CREDIT
AGREEMENT




dated
as of January 7, 2013 between


INTERNATIONAL
BALER CORPORATION




as
the Borrower and


FIRST
MERCHANTS BANK, NATIONAL ASSOCIATION,




as
the Lender


 






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TABLE
OF CONTENTS


	CREDIT
    AGREEMENT	1
	SECTION
    1 DEFINITIONS	1
	1.1 Definitions	1
	1.2
    Other Interpretive Provisions	11
	SECTION
    2 COMMITMENTS OF THE LENDER; BORROWING	11
	2.1
    Commitments	11
	2.2
    Loan Procedures	12
	2.3
    Certain Conditions	12
	SECTION
    3 EVIDENCING OF LOANS	12
	3.1
    Notes	12
	3.2
    Recordkeeping	12
	SECTION
    4 INTEREST	12
	4.1
    Interest Rates	12
	4.2
    Payment Dates; Repayment.	13
	4.3
    Setting and Notice of LIBOR Rates	13
	4.4
    Computation of Interest.	13
	SECTION
    5 FEES.·	13
	5.1 Commitment
    Fee	13
	SECTION
    6 REDUCTION OF THE LOANS; PREPAYMENTS	14
	6.1
    Mandatory Reductions of Revolving Commitment.	14
	6.2
    Prepayments	14
	6.3
    Manner of Prepayments	14
	SECTION
    7 MAKING OF PAYMENTS; SETOFF; TAXES	14
	7.1
    Making of Payments	14
	7.2
    Application of Certain Payments	15
	7.3
    Due Date Extension	15
	7.4
    Setoff	15
	7.5
    Taxes	15
	SECTION
    8 INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS	16
	8.1
    Increased Costs	16
	8.2
    Basis for Determining Interest Rate Inadequate or Unfair	16
	8.3
    Changes in Law Rendering LIBOR Loans Unlawful.	17
	8.4
    Funding Losses	17
	8.5 Right
    of Lender to Fund through Other	17
	8.6
    Discretion of Lender as to Manner of Funding	17
	SECTION
    9 REPRESENTATIONS AND WARRANTIES	18
	9.1
    Organization	18
	9.2
    Authorization; No Conflict.	18
	9.3
    Validity and Binding Nature	18





 













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	9.4
    Financial Condition	18
	9.5
    No Material Adverse Change	18
	9.6
    Litigation and Contingent Liabilities	18
	9.7
    Ownership of Properties; Liens	18
	9.8
    Equity Ownership; Subsidiaries	19
	9.9
    Pension Plans	19
	9.10
    Investment Borrower Act.	19
	9.11
    Regulation 	19
	9.12
    Taxes	19
	9.13
    Solvency, etc	20
	9.14
    Environmental Matters	20
	9.15
    Insurance	20
	9.16
    Real Property	20
	9.17
    Information	21
	9.18
    Intellectual Property	21
	9.19
    Burdensome Obligations	21
	9.20
    Labor Matters	21
	9.21
    No Default.	21
	SECTION
    10 AFFIRMATIVE COVENANTS
	10.l
    Reports, Certificates and Other Information. Furnish to the Lender:	21
	10.2
    Books, Records and Inspections	22
	10.3
    Maintenance of Property; Insurance	23
	10.4
    Compliance with Laws; Payment of Taxes and Liabilities	24
	10.5
    Maintenance of Existence, etc.	24
	10.6
    Use of Proceeds	24
	10.7
    Employee Benefit Plans	24
	10.8
    Environmental Matters	25
	10.9
    Further Assurance	25
	10.10
    Financial Covenants	25
	10.11
    Additional Actions	25
	10.12
    Deposit Accounts/Cash Management Services	25
	SECTION
    11 NEGATIVE COVENANTS	26
	11.1
    Debt.	26
	11.2
    Liens	26
	11.3
    Operating Leases	27
	11.4
    Restricted Payments	27
	11.5
    Mergers, Consolidations, Sales	27
	11.6
    Modification of Organizational Documents	28
	11.7
    Transactions with Affiliates	28
	11.8
    Unconditional Purchase Obligations	28
	11.9
    Inconsistent Agreements	28
	11.10
    Business Activities; Issuance of Equity	28
	11.11
    Investments	28
	11.12
    Fiscal Year	29
	11.13
    Cancellation of Debt.	29
	SECTION
    12 EFFECTIVENESS; CONDITIONS OF LENDING, ETC	29
	12.1
    Initial Credit Extension	29
	12.2
    Conditions	31





