in a Borrower’s business (but excluding
Equipment).


 


Inventory Formula
Amount: the least of (i) $15,000,0005,000,000;
(ii) 60% of the Value of Eligible Inventory (including Eligible In-Transit Inventory); and (iii) 85% of the NOLV Percentage of
the Value of Eligible Inventory; provided, however, that the Inventory Formula Amount attributable to (x) Eligible
Inventory that is Sears Branded Inventory shall not exceed $1,000,000 and (y) Eligible In-Transit Inventory shall not exceed $2,500,000.


 


Inventory Reserve:
reserves established by Agent to reflect factors that may negatively impact the Value of Inventory, including change in salability,
obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.


 




    	 	-17-	 



     

    

 


Investment:
any acquisition of all or substantially all assets of a Person; any acquisition of record or beneficial ownership of any Equity
Interests of a Person; or any loan, advance or capital contribution to or other investment in a Person.


 


IRS: the United
States Internal Revenue Service.


 


Issuing Bank:
Capital One or any Affiliate of Capital One, or any replacement appointed pursuant to Section 2.3.4.


 


Issuing Bank Indemnitees:
Issuing Bank and its officers, directors, employees, Affiliates, agents and attorneys.


 


LC Application:
an application by Borrower Agent to Issuing Bank for issuance of a Letter of Credit, in form and substance satisfactory to Issuing
Bank.


 


LC Conditions:
the following conditions necessary for issuance of a Letter of Credit: (a) each of the conditions set forth in Section 6;
(b) after giving effect to such issuance, total LC Obligations do not exceed the Letter of Credit Subline, no Overadvance exists
and, if no Revolver Loans are outstanding, the LC Obligations do not exceed the Borrowing Base (without giving effect to the LC
Reserve for purposes of this calculation); (c) the expiration date of such Letter of Credit is (i) no more than 365 days from issuance
(subject to any automatic renewal provisions in the case of “evergreen” letters of credit), in the case of standby
Letters of Credit, (ii) no more than 120 days from issuance, in the case of documentary Letters of Credit, and (iii) at least 20
Business Days prior to the Revolver Termination Date; (d) the Letter of Credit and payments thereunder are denominated in Dollars;
and (e) the purpose and form of the proposed Letter of Credit is satisfactory to Lender in its reasonable discretion.


 


LC Documents:
all documents, instruments and agreements (including LC Requests and LC Applications) delivered by Borrowers or any other Person
to Issuing Bank or Agent in connection with issuance, amendment or renewal of, or payment under, any Letter of Credit.


 


LC Obligations:
the sum (without duplication) of (a) all amounts owing by Borrowers for any drawings under Letters of Credit; (b) the undrawn amount
of all outstanding Letters of Credit; and (c) all fees and other amounts owing with respect to Letters of Credit.


 


LC Request:
a request for issuance of a Letter of Credit, to be provided by Borrower Agent to Issuing Bank, in form satisfactory to Agent and
Issuing Bank.


 


LC Reserve:
the aggregate of all LC Obligations, other than (a) those that have been Cash Collateralized; and (b) if no Default or Event of
Default exists, those constituting charges owing to the Issuing Bank.


 


Lender Indemnitees:
Lenders and their officers, directors, employees, Affiliates, agents and attorneys.


 


Lenders: as
defined in the preamble to this Agreement, including Agent in its capacity as a provider of Swingline Loans and any other Person
who hereafter becomes a “Lender” pursuant to an Assignment and Acceptance.


 


Lending Office:
the office designated as such by the applicable Lender at the time it becomes party to this Agreement or thereafter by notice to
Agent and Borrower Agent.


 




    	 	-18-	 



     

    

 


Letter of Credit:
any standby or documentary letter of credit issued by Issuing Bank for the account of a Borrower, or any indemnity, guarantee,
exposure transmittal memorandum or similar form of credit support issued by Agent or Issuing Bank for the benefit of an Obligor.


 


Letter of Credit
Subline: $5,000,000.


 


Leverage Ratio:
the ratio, determined as of the end of any month, of (a) Borrowed Money (other than Contingent Obligations) of P&F and its
Subsidiaries as of the last day of such month, to (b) Adjusted EBITDA for the Measurement Period then ending.


 


LIBOR: for any
Interest Period with respect to a LIBOR Loan, the rate per annum equal to the London Interbank Offered Rate (“LIBOR”)
or successor rate (or if not available, a reasonably comparable rate approved by the Agent), as published on the applicable Bloomberg
screen page (or such other commercially available source providing such quotations as may be designated by the Agent from time
to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar
deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; provided
that to the extent a comparable or successor rate is approved by the Agent in connection herewith, the approved rate shall be applied
in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively
feasible for the Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Agent.


 


LIBOR Capex Loan:
a Capex Loan that bears interest based on LIBOR.


 


LIBOR Loan:
each set of LIBOR Revolver Loans, LIBOR Term Loans or LIBOR Capex Loans having a common length and commencement of Interest Period.


 


LIBOR Revolver Loan:
a Revolver Loan that bears interest based on LIBOR.


 


LIBOR Term Loan:
a Term Loan that bears interest based on LIBOR.


 


License: any
license or agreement under which an Obligor is authorized to use Intellectual Property in connection with any manufacture, marketing,
distribution or disposition of Collateral, any use of Property or any other conduct of its business.


 


Licensor: any
Person from whom an Obligor obtains the right to use any Intellectual Property.


 


Lien: any Person’s
interest in Property securing an obligation owed to, or a claim by, such Person, whether such interest is based on common law,
statute or contract, including liens, security interests, pledges, hypothecations, statutory trusts, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances
affecting Property.


 


Lien Waiver:
an agreement, in form and substance satisfactory to Agent, by which (a) for any material Collateral located on leased premises,
the lessor waives or subordinates any Lien it may have on the Collateral, and agrees to permit Agent to enter upon the premises
and remove the Collateral or to use the premises to store or dispose of the Collateral; (b) for any Collateral held by a warehouseman,
processor, shipper, customs broker or freight forwarder, such Person waives or subordinates any Lien it may have on the Collateral,
agrees to hold any Documents in its possession relating to the Collateral as agent for Agent, and agrees to deliver the Collateral
to Agent upon request; (c) for any Collateral held by a repairman, mechanic or bailee, such Person acknowledges Agent’s Lien,
waives or subordinates any Lien it may have on the Collateral, and agrees to deliver the Collateral to Agent upon request; and
(d) for any Collateral subject to a Licensor’s Intellectual Property rights, the Licensor grants to Agent the right, vis-à-vis
such Licensor, to enforce Agent’s Liens with respect to the Collateral, including the right to dispose of it with the benefit
of the Intellectual Property, whether or not a default exists under any applicable License.


 




    	 	-19-	 



     

    

 


Loan: a Revolver
Loan, Term Loan or Capex Loan.


 


Loan Account:
the loan account established by each Lender on its books pursuant to Section 5.8.


 


Loan Documents:
this Agreement, Other Agreements and Security Documents.


 


Loan Year: each
12 month period commencing on December 19, 2013 and on each annual anniversary thereof.


 


London Banking Day:
any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits)
in London, England.


 


Margin Stock:
as defined in Regulation U of the Board of Governors.


 


Material Adverse
Effect: the effect of any event or circumstance that, taken alone or in conjunction with other events or circumstances, (a)
has or could be reasonably expected to have a material adverse effect on the business, operations, Properties, prospects or condition
(financial or otherwise) of any Borrower or of the Obligors, taken as a whole, on the value of any material Collateral, on the
enforceability of any Loan Documents, or on the validity or priority of Agent’s Liens on any Collateral; (b) impairs the
ability of any Borrower or of the Obligors, taken as a whole, to perform any obligations under the Loan Documents, including repayment
of any Obligations; or (c) otherwise impairs the ability of Agent or any Lender to enforce or collect any Obligations or to realize
upon any Collateral in any material respect.


 


Material Contract:
any agreement or arrangement to which a Borrower or Subsidiary is party (other than the Loan Documents) (a) that is deemed to be
a material contract under any securities law applicable to such Obligor, including the Securities Act of 1933; (b) for which breach,
termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect; or (c) that relates
to Subordinated Debt, or Debt in an aggregate amount of $100,000 or more.


 


Measurement Period:
at any date of determination, the most recently completed twelve consecutive months of P&F and its Subsidiaries.


 


Moody’s:
Moody’s Investors Service, Inc., and its successors.


 


Mortgage: each
mortgage, deed of trust or deed to secure debt (in each case, as amended, modified, supplemented or restated) pursuant to which
an Obligor grants to Agent, for the benefit of Secured Parties, Liens upon the Real Estate owned by such Obligor, as security for
the Obligations.


 


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


 




    	 	-20-	 



     

    

 


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


 


Net Proceeds:
with respect to an Asset Disposition, proceeds (including, when received, any deferred or escrowed payments) received by a Borrower
or Subsidiary in cash from such disposition, net of (a) reasonable and customary costs and expenses actually incurred in connection
therewith, including legal fees and sales commissions; (b) amounts applied to repayment of Debt secured by a Permitted Lien senior
to Agent’s Liens on Collateral sold; (c) transfer or similar taxes; and (d) reserves for indemnities, until such reserves
are no longer needed.


 


NOLV: the net
orderly liquidation value expected to be realized at an orderly, negotiated sale held within a reasonable period of time, net of
all liquidation expenses, as determined from the most recent appraisal performed by an appraiser and on terms satisfactory to Agent


 


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


 


Notes: each
Revolver Note, Term Note, Capex Loan Note or other promissory note executed by an Obligor to evidence any Obligations.


 


Notice of Borrowing:
a Notice of Borrowing to be provided by Borrower Agent to request a Borrowing of Revolver Loans, in form satisfactory to Agent.


 


Notice of Conversion/Continuation:
a Notice of Conversion/Continuation to be provided by Borrower Agent to request a conversion or continuation of any Loans as LIBOR
Loans, in form satisfactory to Agent.


 


Noticed Hedge:
Secured Bank Product Obligations arising under a Hedging Agreement.


 


Obligations:
all (a) principal of and premium, if any, on the Loans, (b) LC Obligations and other obligations of Obligors with respect to Letters
of Credit, (c) interest, expenses, fees and other sums payable by Obligors under Loan Documents, (d) obligations of Obligors under
any indemnity for Claims, (e) Extraordinary Expenses, (f) Secured Bank Product Obligations, and (g) other Debts, obligations and
liabilities of any kind owing by Obligors pursuant to the Loan Documents, whether now existing or hereafter arising, whether evidenced
by a note or other writing, including interest, fees and expenses accruing or incurred after the commencement of an Insolvency
Proceeding whether allowed or allowable in any Insolvency Proceeding, whether arising from an extension of credit, issuance of
a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent,
due or to become due, primary or secondary, or joint or several, provided that the Obligations shall exclude any Excluded
Hedge Obligations.


 


Obligor: each
Borrower, Guarantor, or other Person that is liable for payment of any Obligations or that has granted a Lien in favor of Agent
on its assets to secure any Obligations.


 


Operating Account:
the operating/disbursement account established by Obligors at Capital One, N.A.


 


OFAC: Office
of Foreign Assets Control of the U.S. Treasury Department.


 




    	 	-21-	 



     

    

 


Ordinary Course
of Business: the ordinary course of business of any Borrower or Subsidiary, consistent with past practices and undertaken in
good faith and with respect to compensation, which will include, without limitation, actions contemplated by any existing plan
or agreement or any plan or agreement approved by the Borrower Agent’s Board of Directors (or committee thereof) and such
Board’s independent compensation consultant reasonably satisfactory to Agent.


 


Organic Documents:
with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability
agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate
of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.


 


OSHA: the Occupational
Safety and Hazard Act of 1970.


 


Other Agreements:
each Note; Guaranty; LC Document; Commitment Letter; Lien Waiver; Real Estate Related Document; Borrowing Base Certificate, Compliance
Certificate, financial statement or report delivered hereunder; or other document, instrument or agreement (other than this Agreement
or a Security Document) now or hereafter delivered by an Obligor or other Person to Agent or a Lender in connection with any transactions
relating hereto; provided that, for the avoidance of doubt, “Other Agreements” shall not include any Hedging
Agreements or other agreements executed in connection with Bank Product Obligations.


 


Other Taxes:
all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from
any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.


 


Overadvance:
as defined in Section 2.1.5.


 


Overadvance Loan:
a Base Rate Revolver Loan made when an Overadvance exists or is caused by the funding thereof.


 


Overdraft Facility:
the overdraft facility between Universal, as borrower, and National Westminster Bank Plc, as lender (or another lender from time
to time acceptable to Agent) to be entered into on or about the date hereof, as may be amended from time to time.


 


Participant:
as defined in Section 13.2.


 


Patriot Act:
the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Pub. L. No. 107-56, 115 Stat. 272 (2001).


 


Payment Account:
the Agent’s account at Capital One to which all payments on account of the Obligations are to made or transferred from the
Dominion Account, as designated by the Agent


 


Payment Item:
each check, draft or other item of payment payable to a Obligor, including those constituting proceeds of any Collateral.


 


PBGC: the Pension
Benefit Guaranty Corporation.


 


Pension Act:
the Pension Protection Act of 2006.


 




    	 	-22-	 



     

    

 


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


 


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


 


Permitted Acquisition:
each Acquisition with respect to which: (a) the Obligors and any such newly created or acquired Subsidiary shall comply with the
requirements of Section 10.1.9; (b) the lines of business of the Person to be (or the property and assets of which are to
be) so purchased or otherwise acquired shall be a business permitted by Section 10.2.16; (c) such Acquisition shall
be approved by the board of directors of the Person (or, if such Person is not a corporation, a similar or appropriate governing
body) which is the subject of such Acquisition and such Person does not otherwise oppose such Acquisition; (d) the aggregate consideration
paid or payable for all such Acquisitions (including any purchase price adjustment, earn-out provision, payments in respect of
non-competition or consulting agreements or deferred compensation agreements but excluding any Debt that is in existence when such
Person becomes a Subsidiary or that is secured by an asset when acquired by a Borrower as long as such Debt was not incurred in
contemplation of such Acquisition) shall not exceed $1,000,000 per Fiscal Year; (e) immediately before (including, on a pro forma
basis giving effect to the Acquisition) and immediately after giving effect to any such Acquisition, no Default or Event of Default
shall have occurred and be continuing (including, without limitation, pro forma compliance with the financial covenants set forth
in Sections 10.3.1 and 10.3.2); and (f) the Borrower Agent shall have (i) provided at least 15 Business Days prior
written notice to Agent of such Acquisition along with copies of the acquisition agreements and documentation relating thereto
or drafts thereof (with copies of the final agreements and documents to be provided thereafter when completed), which shall be
reasonably satisfactory to Agent, along with historical financial statements for the most recent fiscal year end (or, if less,
for the period of such Person’s existence) of the Person or business to be acquired (audited if available) to the extent
available and unaudited financial statements thereof for the interim periods, which are available, and (ii) delivered to Agent
at least 10 Business Days prior to the date on which any such Acquisition is to be consummated or such shorter time as Agent may
allow, a certificate of a Senior Officer of the Borrower Agent, in form and substance reasonably satisfactory to the Agent, certifying
that all of the requirements set forth above will be satisfied on or prior to the consummation of such Acquisition, together with
a reasonably detailed calculation of pro forma compliance with Sections 10.3.1 and 10.3.2 and all supporting documentation
and other financial information that Agent may reasonably request. None of the Equipment purchased
or otherwise acquired pursuant to an Acquisition shall be included in the Equipment Formula Amount and none of
the Accounts or Inventory purchased or otherwise acquired pursuant to an Acquisition shall be included in the calculation of the
Borrowing Base until Agent has conducted field examinations and appraisals (which field examinations and appraisals shall be at
the expense of the Borrowers and shall not count towards the limits set forth in Section 10.1.1) reasonably required by
it with results reasonably satisfactory to Agent, and the Person owning such Equipment, Accounts and Inventory shall be a (directly
or indirectly) wholly-owned Domestic Subsidiary of the Borrowers and have become a Borrower.


 


Permitted Asset
Disposition: an Asset Disposition that is (a) a sale of Inventory in the Ordinary Course of Business; (b) as long as no Default
or Event of Default exists and, other than with respect to an Asset Disposition by a Foreign Subsidiary, all Net Proceeds are remitted
to Agent, a disposition of Equipment that, in the aggregate during any 12 month period, has a fair market or book value (whichever
is more) of $100,000 or less, provided that any disposition of Equipment related to a Capex Loan shall be in the form of an arms-length
sale of such Equipment for cash; (c) as long as no Default or Event of Default exists and, other than with respect to an Asset
Disposition by a Foreign Subsidiary, all Net Proceeds are remitted to Agent, a disposition of
(i) the Real Estate located in Tampa, Florida and set forth on Schedule 7.3.1 at fair market value as determined by Borrower
Agent in its reasonable discretion, and
(ii) Inventory that is obsolete, unmerchantable or otherwise unsalable in the Ordinary Course of Business; (d) termination
of a lease of real or personal Property that is not necessary for the Ordinary Course of Business, could not reasonably be expected
to have a Material Adverse Effect and does not result from an Obligor’s default; (e) a disposition, liquidation or dissolution
of any Immaterial Subsidiary; (f) approved in writing by Agent and Required Lenders or (g) the sale and/or issuance of Equity Interests
to the extent not constituting a Change of Control.


 




    	 	-23-	 



     

    

 


Permitted Contingent
Obligations: Contingent Obligations (a) arising from endorsements of Payment Items for collection or deposit in the Ordinary
Course of Business; (b) arising from Hedging Agreements permitted hereunder; (c) existing on the Closing Date, and any extension
or renewal thereof that does not increase the amount of such Contingent Obligation when extended or renewed; (d) incurred in the
Ordinary Course of Business with respect to surety, appeal or performance bonds, or other similar obligations; (e) arising from
customary indemnification obligations in favor of purchasers in connection with dispositions of Equipment permitted hereunder;
(f) arising under the Loan Documents; (g) guaranties of Permitted Debt; or (h) in an aggregate amount of $250,000 or less at any
time.


 


Permitted Investment:
(a) Investments in Subsidiaries to the extent existing on the Closing Date and set forth on Schedule 10.2.5; (b) Cash Equivalents
that are subject to Agent’s Lien and control, pursuant to documentation in form and substance satisfactory to Agent; (c)
loans and advances permitted under Section 10.2.7; (d) to the extent constituting Distributions, Distributions permitted
under Section 10.2.4; (e) Investments made when no Default or Event of Default has occurred and is continuing in an aggregate
amount not to exceed $1,000,000 in the aggregate at any time outstanding for all Obligors; and (f) Permitted Acquisitions,
the Exhaust Acquisition, the Universal Acquisition and the ATSCO Acquisition.


 


Permitted Lien:
as defined in Section 10.2.2.


 


Permitted Purchase
Money Debt: Purchase Money Debt of Borrowers and Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as
long as the aggregate amount does not exceed $500,000 per Fiscal Year and its incurrence does not violate Section 10.2.3.


 


Person: any
individual, corporation, limited liability company, partnership, joint venture, joint stock company, land trust, business trust,
unincorporated organization, Governmental Authority or other entity.


 


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


 


Pledged Interests:
as defined in Section 7.4.1.


 


Post-Petition Interest:
as defined in Section 15.4.3.


 


Prime Rate:
the highest of the rate of interest announced by Capital One, N.A., Citicorp,
N. A. or Bank of America, N.A. from time to time as its prime rate, which rate may be set by such banks on the basis of various
factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above or below such rate. Any change in such rate shall take effect at the opening
of business on the day specified in the public announcement or publication, as applicable, of such change.


 




    	 	-24-	 



     

    

 


Pro Rata: with
respect to any Lender, a percentage (carried out to the ninth decimal place) determined (a) while Revolver Commitments and Capex
Loan Commitments are outstanding, by dividing the amount of such Lender’s Revolver Commitment, Capex Loan Commitment and
Term Loan by the aggregate amount of all Revolver Commitments, Capex Loan Commitments and Term Loans; and (b) at any other time,
by dividing the amount of such Lender’s Loans and LC Obligations by the aggregate amount of all outstanding Loans and LC
Obligations.


 


Properly Contested:
with respect to any obligation of an Obligor, (a) the obligation is subject to a bona fide dispute regarding amount or the Obligor’s
liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and
diligently pursued; (c) appropriate reserves have been established in accordance with GAAP; (d) non-payment could not have a Material
Adverse Effect, nor result in forfeiture or sale of any assets of the Obligor; (e) no Lien is imposed on assets of the Obligor,
unless bonded and stayed to the satisfaction of Agent; and (f) if the obligation results from entry of a judgment or other order,
such judgment or order is stayed pending appeal or other judicial review.


 


Property: any
interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.


 


Protective Advances:
as defined in Section 2.1.6.


 


Purchase Money Debt:
(a) Debt (other than the Obligations) for payment of any of the purchase price of fixed assets; (b) Debt (other than the Obligations)
incurred within 10 days before or after acquisition of any fixed assets, for the purpose of financing any of the purchase price
thereof; and (c) any renewals, extensions or refinancings (but not increases) thereof.


 


Purchase Money Lien:
a Lien that secures Purchase Money Debt, encumbering only the fixed assets acquired with such Debt and constituting a Capital Lease
or a purchase money security interest under the UCC.


 


Qualified ECP:
an Obligor with total assets exceeding $10,000,000, or that constitutes an "eligible contract participant" under the
Commodity Exchange Act and can cause another Person to qualify as an "eligible contract participant" under Section 1a(18)(A)(v)(II)
of such act.


 


RCRA: the Resource
Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).


 


Real Estate:
all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas
or other improvements thereon.


 


Refinancing Conditions:
the following conditions for Refinancing Debt: (a) it is in an aggregate principal amount that does not exceed the principal amount
of the Debt being extended, renewed or refinanced; (b) it has a final maturity no sooner than, a weighted average life no less
than, and an interest rate no greater than, the Debt being extended, renewed or refinanced; (c) it is subordinated to the Obligations
at least to the same extent as the Debt being extended, renewed or refinanced; (d) the representations, covenants and defaults
applicable to it are no less favorable to Borrowers than those applicable to the Debt being extended, renewed or refinanced; (e)
no additional Lien is granted to secure it; (f) no additional Person is obligated on such Debt; and (g) upon giving effect to it,
no Default or Event of Default exists.


 




    	 	-25-	 



     

    

 


Refinancing Debt:
Borrowed Money that is the result of an extension, renewal or refinancing of Debt permitted under Section 10.2.1(b), (d)
or (f).


 


Reimbursement Date:
as defined in Section 2.3.2.


 


Related Real Estate
Documents: with respect to any Real Estate subject to a Mortgage, the following, in form and substance satisfactory to Agent
and received by Agent for review at least 10 days prior to the effective date of the Mortgage: (a) a mortgagee title policy (or
binder therefor) covering Agent’s interest under the Mortgage, in a form and amount and by an insurer acceptable to Agent,
which must be fully paid on such effective date; (b) such assignments of leases, estoppel letters, attornment agreements, consents,
waivers and releases as Agent may require with respect to other Persons having an interest in the Real Estate; (c) a current, as-built
survey of the Real Estate, containing a metes-and-bounds property description and flood plain certification, and certified by a
licensed surveyor acceptable to Agent; (d) flood insurance in an amount, with endorsements and by an insurer acceptable to Agent,
if the Real Estate is within a flood plain; (e) a current appraisal of the Real Estate, prepared by an appraiser acceptable to
Agent, and in form and substance satisfactory to Required Lenders; (f) an environmental assessment, prepared by environmental engineers
acceptable to Agent, and accompanied by such reports, certificates, studies or data as Agent may reasonably require, which shall
all be in form and substance satisfactory to Required Lenders; and (g) an Environmental Agreement and such other documents, instruments
or agreements as Agent may reasonably require with respect to any environmental risks regarding the Real Estate.


 


Rent and Charges
Reserve: the aggregate of (a) all past due rent and other amounts owing by an Obligor to any landlord, warehouseman, processor,
repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Collateral or could assert a Lien on
any Collateral; and (b) a reserve equal to not more than three months' rent and other charges that could be payable to any such
Person, unless it has executed a Lien Waiver.


 


Report: as defined
in Section 12.2.3.


 


Reportable Event:
any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.


 


Reporting
Trigger Period: the period (a) commencing on the day that
a Default or Event of Default occurs, or Availability is less than $2,000,000
at any time; and (b) continuing until, during the preceding 30 consecutive days, no Event of Default has existed and Availability
has been greater than $2,000,000 at all times.


 


Representation Letter:
that certain letter dated as of the date hereof from Borrowers to Agent relating to the relationship between the Obligors and WMC
and the obligations of WMC.


 


Required Lenders:
Lenders (subject to Section 4.2) having (a) Revolver Commitments, Capex Loan Commitments and Term Loans in excess of 50%
of the aggregate Revolver Commitments, Capex Loan Commitments and Term Loans; and (b) if the Revolver Commitments and Capex Loan
Commitments have terminated, Loans in excess of 50% of all outstanding Loans.


 


Restrictive Agreement:
an agreement (other than a Loan Document) that conditions or restricts the right of any Borrower, Subsidiary or other Obligor to
incur or repay Borrowed Money, to grant Liens on any assets, to declare or make Distributions, to modify, extend or renew any agreement
evidencing Borrowed Money, or to repay any intercompany Debt or to perform any of its obligations hereunder.


 




    	 	-26-	 



     

    

 


Revolver Commitment:
for any Lender, its obligation to make Revolver Loans and to participate in LC Obligations up to the maximum principal amount shown
on Schedule 1.1, or as hereafter determined pursuant to each Assignment and Acceptance to which it is a party. “Revolver
Commitments” means the aggregate amount of such commitments of all Lenders in an aggregate amount up to $22,000,000.10,000,000.


 


Revolver Loan:
a loan made pursuant to Section 2.1, and any Swingline Loan, Overadvance Loan or Protective Advance.


 


Revolver Note:
an amended and restated promissory note to be executed by Borrowers in favor of a Lender in the form of Exhibit A, which
shall be in the amount of such Lender’s Revolver Commitment and shall evidence the Revolver Loans made by such Lender.


 


Revolver Termination
Date: December 19, 2017.February
[__], 2019.


 


Royalties: all
royalties, fees, expense reimbursement and other amounts payable by a Borrower under a License.


 


S&P: Standard
& Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.


 


Sanction: any
international economic sanction administered or enforced by the United States Government (including OFAC), the United Nations Security
Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.


 


Second
Amendment: the Second Amendment to this Agreement, dated as of February [__], 2016.


 


Second
Amendment Effective Date: February [__], 2016.


 


Sears Branded Inventory:
all Inventory of the Obligors that is marked or labeled with a trade name, trademark, logo, service mark or other mark or name
owned or licensed by Sears Roebuck and Co. or its Affiliates.


 


Sears Supply Agreement:
that certain Supply Agreement For Compressors and Pneumatic Tools dated as of January 1, 2006, between Sears Roebuck and Co. and
Florida Pneumatic, as amended and in effect on the date hereof.


 


Secured Bank Product
Obligations: Bank Product Debt owing to a Secured Bank Product Provider, provided that , in the case of any Secured
Bank Product Provider other than Capital One and its Affiliates, the maximum amount of such Secured Bank Product Obligations shall
not exceed the amount specified by such provider in writing to Agent, which amount may be established or increased (by further
written notice to Agent from time to time) as long as no Default or Event of Default exists and establishment of a Bank Product
Reserve for such amount and all other Secured Bank Product Obligations would not result in an Overadvance, provided, further,
the Secured Bank Product Obligations of an Obligor shall not include its Excluded Hedge Obligations.


 


Secured Bank Product
Provider: (a) Agent, Capital One or any of their respective Affiliates; and (b) any Lender or Affiliate of a Lender that is
provides a Bank Product, provided, however, in the case of this clause (b), such Lender delivers written notice to
Agent, in form and substance satisfactory to Agent, by the later of the Closing Date or 10 days following the entering into or
creation of a Bank Product, (i) describing the Bank Product and setting forth the maximum amount of the related Secured Bank Product
Obligations (subject to subsequent increase or decrease as set forth in the definition thereof) which is to be secured by the Collateral
and the methodology to be used in calculating such amount, and (ii) agreeing to be bound by Section 12.14.


 




    	 	-27-	 



     

    

 


Secured Parties:
Agent, Issuing Bank, Lenders and Secured Bank Product Providers.


 


Security Documents:
the Mortgages, the Environmental Agreement, Trademark Security Agreements, Deposit Account Control Agreements, any agreement creating
or perfecting rights in Cash Collateral pursuant to the provisions of this Agreement and all other documents, instruments and agreements
now or hereafter securing (or given with the intent to secure) any Obligations.


 


Senior Officer:
the chairman of the board, president, chief executive officer or chief financial officer of a Borrower or, if the context requires,
an Obligor.


 


Settlement Report:
a report delivered by Agent to Lenders summarizing the Revolver Loans and participations in LC Obligations outstanding as of a
given settlement date, allocated to Lenders on a Pro Rata basis in accordance with their Revolver Commitments.