 


 






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	SECTION
    13 EVENTS OF DEFAULT AND THEIR EFFECT	31
	13.1
    Events of Default.	31
	13.2
    Effect of Event of Default	33
	SECTION
    14 [RESERVED]	33
	SECTION
    15 GENERAL	33
	15.1
    Waiver; Amendments	33
	15.2
    Notices	33
	15.3
    Computations	34
	15.4
    Costs, Expenses and Taxes	34
	15.5
    Participations	34
	15.6
    GOVERNING LAW	35
	15.7
    Severability	35
	15.8
    Nature of Remedies	35
	15.9
    Entire Agreement.	35
	15.10
    Counterparts	35
	15.11
    Successors and Assigns	35
	15.12
    Captions	35
	15.13
    Customer Identification - USA Patriot Act Notice	35
	15.14
    INDEMNIFICATION BY THE BORROWER.	36
	15.15
    Nonliability of Lender	36
	15.16
    FORUM SELECTION AND CONSENT TO JURISDICTION	37
	15.17
    WAIVER OF JURY TRIAL	37
	 	 
	SCHEDULES	 
	SCHEDULE
    9.15	Insurance	 
	SCHEDULE
    9.16	Real
    Property	 
	SCHEDULE
    9.18	Intellectual
    Property	 
	SCHEDULE
    11.1	Existing
    Debt	 
	SCHEDULE
    11.2	Existing
    Liens	 
	SCHEDULE
    11.11	Investments	 
	SCHEDULE
    12.1	Debt
    to be Repaid	 
	EXHIBITS	 
	EXHIBIT
    A	Form
    of Revolving Note	 
	EXHIBIT
    B	Form
    of Compliance Certificate	 











 






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CREDIT
AGREEMENT




THIS
CREDIT AGREEMENT dated effective as of January 7, 2013 (this "Agreement") is entered into between INTERNATIONAL BALER CORPORATION,
a Delaware corporation (the "Borrower" or the "Company"), and FIRST MERCHANTS BANK, NATIONAL ASSOCIATION
(the "Lender").


The
Lender has agreed to make available to the Borrower a revolving credit facility upon the terms and conditions set forth herein.


In
consideration of the mutual agreements herein contained, the parties hereto agree as follows:




SECTION
1




1.1
DEFINITIONS




Definitions.
When used herein the following terms shall have the following meanings:


Account
Debtor means the party which is obligated on or under any Account. Account or Accounts is defined in the UCC.


Acquisition
means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of all or substantially all of any business or division of a Person, (b) the
acquisition of in excess of 50% of the Capital Securities of any Person, or otherwise causing any Person to become a Subsidiary, or (c)
a merger or consolidation or any other combination with another Person (other than a Person that is already a Subsidiary).


Affiliate
of any Person means (a) any other Person which, directly or indirectly, controls or is controlled by or is under common control with
such Person, (b) any officer or director of such Person and


(c)
with respect to the Lender, any entity administered or managed by the Lender or an Affiliate or investment advisor thereof and which
is engaged in making, purchasing, holding or otherwise investing in commercial loans. A Person shall be deemed to be "controlled
by" any other Person if such Person possesses, directly or indirectly, power to vote 50% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise. Unless expressly stated otherwise herein, the Lender shall not be deemed
an Affiliate of any Loan Party.


Agreement
- see the Preamble.


Asset
Disposition means the sale, lease, assignment or other transfer for value (each, a "Disposition") by any Loan Party to
any Person (other than a Loan Party) of any asset or right of such Loan Party (including, the loss, destruction or damage of any thereof
or any actual or threatened (in writing to any Loan Party) condemnation, confiscation, requisition, seizure or taking thereof) other
than


(a) 
the Disposition of any asset which is to be replaced, and is in fact replaced, within 60 days with another asset performing the same
or a similar function, (b) the Disposition of obsolete, damaged, worn or surplus assets for which the proceeds for any such Disposition
are utilized to repay the Loans (to the extent such assets are not replaced in accordance with subsection (a) above), and (c) the sale
or lease of inventory in the ordinary course of business.