 


Solvent: as
to any Person, such Person (a) owns Property whose fair salable value is greater than the amount required to pay all of its debts
(including contingent, subordinated, unmatured and unliquidated liabilities); (b) owns Property whose present fair salable value
(as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities) of such Person as they become absolute and matured; (c) is able to pay all of its debts as they mature; (d) has capital
that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage; (e) is not “insolvent” within the meaning of Section 101(32) of the Bankruptcy
Code; and (f) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under
any Loan Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present
or future creditors of such Person or any of its Affiliates. “Fair salable value” means the amount that could
be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by
a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase.


 


Specified Obligor:
an Obligor that is not then an "eligible contract participant" under the Commodity Exchange Act (determined prior to
giving effect to Section 5.11).


 


Subordinated Debt:
unsecured Debt incurred by an Obligor that is expressly subordinate and junior in right of payment to Full Payment of all Obligations,
and is on terms (including maturity, interest, fees, repayment, covenants and subordination) satisfactory to Agent.


 


Subsidiary:
any entity (other than WMC) at least 50% of whose voting securities or Equity Interests is owned by a Borrower or any combination
of Borrowers (including indirect ownership by a Borrower through other entities in which the Borrower directly or indirectly owns
50% of the voting securities or Equity Interests).


 


Swingline Loan:
any Borrowing of Base Rate Revolver Loans funded with Agent’s funds, until such Borrowing is settled among Lenders or repaid
by Borrowers.


 


Tangible Net Worth:
as of any date of determination, for P&F and its Subsidiaries on a consolidated basis, consolidated shareholders’ equity
of P&F and its Subsidiaries on that date as determined in accordance with GAAP minus intangible assets of P&F and
its Subsidiaries on that date minus deferred tax assets of P&F and its Subsidiaries on that date plus Subordinated
Debt on that date.


 




    	 	-28-	 



     

    

 


Taxes: all present
or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.


 


Term Loan: a
loan made pursuant to Section 2.2, including any Tranche A Term Loan and any Tranche B
Term Loan.


 


Term Loan Maturity
Date: December 19, 2017.February
[___], 2019.


 


Term Note: promissory
notes to be executed by Borrowers in favor of a Lender in the form of Exhibit B-1, which shall be in the amount of such
Lender’s Tranche A Commitment and Tranche B Commitment and shall evidence
the Term Loans made by such Lender.


 


Trademark Security
Agreement: each trademark security agreement pursuant to which an Obligor grants to Agent, for the benefit of Secured Parties,
a Lien on such Obligor’s interests in trademarks, as security for the Obligations.


 


Tranche A Commitment:
for any Lender, the obligation of such Lender to make or maintain
a Tranche A Term Loan hereunder, up to the principal amount shown on Schedule 1.1. “Tranche A Commitments”
means the aggregate amount of such commitments of all Lenders in an aggregate amount up to $6,533,333.40100,000.


 


Tranche A Term Loan:
as defined in Section 2.2.


 


Tranche
B Commitment: for any Lender, the obligation of such Lender to make a Tranche B Term Loan hereunder, up to the principal amount
shown on Schedule 1.1. “Tranche B Commitments” means the aggregate amount of such commitments
of all Lenders in an aggregate amount up to $3,000,000.


 


Tranche
B Term Loan: as defined in Section 2.2.


 


Transferee:
any actual or potential Eligible Assignee, Participant or other Person acquiring an interest in any Obligations.


 


Trigger
Period: the period (a) commencing on the day that a Default or Event of Default
occurs, or Availability is less than $1,500,000 at any time; and (b) continuing until, during
the preceding 30 consecutive days, no Event of Default has existed and Availability has been greater than $1,500,000 at all times.


 


Type: any type
of a Loan (i.e., Base Rate Loan or LIBOR Loan) that has the same interest option and, in the case of LIBOR Loans, the same Interest
Period.


 


UCC: the Uniform
Commercial Code as in effect in the State of New York or, when the laws of any other jurisdiction govern the perfection or enforcement
of any Lien, the Uniform Commercial Code of such jurisdiction.


 


Universal: Universal
Air Tools Company Limited, a company organized under the laws of England and Wales.


 




    	 	-29-	 



     

    

 


Universal Acquisition:
the Acquisition of all of the Equity Interests of Universal by Florida Pneumatic for a purchase price equivalent to approximately
$2,000,000, to be adjusted by a potential earn-out (with a maximum amount of approximately $430,000 based on exchange rates as
of the date of this Amendment) and a working capital adjustment


 


Unused Line Fee
Percentage: a per annum rate equal to 0.375%(i)
0.15% prior to January 31, 2017 and (ii) 0.25% thereafter.


 


Upstream Payment:
a Distribution by a Subsidiary of a Borrower to such Borrower.


 


Value: (a) for
Inventory (other than Eligible In-Transit Inventory), its value determined on the basis of the lower of cost or market, calculated
on a first-in, first out basis, and excluding any portion of cost attributable to intercompany profit among Borrowers and their
Affiliates; (b) for Eligible In-Transit Inventory, its value determined on the basis of FOB (as defined in Incoterms 2000 by the
International Chamber of Commerce) at the point of shipment; and (c) for an Account, its face amount, net of any returns, rebates,
discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been
or could be claimed by the Account Debtor or any other Person.


 


WMC: WM Coffman
LLC, a Delaware limited liability company, now known as Old Stairs Co LLC.


 


1.2           Accounting
Terms. Under the Loan Documents (except as otherwise specified herein), all accounting terms shall be interpreted, all
accounting determinations shall be made, and all financial statements shall be prepared, in accordance with GAAP applied on a basis
consistent with the most recent audited financial statements of Borrowers delivered to Agent before the Closing Date and using
the same inventory valuation method as used in such financial statements, except for any change required or permitted by GAAP if
Borrowers’ certified public accountants concur in such change, the change is disclosed to Agent, and Section 10.3
is amended in a manner satisfactory to Required Lenders to take into account the effects of the change.


 


1.3           Uniform
Commercial Code. As used herein, the following terms are defined in accordance with the UCC in effect in the State of New
York from time to time: “Chattel Paper,” “Commercial Tort Claim,” “Deposit Account,” “Document,”
“Equipment,” “General Intangibles,” “Goods,” “Instrument,” “Investment Property,”
“Letter-of-Credit Right” and “Supporting Obligation.”


 


1.4           Certain
Matters of Construction. The terms “herein,” “hereof,” “hereunder” and other words
of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. In the computation of periods of time from a specified date to a later specified date, “from”
means “from and including,” and “to” and “until” each mean “to but excluding.”
The terms “including” and “include” shall mean “including, without limitation” and, for purposes
of each Loan Document, the parties agree that the rule of ejusdem generis shall not be applicable to limit any provision.
Section titles appear as a matter of convenience only and shall not affect the interpretation of any Loan Document. All references
to (a) laws or statutes include all related rules, regulations, interpretations, amendments and successor provisions; (b) any document,
instrument or agreement include any amendments, waivers and other modifications, extensions or renewals (to the extent permitted
by the Loan Documents); (c) any section mean, unless the context otherwise requires, a section of this Agreement; (d) any exhibits
or schedules mean, unless the context otherwise requires, exhibits and schedules attached hereto, which are hereby incorporated
by reference; (e) any Person include successors and assigns; (f) time of day mean time of day at Agent’s notice address under
Section 14.3.1; or (g) discretion of Agent, Issuing Bank or any Lender mean the sole and absolute discretion of such Person.
All calculations of Value, fundings of Loans, issuances of Letters of Credit and payments of Obligations shall be in Dollars and,
unless the context otherwise requires, all determinations (including calculations of Borrowing Base and financial covenants) made
from time to time under the Loan Documents shall be made in light of the circumstances existing at such time. Borrowing Base calculations
shall be consistent with historical methods of valuation and calculation, and otherwise satisfactory to Agent (and not necessarily
calculated in accordance with GAAP). Obligors shall have the burden of establishing any alleged negligence, misconduct or lack
of good faith by Agent, Issuing Bank or any Lender under any Loan Documents. No provision of any Loan Documents shall be construed
against any party by reason of such party having, or being deemed to have, drafted the provision. Whenever the phrase “to
the best of Borrowers’ knowledge” or words of similar import are used in any Loan Documents, it means actual knowledge
of a Senior Officer, or knowledge that a Senior Officer would have obtained if he or she had engaged in good faith and diligent
performance of his or her duties, including reasonably specific inquiries of employees or agents and a good faith attempt to ascertain
the matter to which such phrase relates.


 




    	 	-30-	 



     

    

 


SECTION 2.          CREDIT
FACILITIES


 


2.1           Revolver
Commitment.


 


2.1.1           Revolver
Loans. Each Lender agrees, severally on a Pro Rata basis up to its Revolver Commitment, on the terms set forth herein, to make
Revolver Loans to Borrowers from time to time through the Commitment Termination Date. The Revolver Loans may be repaid and reborrowed
as provided herein. In no event shall Lenders have any obligation to honor a request for a Revolver Loan if the unpaid balance
of Revolver Loans outstanding at such time (including the requested Loan) would exceed the Borrowing Base.


 


2.1.2           Revolver
Notes. The Revolver Loans made by each Lender and interest accruing thereon shall be evidenced by the records of Agent and
such Lender. At the request of any Lender, Borrowers shall deliver a Revolver Note to such Lender.


 


2.1.3           Use
of Proceeds. The proceeds of Revolver Loans shall be used by Borrowers solely (a) to pay fees and transaction expenses associated
with the closing of this credit facility; (b) to pay Obligations in accordance with this Agreement; (c) to finance the ATSCO Acquisition
and Permitted Acquisitions; and (d) for working capital and other lawful corporate purposes of Borrowers.


 


2.1.4           Voluntary
Reduction or Termination of Revolver Commitments.


 


(a)          The
Revolver Commitments shall terminate on the Revolver Termination Date, unless sooner terminated in accordance with this Agreement.
Upon at least 20 Business Days prior written notice to Agent at any time after the first Loan Year, Borrowers may, at their option,
terminate the Revolver Commitments and this credit facility. Any notice of termination given by Borrowers shall be irrevocable.
On the termination date, Borrowers shall make Full Payment of all Obligations.


 


(b)          Borrowers
may permanently reduce the Revolver Commitments, on a Pro Rata basis for each Lender, upon at least 20 Business Days prior written
notice to Agent, which notice shall specify the amount of the reduction and shall be irrevocable once given. Each reduction shall
be in a minimum amount of $1,000,000, or an increment of $1,000,000 in excess thereof.


 


(c)          Concurrently
with any reduction in or termination of the Revolver Commitments, for whatever reason (including an Event of Default), Borrowers
shall pay to Agent, for the Pro Rata benefit of Lenders and as liquidated damages for loss of bargain (and not as a penalty), an
amount equal to (i) if the reduction or termination occurs during the first Loan Year, 1.00% of the Revolver Commitments being
reduced or terminated; and (ii) if it occurs during the second Loan Year, 0.50% of the Revolver Commitments being reduced or terminated.
No termination charge shall be payable if termination occurs on the Revolver Termination Date.


 




    	 	-31-	 



     

    

 


2.1.5           Overadvances.
If the aggregate Revolver Loans exceed the Borrowing Base (“Overadvance”) at any time, the excess amount shall
be payable by Borrowers on demand by Agent, but all such Revolver Loans shall nevertheless constitute Obligations secured
by the Collateral and entitled to all benefits of the Loan Documents. Unless its authority has been revoked in writing by Required
Lenders, Agent may require Lenders to honor requests for Overadvance Loans and to forbear from requiring Borrowers to cure an Overadvance,
(a) when no other Event of Default is known to Agent, as long as (i) the Overadvance does not continue for more than 30 consecutive
days (and no Overadvance may exist for at least five consecutive days thereafter before further Overadvance Loans are required),
and (ii) the Overadvance is not known by Agent to exceed 10% of the Borrowing Base; and (b) regardless of whether an Event of Default
exists, if Agent discovers an Overadvance not previously known by it to exist, as long as from the date of such discovery the Overadvance
(i) is not increased by more than $1,000,000, and (ii) does not continue for more than 30 consecutive days. In no event shall Overadvance
Loans be required that would cause the outstanding Revolver Loans and LC Obligations to exceed the aggregate Revolver Commitments.
Any funding of an Overadvance Loan or sufferance of an Overadvance shall not constitute a waiver by Agent or Lenders of the Event
of Default caused thereby. In no event shall any Borrower or other Obligor be deemed a beneficiary of this Section nor authorized
to enforce any of its terms.


 


2.1.6           Protective
Advances. Agent shall be authorized, in its discretion, at any time that any conditions in Section 6 are not satisfied
to make Base Rate Revolver Loans (“Protective Advances”) (a) up to an aggregate amount (when combined with any outstanding
Overadvance) of $1,000,000 outstanding at any time, if Agent deems such Loans necessary or desirable to preserve or protect Collateral,
or to enhance the collectability or repayment of Obligations; or (b) to pay any other amounts chargeable to Obligors under any
Loan Documents, including costs, fees and expenses. Each Lender shall participate in each Protective Advance on a Pro Rata basis.
Required Lenders may at any time revoke Agent’s authority to make further Protective Advances by written notice to Agent.
Absent such revocation, Agent’s determination that funding of a Protective Advance is appropriate shall be conclusive.


 


2.2           Term
Loan Commitment.


 


2.2.1           Term
Loans. (a) Prior to the Closing Date, certain term loans were made to the
Borrowers under the Existing Agreement which remain outstanding as of the Closing Date (each such outstanding loans being hereinafter
referred to as the “Existing Term Loans”). Subject to the terms and conditions of this Agreement, the
Obligors and each Lender agree that on the Closing Date, the Existing
Term Loans shall bewere
re-evidenced as loans under this Loan Agreement, as Tranche A Term Loans hereunder, and the terms applicable thereto shall
bewere restated in their entirety and shall
be evidenced by this Agreement. Amounts repaid or prepaid in respect of Tranche
A Term Loans may not be reborrowed. The Tranche A Commitment of each Lender shall
immediately and automatically terminateterminated
on the Closing Date after giving effect to the reallocation of the Loans as described in this Section 2.2.1(a)
and Schedule 1.1. 


 


(b)          Each
Lender agrees, severally on a Pro Rata basis up to its Tranche B Commitment, on the terms set forth herein, to make Tranche B Term
Loan to Borrowers. Tranche B Term Loans shall be funded by Lenders on the Closing Date. The Tranche B Commitment of the Lenders
shall expire upon the funding by Lenders of the Tranche B Term Loans. Once repaid, whether such repayment is voluntary or required,
Term B Term Loans may not be reborrowed.  and
Schedule 1.1 as in effect on the Closing Date. On the Second Amendment Effective Date and after
giving effect to the repayment of the Tranche A Term Loans
as required under the Second Amendment, the Tranche A Commitment of each Lender shall be as set forth on Schedule 1.1 and
shall immediately and automatically terminate on such date. 


 




    	 	-32-	 



     

    

 


2.2.2           Term
Notes. The Term Loans made by each Lender and interest accruing thereon shall be evidenced by the records of Agent and such
Lender. At the request of any Lender, Borrowers shall deliver a Term Note to such Lender.


 


2.2B       Capex
Loan Commitment.


 


2.2B.1       Capex Loans.
Prior to the Closing Date, “Capex Loans” (as defined in the Existing Agreement) were made to the Borrowers under the
Existing Agreement which remain outstanding as of the Closing Date (each such outstanding loans being hereinafter referred to as
the “Existing Capex Loans”). Subject to the terms and conditions of this Agreement, the Obligors and each Lender
agree that on the Closing Date, the Existing Capex Loans shall be re-evidenced as Capex Loans loans under this Loan Agreement and
the terms applicable thereto shall be restated in their entirety and shall be evidenced by this Agreement. Each Lender agrees,
severally on a Pro Rata basis up to its Capex Loan Commitment, on the terms set forth herein, to make one or more Capex Loans to
Borrowers from time to time through the earlier of MayJune
30, 20172018
or the Capex Loan Termination Date as requested by Borrowers in the manner set forth in Section 2.2B.2. No repayment in
respect of any Capex Loan may be reborrowed. Each Lender will make Capex Loans only if each of the following conditions is satisfied:


 


(a)          Borrowers
shall have provided evidence to Agent, in form and substance reasonably satisfactory to Agent, that Borrowers will use the proceeds
of each requested Capex Loan to purchase, or reimburse Borrowers in connection with the purchase of, new production, used or refurbished
Equipment (i) used in such Borrowers’ business operations, (ii) to be located at locations in compliance with this Agreement,
and (iii) subject to no Liens other than those in favor of Agent and, when such Capex Loan is made, other Permitted Liens permitted
hereunder pursuant to Section 10.2.2(c), (d), (f), and (i); provided that (A) any used or refurbished
Equipment is subject to an appraisal in form and substance (and by an appraiser) reasonably satisfactory to Agent; and (B) any
Capex Loans made to reimburse Borrowers shall be made within 30 days of Borrowers’ purchase.


 


(b)          Agent
shall have received true copies of the invoice(s) from the seller of the Equipment evidencing the cost of the Equipment Borrowers
propose to purchase or for which Borrowers are requesting reimbursement with the proceeds of each Capex Loan, and such invoice(s)
disclose(s) that the original principal amount of such requested Capex Loan does not exceed (i) in the case of new Equipment, 75%
of the cost of such Equipment, or (ii) in the case of used or refurbished Equipment, 75% of the NOLV of the appraised value of
such Equipment, in each case, exclusive of transportation, installation, taxes, software, perishable tooling and other “soft”
costs (as determined by Agent in its reasonable discretion) pertaining thereto;


 


(c)          Agent
shall have received, in form and substance reasonably satisfactory to Agent, evidence of insurance covering such Equipment as to
which Agent is loss payee pursuant to a Lenders Loss Payable Endorsement acceptable to Agent;


 


(d)          the
requested Capex Loan is in a minimum original principal amount of $250,000;


 




    	 	-33-	 



     

    

 


(e)          the
principal amount of the requested Capex Loan, together with the original principal amounts of all other outstanding Capex Loans
does not exceed the Capex Commitments;


 


(f)          unless
waived by Lenders, the requested Capex Loan would be the only Capex Loan funded by Lenders during Borrowers’ then existing
fiscal quarter;


 


(g)          Borrowers
shall have delivered or caused to be delivered to Agent and each Lender any and all documents, agreements and instruments deemed
reasonably necessary by Agent or any Lender in connection with the making of such Capex Loan. The proceeds of the Capex Loans shall
be used solely for the purposes specified in this Section 2.2B.


 


2.2B.2   Manner of
Borrowing and Funding Capex Loans. A request for a Capex Loan shall be made in the following manner: Borrower Agent shall give
Agent notice (in form reasonably satisfactory to Agent) of its intention to borrow a Capex Loan, in which Borrower Agent shall
specify the amount of the proposed borrowing (consistent with Section 2.2B.1) and the proposed borrowing date, which shall
be a Business Day, no later than 12:00 p.m. (New York time) on the date (a) two (2) Business Days prior to the requested funding
date, in the case of Base Rate Loans, and (b) four (4) Business Days prior to the requested funding date, in the case of LIBOR
Loans. In addition, Borrowers shall also comply with the requirements of Section 2.2B.1 with respect to such Capex Loan.
Each Lender shall timely honor its Capex Loan Commitment on the terms set forth in Section 4.1.2.


 


2.2B.3   Repayment
of Capex Loans. The principal amount of each Capex Loan shall be repaid in consecutive equal monthly installments of 1/60th
of the original principal amount thereof, commencing on the first day of the month following the month in which such Capex Loan
is made and the first day of each month thereafter until the Capex Loan Termination Date. On the Capex Loan Termination Date, all
principal, interest and other amounts owing with respect to each Capex Loan shall be due and payable in full. Each installment
shall be paid to Agent for the Pro Rata benefit of Lenders. Payments made with respect to a Capex Loan may not be reborrowed. Borrowers
may, at their option from time to time, prepay any Capex Loan selected by Borrowers, in whole or in part, which prepayment must
be at least $50,000, plus any increment of $50,000 in excess thereof. Borrowers shall give written notice to Agent of an intended
prepayment of a Capex Loan, which notice shall specify the amount of the prepayment, shall be irrevocable once given, shall be
given at least 10 Business Days prior to the end of a month and shall be effective as of the first day of the next month. All prepayments
shall be applied to such Capex Loan in inverse order of maturity.


 


2.3           Letter
of Credit Facility.


 


2.3.1           Issuance
of Letters of Credit. Issuing Bank shall issue Letters of Credit from time to time until 30 days prior to the Revolver Termination
Date (or until the Commitment Termination Date, if earlier), on the terms set forth herein, including the following:


 


(a)          Each
Borrower acknowledges that Issuing Bank’s issuance of any Letter of Credit is conditioned upon Issuing Bank’s receipt
of a LC Application with respect to the requested Letter of Credit, as well as such other instruments and agreements as Issuing
Bank may customarily require for issuance of a letter of credit of similar type and amount. Issuing Bank shall have no obligation
to issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and LC Application at least three Business Days prior
to the requested date of issuance; (ii) each LC Condition is satisfied; and (iii) if a Defaulting Lender exists, such Lender or
Borrowers have entered into arrangements satisfactory to Agent and Issuing Bank to eliminate any funding risk associated with the
Defaulting Lender. If, in sufficient time to act, Issuing Bank receives written notice from Required Lenders that any LC Condition
has not been satisfied, Issuing Bank shall not issue the requested Letter of Credit. Prior to receipt of any such notice, Issuing
Bank shall not be deemed to have knowledge of any failure of LC Conditions.


 




    	 	-34-	 



     

    

 


(b)          Letters
of Credit may be requested by a Borrower only (i) to support obligations of such Borrower incurred in the Ordinary Course of Business;
or (ii) for other purposes as Agent may approve from time to time in writing.


 


(c)          Obligors
assume all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary. In connection with issuance of any
Letter of Credit, none of Agent, Issuing Bank or any Lender shall be responsible for the existence, character, quality, quantity,
condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in
the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the
form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place,
manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to
in a Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in
connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a Borrower; errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone
or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Letter of Credit or the proceeds
thereof; or any consequences arising from causes beyond the control of Issuing Bank, Agent or any Lender, including any act or
omission of a Governmental Authority. The rights and remedies of Issuing Bank under the Loan Documents shall be cumulative. Issuing
Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrowers are discharged with
proceeds of any Letter of Credit.


 


(d)          In
connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Issuing
Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or communication in
whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper
Person. Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations,
rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance
upon, any advice given by such experts. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating
to Letters of Credit or LC Documents, and shall not be liable for the negligence or misconduct of agents and attorneys-in-fact
selected with reasonable care.


 


2.3.2           Reimbursement;
Participations.


 


(a)          If
Issuing Bank honors any request for payment under a Letter of Credit, Borrowers shall pay to Issuing Bank, on the same day (“Reimbursement
Date”), the amount paid by Issuing Bank under such Letter of Credit, together with interest at the interest rate for
Base Rate Revolver Loans from the Reimbursement Date until payment by Borrowers. The obligation of Borrowers to reimburse Issuing
Bank for any payment made under a Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several, and shall
be paid without regard to any lack of validity or enforceability of any Letter of Credit or the existence of any claim, setoff,
defense or other right that Borrowers may have at any time against the beneficiary. Whether or not Borrower Agent submits a Notice
of Borrowing, Borrowers shall be deemed to have requested a Borrowing of Base Rate Revolver Loans in an amount necessary to pay
all amounts due Issuing Bank on any Reimbursement Date and each Lender agrees to fund its Pro Rata share of such Borrowing whether
or not the Commitments have terminated, an Overadvance exists or is created thereby, or the conditions in Section 6 are
satisfied.


 




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(b)          Upon
issuance of a Letter of Credit, each Lender shall be deemed to have irrevocably and unconditionally purchased from Issuing Bank,
without recourse or warranty, an undivided Pro Rata interest and participation in all LC Obligations relating to the Letter of
Credit. If Issuing Bank makes any payment under a Letter of Credit and Borrowers do not reimburse such payment on the Reimbursement
Date, Agent shall promptly notify Lenders and each Lender shall promptly (within one Business Day) and unconditionally pay to Agent,
for the benefit of Issuing Bank, the Lender’s Pro Rata share of such payment. Upon request by a Lender, Issuing Bank shall
furnish copies of any Letters of Credit and LC Documents in its possession at such time.


 


(c)          The
obligation of each Lender to make payments to Agent for the account of Issuing Bank in connection with Issuing Bank’s payment
under a Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification
or exception whatsoever, and shall be made in accordance with this Agreement under all circumstances, irrespective of any lack
of validity or unenforceability of any Loan Documents; any draft, certificate or other document presented under a Letter of Credit
having been determined to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or the existence of any setoff or defense that any Obligor may have with respect to any Obligations.
Issuing Bank does not assume any responsibility for any failure or delay in performance or any breach by any Borrower or other
Person of any obligations under any LC Documents. Issuing Bank does not make to Lenders any express or implied warranty, representation
or guaranty with respect to the Collateral, LC Documents or any Obligor. Issuing Bank shall not be responsible to any Lender for
any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of any LC Documents; the validity, genuineness, enforceability, collectability, value or sufficiency
of any Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations,
business, creditworthiness or legal status of any Obligor.


 


(d)          No
Issuing Bank Indemnitee shall be liable to any Lender or other Person for any action taken or omitted to be taken in connection
with any LC Documents except as a result of its actual gross negligence or willful misconduct. Issuing Bank shall not have any
liability to any Lender if Issuing Bank refrains from any action under any Letter of Credit or LC Documents until it receives written
instructions from Required Lenders.


 


2.3.3           Cash
Collateral. If any LC Obligations, whether or not then due or payable, shall for any reason be outstanding at any time (a)
that an Event of Default exists, (b) that Availability is less than zero, or (c) after the Commitment Termination Date, then Borrowers
shall, at Issuing Bank’s or Agent’s request, Cash Collateralize the stated amount of all outstanding Letters of Credit
and pay to Issuing Bank the amount of all other LC Obligations. Borrowers shall, on demand by Issuing Bank or Agent from
time to time, Cash Collateralize the LC Obligations of any Defaulting Lender. If Borrowers fail to provide any Cash Collateral
as required hereunder, Lenders may (and shall upon direction of Agent) advance, as Revolver Loans, the amount of the Cash Collateral
required (whether or not the Commitments have terminated, an Overadvance exists or the conditions in Section 6 are satisfied).


 


2.3.4           Resignation
of Issuing Bank. Issuing Bank may resign at any time upon 10 days written notice to Agent and Borrowers. On the effective date
of such resignation, Issuing Bank shall have no further obligation to issue, amend, renew, extend or otherwise modify any Letter
of Credit, but shall continue to have the benefits of Sections 2.3, 12.6 and 14.2 with respect to any Letters
of Credit issued or other actions taken while Issuing Bank. Agent shall promptly appoint a replacement Issuing Bank and, as long
as no Default or Event of Default exists, such replacement shall be reasonably acceptable to Borrowers.


 




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2.3.5           Conflict.
The provisions of this Section 2.3 control in the event of any conflict between the specific terms hereof and any LC Application
or other LC Document.


 


SECTION 3.          INTEREST,
FEES AND CHARGES


 


3.1           Interest.


 


3.1.1           Rates
and Payment of Interest.


 


(a)          The
Obligations shall bear interest (i) if a Base Rate Loan, at the Base Rate in effect from time to time, plus the Applicable Margin;
(ii) if a LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable Margin; and (iii) if any other Obligation
(including, to the extent permitted by law, interest not paid when due), at the Base Rate in effect from time to time, plus the
Applicable Margin for Base Rate Revolver Loans. Interest shall accrue from the date the Loan is advanced or the Obligation is incurred
or payable, until paid by Borrowers. If a Loan is repaid on the same day made, one day’s interest shall accrue.


 


(b)          During
an Insolvency Proceeding with respect to any Borrower, or during any other Event of Default if Agent or Required Lenders in their
discretion so elect, Obligations shall bear interest at the Default Rate (whether before or after any judgment). Each Borrower
acknowledges that the cost and expense to Agent and Lenders due to an Event of Default are difficult to ascertain and that the
Default Rate is a fair and reasonable estimate to compensate Agent and Lenders for this.


 


(c)          Interest
accrued on the Loans shall be due and payable in arrears, (i) on the first day of each month; (ii) on any date of prepayment, with
respect to the principal amount of Loans being prepaid; and (iii) on the Commitment Termination Date. Interest accrued on any other
Obligations shall be due and payable as provided in the Loan Documents and, if no payment date is specified, shall be due and payable
on demand. Notwithstanding the foregoing, interest accrued at the Default Rate shall be due and payable on demand.


 


3.1.2           Application
of LIBOR to Outstanding Loans.


 


(a)          Borrowers
may on any Business Day, subject to delivery of a Notice of Conversion/Continuation, elect to convert any portion of the Base Rate
Loans to, or to continue any LIBOR Loan at the end of its Interest Period as, a LIBOR Loan. During any Default or Event of Default,
Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made, converted or continued as a LIBOR
Loan.


 


(b)          Whenever
Borrowers desire to convert or continue Loans as LIBOR Loans, Borrower Agent shall give Agent a Notice of Conversion/Continuation,
no later than 2:00 p.m. at least three Business Days before the requested conversion or continuation date. Promptly after receiving
any such notice, Agent shall notify each Lender thereof. Each Notice of Conversion/Continuation shall be irrevocable, and shall
specify the amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day),
and the duration of the Interest Period (which shall be deemed to be 30 days if not specified). If, upon the expiration of any
Interest Period in respect of any LIBOR Loans, Borrowers shall have failed to deliver a Notice of Conversion/Continuation, they
shall be deemed to have elected to convert such Loans into Base Rate Loans.


 


3.1.3           Interest
Periods. In connection with the making, conversion or continuation of any LIBOR Loans, Borrowers shall select an interest period
(“Interest Period”) to apply, which interest period shall be one, two or three months; provided, however, that:


 




    	 	-37-	 



     

    

 


(a)          the
Interest Period shall commence on the date the Loan is made or continued as, or converted into, a LIBOR Loan, and shall expire
one, two or three months thereafter, as applicable;


 


(b)          if
any Interest Period begins on a day for which there is no corresponding day in the calendar month at its end or if such corresponding
day falls after the last Business Day of such month, then the Interest Period shall expire on the last Business Day of such month;
and if any Interest Period would otherwise expire on a day that is not a Business Day, then, for purposes of the timing of payment
of interest only (and not for purposes of determining any subsequent Interest Period), the period shall expire on the next Business
Day; provided that such extension of time shall in such case not be included in the computation of payment of interest with
the exception of the final payment of interest at maturity or in connection with a voluntary or involuntary prepayment of principal
prior to maturity; and


 


(c)          no
Interest Period shall extend beyond the Revolver Termination Date; and no Interest Period for a LIBOR Term Loan may be established
that would require repayment before the end of an Interest Period in order to make any scheduled principal payment on Term Loans.


 


3.2           Fees.


 


3.2.1           Unused
Line Fee. Borrowers shall pay to Agent, for the Pro Rata benefit of Lenders, a fee equal to the Unused Line Fee Percentage
times the amount by which the Revolver Commitments exceed the average daily balance of Revolver Loans and stated amount of Letters
of Credit during any month. Such fee shall be payable in arrears, on the first day of each month and on the Commitment Termination
Date.


 


3.2.2           LC
Facility Fees. Borrowers shall pay (a) to Agent, for the Pro Rata benefit of Lenders, a fee equal to the Applicable Margin
in effect for LIBOR Revolver Loans times the average daily undrawn amount of Letters of Credit, which fee shall be payable monthly
in arrears, on the first day of each month; (b) to Issuing Bank, for its own account, a fronting fee equal to 0.250% per annum
on the undrawn amount of each Letter of Credit, which fee shall be payable monthly in arrears, on the first day of each month;
and (c) to Issuing Bank, for its own account, all customary charges associated with the issuance, amending, negotiating, payment,
processing, transfer and administration of Letters of Credit, which may be charged to the Loan Account upon incurrence or which
charges shall be paid upon 5 Business Days notice thereof. During an Event of Default, the fee payable under clause (a) shall be
increased by 2% per annum..


 


3.2.3           Collateral
Management Fee. Borrowers shall pay to Agent, for its own account, a collateral management fee of $18,000 per annum, payable
in equal monthly installments on the first day of each month.


 


3.3           Computation
of Interest, Fees, Yield Protection. All interest, as well as fees and other charges calculated on a per annum basis, shall
be computed for the actual days elapsed, based on a year of 360 days. Each determination by Agent of any interest, fees or interest
rate hereunder shall be final, conclusive and binding for all purposes, absent manifest error. All fees shall be fully earned when
due and shall not be subject to rebate, refund or proration. All fees payable under Section 3.2 are compensation for services
and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money. A certificate
as to amounts payable by Borrowers under Section 3.4, 3.6, 3.7, 3.9 or 5.9, submitted to Borrower Agent by Agent
or the affected Lender, as applicable, shall be final, conclusive and binding for all purposes, absent manifest error, and Borrowers
shall pay such amounts to the appropriate party within 10 days following receipt of the certificate.


 




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3.4           Reimbursement
Obligations. Borrowers shall reimburse Agent for all Extraordinary Expenses. Borrowers shall also reimburse Agent for all
legal, accounting, appraisal, consulting, and other fees, costs and expenses incurred by it in connection with (a) negotiation
and preparation of any Loan Documents, including any amendment or other modification thereof; (b) administration of and actions
relating to any Collateral, Loan Documents and transactions contemplated thereby, including any actions taken to perfect or maintain
priority of Agent’s Liens on any Collateral, to maintain any insurance required hereunder or to verify Collateral; and (c)
subject to the limits of Section 10.1.1(b), each inspection, audit or appraisal with respect to any Obligor or Collateral,
whether prepared by Agent’s personnel or a third party. All legal, accounting and consulting fees shall be charged to Borrowers
by Agent’s professionals at their regular hourly rates, regardless of any reduced or alternative fee billing arrangements
that Agent, any Lender or any of their Affiliates may have with such professionals with respect to this or any other transaction.
If, for any reason (including inaccurate reporting on financial statements or a Compliance Certificate), it is determined that
a higher Applicable Margin should have applied to a period than was actually applied, then the proper margin shall be applied retroactively
and Borrowers shall immediately pay to Agent, for the Pro Rata benefit of Lenders, an amount equal to the difference between the
amount of interest and fees that would have accrued using the proper margin and the amount actually paid. All amounts payable by
Borrowers under this Section may be charged to the Loan Account upon incurrence during the continuance of Default or Event of Default
or otherwise, upon 3 days' notice thereof.


 


3.5           Illegality.
If any Lender determines that any Applicable Law has made it unlawful, or that any Governmental Authority has asserted that it
is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund LIBOR Loans, or to determine or charge interest
rates based upon LIBOR, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase
or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to Agent, (a) any
obligation of such Lender to make or continue LIBOR Loans or to convert Base Rate Loans to LIBOR Loans shall be suspended and (b)
if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined
by reference to the LIBOR component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary
to avoid such illegality, be determined by Agent without reference to the LIBOR component of Base Rate, in each case until such
Lender notifies Agent that the circumstances giving rise to such determination no longer exist. Upon delivery of such notice, (x)
Borrowers shall prepay or, if applicable, convert all LIBOR Loans of such Lender to Base Rate Loans (the interest rate on which
Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by Agent without reference to the LIBOR
component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain
such LIBOR Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Loans and (y) if
such notice asserts the illegality of such Lender determining or charging interest rates based upon LIBOR, Agent shall, during
the period of such suspension, compute the Base Rate applicable to such Lender without reference to the LIBOR component thereof
until Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates
based upon LIBOR. Upon any such prepayment or conversion, Borrowers shall also pay accrued interest on the amount so prepaid or
converted.


 


3.6           Inability
to Determine Rates. If Required Lenders notify Agent for any reason in connection with a request for a Borrowing of, or
conversion to or continuation of, a LIBOR Loan that (1) Dollar deposits are not being offered to banks in the London interbank
Eurodollar market for the applicable amount and Interest Period of such Loan, (2) adequate and reasonable means do not exist for
determining LIBOR for the requested Interest Period, or (3) LIBOR for the requested Interest Period does not, in Lender’s
good faith judgment, adequately and fairly reflect the cost to such Lenders of funding such Loan, then Agent will promptly so notify
Borrower Agent and each Lender. Thereafter, (x) the obligation of Lenders to make or maintain LIBOR Loans shall be suspended and
(y) in the event of a determination described in the preceding sentence with respect to the LIBOR component of the Base Rate, the
utilization of the LIBOR component in determining the Base Rate shall be suspended, in each case until Agent (upon instruction
by Required Lenders) revokes such notice. Upon receipt of such notice, Borrower Agent may revoke any pending request for a Borrowing
of, conversion to or continuation of a LIBOR Loan or, failing that, will be deemed to have submitted a request for a Base Rate
Loan.


 




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3.7           Increased
Costs; Capital Adequacy.


 


3.7.1           Change
in Law. If any Change in Law shall:


 


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


 


(b)          subject
any Lender or Issuing Bank to any Tax with respect to any Loan, Loan Document, Letter of Credit or participation in LC Obligations,
or change the basis of taxation of payments to such Lender or Issuing Bank in respect thereof (except for Indemnified Taxes or
Other Taxes covered by Section 5.9 and the imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender or Issuing Bank); or


 


(c)          impose
on any Lender or Issuing Bank or the London interbank market any other condition, cost or expense affecting any Loan, Loan Document,
Letter of Credit or participation in LC Obligations;


 


and the result thereof shall be to increase
the cost to such Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation to make any such Loan), or to
increase the cost to such Lender or Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining
its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by
such Lender or Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or
Issuing Bank, Borrowers will pay to such Lender or Issuing Bank, as applicable, such additional amount or amounts as will compensate
such Lender or Issuing Bank, as applicable, for such additional costs incurred or reduction suffered.


 


3.7.2           Capital
Adequacy. If any Lender or Issuing Bank determines that any Change in Law affecting such Lender or Issuing Bank or any Lending
Office of such Lender or such Lender’s or Issuing Bank’s holding company, if any, regarding capital requirements has
or would have the effect of reducing the rate of return on such Lender’s, Issuing Bank’s or holding company’s
capital as a consequence of this Agreement, or such Lender’s or Issuing Bank’s Commitments, Loans, Letters of Credit
or participations in LC Obligations, to a level below that which such Lender, Issuing Bank or holding company could have achieved
but for such Change in Law (taking into consideration such Lender’s, Issuing Bank’s and holding company’s policies
with respect to capital adequacy), then from time to time Borrowers will pay to such Lender or Issuing Bank, as the case may be,
such additional amount or amounts as will compensate it or its holding company for any such reduction suffered.


 


3.7.3           Compensation.
Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section shall not constitute
a waiver of its right to demand such compensation, but Borrowers shall not be required to compensate a Lender or Issuing Bank for
any increased costs incurred or reductions suffered more than six months prior to the date that the Lender or Issuing Bank notifies
Borrower Agent of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or Issuing Bank’s
intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).


 




    	 	-40-	 



     

    

 


3.8           Mitigation.
If any Lender gives a notice under Section 3.5 or requests compensation under Section 3.7, or if Borrowers are required
to pay additional amounts with respect to a Lender under Section 5.9, then such Lender shall use reasonable efforts to designate
a different Lending Office or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates,
if, in the judgment of such Lender, such designation or assignment (a) would eliminate the need for such notice or reduce amounts
payable or to be withheld in the future, as applicable; and (b) would not subject the Lender to any unreimbursed cost or expense
and would not otherwise be disadvantageous to it. Borrowers shall pay all reasonable costs and expenses incurred by any Lender
in connection with any such designation or assignment.


 


3.9           Funding
Losses. If for any reason (other than default by a Lender) (a) any Borrowing of, or conversion to or continuation of, a
LIBOR Loan does not occur on the date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether
or not withdrawn), (b) any repayment or conversion of a LIBOR Loan occurs on a day other than the end of its Interest Period, or
(c) Borrowers fail to repay a LIBOR Loan when required hereunder, then Borrowers shall pay to each Lender all losses and expenses
that it sustains as a consequence thereof, including loss of anticipated profits and any loss or expense arising from liquidation
or redeployment of funds or from fees payable to terminate deposits of matching funds. Lenders shall not be required to purchase
Dollar deposits in the interbank market or any other offshore Dollar market to fund any LIBOR Loan, but the provisions hereof shall
be deemed to apply as if each Lender had purchased such deposits to fund its LIBOR Loans.


 


3.10         Maximum
Interest. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law (“maximum
rate”). If Agent or any Lender shall receive interest in an amount that exceeds the maximum rate, the excess interest
shall be applied to the principal of the Obligations or, if it exceeds such unpaid principal, refunded to Borrowers. In determining
whether the interest contracted for, charged or received by Agent or a Lender exceeds the maximum rate, such Person may, to the
extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium rather than
interest; (b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate and spread in equal or
unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.


 


SECTION 4.          LOAN
ADMINISTRATION


 


4.1           Manner
of Borrowing and Funding Revolver Loans.


 


4.1.1           Notice
of Borrowing.


 


(a)          Whenever
Borrowers desire funding of a Borrowing of Revolver Loans, Borrower Agent shall give Agent a Notice of Borrowing. Such notice must
be received by Agent no later than 12:00 p.m. (New York time) (i) on the Business Day of the requested funding date, in the case
of Base Rate Loans, and (ii) at least three Business Days prior to the requested funding date, in the case of LIBOR Loans. Notices
received after 12:00 p.m. (New York time) shall be deemed received on the next Business Day. Each Notice of Borrowing shall be
irrevocable and shall specify (A) the amount of the Borrowing, (B) the requested funding date (which must be a Business Day), (C)
whether the Borrowing is to be made as Base Rate Loans or LIBOR Loans, and (D) in the case of LIBOR Loans, the duration of the
applicable Interest Period (which shall be deemed to be 30 days if not specified).


 




    	 	-41-	 



     

    

 


(b)          Unless
payment is otherwise timely made by Borrowers, the becoming due of any Obligations (whether principal, interest, fees or other
charges, including Extraordinary Expenses, LC Obligations, Cash Collateral and Secured Bank Product Obligations) shall be deemed
to be a request for Base Rate Revolver Loans on the due date, in the amount of such Obligations. The proceeds of such Revolver
Loans shall be disbursed as direct payment of the relevant Obligation. In addition, Agent may, at its option, charge such Obligations
against any operating, investment or other account of a Borrower maintained with Agent or any of its Affiliates.


 


(c)          If
Borrowers establish a controlled disbursement account with Agent or any Affiliate of Agent, then the presentation for payment of
any check or other item of payment drawn on such account at a time when there are insufficient funds to cover it shall be deemed
to be a request for Base Rate Revolver Loans on the date of such presentation, in the amount of the check and items presented for
payment. The proceeds of such Revolver Loans may be disbursed directly to the controlled disbursement account or other appropriate
account.


 


4.1.2           Fundings
by Lenders. Each Lender shall timely honor its Revolver Commitment by funding its Pro Rata share of each Borrowing of Revolver
Loans that is properly requested hereunder. Except for Borrowings to be made as Swingline Loans, Agent shall endeavor to notify
Lenders of each Notice of Borrowing (or deemed request for a Borrowing) by 12:00 on the proposed funding date for Base Rate Loans
or by 3:00 p.m. at least two Business Days before any proposed funding of LIBOR Loans. Each Lender shall fund to Agent such Lender’s
Pro Rata share of the Borrowing to the account specified by Agent in immediately available funds not later than 2:00 p.m. on the
requested funding date, unless Agent’s notice is received after the times provided above, in which event Lender shall fund
its Pro Rata share by 11:00 a.m. on the next Business Day. Subject to its receipt of such amounts from Lenders, Agent shall disburse
the proceeds of the Revolver Loans to the Operating Account or otherwise, to an account or pursuant to direction of Borrower Agent,
in each case, reasonably satisfactory to Agent. Unless Agent shall have received (in sufficient time to act) written notice from
a Lender that it does not intend to fund its Pro Rata share of a Borrowing, Agent may assume that such Lender has deposited or
promptly will deposit its share with Agent, and Agent may disburse a corresponding amount to Borrowers. If a Lender’s share
of any Borrowing or of any settlement pursuant to Section 4.1.3(b) is not received by Agent, then Borrowers agree to repay
to Agent on demand the amount of such share, together with interest thereon from the date disbursed until repaid, at the
rate applicable to the Borrowing.


 


4.1.3           Swingline
Loans; Settlement.


 


(a)          Agent
may, but shall not be obligated to, advance Swingline Loans to Borrowers, up to an aggregate outstanding amount of $1,000,000,
unless the funding is specifically required to be made by all Lenders hereunder. Each Swingline Loan shall constitute a Revolver
Loan for all purposes, except that payments thereon shall be made to Agent for its own account. The obligation of Borrowers to
repay Swingline Loans shall be evidenced by the records of Agent and need not be evidenced by any promissory note.


 


(b)          To
facilitate administration of the Revolver Loans, Lenders and Agent agree (which agreement is solely among them, and not for the
benefit of or enforceable by any Borrower) that settlement among them with respect to Swingline Loans and other Revolver Loans
may take place on a date determined from time to time by Agent, which shall occur at least once each week. On each settlement date,
settlement shall be made with each Lender in accordance with the Settlement Report delivered by Agent to Lenders. Between settlement
dates, Agent may in its discretion apply payments on Revolver Loans to Swingline Loans, regardless of any designation by Borrower
or any provision herein to the contrary. Each Lender’s obligation to make settlements with Agent is absolute and unconditional,
without offset, counterclaim or other defense, and whether or not the Commitments have terminated, an Overadvance exists or the
conditions in Section 6 are satisfied. If, due to an Insolvency Proceeding with respect to a Borrower or otherwise, any
Swingline Loan may not be settled among Lenders hereunder, then each Lender shall be deemed to have purchased from Agent a Pro
Rata participation in each unpaid Swingline Loan and shall transfer the amount of such participation to Agent, in immediately available
funds, within one Business Day after Agent’s request therefor.


 




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4.1.4           Notices.
Each Borrower authorizes Agent and Lenders to extend, convert or continue Loans, effect selections of interest rates, and transfer
funds to or on behalf of Borrowers based on telephonic or e-mailed instructions. Borrowers shall confirm each such request by prompt
delivery to Agent of a Notice of Borrowing or Notice of Conversion/Continuation, if applicable, but if it differs in any material
respect from the action taken by Agent or Lenders, the records of Agent and Lenders shall govern. Neither Agent nor any Lender
shall have any liability for any loss suffered by a Borrower as a result of Agent or any Lender acting upon its understanding of
telephonic or e-mailed instructions from a person believed in good faith by Agent or any Lender to be a person authorized to give
such instructions on a Borrower’s behalf.


 


4.2           Defaulting
Lender. Agent may (but shall not be required to), in its discretion, retain any payments or other funds received by Agent
that are to be provided to a Defaulting Lender hereunder, and may apply such funds to such Lender’s defaulted obligations
or readvance the funds to Borrowers in accordance with this Agreement. The failure of any Lender to fund a Loan, to make any payment
in respect of LC Obligations or to otherwise perform its obligations hereunder shall not relieve any other Lender of its obligations,
and no Lender shall be responsible for default by another Lender. Lenders and Agent agree (which agreement is solely among them,
and not for the benefit of or enforceable by any Borrower) that, solely for purposes of determining a Defaulting Lender’s
right to vote on matters relating to the Loan Documents and to share in payments, fees and Collateral proceeds thereunder, a Defaulting
Lender shall not be deemed to be a “Lender” until all its defaulted obligations have been cured.


 


4.3           Number
and Amount of LIBOR Loans; Determination of Rate. Each Borrowing of LIBOR Loans when made shall be in a minimum amount
of $250,000, plus any increment of $100,000 in excess thereof. No more than 7 Borrowings of LIBOR Loans may be outstanding at any
time, and all LIBOR Loans having the same length and beginning date of their Interest Periods shall be aggregated together and
considered one Borrowing for this purpose. The aggregate dollar amount of LIBOR Loans may not comprise more than 80% of the outstanding
dollar amount of all Revolver Loans plus 100% of the outstanding dollar amount of all Term Loans plus 100% of the
outstanding dollar amount of all Capex Loans minus any scheduled principal payments of the Term Loans to be made pursuant
to Section 5.3.1 minus any scheduled principal payments of the Capex Loans to be made pursuant to Section 2.2B.3
during Interest Periods for all LIBOR Loans. Upon determining LIBOR for any Interest Period requested by Borrowers, Agent shall
promptly notify Borrowers thereof by telephone or electronically and, if requested by Borrowers, shall confirm any telephonic notice
in writing.


 


4.4           Borrower
Agent. Each Obligor hereby designates P&F (“Borrower Agent”) as its representative and agent for
all purposes under the Loan Documents, including requests for Loans and Letters of Credit, designation of interest rates, delivery
or receipt of communications, preparation and delivery of Borrowing Base and , receipt and payment of Obligations, requests for
waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants),
and all other dealings with Agent, Issuing Bank or any Lender. Borrower Agent hereby accepts such appointment. Agent and Lenders
shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication (including any notice
of borrowing) delivered by Borrower Agent on behalf of any Obligor. Agent and Lenders may give any notice or communication with
an Obligor hereunder to Borrower Agent on behalf of such Obligor. Each of Agent, Issuing Bank and Lenders shall have the right,
in its discretion, to deal exclusively with Borrower Agent for any or all purposes under the Loan Documents. Each Obligor agrees
that any notice, election, communication, representation, agreement or undertaking made on its behalf by Borrower Agent shall be
binding upon and enforceable against it.


 




    	 	-43-	 



     

    

 


4.5           One
Obligation. The Loans, LC Obligations and other Obligations shall constitute one general obligation of Borrowers and (unless
otherwise expressly provided in any Loan Document) shall be secured by Agent’s Lien upon all Collateral; provided,
however, that Agent and each Lender shall be deemed to be a creditor of, and the holder of a separate claim against, each
Borrower to the extent of any Obligations jointly or severally owed by such Borrower.


 


4.6           Effect
of Termination. On the effective date of the termination of all the Commitments, all Obligations shall be immediately due
and payable, and any Lender may terminate its and its Affiliates’ Bank Products (including, only with the consent of Agent,
any Cash Management Services). All undertakings of Obligors contained in the Loan Documents shall survive any termination, and
Agent shall retain its Liens in the Collateral and all of its rights and remedies under the Loan Documents until Full Payment of
the Obligations. Notwithstanding Full Payment of the Obligations, Agent shall not be required to terminate its Liens in any Collateral
unless, with respect to any damages Agent may incur as a result of the dishonor or return of Payment Items applied to Obligations,
Agent receives (a) a written agreement, executed by Obligors and any Person whose advances are used in whole or in part to satisfy
the Obligations, indemnifying Agent and Lenders from any such damages; or (b) such Cash Collateral as Agent, in its discretion,
deems necessary to protect against any such damages. Sections 2.3, 3.4, 3.6, 3.7, 3.9, 5.5, 5.9, 5.10, 12, 14.2 and this
Section, and the obligation of each Obligor and Lender with respect to each indemnity given by it in any Loan Document, shall survive
Full Payment of the Obligations and any release relating to this credit facility.


 


SECTION 5.          PAYMENTS


 


5.1           General
Payment Provisions. All payments of Obligations shall be made in Dollars, without offset, counterclaim or defense of any
kind, free of (and without deduction for) any Taxes, and in immediately available funds, not later than 2:00 p.m. on the due date.
Any payment after such time shall be deemed made on the next Business Day. Any payment of a LIBOR Loan prior to the end of its
Interest Period shall be accompanied by all amounts due under Section 3.9. Any prepayment of Loans shall be applied first
to Base Rate Loans and then to LIBOR Loans.


 


5.2           Repayment
of Revolver Loans. Revolver Loans shall be due and payable in full on the Revolver Termination Date, unless payment is
sooner required hereunder. Revolver Loans may be prepaid from time to time, without penalty or premium. If any Asset Disposition
includes the disposition of Accounts, Inventory or Equipment, then Net Proceeds equal to the greater of (a) the net book value
of such Accounts, Inventory or Equipment, or (b) the reduction in the Borrowing Base upon giving effect to such disposition, shall
be applied to the Revolver Loans. Notwithstanding anything herein to the contrary, if an Overadvance exists, Borrowers shall, on
the sooner of Agent’s demand or the first Business Day after any Borrower has knowledge thereof, repay the outstanding Revolver
Loans in an amount sufficient to reduce the principal balance of Revolver Loans to the Borrowing Base.


 




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5.3           Repayment
of Term Loans.


 


5.3.1           Payment
of Principal.  (a) The principal amount of the Tranche A Term Loans shall
be repaid on the first Business Day of each month in consecutive monthly installments of $23,333.33,
commencing on September 1, 2014, until the Term Loan Maturity Date, on which date all principal, interest and other
amounts owing with respect to the Term Loans shall be due and payable in full. Each installment
shall be paid to Agent for the Pro Rata benefit of Lenders. Once repaid, whether such repayment is voluntary or
required, Tranche A Term Loans may not be reborrowed.


 


(b)         The principal amount of the Tranche B Term Loans shall be repaid on the first Business Day of each month in 36 consecutive
monthly installments of $83,333.33, commencing on September 1, 2014 or, if sooner, until the Term Loan Maturity Date, on which
date all principal, interest and other amounts owing with respect to the Term Loans shall be due and payable in full. Each installment
shall be paid to Agent for the Pro Rata benefit of Lenders. Once repaid, whether such repayment is voluntary or required, Tranche
B Term Loans may not be reborrowed.


 


5.3.2           Mandatory
Prepayments.


 


(a)          Within
ten days after delivery to Agent of the financial statement and Compliance Certificate required pursuant to Section 10.1.2 (a),
Borrowers shall (i) deliver to Agent a written calculation of Excess Cash Flow for such Fiscal Year, certified by a Senior Officer
of Borrower Agent, and (ii) prepay Tranche B Term Loans in an amount equal to 50% of such Excess Cash Flow; [Reserved];



 


(b)          Concurrently
with any Asset Disposition of Real Estate, Borrowers shall prepay, in an amount equal to the Net Proceeds of such disposition,
(i) the Tranche A Term Loans until paid in full, then (ii) the Tranche B Term Loans until paid
in full and then (iii) Capex Loans until paid in full;


 


(c)          Concurrently
with the receipt of any proceeds of insurance or condemnation awards paid in respect of any Real Estate, Borrowers shall prepay,
in an amount equal to such proceeds (i) the Tranche A Term Loans until paid in full, then (ii)
the Tranche B Term Loans until paid in full and then (iii) Capex Loans until paid in full, subject in each case
to Section 8.6.2;


 


(d)          Concurrently
with any issuance of Equity Interests by a Borrower (other than in connection with compensation or benefits paid or provided to
employees, officers or directors), Borrowers shall prepay, in an amount equal to the net proceeds of such issuance, to Agent for
the Pro Rata benefit of each Lender holding (i) the Tranche B Term Loans until paid in
full, then (ii) the Tranche A Term Loans until paid in full and then (iii) Capex Loans until paid in full;


 


(e)          Concurrently
with any Asset Disposition of Equipment, Borrowers shall prepay, in an amount equal to the Net Proceeds of such disposition, (i)
if the Equipment is Eligible Equipment, the Capex
Loans until paid in full and any balance to the
Revolving Loans until paid in full and any balance to the Tranche B Term
Loans until paid in full l and (ii) if the Equipment relates to a Capex Loan, the Capex Loans until
paid in full an d any balance to, the Tranche B Term Loans until paid in full; and];
and


 


(f)          On
the Commitment Termination Date, Borrowers shall prepay all Term Loans and Capex Loans (unless sooner repaid hereunder).


 


5.3.3           Optional
Prepayments. Borrowers may, at their option from time to time, prepay the Term Loans, which prepayment must be at least $500,000,50,000,
plus any increment of $500,00010,000
in excess thereof. Borrowers shall give written notice to Agent of an intended prepayment of Term Loans, which notice shall specify
the amount of the prepayment, shall be irrevocable once given, shall be given at least 10 Business Days prior to the end of a month
and shall be effective as of the first day of the next month.


 




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5.3.4           Interest;
Application of Prepayments. Each prepayment of Term Loans shall be accompanied by all interest accrued thereon and any amounts
payable under Section 3.9, and shall be applied to principal in inverse order of maturity.


 


5.4           Payment
of Other Obligations. Obligations other than Loans, including LC Obligations and Extraordinary Expenses, shall be paid
by Borrowers as provided in the Loan Documents or, if no payment date is specified, on demand.


 


5.5           Marshaling;
Payments Set Aside. None of Agent or Lenders shall be under any obligation to marshal any assets in favor of any Obligor
or against any Obligations. If any payment by or on behalf of Obligors is made to Agent, Issuing Bank or any Lender, or Agent,
Issuing Bank or any Lender exercises a right of setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement
entered into by Agent, Issuing Bank or such Lender in its discretion) to be repaid to a trustee, receiver or any other Person,
then to the extent of such recovery, the Obligation originally intended to be satisfied, and all Liens, rights and remedies relating
thereto, shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred.


 


5.6           Post-Default
Allocation of Payments.


 


5.6.1           Allocation.
Notwithstanding anything herein to the contrary, during an Event of Default, monies to be applied to the Obligations, whether arising
from payments by Obligors, realization on Collateral, setoff or otherwise, shall, at the option of Agent or the direction of Required
Lenders, be allocated as follows:


 


(a)          first,
to all costs and expenses, including Extraordinary Expenses, owing to Agent;


 


(b)          second,
to all amounts owing to Agent on Swingline Loans;


 


(c)          third,
to all amounts owing to Issuing Bank on LC Obligations;


 


(d)          fourth,
to all Obligations constituting fees (other than Bank Product Obligations);


 


(e)          fifth,
to all Obligations constituting interest (other than Bank Product Obligations);


 


(f)          sixth,
to all Secured Bank Product Obligations relating to Cash Management Services;


 


(g)          seventh,
to all Loans, Letters of Credit, including Cash Collateralization of outstanding and LC Obligations; and


 


(h)          last,
to all other Obligations.