Attorney
Costs means, with respect to any Person, all reasonable fees and charges of any counsel to such Person, all reasonable disbursements
of any such counsel and all court costs and similar legal expenses.



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Bank
Product Agreements means those certain cash management service agreements entered into from time to time between any Loan Party and
the Lender or its Affiliates in connection with any of the Bank Products.




Bank
Product Obligations means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by the Loan
Parties to the Lender or its Affiliates pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment
of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including
all such amounts that a Loan Party is obligated to reimburse to the Lender as a result of the Lender purchasing participations or executing
indemnities or reimbursement obligations with respect to the Bank Products provided to the Loan Parties pursuant to the Bank Product
Agreements.


Bank
Products means any service or facility extended to any Loan Party by the Lender or its Affiliates including: (a) credit cards, (b)
credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH transactions, (f) cash management, including controlled
disbursement, accounts or services, or (g) Hedging Agreements.




Basis
Point means one-one hundredth of one percent. BSA - see Section 10.4.


Business
Day means any day on which the Lender is open for commercial banking business in Muncie, Indiana and, in the case of a Business Day
which relates to a LIBOR Loan, on which dealings are carried on in the London interbank eurodollar market.


Capital
Expenditures means all expenditures which, in accordance with GAAP, would be required to be capitalized and shown on the consolidated
balance sheet of the Borrower, including expenditures in respect of Capital Leases, but excluding expenditures made in connection with
the replacement, substitution or restoration of assets to the extent financed (a) from insurance proceeds (or other similar recoveries)
paid on account of the loss of or damage to the assets being replaced or restored or (b) with awards of compensation arising from the
taking by eminent domain or condemnation of the assets being replaced.




Capital
Lease means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal property
by such Person that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of such Person.


Capital
Securities means, with respect to any Person, all shares, interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or issued or acquired after the Closing Date, including common
shares, preferred shares, membership interests in a limited liability company, limited or general partnership interests in a partnership,
interests in a trust, interests in other unincorporated organizations or any other equivalent of such ownership interest.




Cash
Capital Expenditures means Capital Expenditures incurred by Borrower not financed with third party funding.




Cash
Equivalent Investment means, at any time, (a) any evidence of Debt, maturing not more than one year after such time, issued or guaranteed
by the United States Government or any agency thereof, (b) commercial paper, maturing not more than one year from the date of issue,
or corporate demand notes, in each case (unless issued by the Lender or its holding company) rated at least A-I by Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies , Inc. or P-1 by Moody's




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Investors
Service, Inc., (c) any certificate of deposit, time deposit or banker's acceptance, maturing not more than one year after such time,
or any overnight Federal Funds transaction that is issued or sold by the Lender or its holding company (or by a commercial banking institution
that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than


$500,000,000),
(d) any repurchase agreement entered into with the Lender (or commercial banking institution of the nature referred to in clause (c))
which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c)
above and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation
of the Lender (or other commercial banking institution) thereunder and (e) money market accounts or mutual funds which invest exclusively
in assets satisfying the foregoing requirements, and (f) other short term liquid investments approved in writing by the Lender.


Change
of Control means the occurrence of any of the following events: (a) Persons who are holders of Capital Securities of the Borrower
on the Closing Date and their Affiliates and family members shall cease to own and control at least 50.5% of the outstanding Capital
Securities of the Borrower; or (b) the Borrower shall cease to, directly or indirectly, own and control 100% of each class of the outstanding
Capital Securities of each Subsidiary.


Closing
Date - see Section 12.1.


Code
means the Internal Revenue Code of 1986. Collateral as defined in the Security Agreement.


Collateral
Documents means, collectively, the Security Agreement, each control agreement and any other agreement or instrument pursuant to which
the Borrower, any Subsidiary or any other Person grants or purports to grant collateral to the Lender or otherwise relates to such collateral.