 




    	 	-46-	 



     

    

 


Amounts shall be applied to each category
of Obligations set forth above until Full Payment thereof and then to the next category. If amounts are insufficient to satisfy
a category, they shall be applied on a pro rata basis among the Obligations in the category. Excluded Hedge Obligations with respect
to any Obligor shall not be paid with amounts received from such Obligor or its assets, but appropriate adjustments shall be made
with respect to amounts obtained from other Obligors to preserve the allocations in any applicable category. Amounts distributed
with respect to any Secured Bank Product Obligations owing to a Lender or an Affiliate of a Lender shall be the lesser of the maximum
Secured Bank Product Obligations last reported to Agent and the actual Secured Bank Product Obligations as calculated by the methodology
reported to Agent for determining the amount due. Agent shall have no obligation to calculate the amount to be distributed with
respect to any Secured Bank Product Obligations, and may request a reasonably detailed calculation of such amount from the applicable
Secured Party. If a Secured Party fails to deliver such calculation within ten days following request by Agent, Agent may assume
the amount to be distributed is zero. The allocations set forth in this Section are solely to determine the rights and priorities
of Agent and Secured Parties as among themselves, and may be changed by agreement among them without the consent of any Obligor.
This Section is not for the benefit of or enforceable by any Obligor.


 


5.6.2           Erroneous
Application. Agent shall not be liable for any application of amounts made by it in good faith and, if any such application
is subsequently determined to have been made in error, the sole recourse of any Lender or other Person to which such amount should
have been made shall be to recover the amount from the Person that actually received it (and, if such amount was received by any
Lender, such Lender hereby agrees to return it).


 


5.7           Application
of Payments. Payments of good funds received in the Payment Account maintained at Agent shall be applied to the Obligations
on the Business Day of receipt. Amounts otherwise received by Agent shall be applied to the Obligations on the Business Day of
receipt of good funds if received by 12:00 noon (New York time) on such day, otherwise such funds may be applied to the Obligations
on the next Business Day. If, as a result of such application, a credit balance exists, the balance shall not accrue interest in
favor of Borrowers and shall be made available to Borrowers as long as no Default or Event of Default exists. Each Obligor irrevocably
waives the right to direct the application of any payments or Collateral proceeds, and agrees that Agent shall have the continuing,
exclusive right to apply and reapply same against the Obligations, in such manner as Agent deems advisable. In the absence of a
Default or Event of Default, any prepayment of Loans shall be applied first to Base Rate Loans and then to LIBOR Loans. Notwithstanding
the foregoing, if the amount of any prepayment of Loans required under this Section 5.7 shall be in excess of the amount
of the Base Rate Loans at the time outstanding (an “Excess Amount”), so long as no Default or Event of Default
shall have occurred and be continuing, only the portion of the amount of such prepayment as is equal to the amount of such outstanding
Base Rate Loans shall be immediately prepaid and, at the election of the Borrowers, the Excess Amount shall be made available to
the Borrowers to the extent an Overadvance would not be caused thereby.


 


5.8           Loan
Account; Account Stated.


 


5.8.1           Loan
Account. Agent shall maintain in accordance with its usual and customary practices an account or accounts (“Loan Account”)
evidencing the Debt of Borrowers resulting from each Loan or issuance of a Letter of Credit from time to time. Any failure of Agent
to record anything in the Loan Account, or any error in doing so, shall not limit or otherwise affect the obligation of Borrowers
to pay any amount owing hereunder. Agent may maintain a single Loan Account in the name of Borrower Agent, and each Obligor confirms
that such arrangement shall have no effect on the joint and several character of its liability for the Obligations.


 




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5.8.2           Entries
Binding. Entries made in the Loan Account shall constitute presumptive evidence of the information contained therein. If any
information contained in the Loan Account is provided to or inspected by any Person, then such information shall be conclusive
and binding on such Person for all purposes absent manifest error, except to the extent such Person notifies Agent in writing within
30 days after receipt or inspection that specific information is subject to dispute.


 


5.9           Taxes.


 


5.9.1           Payments
Free of Taxes. All payments by Obligors of Obligations shall be free and clear of and without reduction for any Taxes. If Applicable
Law requires any Obligor or Agent to withhold or deduct any Tax (including backup withholding or withholding Tax), the withholding
or deduction shall be based on information provided pursuant to Section 5.10 and Agent shall pay the amount withheld or
deducted to the relevant Governmental Authority. If the withholding or deduction is made on account of Indemnified Taxes or Other
Taxes, the sum payable by Borrowers shall be increased so that Agent, Lender or Issuing Bank, as applicable, receives an amount
equal to the sum it would have received if no such withholding or deduction (including deductions applicable to additional sums
payable under this Section) had been made. Without limiting the foregoing, Borrowers shall timely pay all Other Taxes to the relevant
Governmental Authorities.


 


5.9.2           Payment.
Borrowers shall indemnify, hold harmless and reimburse (within 10 days after demand therefor) Agent, Lenders and Issuing Bank for
any Indemnified Taxes or Other Taxes (including those attributable to amounts payable under this Section) withheld or deducted
by any Obligor or Agent, or paid by Agent, any Lender or Issuing Bank, with respect to any Obligations, Letters of Credit or Loan
Documents, whether or not such Taxes were properly asserted by the relevant Governmental Authority, and including all penalties,
interest and reasonable expenses relating thereto, as well as any amount that a Lender or Issuing Bank fails to pay indefeasibly
to Agent under Section 5.10. A certificate as to the amount of any such payment or liability delivered to Borrower Agent
by Agent, or by a Lender or Issuing Bank (with a copy to Agent), shall be conclusive, absent manifest error. As soon as practicable
after any payment of Taxes by a Borrower, Borrower Agent shall deliver to Agent a receipt from the Governmental Authority or other
evidence of payment satisfactory to Agent.


 


5.10         Lender
Tax Information.


 


5.10.1         Status
of Lenders. Each Lender shall deliver documentation and information to Agent and Borrower Agent, at the times and in form required
by Applicable Law or reasonably requested by Agent or Borrower Agent, sufficient to permit Agent or Borrowers to determine (a)
whether or not payments made with respect to Obligations are subject to Taxes, (b) if applicable, the required rate of withholding
or deduction, and (c) such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes for such
payments or otherwise to establish such Lender’s status for withholding tax purposes in the applicable jurisdiction.


 


5.10.2         Documentation.
If a Borrower is resident for tax purposes in the United States, any Lender that is a “United States person” within
the meaning of section 7701(a)(30) of the Code shall deliver to Agent and Borrower Agent IRS Form W-9 or such other documentation
or information prescribed by Applicable Law or reasonably requested by Agent or Borrower Agent to determine whether such Lender
is subject to backup withholding or information reporting requirements. If any Foreign Lender is entitled to any exemption from
or reduction of withholding tax for payments with respect to the Obligations, it shall deliver to Agent and Borrower Agent, on
or prior to the date on which it becomes a Lender hereunder (and from time to time thereafter upon request by Agent or Borrower
Agent, but only if such Foreign Lender is legally entitled to do so), (a) IRS Form W-8BEN claiming eligibility for benefits of
an income tax treaty to which the United States is a party; (b) IRS Form W-8ECI; (c) IRS Form W-8IMY and all required supporting
documentation; (d) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section
881(c) of the Code, IRS Form W-8BEN and a certificate showing such Foreign Lender is not (i) a “bank” within the meaning
of section 881(c)(3)(A) of the Code, (ii) a “10 percent shareholder” of any Obligor within the meaning of section 881(c)(3)(B)
of the Code, or (iii) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code; or (e) any
other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in withholding tax, together with
such supplementary documentation necessary to allow Agent and Borrowers to determine the withholding or deduction required to be
made.


 




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5.10.3         Lender
Obligations. Each Lender and Issuing Bank shall promptly notify Borrowers and Agent of any change in circumstances that would
change any claimed Tax exemption or reduction. Each Lender and Issuing Bank shall indemnify, hold harmless and reimburse (within
10 days after demand therefor) Borrowers and Agent for any Taxes, losses, claims, liabilities, penalties, interest and expenses
(including reasonable attorneys’ fees) incurred by or asserted against a Borrower or Agent by any Governmental Authority
due to such Lender’s or Issuing Bank’s failure to deliver, or inaccuracy or deficiency in, any documentation required
to be delivered by it pursuant to this Section. Each Lender and Issuing Bank authorizes Agent to set off any amounts due to Agent
under this Section against any amounts payable to such Lender or Issuing Bank under any Loan Document.


 


5.11         Nature
and Extent of Each Borrower’s Liability.


 


5.11.1         Joint
and Several Liability. Each Borrower agrees that it is jointly and severally liable for, and absolutely and unconditionally
guarantees to Agent and Lenders the prompt payment and performance of, all Obligations and all agreements under the Loan Documents,
except its Excluded Hedge Obligations. Each Borrower agrees that its guaranty obligations hereunder constitute a continuing guaranty
of payment and not of collection, that such obligations shall not be discharged until Full Payment of the Obligations, and that
such obligations are absolute and unconditional, irrespective of (a) the genuineness, validity, regularity, enforceability, subordination
or any future modification of, or change in, any Obligations or Loan Document, or any other document, instrument or agreement to
which any Obligor is or may become a party or be bound; (b) the absence of any action to enforce this Agreement (including this
Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by Agent or any Lender with respect thereto;
(c) the existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty
for the Obligations or any action, or the absence of any action, by Agent or any Lender in respect thereof (including the release
of any security or guaranty); (d) the insolvency of any Obligor; (e) any election by Agent or any Lender in an Insolvency Proceeding
for the application of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower, as
debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise; (g) the disallowance of any claims of Agent or any
Lender against any Obligor for the repayment of any Obligations under Section 502 of the Bankruptcy Code or otherwise; or (h) any
other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor,
except Full Payment of all Obligations.


 


5.11.2         Waivers.


 


(a)          Each
Borrower expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise,
to compel Agent or Lenders to marshal assets or to proceed against any Obligor, other Person or security for the payment or performance
of any Obligations before, or as a condition to, proceeding against such Borrower. Each Borrower waives all defenses available
to a surety, guarantor or accommodation co-obligor other than Full Payment of all Obligations. It is agreed among each Borrower,
Agent and Lenders that the provisions of this Section 5.11 are of the essence of the transaction contemplated by the Loan
Documents and that, but for such provisions, Agent and Lenders would decline to make Loans and issue Letters of Credit. Each Borrower
acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business, and can be expected
to benefit such business.


 




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(b)          Agent
and Lenders may, in their discretion, pursue such rights and remedies as they deem appropriate, including realization upon Collateral
or any Real Estate by judicial foreclosure or non-judicial sale or enforcement, without affecting any rights and remedies under
this Section 5.11. If, in taking any action in connection with the exercise of any rights or remedies, Agent or any Lender
shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any Borrower or other Person,
whether because of any Applicable Laws pertaining to “election of remedies” or otherwise, each Borrower consents to
such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that any Borrower
might otherwise have had. Any election of remedies that results in denial or impairment of the right of Agent or any Lender to
seek a deficiency judgment against any Borrower shall not impair any other Borrower’s obligation to pay the full amount of
the Obligations. Each Borrower waives all rights and defenses arising out of an election of remedies, such as non-judicial foreclosure
with respect to any security for the Obligations, even though that election of remedies destroys such Borrower’s rights of
subrogation against any other Person. Agent may bid all or a portion of the Obligations at any foreclosure or trustee’s sale
or at any private sale, and the amount of such bid need not be paid by Agent but shall be credited against the Obligations. The
amount of the successful bid at any such sale, whether Agent or any other Person is the successful bidder, shall be conclusively
deemed to be the fair market value of the Collateral, and the difference between such bid amount and the remaining balance of the
Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Section 5.11, notwithstanding
that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which Agent
or any Lender might otherwise be entitled but for such bidding at any such sale.


 


5.11.3         Extent
of Liability; Contribution.


 


(a)          Notwithstanding
anything herein to the contrary, each Borrower’s liability under this Section 5.11 shall be limited to the greater
of (i) all amounts for which such Borrower is primarily liable, as described below, and (ii) such Borrower’s Allocable Amount.


 


(b)          If
any Borrower makes a payment under this Section 5.11 of any Obligations (other than amounts for which such Borrower is primarily
liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments previously or concurrently
made by any other Borrower, exceeds the amount that such Borrower would otherwise have paid if each Borrower had paid the aggregate
Obligations satisfied by such Guarantor Payments in the same proportion that such Borrower’s Allocable Amount bore to the
total Allocable Amounts of all Borrowers, then such Borrower shall be entitled to receive contribution and indemnification payments
from, and to be reimbursed by, each other Borrower for the amount of such excess, pro rata based upon their respective Allocable
Amounts in effect immediately prior to such Guarantor Payment. The “Allocable Amount” for any Borrower shall
be the maximum amount that could then be recovered from such Borrower under this Section 5.11 without rendering such payment
voidable under Section 548 of the Bankruptcy Code or under any applicable state fraudulent transfer or conveyance act, or similar
statute or common law.


 


(c)          Nothing
contained in this Section 5.11 shall limit the liability of any Borrower to pay Loans made directly or indirectly to that
Borrower (including Loans advanced to any other Borrower and then re-loaned or otherwise transferred to, or for the benefit of,
such Borrower), LC Obligations relating to Letters of Credit issued to support such Borrower’s business, and all accrued
interest, fees, expenses and other related Obligations with respect thereto, for which such Borrower shall be primarily liable
for all purposes hereunder. Agent and Lenders shall have the right, at any time in their discretion, to condition Loans and Letters
of Credit upon a separate calculation of borrowing availability for each Borrower and to restrict the disbursement and use of such
Loans and Letters of Credit to such Borrower.


 




    	 	-50-	 



     

    

 


(d)          Each
Obligor that is a Qualified ECP when its guaranty of or grant of Lien as security for a Hedge Obligation becomes effective hereby
jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide funds or other support to each Specified
Obligor with respect to such Swap Obligation as may be needed by such Specified Obligor from time to time to honor all of its obligations
under the Loan Documents in respect of such Hedge Obligation (but, in each case, only up to the maximum amount of such liability
that can be hereby incurred without rendering such Qualified ECP's obligations and undertakings under this Section 5.11
voidable under any applicable fraudulent transfer or conveyance act). The obligations and undertakings of each Qualified ECP under
this Section shall remain in full force and effect until Full Payment of all Obligations. Each Obligor intends this Section to
constitute, and this Section shall be deemed to constitute, a guarantee of the obligations of, and a "keepwell, support or
other agreement" for the benefit of, each Obligor for all purposes of the Commodity Exchange Act.


 


5.11.4         Joint
Enterprise. Each Borrower has requested that Agent and Lenders make this credit facility available to Borrowers on a combined
basis, in order to finance Borrowers’ business most efficiently and economically. Borrowers’ business is a mutual and
collective enterprise, and the successful operation of each Borrower is dependent upon the successful performance of the integrated
group. Borrowers believe that consolidation of their credit facility will enhance the borrowing power of each Borrower and ease
administration of the facility, all to their mutual advantage. Borrowers acknowledge that Agent’s and Lenders’ willingness
to extend credit and to administer the Collateral on a combined basis hereunder is done solely as an accommodation to Borrowers
and at Borrowers’ request.


 


5.11.5         Subordination.
Each Borrower hereby subordinates any claims, including any rights at law or in equity to payment, subrogation, reimbursement,
exoneration, contribution, indemnification or set off, that it may have at any time against any other Obligor, howsoever arising,
to the Full Payment of all Obligations.


 


SECTION 6.          CONDITIONS
PRECEDENT


 


6.1           Conditions
Precedent to Initial Loans. In addition to the conditions set forth in Section 6.2, Lenders shall not be required
to fund any requested Loan, issue any Letter of Credit, or otherwise extend credit to Borrowers hereunder, until the date (“Closing
Date”) that each of the following conditions has been satisfied:


 


(a)          Notes
shall have been executed by Borrowers and delivered to each Lender that requests issuance of a Note. Each other Loan Document shall
have been duly executed and delivered to Agent by each of the signatories thereto, and each Obligor shall be in compliance with
all terms thereof.


 


(b)          Agent
shall have received, in proper form for filing or recording, all filings or recordations necessary to perfect its Liens in the
Collateral, as well as UCC and Lien searches and other evidence satisfactory to Agent that such Liens are the only Liens upon the
Collateral, except Permitted Liens, to the extent requested by Agent.


 


(c)          Agent
shall have received all certificates or instruments representing or evidencing all Pledged Interests required by Section 7.4.1
accompanied by all necessary instruments of transfer or assignment, duly executed in blank.


 




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(d)          Agent
shall have received certificates, in form and substance satisfactory to it, from a knowledgeable Senior Officer of Borrower Agent
certifying that, after giving effect to the initial Loans and transactions hereunder, (i) each Borrower, on an individual basis,
is Solvent and the Obligors, taken as a whole, are Solvent; (ii) no Default or Event of Default exists; (iii) the representations
and warranties set forth in Section 9 that are qualified by materiality are true and correct and the representations and
warranties set forth in Section 9 that are not qualified by materiality are true and correct in all material respects; and
(iv) each Obligor has complied with all agreements and conditions to be satisfied by it under the Loan Documents.


 


(e)          Agent
shall have received a certificate of a duly authorized officer of each Obligor, certifying (i) that attached copies of such Obligor’s
Organic Documents (as to each Guarantor, which have modified since, or were not delivered to Agent in connection with, the Existing
Agreement) are true and complete, and in full force and effect, without amendment except as shown; (ii) that an attached copy of
resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full
force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect
to this credit facility; and (iii) to the title, name and signature of each Person authorized to sign the Loan Documents. Agent
may conclusively rely on this certificate until it is otherwise notified by the applicable Obligor in writing.


 


(f)          Agent
shall have received (i) a written opinion of SilvermanAcampora in form and substance satisfactory to Agent and (ii) a written opinion
of any local counsel to Obligors as Agent may reasonably request, in form and substance satisfactory to Agent.


 


(g)          Agent
shall have received copies of the charter documents of each Obligor, certified by the Secretary of State or other appropriate official
of such Obligor’s jurisdiction of organization. Agent shall have received good standing certificates for each Obligor, issued
by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization and each jurisdiction
where such Obligor’s conduct of business or ownership of Property necessitates qualification.


 


(h)          Borrowers
shall have paid all fees and expenses to be paid to Agent and Lenders on the Closing Date.


 


(i)          The
ATSCO Acquisition shall be consummated in accordance with the ATSCO Purchase Agreement without any amendments, modifications, waivers
or consents thereto that are not reasonably acceptable to the Agent.


 


(j)          Agent
shall have received a Compliance Certificate prepared as of June 30, 2014 demonstrating that upon giving effect to the ATSCO Acquisition
and all Loans and Letters of Credit made or issued in connection therewith or on the Closing Date, and the payment by Borrowers
of all fees and expenses incurred in connection therewith on the Closing Date, the Borrowers are in pro forma compliance with the
covenants set forth in Section 10.3.


 


6.2           Conditions
Precedent to All Credit Extensions. Agent, Issuing Bank and Lenders shall not be required to fund any Loans, arrange for
issuance of any Letters of Credit or grant any other accommodation to or for the benefit of Borrowers, unless the following conditions
are satisfied:


 




    	 	-52-	 



     

    

 


(a)          No
Default or Event of Default shall exist at the time of, or result from, such funding, issuance or grant;


 


(b)          The
representations and warranties of each Obligor in the Loan Documents that are qualified by materiality shall be true and correct
on the date of, and upon giving effect to, such funding, issuance or grant, and the representations and warranties of each Obligor
in the Loan Documents that are not qualified by materiality shall be true and correct in all material respects on the date of,
and upon giving effect to, such funding, issuance or grant, except for representations and warranties that expressly relate to
an earlier date, in which case they shall be true and correct (or true and correct in all material respects, as the case may be)
as of such earlier date;


 


(c)          All
conditions precedent in any other Loan Document shall be satisfied;


 


(d)          No
event shall have occurred or circumstance exist that has or could reasonably be expected to have a Material Adverse Effect; and


 


(e)          With
respect to issuance of a Letter of Credit, the LC Conditions shall be satisfied.


 


Each request (or deemed request) by Borrowers
for funding of a Loan, issuance of a Letter of Credit or grant of an accommodation shall constitute a representation by Borrowers
that the foregoing conditions are satisfied on the date of such request and on the date of such funding, issuance or grant. As
an additional condition to any funding, issuance or grant, Agent shall have received such other information, documents, instruments
and agreements as it deems appropriate in connection therewith.


 


SECTION 7.          COLLATERAL


 


7.1           Grant
of Security Interest. To secure the prompt payment and performance of all Obligations, each Obligor hereby grants to Agent,
for the benefit of Secured Parties, a continuing security interest in and Lien upon all Property of such Obligor, whether now owned
or hereafter acquired, and wherever located, including all of the following Property:


 


(a)          all
Accounts;


 


(b)          all
Chattel Paper, including electronic chattel paper;


 


(c)          all
Commercial Tort Claims, including those shown on Schedule 9.1.16;


 


(d)          all
Deposit Accounts;


 


(e)          all
Documents;


 


(f)          all
General Intangibles, including Intellectual Property;


 


(g)          all
Goods, including Inventory, Equipment and fixtures;


 


(h)          all
Instruments;


 


(i)          all
Investment Property;


 


(j)          all
Letter-of-Credit Rights;


 




    	 	-53-	 



     

    

 


(k)          all
Supporting Obligations;


 


(l)          all
cash, Cash Collateral, Cash Equivalents or monies, whether or not in the possession or under the control of Lender, or a bailee
or Affiliate of Lender;


 


(m)          all
accessions to, substitutions for, and all replacements, products, and cash and non-cash proceeds of the foregoing, including proceeds
of and unearned premiums with respect to insurance policies, and claims against any Person for loss, damage or destruction of any
Collateral; and


 


(n)          all
books and records (including customer lists, files, correspondence, tapes, computer programs, print-outs and computer records)
pertaining to the foregoing.


 


Notwithstanding anything
herein to the contrary, no security interest shall be granted to Agent or Secured Parties under this Section 7.1 in any Equity
Interests of P&F as may hereafter be repurchased by P&F with the consent of the Lenders.


 


7.2           Lien
on Deposit Accounts; Cash Collateral.


 


7.2.1           Deposit
Accounts. To further secure the prompt payment and performance of all Obligations, each Obligor hereby grants to Agent, for
the benefit of Secured Parties, a continuing security interest in and Lien upon all amounts credited to any Deposit Account of
such Obligor, including any sums in any blocked or lockbox accounts or in any accounts into which such sums are swept. Each Obligor
hereby authorizes and directs each bank or other depository to deliver to Agent, upon request, all balances in any Deposit Account
maintained by such Obligor, without inquiry into the authority or right of Agent to make such request.


 


7.2.2           Cash
Collateral. Any Cash Collateral may be invested, at Agent’s discretion, in Cash Equivalents, but Agent shall have no
duty to do so, regardless of any agreement or course of dealing with any Obligor, and shall have no responsibility for any investment
or loss. Each Obligor hereby grants to Agent, for the benefit of Secured Parties, a security interest in all Cash Collateral held
from time to time and all proceeds thereof, as security for the Obligations, whether such Cash Collateral is held in a Cash Collateral
Account or elsewhere. Agent may apply Cash Collateral to the payment of any Obligations, in such order as Agent may elect, as they
become due and payable. Each Cash Collateral Account and all Cash Collateral shall be under the sole dominion and control of Agent.
No Obligor or other Person claiming through or on behalf of any Obligor shall have any right to any Cash Collateral, until Full
Payment of all Obligations.


 


7.3           Real
Estate Collateral.


 


7.3.1           Lien
on Real Estate. The Obligations shall also be secured by Mortgages upon all Real Estate owned by Obligors, including the Real
Estate owned as of the Closing Date which is set forth on Schedule 7.3.1.7.3.1
(but excluding, as of the First Amendment Effective Date, the Real Estate located in Tampa, Florida owned on the Closing
Date and set forth on Schedule 7.3.1). The Mortgages shall be duly recorded, at Obligors’ expense, in each
office where such recording is required to constitute a fully perfected Lien on the Real Estate covered thereby. If any Obligor
acquires Real Estate hereafter, Obligors shall, within 30 days, execute, deliver and record a Mortgage sufficient to create a first
priority Lien in favor of Agent on such Real Estate, and shall deliver all Related Real Estate Documents.


 


7.3.2           Collateral
Assignment of Leases. To further secure the prompt payment and performance of all Obligations, each Obligor hereby transfers
and assigns to Agent, for the benefit of Secured Parties, all of such Obligor’s right, title and interest in, to and under
all now or hereafter existing leases of real Property to which such Obligor is a party, whether as lessor or lessee, and all extensions,
renewals, modifications and proceeds thereof.


 




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7.4           Investment
Property and other Equity Interests.


 


7.4.1           Delivery
of Certificates. All certificates or instruments representing or evidencing any Investment Property or other Equity Interests
constituting Collateral hereunder (“Pledged Interests”), including the Pledged Interests as of the Closing Date
which are set forth on Schedule 7.4.1 hereto, shall be delivered to and held by or on behalf of Agent, for the benefit of
Secured Parties, pursuant hereto, shall be in suitable form for further transfer by delivery, and shall be accompanied by all necessary
instruments of transfer or assignment, duly executed in blank. The Pledged Interests consisting of Equity Interests pledged hereunder
have been duly authorized and validly issued and are fully paid and, with respect to Equity Interests in corporations, non-assessable.


 


7.4.2           Issuer
Agreements. Each Obligor that is the issuer of any Pledged Interests hereby (i) acknowledges the security interest and Lien
of Agent in such Collateral granted by the Obligor owning such Pledged Interests and (ii) agrees that, with respect to any such
Pledged Interests, it will comply with the instructions originated by Agent in accordance with this Agreement or the Security Documents
without further consent of any other Obligor.


 


7.4.3           Distributions
on Investment Property and other Equity Interests. In the event that any cash dividend or cash distribution (a “Dividend”)
is permitted to be paid on any Pledged Interests of any Obligor at a time when no Event of Default has occurred and is continuing,
such Dividend may be paid directly to the applicable Obligor or to another Obligor designated by the Borrower Agent. If an Event
of Default has occurred and is continuing, then any such Dividend or payment (other than Upstream Payments) shall be paid directly
to Agent to be applied as set forth in Section 5.7.


 


7.4.4           Voting
Rights with respect to Equity Interests. So long as no Event of Default has occurred and is continuing, Obligors shall be entitled
to exercise any and all voting and other consensual rights pertaining to any of the Pledged Interests or any part thereof. If an
Event of Default shall have occurred and be continuing, all rights of Obligors to exercise the voting and other consensual rights
that it would otherwise be entitled to exercise shall, at Agent’s option upon notice to such Obligors, be suspended, and
all such rights shall, at Agent’s option upon notice to such Obligors, thereupon become vested in Agent for the benefit of
the Secured Parties during the continuation of such Event of Default, and Agent shall, at its option upon notice to such Obligors,
thereupon have the sole right to exercise such voting and other consensual rights and during the continuation of such Event of
Default, Agent shall have the right to act with respect thereto as though it were the outright owner thereof.


 


7.4.5           Securities
Accounts. Each Obligor irrevocably authorizes and directs each securities intermediary or other Person with which any securities
account or similar investment property is maintained, if any, upon written instruction of Agent, to dispose of such Collateral
at the direction of Agent and comply with the instructions originated by Agent without further consent of any Obligor. Agent agrees
with the Obligors that such instruction shall not be given by Agent unless a Default or Event of Default has occurred and is continuing.


 


7.5           Other
Collateral; New Subsidiaries.


 


7.5.1           Commercial
Tort Claims. Borrower Agent shall promptly notify Agent in writing if any Obligor has a Commercial Tort Claim (other than,
as long as no Default or Event of Default exists, a Commercial Tort Claim for less than $100,000), shall promptly amend Schedule
9.1.16 to include such claim, and shall take such actions as Agent deems appropriate to subject such claim to a duly perfected,
first priority Lien in favor of Agent (for the benefit of Secured Parties).


 




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7.5.2           Certificate
of Title Collateral. Borrower Agent shall deliver to Agent, as soon as practicable following a request therefore by Agent,
any and all evidence of ownership of any of the Equipment (including, without limitation, certificates of title and applications
for title).


 


7.5.3           Certain
After-Acquired Collateral. Borrower Agent shall promptly notify Agent in writing if, after the Closing Date, any Obligor obtains
any interest in any Collateral consisting of Deposit Accounts, Chattel Paper, Documents, Instruments, Intellectual Property, Investment
Property or Letter-of-Credit Rights with a value in excess of $10,000 and, upon Agent’s request, shall promptly take such
actions as Agent deems appropriate to effect Agent’s duly perfected, first priority Lien upon such Collateral, including
obtaining any appropriate possession, control agreement or Lien Waiver. If any Collateral is in the possession of a third party,
at Agent’s request, Obligors shall obtain an acknowledgment that such third party holds the Collateral for the benefit of
Agent.