Commitment
means the Lender's commitment to make the Loans.


Compliance
Certificate means a Compliance Certificate in substantially the form of Exhibit B.


Computation
Period means each period of four consecutive Fiscal Quarters ending on the last day of a Fiscal Quarter.


Consolidated
Net Income means, with respect to the Borrower and its Subsidiaries for any period, the net income (or loss) of the Borrower and
its Subsidiaries for such period, excluding any gains from Asset Dispositions, any extraordinary gains and any gains from discontinued
operations.


Contingent
Liability means, with respect to any Person, each obligation and liability of such Person and all such obligations and liabilities
of such Person incurred pursuant to any agreement, undertaking or arrangement by which such Person: (a) guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply
funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, dividend, obligation
or other liability of any other Person in any manner (other than by endorsement of instruments in the course of collection), including
any indebtedness, dividend or other obligation which may be issued or incurred at some future time; (b) guarantees the payment of dividends
or other distributions upon the Capital Securities of any other Person; (c) undertakes or agrees (whether contingently or otherwise):
(i) to purchase, repurchase, or otherwise acquire any indebtedness, obligation or liability of any other Person or any property or assets
constituting security therefor, (ii) to advance or provide funds for the payment or discharge of any indebtedness, obligation or liability
of any other Person (whether in the form of loans, advances, stock purchases, capital contributions or otherwise),




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or
to maintain solvency, assets, level of income, working capital or other financial condition of any other Person, or (iii) to make payment
to any other Person other than for value received; (d) agrees to lease property or to purchase securities, property or services from
such other Person with the purpose or intent of assuring the owner of such indebtedness or obligation of the ability of such other Person
to make payment of the indebtedness or obligation; (e) to induce the issuance of, or in connection with the issuance of, any letter of
credit for the benefit of such other Person; or (f) undertakes or agrees otherwise to assure a creditor against loss. The amount of any
Contingent Liability shall (subject to any limitation set forth herein) be deemed to be the outstanding principal amount (or maximum
permitted principal amount, iflarger) of the indebtedness, obligation or other liability guaranteed or supported thereby.


Controlled
Group means all members of a controlled group of corporations, all members of a controlled group of trades or businesses (whether
or not incorporated) under common control and all members of an affiliated service group which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the Code or Section 4001 ofERISA.


Debt
means the Borrower's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property or
services (other than accounts payable arising in the ordinary course of the Borrower's business payable on terms customary in the trade),
(iii) obligations, whether or not assumed, secured by liens or security interest or payable out of the proceeds or production from property
now or hereafter owned or acquired by the Borrower, (iv) obligations which are evidenced by notes, acceptances, or other negotiable instruments,
(v) obligations to purchase securities or other property arising out of or in connection with the sale of the same or substantially similar
securities or property, (vi) obligations which would be shown as a liability on a balance sheet of the Borrower prepared in accordance
with GAAP and which arise under leases of property by the Borrower as lessee which would be capitalized on a balance sheet the Borrower
prepared in accordance with GAAP, (vii) any other obligation for borrowed money or other financial accommodation which in accordance
with GAAP would be shown as a liability on the balance sheet of the Borrowe-r; and (viii) any agreement, undertaking or arrangement by
which the Borrower assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes
or is contingently liable upon, the obligation or liability of any other person or entity, or agrees to maintain the net worth or working
capital or other financial condition of any other person or entity, or otherwise assures any creditor of such other person or entity
against loss, including, without limitation, any comfort letter, operating agreement, take or pay contract or the obligations of the
Borrower as general partner of a partnership with respect to the liabilities of the partnership.




Debt
Service means with respect to any period, the sum of the Borrower's interest expense for such period, plus the sum of all scheduled
payments of Debt of the Borrower made or due during such period.




Debt
to be Repaid means Debt listed on Schedule 12.1.


Designated
Proceeds - see Section 6.2.2(a).


Dollar
and the sign "$" mean lawful money of the United States of America.