 


7.5.4           New
Subsidiaries. Upon the formation or acquisition of any new direct or indirect Domestic Subsidiary (other than an Immaterial
Subsidiary) by any Obligor, then the Borrower Agent shall, at the Obligors’ expense, within 30 days after such formation
or acquisition (or such later date as the Agent may specify in its sole discretion), (a) cause it to become a Borrower under this
agreement if it is a wholly-owned Domestic Subsidiary of Parent, or, if none of the assets of such subsidiary are to be included
in the Borrowing Base or the Agent otherwise consents (or requests) in writing, cause it to become a Guarantor and guaranty the
Obligations in a manner reasonably satisfactory to Agent, and (b) cause such Domestic Subsidiary to duly execute and deliver to
Agent such joinder agreements, amendments or supplements to the Loan Documents as are reasonably requested by the Agent, (if required
under Section 8.5) control agreements and a legal opinion in form and substance reasonably satisfactory to Agent, to cause
or authorize the filing of appropriate UCC financing statements, and to take any other action as may be necessary to vest in Agent
valid and subsisting Liens on the properties purported to be subject thereto.


 


7.5.5           New
Deposit Accounts and Securities Accounts. Concurrently with or prior to the opening of a Deposit Account, securities account
or commodity account by any Obligor, other than any excluded account described in Section 8.5, such Obligor shall deliver
to Agent a Deposit Account Control Agreement covering such Deposit Account, or other control agreement covering such securities
account or commodity account, in each case, in form and substance reasonably satisfactory to Agent, duly executed by such Obligor,
Agent and the applicable bank, securities intermediary or commodity intermediary, as the case may be.


 


7.6           No
Assumption of Liability. The Lien on Collateral granted hereunder is given as security only and shall not subject Agent
or any Lender to, or in any way modify, any obligation or liability of Obligors relating to any Collateral. In no event shall the
grant of any Lien under any Loan Document secure an Excluded Hedge Obligation of the granting Obligor.


 


7.7           Further
Assurances. Promptly upon request, Obligors shall deliver such instruments, assignments, title certificates, or other documents
or agreements, and shall take such actions, as Agent deems appropriate under Applicable Law to evidence or perfect its Lien on
any Collateral, or otherwise to give effect to the intent of this Agreement. Each Obligor irrevocably authorizes Lender at any
time and from time to time to authenticate and file in any relevant jurisdiction any financing statements (including fixture filings)
and amendments thereto that contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction
for the filing of any financing statement or amendment relating to the Collateral, including, without limitation (i) whether such
Obligor is an organization, the type of organization and any organizational identification number issued to such Obligor, (ii)
indicating the Collateral as “all assets” or “all personal property” of such Obligor, or words to similar
effect, and (iii) filing any financing or continuation statements, amendments or other documents without the signature of such
Obligor where permitted by law. Each Obligor hereby ratifies any action taken by Lender before the Closing Date to effect or perfect
its Lien on any Collateral. All of Agent’s Liens on Collateral (and all evidences of such Liens), whether effected hereunder
or under any other Loan Document, are granted to Agent as agent for the benefit of all Secured Parties


 




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7.8           Foreign
Subsidiary Stock. Notwithstanding Section 7.1, the Collateral shall include only 65% of the voting stock of any
Foreign Subsidiary.


 


SECTION 8.          COLLATERAL
ADMINISTRATION


 


8.1           Borrowing
Base Certificates. By the 20th day of each month, Borrowers shall deliver to Lender a Borrowing Base Certificate prepared
as of the close of business of the previous month; provided, however, that during a
Reporting Trigger Period, Borrowers shall deliver to Agent a Borrowing Base Certificate on a weekly basis, by the third
Business Day of the week, as of the end of the prior week, and at such other times as Agent may request. All calculations of Availability
in any Borrowing Base Certificate shall originally be made by Borrowers and certified by a Senior Officer, provided that Agent
may from time to time review and adjust any such calculation (a) to reflect its reasonable estimate of declines in value of any
Collateral, due to collections received in the Dominion Account or otherwise; (b) to adjust advance rates to reflect changes in
dilution, quality, mix and other factors affecting Collateral; and (c) to the extent the calculation is not made in accordance
with this Agreement or does not accurately reflect the Availability Reserve or the Borrowing Base Reserve.


 


8.2           Administration
of Accounts.


 


8.2.1           Records
and Schedules of Accounts. Each Borrower shall keep accurate and complete records of its Accounts, including all payments and
collections thereon, and shall submit to Agent sales, collection, reconciliation and other reports in form satisfactory to Agent,
on such periodic basis as Agent may request. Each Borrower shall also provide to Agent, on or before the 15th day of each month,
a detailed aged trial balance of all Accounts as of the end of the preceding month, specifying each Account’s Account Debtor
name and address, amount, invoice date and due date, showing any discount, allowance, credit, authorized return or dispute, and
including such proof of delivery, copies of invoices and invoice registers, copies of related documents, repayment histories, status
reports and other information as Agent may reasonably request. If Accounts of any single Account Debtor in an aggregate face amount
of $100,000 or more cease to be Eligible Accounts, Borrowers shall notify Agent of such occurrence promptly (and in any event within
three Business Days) after any Borrower has knowledge thereof.


 


8.2.2           Taxes.
If an Account of any Borrower includes a charge for any Taxes, Agent is authorized, in its discretion, to pay the amount thereof
to the proper taxing authority for the account of such Borrower and to charge Borrowers therefor; provided, however,
that neither Agent nor Lenders shall be liable for any Taxes that may be due from Borrowers or with respect to any Collateral.


 


8.2.3           Account
Verification. Whether or not a Default or Event of Default exists, Agent shall have the right at any time, in the name of Agent,
any designee of Agent or any Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrowers
by mail, telephone or otherwise. Borrowers shall cooperate fully with Agent in an effort to facilitate and promptly conclude any
such verification process.


 




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8.2.4           Maintenance
of Dominion Account. Borrowers shall maintain Dominion Accounts pursuant to lockbox or other arrangements acceptable to Agent.
Borrowers shall obtain an agreement (in form and substance satisfactory to Agent) from each lockbox servicer and Dominion Account
bank, establishing Agent’s control over and Lien in the lockbox or Dominion Account, requiring prompt (and in any event within
two Business Days after receipt) deposit of all remittances received in the lockbox to a Dominion Account, and waiving offset rights
of such servicer or bank, except for customary administrative charges. Agent and Lenders assume no responsibility to Borrowers
for any lockbox arrangement or Dominion Account, including any claim of accord and satisfaction or release with respect to any
Payment Items accepted by any bank.


 


8.2.5           Proceeds
of Collateral. Borrowers shall request in writing and otherwise take all necessary steps to ensure that all payments on Accounts
or otherwise relating to Collateral are made directly to a Dominion Account (or a lockbox relating to a Dominion Account). If any
Borrower or Subsidiary receives cash or Payment Items with respect to any Collateral, it shall hold same in trust for Agent and
promptly (not later than the next Business Day) deposit same into a Dominion Account.


 


8.3           Administration
of Inventory.


 


8.3.1           Records
and Reports of Inventory. Each Borrower shall keep accurate and complete records of its Inventory, including costs and daily
withdrawals and additions, and shall submit to Agent inventory and reconciliation reports in form satisfactory to Agent, on such
periodic basis as Agent may request. Each Borrower shall (a) conduct a physical inventory at least once per calendar year (and
on a more frequent basis if requested by Agent when an Event of Default exists) or (b) periodic cycle counts consistent with historical
practices, and shall provide to Agent a report based on each such inventory and count promptly upon completion thereof, together
with such supporting information as Agent may request. Agent may participate in and observe each physical count.


 


8.3.2           Returns
of Inventory. No Borrower shall return any Inventory to a supplier, vendor or other Person, whether for cash, credit or otherwise,
unless (a) such return is in the Ordinary Course of Business; (b) no Default, Event of Default or Overadvance exists or would result
therefrom; (c) Agent is promptly notified if the aggregate Value of all Inventory returned in any month exceeds $25,000; and (d)
any payment received by a Borrower for a return is promptly remitted to Agent for application to the Obligations.


 


8.3.3           Acquisition,
Sale and Maintenance. No Borrower shall acquire or accept any Inventory on consignment or approval, and shall take all steps
to assure that all Inventory is produced in accordance with Applicable Law, including the FLSA. Other than the customers and locations
listed in Schedule 8.3.3, no Borrower shall sell any Inventory on consignment or approval or any other basis under which
the customer may return or require a Borrower to repurchase such Inventory. Schedule 8.3.3 may be amended or supplemented
from time to time by Borrowers with the consent of Agent. Borrowers shall use, store and maintain all Inventory with reasonable
care and caution, in accordance with applicable standards of any insurance and in conformity with all Applicable Law, and shall
make current rent payments (within applicable grace periods provided for in leases) at all locations where any Collateral is located.


 


8.4           Administration
of Equipment.


 


8.4.1           Records
and Schedules of Equipment. Each Borrower shall keep accurate and complete records of its Equipment, including kind, quality,
quantity, cost, acquisitions and dispositions thereof, and shall submit to Agent, on such periodic basis as Agent may request,
a current schedule thereof, in form satisfactory to Agent. Promptly upon request, Borrowers shall deliver to Agent evidence of
their ownership or interests in any Equipment.


 




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8.4.2           Dispositions
of Equipment. No Borrower shall sell, lease or otherwise dispose of any Equipment, without the prior written consent of Agent,
other than (a) a Permitted Asset Disposition; or (b) replacement of Equipment that is worn, damaged or obsolete with Equipment
of like function and value, if the replacement Equipment is acquired substantially contemporaneously with such disposition and
is free of Liens other than Permitted Liens (other than a Purchase Money Lien with respect to Equipment related to a Capex Loan).


 


8.4.3           Condition
of Equipment. The Equipment is in good operating condition and repair, and all necessary replacements and repairs have been
made so that the value and operating efficiency of the Equipment is preserved at all times, reasonable wear and tear excepted.
Each Borrower shall ensure that the Equipment is mechanically and structurally sound, and capable of performing the functions for
which it was designed, in accordance with manufacturer specifications. No Borrower shall permit any Equipment to become affixed
to real Property unless any landlord or mortgagee delivers a Lien Waiver.


 


8.5           Administration
of Deposit Accounts. Schedule 8.5 sets forth all Deposit Accounts maintained by Borrowers, including all Dominion
Accounts. Each Borrower shall take all actions necessary to establish Agent’s control of each such Deposit Account (other
than (a) an account exclusively used for payroll, payroll taxes or employee benefits, (b) an account containing not more than $10,000
at any time or (c) accounts maintained at Wachovia Bank, National Association and First Niagara Bank, in each case, containing
not more than $25,000 at any time), including, without limitation, the execution and delivery of a Deposit Account Control Agreement
for each such Deposit Account. Each Borrower shall be the sole account holder of each Deposit Account and shall not allow any other
Person (other than Agent) to have control over a Deposit Account or any Property deposited therein. Each Borrower shall promptly
notify Agent of any opening or closing of a Deposit Account and, with the consent of Agent, will amend Schedule 8.5 to reflect
same.


 


8.6           General
Provisions.


 


8.6.1           Location
of Collateral. All tangible items of Collateral, other than Inventory in transit, shall at all times be kept by Borrowers at
the business locations set forth in Schedule 8.6.1, except that Borrowers may (a) make sales or other dispositions of Collateral
in accordance with Section 10.2.6; and (b) move Collateral to another location in the United States, upon 30 Business Days
prior written notice to Agent.


 


8.6.2           Insurance
of Collateral; Condemnation Proceeds.


 


(a)          Each
Borrower shall maintain insurance with respect to the Collateral, covering casualty, hazard, theft, malicious mischief, flood and
other risks, in amounts, with endorsements and with insurers (with a Best’s Financial Strength Rating of at least A- VII,
unless otherwise approved by Agent) reasonably satisfactory to Agent. All proceeds under each policy shall be payable to Agent.
From time to time upon request, Borrowers shall deliver to Agent the originals or certified copies of its insurance policies and
updated flood plain searches. Unless Agent shall agree otherwise, each policy shall include reasonably satisfactory endorsements
(i) showing Agent as loss payee; (ii) requiring 30 days prior written notice to Agent in the event of cancellation of the policy
for any reason whatsoever; and (iii) specifying that the interest of Agent shall not be impaired or invalidated by any act or neglect
of any Borrower or the owner of the Property, nor by the occupation of the premises for purposes more hazardous than are permitted
by the policy. If any Borrower fails to provide and pay for any insurance, Agent may, at its option, but shall not be required
to, procure the insurance and charge Borrowers therefor. Each Borrower agrees to deliver to Agent, promptly as rendered, copies
of all reports made to insurance companies. While no Event of Default exists, Borrowers may settle, adjust or compromise any insurance
claim, as long as the proceeds are delivered to Agent (and with respect to Real Estate and Equipment related to a Capex Loan, the
terms and amount are reasonably satisfactory to Agent). If an Event of Default exists, only Agent shall be authorized to settle,
adjust and compromise such claims.


 




    	 	-59-	 



     

    

 


(b)          Any
proceeds of insurance (other than proceeds from workers’ compensation, D&O, employee practice insurance or life insurance
as to which an Obligor is not the beneficiary) and any awards arising from condemnation of any Collateral shall be paid to Agent.
Subject to Section 8.6.2(c), any such proceeds or awards that relate to (i) Inventory or Equipment other than Equipment
related to a Capex Loan shall be applied to payment of the Revolver Loans, and then to any other Obligations outstanding, other
than Term Loans and Capex Loans, (ii) Real Estate shall be applied first to Term Loans, then to
Capex Loans or Revolver Loans (in Agent’s reasonable discretion) and then to other Obligations, (iii) Equipment
related to a Capex Loan shall be applied to payment of such Capex Loan then to other Capex Loans or Revolver Loans (in Agent’s
reasonable discretion) and then to other Obligations, other than Term Loans and (iv) life insurance shall be applied to payment
of the Revolver Loans, and then to any other Obligations outstanding, other than Term Loans and Capex Loans.


 


(c)          Any
insurance proceeds or condemnation awards relating to any loss or destruction of Real Estate or Equipment may be used by the Borrowers
(1) with the consent of the Agent or (2) if requested by Borrowers in writing within 90 days after Agent’s receipt of such
proceeds, to repair or replace such Real Estate or Equipment (and until so used, the proceeds shall be held by Agent as Cash Collateral);
provided that, in the case of this clause (2), as long as (i) no Default or Event of Default exists; (ii) such repair or replacement
is promptly undertaken and concluded, in accordance with plans or proposed applications reasonably satisfactory to Agent; (iii)
replacement buildings are constructed on the sites of the original casualties or other locations in compliance with this Agreement
and are of comparable size, quality and utility to the destroyed buildings or replacement Equipment is of comparable type, quality
and utility to and of equal or greater value than the damaged Equipment; (iv) the repaired or replaced Property is free of Liens,
other than Permitted Liens that are not Purchase Money Liens; (v) Borrowers comply with disbursement procedures for such repair
or replacement as Agent may reasonably require; and (vi) the aggregate amount of such proceeds or awards from any single casualty
or condemnation does not exceed $500,000 in the case of Equipment and $2,000,000 in the case of Real Estate; provided that, any
proceeds of Equipment related to a Capex Loan may not be so used unless at the time of proposed use of such proceeds, all of the
applicable conditions for making a Capex Loan would be met (other than the limitation set forth in Section 2.2B.1(d), (e)
or (f) or elsewhere in this Agreement, but solely with respect to this clause (c)).


 


8.6.3           Protection
of Collateral. All expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping any Collateral,
all Taxes payable with respect to any Collateral (including any sale thereof), and all other payments required to be made by Agent
to any Person to realize upon any Collateral, shall be borne and paid by Borrowers. Agent shall not be liable or responsible in
any way for the safekeeping of any Collateral, for any loss or damage thereto (except for reasonable care in its custody while
Collateral is in Agent’s actual possession), for any diminution in the value thereof, or for any act or default of any warehouseman,
carrier, forwarding agency or other Person whatsoever, but the same shall be at Borrowers’ sole risk.


 


8.6.4           Defense
of Title to Collateral. Each Borrower shall at all times defend its title to Collateral and Agent’s Liens therein against
all Persons, claims and demands whatsoever, except Permitted Liens.


 




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8.7           Power
of Attorney. Each Obligor hereby irrevocably constitutes and appoints Agent (and all Persons designated by Agent) as such
Obligor’s true and lawful attorney (and agent-in-fact) for the purposes provided in this Section. Agent, or Agent’s
designee, may, without notice and in either its or a Obligor’s name, but at the cost and expense of Obligors:


 


(a)          Endorse
a Obligor’s name on any Payment Item (including Chattel Paper and Instruments) or other proceeds of Collateral (including
proceeds of insurance) that come into Agent’s possession or control; and


 


(b)          During
an Event of Default, (i) notify any Account Debtors of the assignment of their Accounts, demand and enforce payment of Accounts
by legal proceedings or otherwise, and generally exercise any rights and remedies with respect to Accounts; (ii) settle, adjust,
modify, compromise, discharge or release any Accounts or other Collateral, or any legal proceedings brought to collect Accounts
or Collateral; (iii) sell or assign any Accounts and other Collateral upon such terms, for such amounts and at such times as Agent
deems advisable; (iv) collect, liquidate and receive balances in Deposit Accounts or investment accounts, and take control, in
any manner, of proceeds of Collateral; (v) prepare, file and sign a Obligor’s name to a proof of claim or other document
in a bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction of Lien or similar document; (vi) receive, open
and dispose of mail addressed to a Obligor, and notify postal authorities to deliver any such mail to an address designated by
Agent; (vii) endorse any Chattel Paper, Document, Instrument, bill of lading, or other document or agreement relating to any Accounts,
Inventory or other Collateral; (viii) use a Obligor’s stationery and sign its name to verifications of Accounts and notices
to Account Debtors; (ix) use information contained in any data processing, electronic or information systems relating to Collateral;
(x) make and adjust claims under insurance policies; (xi) take any action as may be necessary or appropriate to obtain payment
under any letter of credit, banker’s acceptance or other instrument for which a Obligor is a beneficiary; and (xii) take
all other actions as Agent deems appropriate to fulfill any Obligor’s obligations under the Loan Documents.


 


SECTION 9.          REPRESENTATIONS
AND WARRANTIES


 


9.1           General
Representations and Warranties. To induce Agent and Lenders to enter into this Agreement and to make available the Commitments,
Loans and Letters of Credit, each Obligor represents and warrants that:


 


9.1.1           Organization
and Qualification. Each Obligor and Subsidiary is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Each Obligor and Subsidiary is duly qualified, authorized to do business and in good standing
as a foreign corporation in each jurisdiction where failure to be so qualified could reasonably be expected to have a Material
Adverse Effect.


 


9.1.2           Power
and Authority. Each Obligor is duly authorized to execute, deliver and perform the Loan Documents delivered by it or to which
it is a party. The execution, delivery and performance of the Loan Documents have been duly authorized by all necessary action,
and do not (a) require any consent or approval of any holders of Equity Interests of any Obligor, other than those already obtained;
(b) contravene the Organic Documents of any Obligor; (c) violate or cause a default under any Applicable Law or Material Contract;
or (d) result in or require the imposition of any Lien (other than Permitted Liens) on any Property of any Obligor.


 


9.1.3           Enforceability.
Each Loan Document is a legal, valid and binding obligation of each Obligor party thereto, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally.


 




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9.1.4           Capital
Structure. Schedule 9.1.4 shows, for each Obligor and Subsidiary, its name, its jurisdiction of organization, its authorized
and issued Equity Interests, the holders of its Equity Interests, and all agreements binding on such holders with respect to their
Equity Interests. Except as disclosed on Schedule 9.1.4, in the five years preceding the Closing Date, no Obligor or Subsidiary
has acquired any substantial assets from any other Person nor been the surviving entity in a merger or combination. Each Obligor
has good title to its Equity Interests in its Subsidiaries, subject only to Agent’s Lien, and all such Equity Interests are
duly issued, fully paid and non-assessable. There are no outstanding purchase options, warrants, subscription rights, agreements
to issue or sell, convertible interests, phantom rights or powers of attorney relating to Equity Interests of any Obligor or Subsidiary.


 


9.1.5           Title
to Properties; Priority of Liens. Each Obligor and Subsidiary has good and marketable title to (or valid leasehold interests
in) all of its Real Estate, and good title to all of its personal Property, including all Property reflected in any financial statements
delivered to Agent or Lenders, in each case free of Liens except Permitted Liens. Each Obligor and Subsidiary has paid and discharged
all lawful claims that, if unpaid, could become a Lien on its Properties, other than Permitted Liens. All Liens of Agent in the
Collateral are duly perfected, first priority Liens, subject only to Permitted Liens that are expressly allowed to have priority
over Agent’s Liens.


 


9.1.6           Accounts.
Agent may rely, in determining which Accounts are Eligible Accounts, on all statements and representations made by Borrowers with
respect thereto. Borrowers warrant, with respect to each Account at the time it is shown as an Eligible Account in a Borrowing
Base Certificate, that:


 


(a)          it
is genuine and in all respects what it purports to be, and is not evidenced by a judgment;


 


(b)          it
arises out of a completed, bona fide sale and delivery of goods in the Ordinary Course of Business, and substantially in
accordance with any purchase order, contract or other document relating thereto;


 


(c)          it
is for a sum certain, maturing as stated in the invoice covering such sale, a copy of which has been furnished or is available
to Agent on request;


 


(d)          it
is not subject to any offset, Lien (other than Agent’s Lien), deduction, defense, dispute, counterclaim or other adverse
condition except as arising in the Ordinary Course of Business and disclosed to Agent; and it is absolutely owing by the Account
Debtor, without contingency in any respect;


 


(e)          no
purchase order, agreement, document or Applicable Law restricts assignment of the Account to Agent (regardless of whether, under
the UCC, the restriction is ineffective), and the applicable Borrower is the sole payee or remittance party shown on the invoice;


 


(f)          no
extension, compromise, settlement, modification, credit, deduction or return has been authorized with respect to the Account, except
discounts or allowances granted in the Ordinary Course of Business for prompt payment that are reflected on the face of the invoice
related thereto and in the written reports submitted to Agent hereunder; and


 




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(g)          to
the best of Borrowers’ knowledge, except as reflected on the written reports submitted to Agent hereunder, (i) there are
no facts or circumstances that are reasonably likely to impair the enforceability or collectability of such Account; (ii) the Account
Debtor had the capacity to contract when the Account arose, continues to meet the applicable Borrower’s customary credit
standards, is Solvent, is not contemplating or subject to an Insolvency Proceeding, and has not failed, or suspended or ceased
doing business; and (iii) there are no proceedings or actions threatened or pending against any Account Debtor that could reasonably
be expected to have a material adverse effect on the Account Debtor’s financial condition.


 


9.1.7           Financial
Statements. The consolidated and consolidating balance sheets, and related statements of income, cash flow and shareholder’s
equity, of Borrowers and Subsidiaries that have been and are hereafter delivered to Agent and Lenders, are prepared in accordance
with GAAP, and fairly present the financial positions and results of operations of Borrowers and Subsidiaries at the dates and
for the periods indicated. All projections delivered from time to time to Agent and Lenders have been prepared in good faith, based
on reasonable assumptions in light of the circumstances at such time. Since December 31, 2013,2014,
there has been no change in the condition, financial or otherwise, of any Borrower or Subsidiary that could reasonably be expected
to have a Material Adverse Effect. No financial statement delivered to Agent or Lenders at any time contains any untrue statement
of a material fact, nor fails to disclose any material fact necessary to make such statement not materially misleading. Each Borrower
and Subsidiary is Solvent.


 


9.1.8           Surety
Obligations. No Borrower or Subsidiary is obligated as surety or indemnitor under any bond or other contract that assures payment
or performance of any obligation of any Person, except as permitted hereunder.


 


9.1.9           Taxes.
Each Borrower and Subsidiary has filed all federal, state and local tax returns and other reports that it is required by law to
file, and has paid, or made provision for the payment of, all Taxes upon it, its income and its Properties that are due and payable,
except to the extent being Properly Contested. The provision for Taxes on the books of each Borrower and Subsidiary is adequate
for all years not closed by applicable statutes, and for its current Fiscal Year.


 


9.1.10         Brokers.
There are no brokerage commissions, finder’s fees or investment banking fees payable in connection with any transactions
contemplated by the Loan Documents.


 


9.1.11         Intellectual
Property. Except as set forth on Schedule 9.1.11, each Borrower and Subsidiary owns or has the lawful right to use all Intellectual
Property necessary for the conduct of its business, without conflict with any rights of others. There is no pending or, to any
Borrower’s knowledge, threatened Intellectual Property Claim with respect to any Borrower, any Subsidiary or any of their
Property (including any Intellectual Property). Except as disclosed on Schedule 9.1.11, no Borrower or Subsidiary pays or
owes any Royalty or other compensation to any Person with respect to any Intellectual Property. All Intellectual Property owned,
used or licensed by, or otherwise subject to any interests of, any Borrower or Subsidiary is shown on Schedule 9.1.11.


 


9.1.12         Governmental
Approvals. Each Borrower and Subsidiary has, is in compliance in all material respects with, and is in good standing with respect
to, all Governmental Approvals necessary to conduct its business and to own, lease and operate its Properties. All necessary import,
export or other licenses, permits or certificates for the import or handling of any goods or other Collateral have been procured
and are in effect, and Borrowers and Subsidiaries have complied with all foreign and domestic laws with respect to the shipment
and importation of any goods or Collateral, except where noncompliance could not reasonably be expected to have a Material Adverse
Effect.


 




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9.1.13         Compliance
with Laws. Each Borrower and Subsidiary has duly complied, and its Properties and business operations are in compliance, in
all material respects with all Applicable Law, except where noncompliance could not reasonably be expected to have a Material Adverse
Effect. There have been no citations, notices or orders of material noncompliance issued to any Borrower or Subsidiary under any
Applicable Law. No Inventory has been produced in violation of the FLSA.


 


9.1.14         Compliance
with Environmental Laws. Except as disclosed on Schedule 9.1.14, no Borrower’s or Subsidiary’s past or present
operations, Real Estate or other Properties are subject to any federal, state or local investigation to determine whether any remedial
action is needed to address any environmental pollution, hazardous material or environmental clean-up that could reasonably be
expected to have a Material Adverse Effect or to exceed $50,000. No Borrower or Subsidiary has received any Environmental Notice.
No Borrower or Subsidiary has any contingent liability with respect to any Environmental Release, environmental pollution or hazardous
material on any Real Estate now or previously owned, leased or operated by it that could reasonably be expected to have a Material
Adverse Effect or to exceed $50,000. The representations and warranties contained in the Environmental Agreement are true and correct
on the Closing Date.


 


9.1.15         Burdensome
Contracts. No Borrower or Subsidiary is a party or subject to any contract, agreement or charter restriction that could reasonably
be expected to have a Material Adverse Effect. No Obligor or Subsidiary is party or subject to any Restrictive Agreement, except
as shown on Schedule 9.1.15. No such Restrictive Agreement conditions, restricts or prohibits the execution, delivery or
performance of any Loan Document, the incurrence or repayment of any Obligations or the granting of any Liens on any assets, by
an Obligor.


 


9.1.16         Litigation.
Except as shown on Schedule 9.1.16, there are no proceedings or investigations pending or, to any Borrower’s knowledge,
threatened against any Borrower or Subsidiary, or any of their businesses, operations, Properties, prospects or conditions, that
(a) relate to any Loan Documents or transactions contemplated thereby; or (b) could reasonably be expected to have a Material Adverse
Effect if determined adversely to any Borrower or Subsidiary. Except as shown on such Schedule, no Obligor has a Commercial Tort
Claim (other than, as long as no Default or Event of Default exists, a Commercial Tort Claim for less than $100,000). No Borrower
or Subsidiary is in default with respect to any order, injunction or judgment of any Governmental Authority.


 


9.1.17         No
Defaults. No event or circumstance has occurred or exists that constitutes a Default or Event of Default. No Borrower or Subsidiary
is in default, and no event or circumstance has occurred or exists that with the passage of time or giving of notice would constitute
a default, under any Material Contract to the best of its knowledge or in the payment of any Borrowed Money. There is no basis
upon which any party (other than a Borrower or Subsidiary) could terminate a Material Contract prior to its scheduled termination
date.


 


9.1.18         ERISA.
Except as disclosed on Schedule 9.1.18:


 


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


 




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


 


(iii)        (i)
No ERISA Event has occurred, and no Obligor or any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably
be expected to constitute or result in an ERISA Event with respect to any Pension Plan; (ii) each Obligor and each ERISA Affiliate
has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, no waiver of the minimum funding
standards under the Pension Funding Rules has been applied for or obtained; (iii) as of the most recent valuation date for any
Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higher and no Obligor
or any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment
percentage for any such plan to drop below 60% as of the most recent valuation date; (iv) no Obligor or any ERISA Affiliate has
incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become
due that are unpaid; (v) no Obligor or any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or
Section 4212(c) of ERISA; and (vi) no Pension Plan has been terminated by the plan administrator thereof nor by the PBGC, and no
event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under
Title IV of ERISA to terminate any Pension Plan.


 


(iv)        With
respect to any Foreign Plan, (i) all employer and employee contributions required by law or by the terms of the Foreign Plan have
been made, or, if applicable, accrued, in accordance with normal accounting practices; (ii) the fair market value of the assets
of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance, or the book reserve established
for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations
with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations
most recently used to account for such obligations in accordance with applicable generally accepted accounting principles; and
(iii) it has been registered as required and has been maintained in good standing with applicable regulatory authorities.


 


(v)         No
Obligor or any ERISA Affiliate maintains or contributes to, or has any unsatisfied obligation to contribute to, or liability under,
any active or terminated Pension Plan other than those listed on Schedule 9.1.18 hereto.


 


9.1.19    Trade
Relations. There exists no actual or threatened termination, limitation or modification of any business relationship between
any Borrower or Subsidiary and any customer or supplier, or any group of customers or suppliers, that individually or in the aggregate
would cause a Material Adverse Effect. There exists no condition or circumstance that could reasonably be expected to impair the
ability of any Borrower or Subsidiary to conduct its business at any time hereafter in substantially the same manner as conducted
on the Closing Date.


 


9.1.20    Labor
Relations. Except as described on Schedule 9.1.20, no Borrower or Subsidiary is party to or bound by any collective
bargaining agreement, management agreement or consulting agreement. There are no material grievances, disputes or controversies
with any union or other organization of any Borrower’s or Subsidiary’s employees, or, to any Borrower’s knowledge,
any asserted or threatened strikes, work stoppages or demands for collective bargaining that could reasonably be expected to have
a Material Adverse Effect.


 




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9.1.21    Payable
Practices. Except in the Ordinary Course of Business, no Borrower or Subsidiary has made any material change in its historical
accounts payable practices from those in effect on the Closing Date.


 


9.1.22    Not
a Regulated Entity. No Obligor is (a) an “investment company” or a “person directly or indirectly controlled
by or acting on behalf of an investment company” within the meaning of the Investment Company Act of 1940; or (b) subject
to regulation under the Federal Power Act, the Interstate Commerce Act, any public utilities code or any other Applicable Law regarding
its authority to incur Debt.


 


9.1.23    Margin
Stock. No Borrower or Subsidiary is engaged, principally or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No Loan proceeds or Letters of Credit will be used by Borrowers
to purchase or carry, or to reduce or refinance any Debt incurred to purchase or carry, any Margin Stock or for any related purpose
governed by Regulations T, U or X of the Board of Governors.


 


9.1.24    OFAC.
No Borrower, Subsidiary or, to the knowledge of any Borrower or Subsidiary, any director, officer, employee, agent,
affiliate or representative thereof, is an individual or entity currently the subject of any Sanctions. No Borrower or Subsidiary
is located, organized or resident in a Designated Jurisdiction.


 


9.2           Complete
Disclosure. No Loan Document contains any untrue statement of a material fact, nor fails to disclose any material fact
necessary to make the statements contained therein not materially misleading. There is no fact or circumstance that any Obligor
has failed to disclose to Agent in writing that could reasonably be expected to have a Material Adverse Effect.


 


SECTION 10.       COVENANTS
AND CONTINUING AGREEMENTS


 


10.1         Affirmative
Covenants. As long as any Commitments or Obligations are outstanding, each Obligor shall, and shall cause each Subsidiary
to:


 


10.1.1   Inspections;
Appraisals.


 


(a)          Permit
Agent, or its representatives or designees, from time to time, subject (except when a Default or Event of Default exists) to reasonable
notice and normal business hours, to visit and inspect the Properties of any Obligor or Subsidiary, inspect, audit and make extracts
from any Obligor’s or Subsidiary’s books and records, and discuss with its officers, employees, agents, advisors and
independent accountants such Obligor’s or Subsidiary’s business, financial condition, assets, prospects and results
of operations. Lenders may participate in any such visit or inspection, at their own expense. Neither Agent nor any Lender shall
have any duty to any Obligor to make any inspection, nor to share any results of any inspection, appraisal or report with any Obligor.
Obligors acknowledge that all inspections, appraisals and reports are prepared by Agent and Lenders for their purposes, and Obligors
shall not be entitled to rely upon them.


 




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(b)          Reimburse
Agent for all charges, costs and expenses of Agent in connection with (i) examinations of any Obligor’s books and records
or any other financial or Collateral matters as Agent deems appropriate, up to three times per Loan Year; and (ii) appraisals of
Inventory and Equipment up to one time per Loan Year; provided, however, that if an examination or appraisal is initiated
during a Default or Event of Default, all charges, costs and expenses therefor shall be reimbursed by Borrowers without regard
to such limits. Subject to and without limiting the foregoing, Obligors specifically agree to pay Agent’s then standard charges
for each day that an employee of Agent or its Affiliates is engaged in any examination activities, and shall pay the standard charges
of Agent’s internal appraisal group. (The current standard per diem charge for an employee of Agent or the third party currently
utilized by Agent is $850 per day or part thereof.) This Section shall not be construed to limit Agent’s right to conduct
examinations or to obtain appraisals at any time in its discretion, nor to use third parties for such purposes.


 


10.1.2    Financial
and Other Information. Keep adequate records and books of account with respect to its business activities, in which proper
entries are made in accordance with GAAP reflecting all financial transactions; and furnish to Agent and Lenders:


 


(a)          
as soon as available, and in any event within 120 days after the close of each Fiscal Year, balance sheets as of the end of such
Fiscal Year and the related statements of income, cash flow and shareholders’ equity for such Fiscal Year, on consolidated
and consolidating bases for (i) Borrowers and Subsidiaries, which consolidated statements shall be audited and certified (without
qualification) by CohnReznick LLP or another firm of independent certified public accountants of recognized standing selected by
Borrowers and acceptable to Agent, and shall set forth in comparative form corresponding figures for the preceding Fiscal Year
and other information acceptable to Agent, and a copy of the annual report on Form 10-K if any Obligor is a reporting entity and
(ii) of Universal which consolidated statements shall be audited and certified (without qualification) by Smith & Williamson
LLP or another firm of chartered accountants of recognized standing selected by Borrowers and acceptable to Agent, and shall set
forth in comparative form corresponding figures for the preceding Fiscal Year and other information acceptable to Agent;


 


(b)          as
soon as available, and in any event within 30 days after the end of each month (but within 60 days after the last month in a Fiscal
Quarter and within 90 days after the last month in a Fiscal Year), unaudited balance sheets as of the end of such month and the
related statements of income and cash flow for such month and for the portion of the Fiscal Year then elapsed, (i) on consolidated
and consolidating bases for Borrowers and Subsidiaries (which consolidating statements shall be prepared by Borrowers), setting
forth in comparative form corresponding figures for the preceding Fiscal Year and certified by the chief financial officer of Borrower
Agent as prepared in accordance with GAAP and fairly presenting the financial position and results of operations for such month
and period, subject to normal year-end adjustments and the absence of footnotes, and a copy of the quarterly report on Form 10-Q
if any Obligor is a reporting entity; and (ii) on consolidated and consolidating bases for Universal, setting forth in comparative
form corresponding figures for the preceding Fiscal Year and certified by the chief financial officer of Borrower Agent as prepared
in accordance with GAAP and fairly presenting the financial position and results of operations for such month and period, subject
to normal year-end adjustments and the absence of footnotes;


 


(c)          concurrently
with delivery of financial statements under clauses (a) and (b) above
[(in the case of clause (b) when no Reporting Trigger Period is in effect, only for the last month in each Fiscal Quarter],
or more frequently if requested by Agent while a Default or Event of Default exists, a Compliance Certificate executed by the chief
financial officer of Borrower Agent;


 


(d)          concurrently
with delivery of financial statements under clause (a) above, copies of all management letters and other material reports submitted
to Borrowers by their accountants in connection with such financial statements;


 




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(e)          not
later than 60 days prior to the end of each Fiscal Year, projections of Borrowers’ consolidated balance sheets, results of
operations, cash flow and Availability for the next three Fiscal Years of Borrowers, in which the first Fiscal Year shall be on
a monthly basis and the next two Fiscal Years shall be on an annual basis;


 


(f)          within
20 days after the end of each month, each Obligor shall provide Agent with (i) a detailed trade payable aging, as of the end of
the prior month and at Agent’s request, a listing of each such Obligor’s trade payables, specifying the trade creditor
and balance due, all in form reasonably satisfactory to Agent, and (ii) a detailed listing of Inventory by location, including
details of any inventory in-transit to such Obligor, as of the end of the prior month, all in form reasonably satisfactory to Agent;


 


(g)          promptly
after the sending or filing thereof, copies of any proxy statements, financial statements or reports that any Obligor has made
generally available to its shareholders; copies of any regular, periodic and special reports or registration statements or prospectuses
that any Obligor files with the Securities and Exchange Commission or any other Governmental Authority, or any securities exchange;
and copies of any press releases or other statements made available by an Obligor to the public concerning material changes to
or developments in the business of such Obligor;


 


(h)          promptly
after the sending or filing thereof, copies of any annual report to be filed in connection with each Plan or Foreign Plan;


 


(i)          such
other reports and information (financial or otherwise) as Agent may request from time to time in connection with any Collateral
or any Borrower’s, Subsidiary’s or other Obligor’s financial condition or business; and


 


10.1.3   Notices.
Notify Agent and Lenders in writing, promptly after a Borrower’s obtaining knowledge thereof, of any of the following that
affects an Obligor: (a) the threat or commencement of any proceeding or investigation, whether or not covered by insurance, if
an adverse determination could have a Material Adverse Effect; (b) any pending or threatened labor dispute, strike or walkout,
or the expiration of any material labor contract; (c) any default under or termination of the Sears Supply Agreement or other Material
Contract; (d) the existence of any Default or Event of Default; (e) any judgment in an amount exceeding $250,000 not covered by
insurance; (f) the assertion of any Intellectual Property Claim, if an adverse resolution could have a Material Adverse Effect;
(g) any violation or asserted violation of any Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an adverse
resolution could have a Material Adverse Effect; (h) any Environmental Release by an Obligor or on any Property owned, leased or
occupied by an Obligor; or receipt of any Environmental Notice; (i) the occurrence of any ERISA Event; (j) the discharge of or
any withdrawal or resignation by Borrowers’ independent accountants; (k) any opening of a new office or place of business,
at least 30 days prior to such opening; or (l) notices of any claims or actions against any Obligor in excess of $25,000 relating
to WMC; and after the occurrence of any of the foregoing, provide status updates and copies of documents as reasonably requested
by Agent.


 


10.1.4    Landlord
and Storage Agreements. Upon request, provide Agent with copies of all existing agreements, and promptly after execution thereof
provide Agent with copies of all future agreements, between an Obligor and any landlord, warehouseman, processor, shipper, bailee
or other Person that owns any premises at which any Collateral may be kept or that otherwise may possess or handle any Collateral.


 




    	 	-68-	 



     

    

 


10.1.5    Compliance
with Laws. Comply with all Applicable Laws, including ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws
regarding collection and payment of Taxes, and maintain all Governmental Approvals necessary to the ownership of its Properties
or conduct of its business, unless failure to comply (other than failure to comply with Anti-Terrorism Laws) or maintain could
not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, if any Environmental
Release occurs at or on any Properties of any Borrower or Subsidiary, it shall act promptly and diligently to investigate and report
to Agent and all appropriate Governmental Authorities the extent of, and to make appropriate remedial action to eliminate, such
Environmental Release, whether or not directed to do so by any Governmental Authority.


 


10.1.6    Taxes.
Pay and discharge all Taxes prior to the date on which they become delinquent or penalties attach, unless such Taxes are being
Properly Contested.


 


10.1.7    Insurance.
In addition to the insurance required hereunder with respect to Collateral, maintain insurance with insurers (with a Best Rating
of at least A7, unless otherwise approved by Agent) satisfactory to Agent, (a) with respect to the Properties and business of Borrowers
and Subsidiaries of such type (including product liability, workers’ compensation, larceny, embezzlement, or other criminal
misappropriation insurance), in such amounts, and with such coverages and deductibles as are customary for companies similarly
situated; and (b) business interruption insurance in an amount not less than $2,000,000, with deductibles and subject to an Insurance
Assignment satisfactory to Agent.


 


10.1.8    Licenses.
Keep each License affecting any Collateral (including the manufacture, distribution or disposition of Inventory) or any other material
Property of Borrowers and Subsidiaries in full force and effect; promptly notify Agent of any proposed modification to any such
License, or entry into any new License, in each case at least 30 days prior to its effective date; pay all Royalties when due;
and notify Agent of any default or breach asserted by any Person to have occurred under any License.


 


10.1.9    Future
Subsidiaries. Promptly notify Agent upon any Person becoming a Subsidiary and, if such Person is not a Foreign Subsidiary promptly
(but within 30 days or such later date as is agreed by the Agent) cause it to be joined to this Agreement, at the option of the
Agent, as a Borrower or a Guarantor of the Obligations in a manner satisfactory to Agent, and to execute and deliver such documents,
instruments and agreements and to take such other actions as Agent shall require to evidence and perfect a Lien in favor of Agent
(for the benefit of Secured Parties) on all assets of such Person, including delivery of such legal opinions, in form and substance
satisfactory to Agent, as Agent shall deem appropriate. If such a Person is a Foreign Subsidiary, upon request of the Agent, promptly
(but within 30 days or such later date as is agreed by the Agent) deliver 65% of the Equity Interests of such Foreign Subsidiary
to the Agent, along with such documents (including a pledge agreement and stock powers executed in blank) reasonably requested
by Agent to obtain and perfect a Lien on such Equity Interests for the benefit of Agent and the Secured Parties.


 


10.1.10  Depository
Bank. Other than Foreign Subsidiaries, maintain Capital One as its principal depository bank, including for the maintenance
of operating, collection, disbursement and other deposit accounts and Cash Management Services.


 


10.2         Negative
Covenants. As long as any Commitments or Obligations are outstanding, each Obligor shall not, and shall cause each Subsidiary
not to:


 


10.2.1    Permitted
Debt. Create, incur, guarantee or suffer to exist any Debt, except:


 


(a)          the
Obligations;


 




    	 	-69-	 



     

    

 


(b)          Subordinated
Debt;


 


(c)          Permitted
Purchase Money Debt;


 


(d)          Borrowed
Money (other than the Obligations, Subordinated Debt and Permitted Purchase Money Debt), but only to the extent outstanding on
the Closing Date and not satisfied with proceeds of the initial Loans;


 


(e)          Bank
Product Debt;


 


(f)           Debt
that is in existence when a Person becomes a Subsidiary or that is secured by an asset when acquired by a Borrower or Subsidiary,
as long as such Debt was not incurred in contemplation of such Person becoming a Subsidiary or such acquisition, and does not exceed
$500,000 in the aggregate at any time;


 


(g)          Permitted
Contingent Obligations;


 


(h)          Refinancing
Debt as long as each Refinancing Condition is satisfied;


 


(i)            Debt
that is not included in any of the preceding clauses of this Section, is not secured by a Lien and does not exceed $250,000 in
the aggregate at any time; and


 


(j)            Debt
of Universal with respect to the Overdraft Facility not to exceed $300,000 at any time outstanding.


 


10.2.2   Permitted
Liens. Create or suffer to exist any Lien upon any of its Property, except the following (collectively, “Permitted
Liens”):


 


(a)          Liens
in favor of Agent;


 


(b)          Purchase
Money Liens securing Permitted Purchase Money Debt;


 


(c)          Liens
for Taxes not yet due or being Properly Contested;


 


(d)          non-consenual,
possessory or statutory Liens (other than Liens for Taxes or imposed under ERISA) arising in the Ordinary Course of Business, but
only if (i) payment of the obligations secured thereby is not yet due or is being Properly Contested, and (ii) such Liens do not
materially impair the value or use of the Property or materially impair operation of the business of any Borrower or Subsidiary;


 


(e)          Liens
incurred or deposits made in the Ordinary Course of Business to secure the performance of tenders, bids, leases, contracts (except
those relating to Borrowed Money), statutory obligations and other similar obligations, or arising as a result of progress payments
under government contracts, as long as such Liens are at all times junior to Agent’s Liens;


 


(f)          Liens
arising in the Ordinary Course of Business that are subject to Lien Waivers;


 


(g)          Liens
arising by virtue of a judgment or judicial order against any Borrower or Subsidiary, or any Property of a Borrower or Subsidiary,
as long as such Liens are (i) in existence for less than 20 consecutive days or being Properly Contested, and (ii) at all times
junior to Agent’s Liens;


 




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(h)          easements,
rights-of-way, restrictions, covenants or other agreements of record, and other similar charges or encumbrances on Real Estate,
that do not secure any monetary obligation and do not interfere with the Ordinary Course of Business;


 


(i)            Liens
on assets of Universal to secure Debt under the Overdraft Facility;


 


(j)            normal
and customary rights of setoff upon deposits in favor of depository institutions, and Liens of a collecting bank on Payment Items
in the course of collection; and


 


(k)           other
Liens existing on the date hereof and shown on Schedule 10.2.2.


 


10.2.3    Capital
Expenditures. Make Capital Expenditures in excess of $2,500,000, in the aggregate during any Fiscal Year; provided,
however, that if the amount of Capital Expenditures permitted to be made in any Fiscal Year exceeds the amount actually
made, up to 100% of such excess may be carried forward to the next Fiscal Year.


 


10.2.4    Distributions;
Upstream Payments; Executive Compensation. Declare or make any Distributions or pay executive compensation, except (a) Upstream
Payments, (b) Distributions of Equity Interests that do not result in a Change of Control and (c) executive compensation, including
incentive compensation, and management and directors’ fees and expenses consistent with past practice and, in the case of
incentive compensation, with any incentive plans approved by the Board of Directors of P&F as set forth on Schedule 10.2.4
or as subsequently approved by such Board (or a committee thereof) and such Board’s independent compensation consultant reasonably
satisfactory to Agent; or create or suffer to exist any encumbrance or restriction on the ability of a Subsidiary to make any Upstream
Payment, except for restrictions under the Loan Documents, under Applicable Law or in effect on the Closing Date as shown on Schedule
9.1.15.


 


10.2.5    Restricted
Investments. Make any Investment other than a Permitted Investment; provided that none of
the Equipment purchased or otherwise acquired pursuant to an Acquisition shall be included in the Equipment Formula Amount and
none of the Accounts or Inventory purchased or otherwise acquired pursuant to an Acquisition shall be included in the calculation
of the Borrowing Base until Agent has conducted field examinations and appraisals (which field examinations and appraisals shall
be at the expense of the Borrowers and shall not count towards the limits set forth in Section 10.1.1) reasonably required
by it with results reasonably satisfactory to Agent, and the Person owning such Equipment, Accounts and Inventory shall be a (directly
or indirectly) wholly-owned Subsidiary of the Borrowers and have become a Borrower.


 


10.2.6    Disposition
of Assets. Make any Asset Disposition, except a Permitted Asset Disposition, a disposition of Equipment under Section 8.4.2,
or a transfer of Property by a Subsidiary or Obligor to a Borrower.


 


10.2.7    Loans.
Make any loans or other advances of money to any Person, except (a) advances to an officer or employee for salary, travel expenses,
commissions and similar items in the Ordinary Course of Business; (b) prepaid expenses and extensions of trade credit made in the
Ordinary Course of Business; (c) deposits with financial institutions permitted hereunder; (d) intercompany loans by a Borrower
or Guarantor to another Borrower or from a Guarantor to another Guarantor or from a Subsidiary that is not an Obligor to an Obligor
(provided, that the terms thereof are reasonably satisfactory to Agent); (e) from a Borrower to a Guarantor in the Ordinary Course
of Business and not to exceed $500,000 at any time outstanding with respect to all loans from all Borrowers to all Guarantors and
(f) Permitted Investments.


 




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10.2.8    Restrictions
on Payment of Certain Debt. Make any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance
or acquisition) with respect to any (a) Subordinated Debt, except regularly scheduled payments of principal, interest and fees,
but only to the extent permitted under any subordination agreement relating to such Debt (and a Senior Officer of Borrower Agent
shall certify to Agent, not less than five Business Days prior to the date of payment, that all conditions under such agreement
have been satisfied); or (b) Borrowed Money (other than the Obligations) prior to its due date under the agreements evidencing
such Debt as in effect on the Closing Date or, if later, when entered into (or, in each case, as amended thereafter with the consent
of Agent) except payments made in connection with a Permitted Asset Disposition in satisfaction of Permitted Liens on the Equipment
or Real Estate that is the subject of such Asset Disposition.


 


10.2.9    Fundamental
Changes. (a) Merge, combine or consolidate with any Person, or liquidate, wind up its affairs or dissolve itself, in each case
whether in a single transaction or in a series of related transactions, except for (i) Permitted Acquisitions, (ii) mergers or
consolidations of a wholly-owned Subsidiary with another wholly-owned Subsidiary (provided that if either Subsidiary is an Obligor,
the surviving Subsidiary shall be an Obligor) or into a Borrower, and (iii) liquidations or dissolutions of Immaterial Subsidiaries;
(b) change its name or conduct business under any fictitious name; (c) change its tax, charter or other organizational identification
number; or (d) change its form or state of organization.


 


10.2.10  Subsidiaries.
Form or acquire any Subsidiary after the Closing Date, except in accordance with Sections 10.1.9 and 10.2.5; or permit
any existing Subsidiary to issue any additional Equity Interests except director’s qualifying shares.


 


10.2.11  Organic
Documents. Amend, modify or otherwise change any of its Organic Documents as in effect on the Closing Date, except for new
agreements, amendments, modifications or other changes that do not adversely affect the rights and privileges of any Borrower or
Obligor, or its Subsidiaries, and do not adversely affect the ability of a Borrower, Obligor or a Domestic Subsidiary to borrower
hereunder or to amend, modify, renew or supplement the terms of this Agreement or any of the other Loan Documents, or otherwise
adversely affect the interest of Agent or the Lenders and so long as at the time of such amendment, modification or change, no
Default or Event of Default shall exist or have occurred and be continuing.


 


10.2.12  Tax
Consolidation. File or consent to the filing of any consolidated income tax return with any Person other than Borrowers and
Subsidiaries and WMC.


 


10.2.13  Accounting
Changes. Make any material change in accounting treatment or reporting practices, except as required by GAAP and in accordance
with Section 1.2; or change its Fiscal Year.


 


10.2.14  Restrictive
Agreements. Become a party to any Restrictive Agreement, except a Restrictive Agreement (a) in effect on the Closing Date and
set forth on Schedule 9.1.15; (b) relating to secured Debt permitted hereunder, as long as the restrictions apply only to
collateral for such Debt or a Foreign Subsidiary that is an obligor with respect to such Debt; or (c) constituting customary restrictions
on assignment in leases and other contracts.


 


10.2.15  Hedging
Agreements. Enter into any Hedging Agreement, except to hedge risks arising in the Ordinary Course of Business and not for
speculative purposes.


 




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10.2.16  Conduct
of Business. Engage in any business, other than its business as conducted on the Closing Date and any business reasonably related,
ancillary or complimentary to such business.


 


10.2.17  Affiliate
Transactions. Enter into or be party to any transaction with an Affiliate, except (a) transactions contemplated by the Loan
Documents; (b) payment of reasonable compensation to officers and employees for services actually rendered,
(including executive compensation and incentive compensation in accordance with Section 10.2.4) and loans and
advances permitted by Section 10.2.7; (c) payment of customary directors’ fees and indemnities; (d) transactions solely
among Borrowers or solely among Guarantors; (e) transactions among Borrowers and Guarantors provided that they do not involve in
the aggregate the transfer of assets or value to one or more Guarantors having a value in excess of $250,000 at any one time outstanding;
(f) transactions that were consummated prior to the Closing Date, as shown on Schedule 10.2.17; and (g) transactions with
Affiliates (other than WMC, except as provided in Section 10.2.20) in the Ordinary Course of Business, upon fair and reasonable
terms fully disclosed to Agent and no less favorable than would be obtained in a comparable arm’s-length transaction with
a non-Affiliate.


 


10.2.18  Plans.
Become party to any Multiemployer Plan or Foreign Plan, other than any in existence on the Closing Date.


 


10.2.19  Amendments
to Subordinated Debt. Amend, supplement or otherwise modify any document, instrument or agreement relating to any Subordinated
Debt, if such modification (a) increases the principal balance of such Debt, or increases any required payment of principal or
interest; (b) accelerates the date on which any installment of principal or any interest is due, or adds any additional redemption,
put or prepayment provisions; (c) shortens the final maturity date or otherwise accelerates amortization; (d) increases the interest
rate; (e) increases or adds any fees or charges; (f) modifies any covenant in a manner or adds any representation, covenant or
default that is more onerous or restrictive in any material respect for any Borrower or Subsidiary, or that is otherwise materially
adverse to any Borrower, any Subsidiary or Lenders; (g) results in the Obligations not being fully benefited by the subordination
provisions applicable thereto or (h) results in the Obligations not constituting “Senior Debt” under any applicable
subordination agreement.


 


10.2.20  WMC.
No Obligor shall (i) transfer any assets or make any loans to, or Investments in WMC, (ii) assume, become obligated for or satisfy
any obligations of WMC, (ii) resume any of the operations or business of WMC or (iv) use the names or other assets of WMC in its
business or operations except for payment of reasonable expense, including without limitation legal and accounting fees, in connection
with the winding up or dissolution of WMC.


 


10.2.21  Post-Closing
Deliveries. Fail to satisfy any of the requirements set forth on Schedule 10.2.21 within the time period(s)
specified therein or such later time period(s) as may be approved by Agent.


 


10.3         Financial
Covenants. As long as any Commitments or Obligations are outstanding, Borrowers shall:


 


10.3.1    Leverage
Ratio. MaintainWhile
a Trigger Period is in effect, maintain a Leverage Ratio at all times not
greater than the applicable ratio set forth below, measured for the
most recently ended month for which financial statements have been delivered hereunder prior to the Trigger Period and each month
ending thereafter until the Trigger Period is no longer in effect:


 




    	 	-73-	 



     

    

 


	Measurement Date	 	Maximum Leverage Ratio
	Closing Date through September 30, 2015	 	4.00 to 1.00
	October 1, 2015 through November 30, 2015	 	3.50 to 1.00
	December 1,31, 2015  and thereafter	 	3.25 to 1.00


 


10.3.2    Fixed
Charge Coverage Ratio.  MaintainWhile
a Trigger Period is in effect, maintain a Fixed Charge Coverage Ratio as of the end of each Measurement Period of not
less than 1.50 to 1.00.1.00
while a Trigger Period is in effect, measured for the most recently ended Measurement Period for which financial statements have
been delivered hereunder prior to the Trigger Period and each
Measurement Period ending thereafter until the Trigger Period
is no longer in effect.


 


10.3.3    Tangible
Net Worth. Maintain a Tangible Net Worth, as of the Measurement
Period ending June 30, 2014 and each Fiscal Quarter end thereafter, of not less than $15,500,000
plus 50% of the consolidated net income (if positive) of P&F and its
Subsidiaries for each Fiscal Quarter ending after June 30, 2014.


 


SECTION 11.       EVENTS
OF DEFAULT; REMEDIES ON DEFAULT


 


11.1         Events
of Default. Each of the following shall be an “Event of Default” hereunder, if the same shall occur
for any reason whatsoever, whether voluntary or involuntary, by operation of law or otherwise:


 


(a)          A
Borrower fails to pay any Obligations when due (whether at stated maturity, on demand, upon acceleration or otherwise);


 


(b)          Any
representation, warranty or other written statement of an Obligor made in connection with any Loan Documents or transactions contemplated
thereby is incorrect or misleading in any material respect when given;


 


(c)          A
Borrower breaches or fail to perform any covenant contained in Section 7.2, 7.3, 7.4, 7 .5, 7.7, 8.1, 8.2.4, 8.2.5, 8.5, 8.6.2,
10.1.1, 10.1.2, 10.1.3 (d), 10.2 or 10.3;


 


(d)          An
Obligor breaches or fails to perform any other covenant contained in any Loan Documents, and such breach or failure is not cured
within 30 days after a Senior Officer of such Obligor has knowledge thereof or receives notice thereof from Agent, whichever is
sooner; provided, however, that such notice and opportunity to cure shall not apply if the breach or failure to perform
is not capable of being cured within such period or is a willful breach by an Obligor;


 


(e)          A
Guarantor repudiates, revokes or attempts to revoke its Guaranty; an Obligor or third party denies or contests the validity or
enforceability of any Loan Documents or Obligations, or the perfection or priority of any Lien granted to Agent; or any Loan Document
ceases to be in full force or effect for any reason (other than a waiver or release by Agent and Lenders);


 


(f)          Any
breach or default of an Obligor occurs under any document, instrument or agreement to which it is a party or by which it or any
of its Properties is bound, relating to any Debt (other than the Obligations) in excess of $500,000, if the maturity of or any
payment with respect to such Debt may be accelerated or demanded due to such breach;


 




    	 	-74-	 



     

    

 


(g)          Any
unsatisfied judgment or order for the payment of money is entered against an Obligor in an amount that exceeds, individually or
cumulatively with all unsatisfied judgments or orders against all Obligors, $500,000 (net of any insurance coverage therefor acknowledged
in writing by the insurer), unless a stay of enforcement of such judgment or order is in effect, by reason of a pending appeal
or otherwise;


 


(h)          A
loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $600,000
($800,000 in the case of hurricane damage to any Collateral);


 


(i)          An
Obligor is enjoined, restrained or in any way prevented by any Governmental Authority from conducting any part of its business
that could reasonably be expected to have a Material Adverse Effect; an Obligor suffers the loss, revocation or termination of
any material license, permit, lease or agreement necessary to its business; there is a cessation of any material part of an Obligor’s
business for a material period of time; any material Collateral or Property of an Obligor is taken or impaired through condemnation;
an Obligor agrees to or commences any liquidation, dissolution or winding up of its affairs; or an Obligor is not Solvent;


 


(j)          An
Insolvency Proceeding is commenced by an Obligor; an Obligor makes an offer of settlement, extension or composition to its unsecured
creditors generally; a trustee is appointed to take possession of any substantial Property of or to operate any of the business
of an Obligor; or an Insolvency Proceeding is commenced against an Obligor and: the Obligor consents to institution of the proceeding,
the petition commencing the proceeding is not timely contested by the Obligor, the petition is not dismissed within 30 days after
filing, or an order for relief is entered in the proceeding;


 


(k)          An
ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan that has resulted or could reasonably be expected to result
in liability of an Obligor to a Pension Plan, Multiemployer Plan or PBGC in excess of $250,000, or that constitutes grounds for
appointment of a trustee for or termination by the PBGC of any Pension Plan or Multiemployer Plan; an Obligor or ERISA Affiliate
fails to pay when due any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan; or any event similar to the foregoing occurs or exists with respect to a Foreign Plan;


 


(l)          An
Obligor or any of its Senior Officers is criminally indicted or convicted for (i) a felony committed in the conduct of the Obligor’s
business, or (ii) violating any state or federal law (including the Controlled Substances Act, Money Laundering Control Act of
1986 and Illegal Exportation of War Materials Act) that could lead to forfeiture of any material Property or any Collateral;


 


(m)          A
Change of Control occurs; or any event occurs or condition exists that has a Material Adverse Effect; or


 


(n)          Any
material provision of any subordination provision applicable to any Subordinated Debt in excess of an aggregate of $500,000, ceases
to be in full force and effect; or any Obligor contests in any manner the validity or enforceability of any such provision; or
any Obligor breaches any such provision.