EBITDA
means, for any period, Consolidated Net Income for such period plus, to the extent deducted in determining such Consolidated Net
Income, Interest Expense, income tax expense, depreciation and amortization expense, rent, and any one-time fees attributable to closing
costs and refinancing transaction expenses associated with the transactions contemplated by this Agreement for such period.




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Environmental
Claims means all claims, however asserted, by any governmental, regulatory or judicial authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law, or for release or injury to the environment.


Environmental
Laws means all present or future federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative or judicial orders, consent agreements, directed duties, requests, licenses, authorizations and permits
of, and agreements with, any governmental authority, in each case relating to any matter arising out of or relating to public health
and safety, or pollution or protection of the environment or workplace, including any of the foregoing relating to the presence, use,
production, generation, handling, transport, treatment, storage, disposal, distribution, discharge , emission, release, threatened release,
control or cleanup of any Hazardous Substance.


ERISA
means the Employee Retirement Income Security Act of 1974. Event of Default means any of the events described in Section
13.1.


Excluded
Taxes means taxes based upon, or measured by, the Lender's (or a branch of the Lender's) overall net income, overall net receipts,
or overall net profits (including franchise taxes imposed in lieu of such taxes), but only to the extent such taxes are imposed by a
taxing authority (a) in a jurisdiction in which the Lender is organized, (b) in a jurisdiction which the Lender's principal office is
located, or (c) in a jurisdiction in which the Lender's lending office (or branch) in respect of which payments under this Agreement
are made is located.




Fiscal
Quarter means a fiscal quarter of a Fiscal Year.




Fiscal
Year means the fiscal year of the Borrower and its Subsidiaries, which period shall be the 12-month period ending on December 31
of each year. References to a Fiscal Year with a number corresponding to any calendar year (e.g., "Fiscal Year 2012") refer
to the Fiscal Year ending on December 31 of such calendar year.


Fixed
Charge Coverage Ratio means, as of the last day of any Fiscal Quarter, a ratio, the numerator of which is Borrower's EBITDA minus
Cash Capital Expenditures for the Computation Period, and the denominator of which is the sum of (a) Borrower's Debt Services for the
Computation Period, (b) without duplication and to the extend deducted in determining net income for the most recently preceding Fiscal
Year, income tax expense for such Computation Period, determined in accordance with GAAP, and (c) all dividends and distributions paid
during the Computation Period.




FRB
means the Board of Governors of the Federal Reserve System or any successor thereto.




GAAP
means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession) and the Securities
and Exchange Commission, which are applicable to the circumstances as of the date of determination.


Hazardous
Substances means (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, dielectric fluid containing levels of polychlorinated biphenyls, radon gas and mold; (b) any chemicals,
materials, pollutant or substances defined as or included in the definition of "hazardous substances", "hazardous waste",
"hazardous materials", "extremely hazardous substances", "restricted hazardous waste", "toxic substances",
"toxic pollutants", "contaminants", "pollutants" or words of similar import, under any




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applicable
Environmental Law; and (c) any other chemical, material or substance, the exposure to, or release of which is prohibited, limited or
regulated by any governmental authority or for which any duty or standard of care is imposed pursuant to, any Environmental Law.


Hedging
Agreement means any interest rate, currency or commodity swap agreement, cap agreement or collar agreement, and any other agreement
or arrangement designed to protect a Person against fluctuations in interest rates, currency exchange rates or commodity prices.


Hed!!i.ng
Obligation means, with respect to any Person, any liability of such Person under any Hedging Agreement.


Indemnified
Liabilities - see Section 15.14.




Interest
Expense means for any period the consolidated interest expense of the Borrower and its Subsidiaries for such period (including all
imputed interest on Capital Leases).


Interest
Period means, as to any LIBOR Loan or Prime Loan, the period commencing on the date such Loan is borrowed or continued as, or converted
into, a LIBOR Loan or Prime Loan, as the case may be, and ending on the date one month thereafter; provided that:


(a) 
if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the following
Business Day .unless the result of such extension would be to carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;


(b) 
any Interest Period that begins on a day for which there is no numerically corresponding day in the calendar month at the end of such
Interest Period shall end on the last Business Day of the calendar month at the end of such Interest Period;


(c) 
the Borrower may not select any Interest Period for a Revolving Loan which would extend beyond the scheduled Termination Date.


Investment
means, with respect to any Person, any investment in another Person, whether by acquisition of any debt or Capital Security, by making
any loan or advance, by becoming obligated with respect to a Contingent Liability in respect of obligations of such other Person (other
than travel and similar advances to employees in the ordinary course of business) or by making an Acquisition.


LIBOR
Loan means any Loan which bears interest at a rate determined by reference to the LIBORRate.


LIBOR
Office means with respect to the Lender the office or offices of the Lender which shall be making or maintaining the LIBOR Loans
of the Lender hereunder. A LIBOR Office of the Lender may be, at the option of the Lender, either a domestic or foreign office.


LIBOR
Ouoted Rate means, for any day, the LIBOR Rate for an interest period of one (1) month as of such day.


LIBOR
Rate means an independent index which is the One Month London Interbank Offered Rate or LIBOR, identified in the Wall Street Journal
"Money Rates" column on the date the interest rate is to be determined, or if that date is not a publication date, on the publication
date immediately preceding. The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable,
Lender may designate a substitute index after notifying Borrower. Any changes or




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adjustments
to the interest rate will not occur more often than each month. Borrower understands that Lender may make loans based on rates other
than the Index. The Lender's determination of the LIBOR Rate shall be conclusive, absent manifest error.




Lien
means, with respect to any Person, any interest granted by such Person in any real or personal property, asset or other right owned
or being purchased or acquired by such Person (including an interest in respect of a Capital Lease) which secures payment or performance
of any obligation and shall include any mortgage, lien, encumbrance, title retention lien, charge or other security interest of any kind,
whether arising by contract, as a matter of law, by judicial process or otherwise.


Loan
Documents means this Agreement, the Note, the Collateral Documents and all documents, instruments and agreements delivered in connection
with the foregoing.


Loan
Pa rty means the Borrower and each Subsidiary of the Borrower. Loan or Loans means, as the context may require, the Revolving
Loan. Mandato rv Prepaym ent Event - see Section 6.2.2fa).


Margin
Stock means any "margin stock" as defined in Regulation U.


Material
Adverse Effect means (a) a material adverse change in, or a material adverse effect upon, the financial condition, operations, business
or assets (taken as a whole) of the Loan Parties taken as a whole, (b) a material impairment of the ability of any Loan Party to perform
any of the material Obligations under any Loan Document or (c) a material adverse effect upon any substantial portion of the collateral
under the Collateral Documents or upon the legality, validity, binding effect or enforceability against any Loan Party of any material
obligations under any Loan Document.




Multiemployer
Pension Plan means a multiemployer plan, as defined in Section 400l(a)(3) of BRISA, to which the Borrower or any other member of
the Controlled Group may have any liability.


Net
Cash Proceeds means:


(a) 
with respect to any Asset Disposition, the aggregate cash proceeds (including cash proceeds received pursuant to policies of insurance
or by way of deferred payment of principal pursuant to a note, installment receivable or otherwise, but only as and when received) received
by any Loan Party pursuant to such Asset Disposition net of (i) the direct costs relating to such sale, transfer or other disposition
(including sales commissions and legal, accounting and investment banking fees), (ii) taxes paid or reasonably estimated by the Borrower
to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements)
and (iii) amounts required to be applied to the repayment of any Debt secured by a Lien on the asset subject to such Asset Disposition
(other than the Loans);


(b) 
with respect to any issuance of Capital Securities resulting in a Change of Control, the aggregate cash proceeds received by any Loan
Party pursuant to such issuance, net of the direct costs relating to such issuance (including sales and underwriters' commissions); and


(c) 
with respect to any issuance of Debt, the aggregate cash proceeds received by any Loan Party pursuant to such issuance, net of the direct
costs of such issuance (including up-front, underwriters' and placement fees).




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Notes
means the promissory note substantially in the forms of Exhibit A attached and any other promissory notes executed
and delivered by Borrower and payable to Lender from time to time, together with all renewals, substitutions and replacements .thereof.


Notice
of Borrowing- see Section 2.2.1.