 


11.2        Remedies
upon Default. If an Event of Default described in Section 11.1(j) occurs with respect to any Borrower, then to the
extent permitted by Applicable Law, all Obligations (other than Secured Bank Product Obligations) shall become automatically due
and payable and all Commitments shall terminate, without any action by Agent or notice of any kind. In addition, or if any other
Event of Default exists, Agent may in its discretion (and shall upon written direction of Required Lenders) do any one or more
of the following from time to time:


 




    	 	-75-	 



     

    

 


(a)          declare
any Obligations immediately due and payable, whereupon they shall be due and payable without diligence, presentment, demand, protest
or notice of any kind, all of which are hereby waived by Obligors to the fullest extent permitted by law;


 


(b)          terminate,
reduce or condition any Commitment, or make any adjustment to the Borrowing Base;


 


(c)          require
Obligors to Cash Collateralize LC Obligations, Secured Bank Product Obligations and other Obligations that are contingent or not
yet due and payable, and, if Obligors fail promptly to deposit such Cash Collateral, Agent may (and shall upon the direction of
Required Lenders) advance the required Cash Collateral as Revolver Loans (whether or not an Overadvance exists or is created thereby,
or the conditions in Section 6 are satisfied); and


 


(d)          exercise
any other rights or remedies afforded under any agreement, by law, at equity or otherwise, including the rights and remedies of
a secured party under the UCC. Such rights and remedies include the rights to (i) take possession of any Collateral; (ii) require
Obligors to assemble Collateral, at Borrowers’ expense, and make it available to Agent at a place designated by Agent; (iii)
enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned
or leased by an Obligor, Obligors agree not to charge for such storage); and (iv) sell or otherwise dispose of any Collateral in
its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may
be required by Applicable Law, in lots or in bulk, at such locations, all as Agent, in its discretion, deems advisable. Each Obligor
agrees that 10 days' notice of any proposed sale or other disposition of Collateral by Agent shall be reasonable. Agent shall have
the right to conduct such sales on any Obligor’s premises, without charge, and such sales may be adjourned from time to time
in accordance with Applicable Law. Agent shall have the right to sell, lease or otherwise dispose of any Collateral for cash, credit
or any combination thereof, and Agent may purchase any Collateral at public or, if permitted by law, private sale and, in lieu
of actual payment of the purchase price, may credit bid and set off the amount of such price against the Obligations.


 


11.3        License.
Agent is hereby granted an irrevocable, non-exclusive license or other right to use, license or sub-license (without payment of
royalty or other compensation to any Person) any or all Intellectual Property of Obligors, computer hardware and software, trade
secrets, brochures, customer lists, promotional and advertising materials, labels, packaging materials and other Property, in advertising
for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect
to, any Collateral. Each Obligor’s rights and interests under Intellectual Property shall inure to Agent’s benefit.


 


11.4        Setoff.
At any time during an Event of Default, Agent, Issuing Bank, Lenders, and any of their Affiliates are authorized, to the fullest
extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional
or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by Agent, Issuing
Bank, such Lender or such Affiliate to or for the credit or the account of an Obligor against any Obligations, irrespective of
whether or not Agent, Issuing Bank, such Lender or such Affiliate shall have made any demand under this Agreement or any other
Loan Document and although such Obligations may be contingent or unmatured or are owed to a branch or office of Agent, Issuing
Bank, such Lender or such Affiliate different from the branch or office holding such deposit or obligated on such indebtedness;
provided that in the event any Defaulting Lender shall exercise any such right of setoff, (a) all amounts so set off shall
be paid over immediately to Agent for further application in accordance with the provisions of Section 4.2 and, pending
such payment, shall be segregated by such Defaulting Lender from its other funds and deemed to be held in trust for the benefit
of Agent and the Lenders and (b) the Defaulting Lender shall provide promptly to Agent a statement describing in reasonable detail
the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of Agent, Issuing Bank,
each Lender and each such Affiliate under this Section are in addition to other rights and remedies (including other rights of
setoff) that such Person may have.


 




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11.5        Remedies
Cumulative; No Waiver.


 


11.5.1   Cumulative
Rights. All agreements, warranties, guaranties, indemnities and other undertakings of Borrowers or Obligors under the Loan
Documents are cumulative and not in derogation of each other. The rights and remedies of Agent and Lenders are cumulative, may
be exercised at any time and from time to time, concurrently or in any order, and are not exclusive of any other rights or remedies
available by agreement, by law, at equity or otherwise. All such rights and remedies shall continue in full force and effect until
Full Payment of all Obligations.


 


11.5.2   Waivers.
No waiver or course of dealing shall be established by (a) the failure or delay of Agent or any Lender to require strict performance
by Obligors with any terms of the Loan Documents, or to exercise any rights or remedies with respect to Collateral or otherwise;
(b) the making of any Loan or issuance of any Letter of Credit during a Default, Event of Default or other failure to satisfy any
conditions precedent; or (c) acceptance by Agent or any Lender of any payment or performance by an Obligor under any Loan Documents
in a manner other than that specified therein. It is expressly acknowledged by Obligors that any failure to satisfy a financial
covenant on a measurement date shall not be cured or remedied by satisfaction of such covenant on a subsequent date.


 


SECTION 12.         AGENT


 


12.1         Appointment,
Authority and Duties of Agent.


 


12.1.1   Appointment
and Authority. Each Secured Party appoints and designates Capital One Business Credit Corporation
as Agent under all Loan Documents. Agent may, and each Secured Party authorizes Agent to, enter into all Loan Documents to which
Agent is intended to be a party and accept all Security Documents, for the benefit of Secured Parties. Each Secured Party agrees
that any action taken by Agent or Required Lenders in accordance with the provisions of the Loan Documents, and the exercise by
Agent or Required Lenders of any rights or remedies set forth therein, together with all other powers reasonably incidental thereto,
shall be authorized by and binding upon all Secured Parties. Without limiting the generality of the foregoing, Agent shall have
the sole and exclusive authority to (a) act as the disbursing and collecting agent for Lenders with respect to all payments and
collections arising in connection with the Loan Documents; (b) execute and deliver as Agent each Loan Document, including any intercreditor
or subordination agreement, and accept delivery of each Loan Document from any Obligor or other Person; (c) act as collateral agent
for Secured Parties for purposes of perfecting and administering Liens under the Loan Documents, and for all other purposes stated
therein; (d) manage, supervise or otherwise deal with Collateral; and (e) take any Enforcement Action or otherwise exercise any
rights or remedies with respect to any Collateral under the Loan Documents, Applicable Law or otherwise. The duties of Agent shall
be ministerial and administrative in nature, and Agent shall not have a fiduciary relationship with any Secured Party, Participant
or other Person, by reason of any Loan Document or any transaction relating thereto. Agent alone shall be authorized to determine
whether any Accounts or Inventory constitute Eligible Accounts, Eligible In-Transit Inventory or Eligible Inventory, or whether
to impose or release any reserve, or whether any conditions to funding or to issuance of a Letter of Credit have been satisfied,
which determinations and judgments, if exercised in good faith, shall exonerate Agent from liability to any Lender or other Person
for any error in judgment.


 




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12.1.2   Duties.
Agent shall not have any duties except those expressly set forth in the Loan Documents. The conferral upon Agent of any right shall
not imply a duty on Agent’s part to exercise such right, unless instructed to do so by Required Lenders in accordance with
this Agreement.


 


12.1.3   Agent
Professionals. Agent may perform its duties through agents and employees. Agent may consult with and employ Agent Professionals,
and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given
by an Agent Professional. Agent shall not be responsible for the negligence or misconduct of any agents, employees or Agent Professionals
selected by it with reasonable care.


 


12.1.4    Instructions
of Required Lenders. The rights and remedies conferred upon Agent under the Loan Documents may be exercised without the necessity
of joinder of any other party, unless required by Applicable Law. Agent may request instructions from Required Lenders or other
Secured Parties with respect to any act (including the failure to act) in connection with any Loan Documents, and may seek assurances
to its satisfaction from any or all Secured Parties of their indemnification obligations against all Claims that could be incurred
by Agent in connection with any act. Agent shall be entitled to refrain from any act until it has received such instructions or
assurances, and Agent shall not incur liability to any Person by reason of so refraining. Instructions of Required Lenders shall
be binding upon all Secured Parties, and no Secured Party shall have any right of action whatsoever against Agent as a result of
Agent acting or refraining from acting in accordance with the instructions of Required Lenders. Notwithstanding the foregoing,
instructions by and consent of Secured Parties shall be required in the circumstances described in Section 14.1.1. In no
event shall Agent be required to take any action that, in its opinion, is contrary to Applicable Law or any Loan Documents or could
subject any Agent Indemnitee to personal liability.


 


12.2         Agreements
Regarding Collateral and Field Examination Reports.


 


12.2.1   Lien
Releases; Care of Collateral. Secured Parties authorize Agent to release any Lien with respect to any Collateral (a) upon Full
Payment of the Obligations; (b) that is the subject of an Asset Disposition which Borrowers certify in writing to Agent is a Permitted
Asset Disposition or a Lien which Borrowers certify is a Permitted Lien entitled to priority over Agent’s Liens (and Agent
may rely conclusively on any such certificate without further inquiry); (c) that does not constitute a material part of the Collateral;
or (d) with the written consent of all Lenders. Secured Parties authorize Agent to subordinate its Liens to any Purchase Money
Lien permitted hereunder. Agent shall have no obligation to assure that any Collateral exists or is owned by a Borrower, or is
cared for, protected or insured, nor to assure that Agent’s Liens have been properly created, perfected or enforced, or are
entitled to any particular priority, nor to exercise any duty of care with respect to any Collateral.


 


12.2.2   Possession
of Collateral. Agent and Secured Parties appoint each Lender as agent (for the benefit of Secured Parties) for the purpose
of perfecting Liens in any Collateral held or controlled by such Lender, to the extent such Liens are perfected by possession or
control. If any Lender obtains possession or control of any Collateral, it shall notify Agent thereof and, promptly upon Agent’s
request, deliver such Collateral to Agent or otherwise deal with it in accordance with Agent’s instructions.


 




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12.2.3   Reports.
Agent shall promptly forward to each Lender, when complete, copies of any field audit, examination or appraisal report prepared
by or for Agent with respect to any Obligor or Collateral (“Report”). Each Lender agrees (a) that neither Capital
One Business Credit Corporation nor Agent makes any representation or warranty
as to the accuracy or completeness of any Report, and shall not be liable for any information contained in or omitted from any
Report; (b) that the Reports are not intended to be comprehensive audits or examinations, and that Agent or any other Person performing
any audit or examination will inspect only specific information regarding Obligations or the Collateral and will rely significantly
upon Borrowers’ books and records as well as upon representations of Borrowers’ officers and employees; and (c) to
keep all Reports confidential and strictly for such Lender’s internal use, and not to distribute any Report (or the contents
thereof) to any Person (except to such Lender’s Participants, attorneys and accountants) or use any Report in any manner
other than administration of the Loans and other Obligations. Each Lender shall indemnify and hold harmless Agent and any other
Person preparing a Report from any action such Lender may take as a result of or any conclusion it may draw from any Report, as
well as from any Claims arising as a direct or indirect result of Agent furnishing a Report to such Lender.


 


12.3         Reliance
By Agent. Agent shall be entitled to rely, and shall be fully protected in relying, upon any certification, notice or other
communication (including those by telephone, telex, telegram, telecopy or e-mail) believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person, and upon the advice and statements of Agent Professionals.


 


12.4         Action
Upon Default. Agent shall not be deemed to have knowledge of any Default or Event of Default, or of any failure to satisfy
any conditions in Section 6, unless it has received written notice from a Borrower or a Lender specifying the occurrence
and nature thereof. If any Lender acquires knowledge of a Default, Event of Default or failure of such conditions, it shall promptly
notify Agent and the other Lenders thereof in writing. Each Secured Party agrees that, except as otherwise provided in any Loan
Documents or with the written consent of Agent and Required Lenders, it will not take any Enforcement Action, accelerate Obligations
(other than Secured Bank Product Obligations), or exercise any right that it might otherwise have under Applicable Law to credit
bid at foreclosure sales, UCC sales or other similar dispositions of Collateral or to assert any rights relating to any Collateral.
Notwithstanding the foregoing, however, a Secured Party may take action to preserve or enforce its rights against an Obligor where
a deadline or limitation period is applicable that would, absent such action, bar enforcement of Obligations held by such Secured
Party, including the filing of proofs of claim in an Insolvency Proceeding.


 


12.5         Ratable
Sharing. If any Lender shall obtain any payment or reduction of any Obligation, whether through set-off or otherwise, in
excess of its share of such Obligation, determined on a Pro Rata basis or in accordance with Section 5.6.1, as applicable,
such Lender shall forthwith purchase from Agent, Issuing Bank and the other Lenders such participations in the affected Obligation
as are necessary to cause the purchasing Lender to share the excess payment or reduction on a Pro Rata basis or in accordance with
Section 5.6.1, as applicable. If any of such payment or reduction is thereafter recovered from the purchasing Lender, the
purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. No Lender shall
set off against any Dominion Account without the prior consent of Agent. The Pro Rata sharing provisions of this Section shall
not be construed to apply to (a) any payment made by or on behalf of Borrowers pursuant to and in accordance with the express terms
of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (b) the application of
Cash Collateral provided for in Section 2.3.3, (c) any payment obtained by a Lender as consideration for the assignment
of or sale of a participation in any of its Revolver Loans or subparticipations in LC Obligations or Swingline Loans to any assignee
or participant (to the extent permitted hereunder) or (d) any payment made in respect of, and to any Lender participating in, any
additional loan facility arising under any amendment of this Agreement.


 




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12.6         Indemnification
of Agent Indemnitees. EACH LENDER SHALL INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES AND ISSUING BANK INDEMNITEES,
TO THE EXTENT NOT REIMBURSED BY OBLIGORS (BUT WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF CREDIT PARTIES UNDER ANY LOAN
DOCUMENTS), ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY AGENT INDEMNITEE OR ISSUING
BANK INDEMNITEE, PROVIDED THAT ANY CLAIM AGAINST AN AGENT INDEMNITEE RELATES TO OR ARISES FROM ITS ACTING AS OR FOR AGENT (IN THE
CAPACITY OF AGENT). In Agent’s discretion, it may reserve for any Claims made against an Agent Indemnitee or Issuing
Bank Indemnitee, and may satisfy any judgment, order or settlement relating thereto, from proceeds of Collateral prior to making
any distribution of Collateral proceeds to Secured Parties. If Agent is sued by any receiver, bankruptcy trustee, debtor-in-possession
or other Person for any alleged preference or fraudulent transfer, then any monies paid by Agent in settlement or satisfaction
of such proceeding, together with all interest, costs and expenses (including attorneys’ fees) incurred in the defense of
same, shall be promptly reimbursed to Agent by each Lender to the extent of its Pro Rata share.


 


12.7         Limitation
on Responsibilities of Agent. Agent shall not be liable to any Secured Party for any action taken or omitted to be taken
under the Loan Documents, except for losses directly and solely caused by Agent’s gross negligence or willful misconduct.
Agent does not assume any responsibility for any failure or delay in performance or any breach by any Obligor, Lender or other
Secured Party of any obligations under the Loan Documents. Agent does not make to Secured Parties any express or implied warranty,
representation or guarantee with respect to any Obligations, Collateral, Loan Documents or Obligor. No Agent Indemnitee shall be
responsible to Secured Parties for any recitals, statements, information, representations or warranties contained in any Loan Documents;
the execution, validity, genuineness, effectiveness or enforceability of any Loan Documents; the genuineness, enforceability, collectability,
value, sufficiency, location or existence of any Collateral, or the validity, extent, perfection or priority of any Lien therein;
the validity, enforceability or collectability of any Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor or Account Debtor. No Agent Indemnitee shall have any obligation
to any Secured Party to ascertain or inquire into the existence of any Default or Event of Default, the observance or performance
by any Obligor of any terms of the Loan Documents, or the satisfaction of any conditions precedent contained in any Loan Documents.


 


12.8         Successor
Agent and Co-Agents.


 


12.8.1    Resignation;
Successor Agent. Subject to the appointment and acceptance of a successor Agent as provided below, Agent may resign at any
time by giving at least 30 days written notice thereof to Lenders and Borrower Agent. Upon receipt of such notice, Required Lenders
shall have the right to appoint a successor Agent which shall be (a) a Lender or an Affiliate of a Lender; or (b) a commercial
bank that is organized under the laws of the United States or any state or district thereof, has a combined capital surplus of
at least $200,000,000 and (provided no Default or Event of Default exists) is reasonably acceptable to Borrower Agent. If no successor
agent is appointed prior to the effective date of the resignation of Agent, then Agent may appoint a successor agent from among
Lenders or, if no Lender accepts such role, Agent may appoint Required Lenders as successor agent. Upon acceptance by a successor
Agent of an appointment to serve as Agent hereunder, or upon appointment of Required Lenders as successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the powers and duties of the retiring Agent without further act, and
the retiring Agent shall be discharged from its duties and obligations hereunder but shall continue to have the benefits of the
indemnification set forth in Sections 12.6 and 14.2. Notwithstanding any Agent’s resignation, the provisions
of this Section 12 shall continue in effect for its benefit with respect to any actions taken or omitted to be taken by
it while Agent. Any successor to Capital One Business Credit Corporation by merger
or acquisition of stock or this loan shall continue to be Agent hereunder without further act on the part of the parties hereto,
unless such successor resigns as provided above.


 




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12.8.2    Separate
Collateral Agent. It is the intent of the parties that there shall be no violation of any Applicable Law denying or restricting
the right of financial institutions to transact business in any jurisdiction. If Agent believes that it may be limited in the exercise
of any rights or remedies under the Loan Documents due to any Applicable Law, Agent may appoint an additional Person who is not
so limited, as a separate collateral agent or co-collateral agent. If Agent so appoints a collateral agent or co-collateral agent,
each right and remedy intended to be available to Agent under the Loan Documents shall also be vested in such separate agent. Every
covenant and obligation necessary to the exercise thereof by such agent shall run to and be enforceable by it as well as Agent.
Secured Parties shall execute and deliver such documents as Agent deems appropriate to vest any rights or remedies in such agent.
If any collateral agent or co-collateral agent shall die or dissolve, become incapable of acting, resign or be removed, then all
the rights and remedies of such agent, to the extent permitted by Applicable Law, shall vest in and be exercised by Agent until
appointment of a new agent.


 


12.9         Due
Diligence and Non-Reliance. Each Lender acknowledges and agrees that it has, independently and without reliance upon Agent
or any other Lenders, and based upon such documents, information and analyses as it has deemed appropriate, made its own credit
analysis of each Obligor and its own decision to enter into this Agreement and to fund Loans and participate in LC Obligations
hereunder. Each Secured Party has made such inquiries as it feels necessary concerning the Loan Documents, Collateral and Obligors.
Each Secured Party acknowledges and agrees that the other Secured Parties have made no representations or warranties concerning
any Obligor, any Collateral or the legality, validity, sufficiency or enforceability of any Loan Documents or Obligations. Each
Secured Party will, independently and without reliance upon any other Secured Party, and based upon such financial statements,
documents and information as it deems appropriate at the time, continue to make and rely upon its own credit decisions in making
Loans and participating in LC Obligations, and in taking or refraining from any action under any Loan Documents. Except for notices,
reports and other information expressly requested by a Lender, Agent shall have no duty or responsibility to provide any Secured
Party with any notices, reports or certificates furnished to Agent by any Obligor or any credit or other information concerning
the affairs, financial condition, business or Properties of any Obligor (or any of its Affiliates) which may come into possession
of Agent or its Affiliates.


 


12.10         Replacement
of Certain Lenders. If a Lender (a) is a Defaulting Lender, or (b) fails to give its consent to any amendment, waiver or
action for which consent of all Lenders was required and Required Lenders consented, then, in addition to any other rights and
remedies that any Person may have, Agent may, by notice to such Lender within 120 days after such event, require such Lender to
assign all of its rights and obligations under the Loan Documents to Eligible Assignee(s) specified by Agent, pursuant to appropriate
Assignment and Acceptance(s) and within 20 days after Agent’s notice. Agent is irrevocably appointed as attorney-in-fact
to execute any such Assignment and Acceptance if the Lender fails to execute same. Such Lender shall be entitled to receive, in
cash, concurrently with such assignment, all amounts owed to it under the Loan Documents, including all principal, interest and
fees through the date of assignment (but excluding any prepayment charge).


 


12.11         Remittance
of Payments and Collections.


 


12.11.1  Remittances
Generally. All payments by any Lender to Agent shall be made by the time and on the day set forth in this Agreement, in immediately
available funds. If no time for payment is specified or if payment is due on demand by Agent and request for payment is made by
Agent by 11:00 a.m. on a Business Day, payment shall be made by Lender not later than 2:00 p.m. on such day, and if request is
made after 11:00 a.m., then payment shall be made by 11:00 a.m. on the next Business Day. Payment by Agent to any Secured Party
shall be made by wire transfer, in the type of funds received by Agent. Any such payment shall be subject to Agent’s right
of offset for any amounts due from such payee under the Loan Documents.


 




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12.11.2  Failure
to Pay. If any Secured Party fails to pay any amount when due by it to Agent pursuant to the terms hereof, such amount shall
bear interest from the due date until paid at the rate determined by Agent as customary in the banking industry for interbank compensation.
In no event shall Borrowers be entitled to receive credit for any interest paid by a Secured Party to Agent, nor shall any Defaulting
Lender be entitled to interest on any amounts held by Agent pursuant to Section 4.2.


 


12.11.3  Recovery
of Payments. If Agent pays any amount to a Secured Party in the expectation that a related payment will be received by Agent
from an Obligor and such related payment is not received, then Agent may recover such amount from each Secured Party that received
it. If Agent determines at any time that an amount received under any Loan Document must be returned to an Obligor or paid to any
other Person pursuant to Applicable Law or otherwise, then, notwithstanding any other term of any Loan Document, Agent shall not
be required to distribute such amount to any Lender. If any amounts received and applied by Agent to any Obligations are later
required to be returned by Agent pursuant to Applicable Law, each Lender shall pay to Agent, on demand, such Lender’s
Pro Rata share of the amounts required to be returned.


 


12.12         Agent
in its Individual Capacity. As a Lender, Capital One Business Credit Corporation shall
have the same rights and remedies under the other Loan Documents as any other Lender, and the terms “Lenders,” “Required
Lenders” or any similar term shall include Capital One Business Credit Corporation in
its capacity as a Lender. Each of Capital One Business Credit Corporation and
its Affiliates may accept deposits from, maintain deposits or credit balances for, invest in, lend money to, provide Bank Products
to, act as trustee under indentures of, serve as financial or other advisor to, and generally engage in any kind of business with,
Obligors and their Affiliates, as if Capital One Business Credit Corporation were
any other lender, without any duty to account therefor (including any fees or other consideration received in connection therewith)
to the other Lenders. In their individual capacity, Capital One Business Credit Corporation
and its Affiliates may receive information regarding Obligors, their Affiliates and their Account Debtors (including information
subject to confidentiality obligations), and each Secured Party agrees that Capital One Business
Credit Corporation and its Affiliates shall be under no obligation to provide such information to any Secured Party,
if acquired in such individual capacity and not as Agent hereunder.


 


12.13         Agent
Titles. Each Lender, other than Capital One Business Credit Corporation,
that is designated (on the cover page of this Agreement or otherwise) by Capital One Business
Credit Corporation as an “Agent” or “Arranger” of any type shall not have any right, power,
responsibility or duty under any Loan Documents other than those applicable to all Lenders, and shall in no event be deemed to
have any fiduciary relationship with any other Lender.


 


12.14         Bank
Product Providers. Each Secured Bank Product Provider, by delivery of a notice to Agent of a Bank Product, agrees to be
bound by Section 5.6 and this Section 12. Each Secured Bank Product Provider shall indemnify and hold harmless Agent
Indemnitees, to the extent not reimbursed by Obligors, against all Claims that may be incurred by or asserted against any Agent
Indemnitee in connection with such provider’s Secured Bank Product Obligations.


 


12.15         No
Third Party Beneficiaries. This Section 12 is an agreement solely among Secured Parties and Agent, and shall survive
Full Payment of the Obligations. This Section 12 does not confer any rights or benefits upon Obligors or any other Person.
As between Obligors and Agent, any action that Agent may take under any Loan Documents or with respect to any Obligations shall
be conclusively presumed to have been authorized and directed by Secured Parties.


 




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SECTION 13.         BENEFIT
OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS


 


13.1         Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of Obligors, Agent, Lenders, Secured Parties,
and their respective successors and assigns, except that (a) no Borrower shall have the right to assign its rights or delegate
its obligations under any Loan Documents; and (b) any assignment by a Lender must be made in compliance with Section 13.3.
Agent may treat the Person which made any Loan as the owner thereof for all purposes until such Person makes an assignment in accordance
with Section 13.3. Any authorization or consent of a Lender shall be conclusive and binding on any subsequent transferee
or assignee of such Lender.


 


13.2         Participations.


 


13.2.1    Permitted
Participants; Effect. Any Lender may, in the ordinary course of its business and in accordance with Applicable Law, at any
time sell to a financial institution (other than a Defaulting Lender, an Obligor or an Affiliate of an Obligor) (“Participant”)
a participating interest in the rights and obligations of such Lender under any Loan Documents. Despite any sale by a Lender of
participating interests to a Participant, such Lender’s obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for performance of such obligations, such Lender shall remain
the holder of its Loans and Commitments for all purposes, all amounts payable by Borrowers shall be determined as if such Lender
had not sold such participating interests, and Borrowers and Agent shall continue to deal solely and directly with such Lender
in connection with the Loan Documents. Each Lender shall be solely responsible for notifying its Participants of any matters under
the Loan Documents, and Agent and the other Lenders shall not have any obligation or liability to any such Participant. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 5.9 unless Borrowers
agree otherwise in writing.


 


13.2.2    Voting
Rights. Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, waiver or
other modification of any Loan Documents other than that which forgives principal, interest or fees, reduces the stated interest
rate or fees payable with respect to any Loan or Commitment in which such Participant has an interest, postpones the Commitment
Termination Date or any date fixed for any regularly scheduled payment of principal, interest or fees on such Loan or Commitment,
or releases any Borrower, Guarantor or substantial portion of the Collateral.


 


13.2.3    Benefit
of Set-Off. Borrowers agree that each Participant shall have a right of set-off in respect of its participating interest to
the same extent as if such interest were owing directly to a Lender, and each Lender shall also retain the right of set-off with
respect to any participating interests sold by it. By exercising any right of set-off, a Participant agrees to share with Lenders
all amounts received through its set-off, in accordance with Section 12.5 as if such Participant were a Lender.


 


13.3         Assignments.


 


13.3.1    Permitted
Assignments. A Lender may assign to an Eligible Assignee any of its rights and obligations under the Loan Documents, as long
as (a) each assignment is of a constant, and not a varying, percentage of the transferor Lender’s rights and obligations
under the Loan Documents and, in the case of a partial assignment, is in a minimum principal amount of $5,000,000 (unless otherwise
agreed by Agent in its discretion) and integral multiples of $1,000,000 in excess of that amount; (b) except in the case of an
assignment in whole of a Lender’s rights and obligations, the aggregate amount of the Commitments retained by the transferor
Lender is at least $5,000,000 (unless otherwise agreed by Agent in its discretion); and (c) the parties to each such assignment
shall execute and deliver to Agent, for its acceptance and recording, an Assignment and Acceptance. Nothing herein shall limit
the right of a Lender to pledge or assign any rights under the Loan Documents to (i) any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of Governors and any Operating Circular issued by such Federal
Reserve Bank, or (ii) counterparties to swap agreements relating to any Loans; provided, however, that any payment
by Borrowers to the assigning Lender in respect of any Obligations assigned as described in this sentence shall satisfy Borrowers’
obligations hereunder to the extent of such payment, and no such assignment shall release the assigning Lender from its obligations
hereunder.


 




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13.3.2    Effect;
Effective Date. Upon delivery to Agent of an assignment notice in the form of Exhibit D and a processing fee of $3,500
(unless otherwise agreed by Agent in its discretion), the assignment shall become effective as specified in the notice, if it complies
with this Section 13.3. From such effective date, the Eligible Assignee shall for all purposes be a Lender under the Loan
Documents, and shall have all rights and obligations of a Lender thereunder. Upon consummation of an assignment, the transferor
Lender, Agent and Borrowers shall make appropriate arrangements for issuance of replacement and/or new Notes, as applicable. The
transferee Lender shall comply with Section 5.10 and deliver, upon request, an administrative questionnaire satisfactory
to Agent.


 


SECTION 14.         MISCELLANEOUS


 


14.1         Consents,
Amendments and Waivers.


 


14.1.1    Amendment.
No modification of any Loan Document, including any extension or amendment of a Loan Document or any waiver of a Default or Event
of Default, shall be effective without the prior written agreement of Agent (with the consent of Required Lenders) and each Obligor
party to such Loan Document, provided, however, that only the consent of the parties to a Bank Product agreement shall be required
for any modification of such agreement and that


 


(a)          without
the prior written consent of Agent, no modification shall be effective with respect to any provision in a Loan Document that relates
to any rights, duties or discretion of Agent;


 


(b)          without
the prior written consent of Issuing Bank, no modification shall be effective with respect to any LC Obligations, Section 2.3
or any other provision in a Loan Document that relates to any rights, duties or discretion of Issuing Bank;


 


(c)          without
the prior written consent of each affected Lender, no modification shall be effective that would (i) increase the Commitment of
such Lender; (ii) reduce the amount of, or waive or delay payment of, any principal, interest or fees payable to such Lender; or
(iii) extend the Revolver Termination Date, Term Loan Maturity Date or Capex Loan Termination Date;


 


(d)          without
the prior written consent of all Lenders (except a Defaulting Lender as provided in Section 4.2), no modification shall
be effective that would (i) alter Section 5.6, 7.1 (except to add Collateral) or 14.1.1; (ii) amend the definition
of Borrowing Base (or any defined term used in such definition), Pro Rata or Required Lenders; (iii) release Collateral with a
book value greater than $1,000,000 during any calendar year, except as currently contemplated by the Loan Documents; or (iv) release
any Obligor from liability for any Obligations, if such Obligor is Solvent at the time of the release; and


 


(e)          without
the prior written consent of a Secured Bank Product Provider, no modification shall be effective that affects its relative payment
priority under Section 5.6.


 




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14.1.2    Limitations.
The agreement of any Obligor shall not be necessary to the effectiveness of any modification of a Loan Document that deals solely
with the rights and duties of Lenders, Agent and/or Issuing Bank as among themselves. Only the consent of the parties to the Commitment
Letter or any agreement relating to a Bank Product shall be required for any modification of such agreement, and any non-Lender
that is party to a Bank Product agreement shall have no right to participate in any manner in modification of any other Loan Document.
Any waiver or consent granted by Agent or Lenders hereunder shall be effective only if in writing and only for the matter specified.


 


14.1.3    Payment
for Consents. No Obligor will, directly or indirectly, pay any remuneration or other thing of value, whether by way of additional
interest, fee or otherwise, to any Lender (in its capacity as a Lender hereunder) as consideration for agreement by such Lender
with any modification of any Loan Documents, unless such remuneration or value is concurrently paid, on the same terms, on a Pro
Rata basis to all Lenders providing their consent.


 


14.2         Indemnity.
EACH OBLIGOR SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST
ANY INDEMNITEE, INCLUDING CLAIMS ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE OR ASSERTED BY ANY OBLIGOR OR OTHER PERSON. In
no event shall any party to a Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with respect
to a Claim that is determined in a final, non-appealable judgment by a court of competent jurisdiction to result from the gross
negligence or willful misconduct of such Indemnitee.


 


14.3         Notices
and Communications.


 


14.3.1    Notice
Address. Subject to Section 4.1.4, all notices and other communications by or to a party hereto shall be in writing
and shall be given to any Obligor, at Borrower Agent’s address shown on the signature pages hereof, and to any other Person
at its address shown on the signature pages hereof (or, in the case of a Person who becomes a Lender after the Closing Date, at
the address shown on its Assignment and Acceptance), or at such other address as a party may hereafter specify by notice in accordance
with this Section 14.3. Each such notice or other communication shall be effective only (a) if given by facsimile transmission,
when transmitted to the applicable facsimile number, if confirmation of receipt is received; (b) if given by mail, three Business
Days after deposit in the U.S. mail, with first-class postage pre-paid, addressed to the applicable address; or (c) if given by
personal delivery, when duly delivered to the notice address with receipt acknowledged. Notwithstanding the foregoing, no notice
to Agent pursuant to Section 2.1.4, 2.3, 3.1.2, 4.1.1 or 5.3.3 shall be effective until actually received by the
individual to whose attention at Agent such notice is required to be sent. Any written notice or other communication that is not
sent in conformity with the foregoing provisions shall nevertheless be effective on the date actually received by the noticed party.
Any notice received by Borrower Agent shall be deemed received by all Obligors.


 


14.3.2    Electronic
Communications; Voice Mail. Electronic mail and internet websites may be used only for routine communications, such as financial
statements, Borrowing Base Certificates and other information required by Section 10.1.2, administrative matters, distribution
of Loan Documents for execution, and matters permitted under Section 4.1.4. Agent and Lenders make no assurances as to the
privacy and security of electronic communications. Electronic and voice mail may not be used as effective notice under the Loan
Documents.


 


14.3.3    Non-Conforming
Communications. Agent and Lenders may rely upon any notices purportedly given by or on behalf of any Obligor even if such notices
were not made in a manner specified herein, were incomplete or were not confirmed, or if the terms thereof, as understood by the
recipient, varied from a later confirmation. Each Obligor shall indemnify and hold harmless each Indemnitee from any liabilities,
losses, costs and expenses arising from any telephonic communication purportedly given by or on behalf of a Obligor.


 




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14.4         Performance
of Borrowers’ Obligations. Agent may, in its discretion at any time and from time to time, at Borrowers’ expense,
pay any amount or do any act required of a Borrower under any Loan Documents or otherwise lawfully requested by Agent to (a) enforce
any Loan Documents or collect any Obligations; (b) protect, insure, maintain or realize upon any Collateral; or (c) defend or maintain
the validity or priority of Agent’s Liens in any Collateral, including any payment of a judgment, insurance premium, warehouse
charge, finishing or processing charge, or landlord claim, or any discharge of a Lien. All payments, costs and expenses (including
Extraordinary Expenses) of Agent under this Section shall be reimbursed to Agent by Borrowers, on demand, with interest
from the date incurred to the date of payment thereof at the Default Rate applicable to Base Rate Revolver Loans. Any payment made
or action taken by Agent under this Section shall be without prejudice to any right to assert an Event of Default or to exercise
any other rights or remedies under the Loan Documents.


 


14.5         Credit
Inquiries. Each Obligor hereby authorizes Agent and Lenders (but they shall have no obligation) to respond to usual and
customary credit inquiries from third parties concerning any Borrower or Domestic Subsidiary.


 


14.6         Severability.
Wherever possible, each provision of the Loan Documents shall be interpreted in such manner as to be valid under Applicable Law.
If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and
the remaining provisions of the Loan Documents shall remain in full force and effect.


 


14.7         Cumulative
Effect; Conflict of Terms. The provisions of the Loan Documents are cumulative. The parties acknowledge that the Loan Documents
may use several limitations, tests or measurements to regulate similar matters, and they agree that these are cumulative and that
each must be performed as provided. Except as otherwise provided in another Loan Document (by specific reference to the applicable
provision of this Agreement), if any provision contained herein is in direct conflict with any provision in another Loan Document,
the provision herein shall govern and control.


 


14.8         Counterparts.
Any Loan Document may be executed in counterparts, each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall become effective when Agent has received counterparts bearing the signatures
of all parties hereto. Delivery of a signature page of any Loan Document by telecopy or other electronic means shall be effective
as delivery of a manually executed counterpart of such agreement.


 


14.9         Entire
Agreement. Time is of the essence of the Loan Documents. The Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof, and supersede any and all previous agreements and understandings, oral or written, relating
to the subject matter hereof.


 


14.10         Relationship
with Lenders. The obligations of each Lender hereunder are several, and no Lender shall be responsible for the obligations
or Commitments of any other Lender. Amounts payable hereunder to each Lender shall be a separate and independent debt. It shall
not be necessary for Agent or any other Lender to be joined as an additional party in any proceeding for such purposes. Nothing
in this Agreement and no action of Agent, Lenders or any other Secured Party pursuant to the Loan Documents or otherwise shall
be deemed to constitute Agent and any Secured Party to be a partnership, association, joint venture or any other kind of entity,
nor to constitute control of any Obligor.


 




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14.11         No
Control; No Advisory or Fiduciary Responsibility. Nothing in any Loan Document and no action of Agent or any Lender pursuant
to any Loan Document shall be deemed to constitute control of any Obligor by Agent or Lenders. In connection with all aspects of
each transaction contemplated by any Loan Document, Obligors acknowledge and agree that (a)(i) this credit facility and any related
arranging or other services by Agent, any Lender, any of their Affiliates or any arranger are arm’s-length commercial transactions
between Obligors and such Person; (ii) Obligors have consulted their own legal, accounting, regulatory and tax advisors to the
extent they have deemed appropriate; and (iii) Obligors are capable of evaluating and understanding, and do understand and accept,
the terms, risks and conditions of the transactions contemplated by the Loan Documents; (b) each of Agent, Lenders, their Affiliates
and any arranger is and has been acting solely as a principal in connection with this credit facility, is not the financial advisor,
agent or fiduciary for Obligors, any of their Affiliates or any other Person, and has no obligation with respect to the transactions
contemplated by the Loan Documents except as expressly set forth therein; and (c) Agent, Lenders, their Affiliates and any arranger
may be engaged in a broad range of transactions that involve interests that differ from those of Obligors and their Affiliates,
and have no obligation to disclose any of such interests to Obligors or their Affiliates. To the fullest extent permitted by Applicable
Law, each Obligor hereby waives and releases any claims that it may have against Agent, Lenders, their Affiliates and any arranger
with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated
by a Loan Document.


 


14.12         Confidentiality.
Each of Agent, Lenders and Issuing Bank shall maintain the confidentiality of all Information (as defined below), except that Information
may be disclosed (a) to its Affiliates, and to its and their partners, directors, officers, employees, agents, advisors and representatives
(provided such Persons are informed of the confidential nature of the Information and instructed to keep it confidential); (b)
to the extent requested by any governmental, regulatory or self-regulatory authority purporting to have jurisdiction over it or
its Affiliates; (c) to the extent required by Applicable Law or by any subpoena or other legal process; (d) to any other party
hereto; (e) in connection with any action or proceeding, or other exercise of rights or remedies, relating to any Loan Documents
or Obligations; (f) subject to an agreement containing provisions substantially the same as this Section, to any Transferee or
any actual or prospective party (or its advisors) to any Bank Product; (g) with the consent of Borrower Agent; or (h) to the extent
such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) is available to Agent,
any Lender, Issuing Bank or any of their Affiliates on a non-confidential basis from a source other than Borrowers. Notwithstanding
the foregoing, Agent and Lenders may publish or disseminate general information describing this credit facility, including the
names and addresses of Obligors and a general description of Obligors’ businesses, and may use Obligors’ logos, trademarks
or product photographs in advertising materials. As used herein, “Information” means all information received
from an Obligor or Subsidiary relating to it or its business that is identified as confidential when delivered. Any Person required
to maintain the confidentiality of Information pursuant to this Section shall be deemed to have complied if it exercises the same
degree of care that it accords its own confidential information. Each of Agent, Lenders and Issuing Bank acknowledges that (i)
Information may include material non-public information concerning an Obligor or Subsidiary; (ii) it has developed compliance procedures
regarding the use of material non-public information; and (iii) it will handle such material non-public information in accordance
with Applicable Law, including federal and state securities laws.


 


14.13         GOVERNING
LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).


 




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14.14         Consent
to Forum.


 


14.14.1  Forum.
EACH OBLIGOR HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION
OVER NEW YORK, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL
BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE
REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1. Nothing herein shall limit the right of
Agent or any Lender to bring proceedings against any Obligor in any other court, nor limit the right of any party to serve process
in any other manner permitted by Applicable Law. Nothing in this Agreement shall be deemed to preclude enforcement by Agent of
any judgment or order obtained in any forum or jurisdiction.


 


14.15         Waivers
by Obligors. To the fullest extent permitted by Applicable Law, each Obligor waives (a) the right to trial by jury (which
Agent and each Lender hereby also waives) in any proceeding or dispute of any kind relating in any way to any Loan Documents, Obligations
or Collateral; (b) presentment, demand, protest, notice of presentment, default, non-payment, maturity, release, compromise, settlement,
extension or renewal of any commercial paper, accounts, documents, instruments, chattel paper and guaranties at any time held by
Agent on which a Obligor may in any way be liable, and hereby ratifies anything Agent may do in this regard; (c) notice prior to
taking possession or control of any Collateral; (d) any bond or security that might be required by a court prior to allowing Agent
to exercise any rights or remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against Agent
or any Lender, on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct
or actual damages) in any way relating to any Enforcement Action, Obligations, Loan Documents or transactions relating thereto;
and (g) notice of acceptance hereof. Each Obligor acknowledges that the foregoing waivers are a material inducement to Agent
and Lenders entering into this Agreement and that Agent and Lenders are relying upon the foregoing in their dealings with Obligors.
Each Obligor has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial
and other rights following consultation with legal counsel. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.


 


14.16         Patriot
Act Notice. Agent and Lenders hereby notify Obligor s that pursuant to the requirements of the Patriot Act, Agent and Lenders
are required to obtain, verify and record information that identifies each Obligor, including its legal name, address, tax ID number
and other information that will allow Agent and Lenders to identify it in accordance with the Patriot Act. Agent and Lenders will
also require information regarding each personal guarantor, if any, and may require information regarding Obligor s’ management
and owners, such as legal name, address, social security number and date of birth.


 


SECTION 15.         GUARANTY
OF OBLIGATIONS


 


15.1         Guaranty;
Limitation of Liability. In order to induce Agent and Lenders to enter into this Agreement and to induce the Lenders to
extend credit hereunder and to induce the Lenders or their affiliates provide Bank Products, and in recognition of the direct benefit
received by the Guarantors from the extension of such credit and provision of such Bank Products, each Guarantor hereby absolutely,
unconditionally and irrevocably guarantees (the undertaking by each Guarantor under this Section 15 being, as amended from
time to time, the “Facility Guaranty”) the punctual payment when due, whether at scheduled maturity or on any
date of a required prepayment or by acceleration, demand or otherwise, of all Obligations of each other Obligor now or hereafter
existing under or in respect of the Loan Documents (including, without limitation, any extensions, modifications, substitutions,
amendments or renewals of any or all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premiums, fees, indemnities, contract causes of action, costs, expenses or otherwise (such Obligations
being the “Guaranteed Obligations”), and agrees to pay any and all expenses (including, without limitation,
reasonable fees and expenses of counsel) incurred by Agent or any other Secured Party in enforcing any rights under this Facility
Guaranty or any other Loan Document. Without limiting the generality of the foregoing, each Guarantor’s liability shall extend
to all amounts that constitute part of the Guaranteed Obligations and would be owed by any other Obligor to any Secured Party under
or in respect of the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of any Insolvency
Proceeding involving such other Obligor.


 




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15.1.1    No
Fraudulent Transfer. Each Guarantor, Agent and each other Secured Party, hereby confirms that it is the intention of such Persons
that this Facility Guaranty and the obligations of each Guarantor hereunder not constitute a fraudulent transfer or conveyance
for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
foreign, federal or state law to the extent applicable to this Facility Guaranty and the Obligations of each Guarantor hereunder.
To effectuate the foregoing intention, each Guarantor, Agent and each of the other Secured Parties hereby irrevocably agree that
such Guaranteed Obligations and other liabilities shall be limited to the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of each Guarantor that are relevant under the laws referred to in the first
sentence hereof, and after giving effect to any collections from, any rights to receive contributions from, or payments made by
or on behalf of, any of the other Obligors in respect of the Obligations under any Loan Document, result in the Guaranteed Obligations
and all other liabilities of each Guarantor under this Facility Guaranty not constituting a fraudulent transfer or conveyance.


 


15.1.2    Contribution.
Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment shall be required to be made to any
Secured Party under this Facility Guaranty, any other Loan Document or any other guaranty, each Guarantor will contribute, to the
maximum extent permitted by law, such amounts to each other Guarantor and each other guarantor so as to maximize the aggregate
amount paid to the Secured Parties under or in respect of the Loan Documents.


 


15.2         Guaranty
Absolute.


 


15.2.1    Each
Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents,
regardless of any Applicable Law, now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party with respect thereto. The obligations of each Guarantor under or in respect of this Facility Guaranty are independent
of the Guaranteed Obligations or any other Obligations of any other Obligor under or in respect of the Loan Documents, and a separate
action or actions may be brought and prosecuted against each Guarantor to enforce this Facility Guaranty, irrespective of whether
any action is brought against any Borrower or any other Obligor or whether any Borrower or any other Obligor is joined in any such
action or actions. The liability of each Guarantor under this Facility Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating
to, any or all of the following:


 


(a)          any
lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto;


 


(b)          any
change in the time, manner or place of payment of, or in any other term of, including any increase in the amount of, all or any
of the Guaranteed Obligations or any other Obligations of any other Obligor under or in respect of the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to any Obligor or otherwise;


 




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(c)          any
taking, exchange, release or non-perfection of any Collateral or any other collateral, or any taking, release or amendment or waiver
of, or consent to departure from, any other guaranty, for all or any of the Guaranteed Obligations;


 


(d)          any
manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations,
or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations
or any other Obligations of any Obligor under the Loan Documents or any other assets of any Obligor; the failure of Agent, any
other Secured Party or any other person to exercise diligence or reasonable care in the preservation, protection, enforcement,
sale or other handling or treatment of all or any part of such Collateral, property or security;


 


(e)          the
fact that any Collateral, security, security interest or lien contemplated or intended to be given, created or granted as security
for the repayment of the Guaranteed Obligations shall not be properly perfected or created, or shall prove to be unenforceable
or subordinate to any other security interest or lien, it being recognized and agreed by each Guarantor that such Guarantor is
not entering into this Facility Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability,
collectability or value of any such Collateral;


 


(f)          any
change, restructuring or termination of the corporate structure or existence of any Obligor or any of its Subsidiaries;


 


(g)          any
failure of any Secured Party to disclose to any Obligor any information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Obligor now or hereafter known to such Secured Party (each Guarantor
waiving any duty on the part of the Secured Parties to disclose such information);


 


(h)          the
failure of any other Person to execute or deliver any Loan Document or any supplement thereto or any other guaranty or agreement
or the release or reduction of liability of any Guarantor or other guarantor or surety with respect to the Guaranteed Obligations;
or


 


(i)          any
other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation
by any Secured Party that might otherwise constitute a defense available to, or a discharge of, any Obligor or any other guarantor
or surety, other than Full Payment of the Guaranteed Obligations.


 


15.2.2    Reinstatement.
This Facility Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of
the Guaranteed Obligations is rescinded or must otherwise be returned by Agent or any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of any Borrower or any other Obligor or otherwise, all as though such payment had not
been made.


 


15.2.3    Guarantied
Obligations Due. Each Guarantor hereby further agrees that, as between each Guarantor on the one hand, and Agent and the other
Secured Parties, on the other hand, (i) the Guaranteed Obligations of each Guarantor may be declared to be forthwith due and payable
as provided in Section 11.2 (and shall be deemed to have become automatically due and payable in the circumstances provided
in Section 11.2) for purposes of Section 15.1, notwithstanding any stay, injunction or other prohibition preventing
such declaration in respect of the Obligations of any of the Obligors guaranteed hereunder (or preventing such Guaranteed Obligations
from becoming automatically due and payable) as against any other Person and (ii) in the event of any declaration of acceleration
of such Guaranteed Obligations (or such Guaranteed Obligations being deemed to have become automatically due and payable) as provided
in Section 11.2, such Guaranteed Obligations (whether or not due and payable by any other Person) shall forthwith become
due and payable by each Guarantor for all purposes of this Facility Guaranty.


 




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15.3         Waivers
and Acknowledgments. Each Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance,
presentment, demand for performance, notice of nonperformance, default, acceleration, protest or dishonor and any other notice
with respect to any of the Guaranteed Obligations and this Facility Guaranty and any requirement that Agent or any Secured Party
protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against any
Obligor or any other Person or any Collateral.


 


15.3.1    Waiver
of Right of Revocation. Each Guarantor hereby unconditionally and irrevocably waives any right to revoke this Facility Guaranty
and acknowledges that this Facility Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.


 


15.3.2    Waiver
of Defenses. Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or
defense based upon an election of remedies by Agent or any Secured Party that in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of each Guarantor or other
rights of each Guarantor to proceed against any of the other Obligors, any other guarantor or any other Person or any Collateral
and (ii) any defense based on any right of set-off or counterclaim against or in respect of the Obligations of each Guarantor hereunder.


 


15.3.3    Foreclosure.
Each Guarantor acknowledges that Agent may, without notice to or demand upon each Guarantor and without affecting the liability
of each Guarantor under this Facility Guaranty, foreclose under any mortgage by nonjudicial sale, and each Guarantor hereby waives
any defense to the recovery by Agent and the other Secured Parties against each Guarantor of any deficiency after such nonjudicial
sale and any defense or benefits that may be afforded by applicable law.


 


15.3.4    Waiver
of Duty to Disclose. Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of Agent or any Secured
Party to disclose to each Guarantor any matter, fact or thing relating to the business, financial condition, operations, or performance
of any other Obligor or any of its Subsidiaries now or hereafter known by Agent or such Secured Party.


 


15.3.5    Knowing
Waivers. Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in Section 15.2 and this Section 15.3 are knowingly
made in contemplation of such benefits.


 




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15.4         Subrogation.
Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire
against any Borrower, any other Obligor or any other insider guarantor that arise from the existence, payment, performance or enforcement
of each Guarantor’s Obligations under or in respect of this Facility Guaranty or any other Loan Document, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate
in any claim or remedy of Agent or any Secured Party against any Borrower, any other Obligor or any other insider guarantor or
any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from any Borrower, any other Obligor or any other insider guarantor, directly
or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy
or right, unless and until Full Payment of all of the Guaranteed Obligations and all other amounts payable under this Facility
Guaranty. If any amount shall be paid to each Guarantor in violation of the immediately preceding sentence at any time prior to
the Full Payment of the Guaranteed Obligations and all other amounts payable under this Facility Guaranty, such amount shall be
received and held in trust for the benefit of the Secured Parties, shall be segregated from other property and funds of each Guarantor
and shall forthwith be paid or delivered to Agent in the same form as so received (with any necessary endorsement or assignment)
to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Facility Guaranty, whether matured
or unmatured, in accordance with the terms of the Loan Documents, or to be held as Collateral for any Guaranteed Obligations or
other amounts payable under this Facility Guaranty thereafter arising. If any Guarantor shall make payment to any Secured Party
of all or any part of the Guaranteed Obligations, and Full Payment of the Guaranteed Obligations shall occur, then the Secured
Parties will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest
in the Guaranteed Obligations resulting from such payment made by such Guarantor pursuant to this Facility Guaranty.


 


15.4.1    Subordination.
Each Guarantor hereby subordinates any and all debts, liabilities and other obligations in the nature of borrowed money owed to
each Guarantor by each other Obligor (as used in this Section 15, the “Intercompany Obligations”) to
the Guaranteed Obligations to the extent and in the manner hereinafter set forth in this Section 15.4:


 


15.4.2    Prohibited
Payments, Etc. Except (a) during the continuance of any Event of Default under Sections 11.1(a) or (j) or (b)
after notice from Agent or any Lender of any other Event of Default under this Agreement, each Guarantor may receive regularly
scheduled payments from any other Obligor on account of the Intercompany Obligations. During the continuance of any Event of Default
under Sections 11.1(a) or (j) or after notice from Agent or any Lender of any other Event of Default under this Agreement,
however, each Guarantor shall not demand, accept or take any action to collect any payment on account of the Intercompany Obligations
unless the Required Lenders otherwise agree.


 


15.4.3    Prior
Payment of Guaranteed Obligations. In any Insolvency Proceeding relating to any other Obligor, each Guarantor agrees that the
Secured Parties shall be entitled to receive Full Payment in cash of all Guaranteed Obligations (including all interest, expenses
and fees (including legal fees) accruing after the commencement of any Insolvency Proceeding, whether or not constituting an allowed
claim in such proceeding (as used in this Section 15, “Post-Petition Interest”)) before each Guarantor
receives payment of any Intercompany Obligations.


 


15.4.4    Turn-Over.
After the occurrence and during the continuance of any Event of Default (including the commencement and continuation of any Insolvency
Proceeding relating to any other Obligor), each Guarantor shall, if Agent so requests, collect, enforce and receive payments on
account of the Intercompany Obligations as trustee for the Secured Parties and deliver such payments to Agent on account of the
Guaranteed Obligations (including all Post Petition Interest), together with any necessary endorsements or other instruments of
transfer, but without reducing or affecting in any manner the liability of each Guarantor under the other provisions of this Facility
Guaranty.


 


15.4.5    Agent
Authorization. After the occurrence and during the continuance of any Event of Default (including the commencement and continuation
of any Insolvency Proceeding relating to any other Obligor), Agent is authorized and empowered (but without any obligation to so
do), in its discretion, (i) in the name of each Guarantor, to collect and enforce, and to submit claims in respect of, Intercompany
Obligations and to apply any amounts received thereon to the Guaranteed Obligations (including any and all Post Petition Interest),
and (ii) to require each Guarantor (A) to collect and enforce, and to submit claims in respect of, Intercompany Obligations and
(B) to pay any amounts received on such obligations to Agent for application to the Guaranteed Obligations (including any and all
Post Petition Interest).


 




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15.4.6    Continuing
Guaranty; Assignments. This Facility Guaranty is a continuing guaranty and shall (a) remain in full force and effect until
the Full Payment of the Guaranty Obligations, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Secured Parties and their successors, transferees and assigns. Without limiting the generality
of clause (c) of the immediately preceding sentence, any Secured Party may assign or otherwise transfer all or any portion of its
rights and obligations under this Agreement (including, without limitation, all or any portion of its Commitments, the Loans owing
to it and the Note or Notes held by it) to any other Person, and such other Person shall thereupon become vested with all the benefits
in respect thereof granted to such Secured Party herein or otherwise, in each case as and to the extent provided in Section
13.3. No Guarantor shall have the right to assign its rights hereunder or any interest herein without the prior written consent
of the Secured Parties


 


[Remainder of page intentionally left
blank; signatures begin on following page]


 




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IN WITNESS WHEREOF,
this Agreement has been executed and delivered as of the date set forth above.


 





	 	BORROWERS:
	 	 
	 	P&F INDUSTRIES, INC.
	 	FLORIDA PNEUMATIC MANUFACTURING
	 	CORPORATION
	 	HY-TECH MACHINE, INC.
	 	ATSCO HOLDINGS CORPORATION
	 	NATIONWIDE INDUSTRIES, INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	 	Attention:	 
	 	 	Telecopy:	 
	 	 
	 	GUARANTORS:
	 	 
	 	CONTINENTAL TOOL GROUP, INC.
	 	COUNTRYWIDE HARDWARE, INC.
	 	EMBASSY INDUSTRIES, INC.
	 	GREEN MANUFACTURING, INC.
	 	PACIFIC STAIR PRODUCTS, INC.
	 	EXHAUST TECHNOLOGIES, INC.
	 	WILP HOLDINGS, INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	 	Attention:	 
	 	 	Telecopy:	 
	 	 
	 	WOODMARK INTERNATIONAL, L.P.
	 	 
	 	By:	Countrywide Hardware, Inc.
	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 
	 	 	Attention:	 
	 	 	Telecopy:	 




 


LOAN AND SECURITY AGREEMENT


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	 	AGENT AND LENDERS:
	 	 
	 	CAPITAL ONE BUSINESS CREDIT CORPORATION, NATIONAL ASSOCIATION as Agent and Lender
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 
	 	275 Broadhollow Road
	 	Melville, New York 11747
	 	Attention:	Julianne Low	 
	 	Telecopy:	 	 







 


LOAN AND SECURITY AGREEMENT


Signature page