Obligations
means all obligations (monetary (including post-petition interest, allowed or not) or otherwise) of any Loan Party under this Agreement
and any other Loan Document including Attomey Costs, all Hedging Obligations of any Loan Party permitted hereunder which are owed to
the Lender or its Affiliate, and all Bank Products Obligations of any Loan Party, all in each case howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due.


OFAC
- see Section 10.4.




Operating
Lease means any lease of (or other agreement conveying the right to use) any real or personal property by any Loan Party, as lessee,
other than any Capital Lease.




PBGC
means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.




Partici
pant - see Section 15.5.




Pension
Plan means a "pension plan", as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA or
the minimum funding standards of ERISA (other than a Multiemployer Pension Plan), and as to which the Borrower or any member of the Controlled
Group may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of
ERISA.


Permitted
Lien means a Lien expressly permitted hereunder pursuant to Section 11.2.




Person
means any natural person, corporation, partnership, trust, limited liability company, association, governmental authority or unit,
or any other entity, whether acting in an individual, fiduciary or other capacity.


Premises
means the real property and improvements located at 5400 Rio Grande Avenue, Jacksonville, Florida 32254.




Prime
Loan means any Loan which bears interest at a rate determined by reference to the Prime


Rate.




Prime
Rate means, for any day, the rate of interest in effect for such day as publicly announced


from
time to time by the Lender as its prime rate (whether or not such rate is actually charged by the Lender), which is not intended to be
the Lender's lowest or most favorable rate of interest at any one time. Any change in the Prime Rate announced by the Lender shall take
effect at the opening of business on the day specified in the public announcement of such change; provided that the Lender shall not
be obligated to give notice of any change in the Prime Rate.


Regulation
D means Regulation D of the FRB. Regulation U means Regulation U of the FRB.




    	8



    	 



    



Reportable
Event means a reportable event as defined in Section 4043 of ERISA and the regulations issued thereunder as to which the PBGC has
not waived the notification requirement of Section 4043(a), or the failure of a Pension Plan to meet the minimum funding standards of
Section 412 of the Code (without regard to whether the Pension Plan is a plan described in Section 4021(a)(2) of ERISA) or under Section
302 ofERJSA.


Revolving
Commitment means One Million Six Hundred Fifty Thousand and No/100 Dollars ($1,650,000.00), as reduced from time to time pursuant
to Section 6.1.


Revolving
Loans - see Section 2.1(a).


Revolving
Loan Termination Date means the earlier to occur of (a) December 31, 2014, or (b) such other date on which the Revolving Commitment
terminates pursuant to Section 6 or Section 13.


Revolving
Outstandings - means, at any time, the sum of the agreement principal amount of all outstanding Revolving Loans.


Security
Agreement means the Security Agreement and Perfection Certificate in form and substance satisfactory to the Lender executed and delivered
by Borrower to Lender.


Senior
Officer means, with respect to any Loan Party, any of the chief executive officer, the chief financial officer, the chief operating
officer or the treasurer of such Loan Party.


Subsidiary
means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person owns,
directly or indirectly, such number of outstanding Capital Securities as have more than 50% of the ordinary voting power for the election
of directors or other managers of such corporation, partnership, limited liability company or other entity. Unless the context otherwise
requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of the Borrower. Additionally, for purposes of clarification,
any individual owning more that 50% of the Capital Securities of any Person shall not be deemed a Subsidiary of such Person.


Tangible
Net Worth means the stockholders' equity of the Borrower minus the net book value of all assets that are treated as intangibles,
all as determined in accordance with GAAP.


Taxes
means any and all present and future taxes, duties, levies, imposts, deductions, assessments, charges or withholdings, and any and
all liabilities (including interest and penalties and other additions to taxes) with respect to the foregoing, but excluding Excluded
Taxes.


Termination
Event means, with respect to a Pension Plan that is subject to Title IV ofERJSA, (a) a Reportable Event, (b) the withdrawal of Borrower
or any other member of the Controlled Group from such Pension Plan during a plan year in which Borrower or any other member of the Controlled
Group was a "substantial employer" as defined in Section 4001(a)(2) of ERJSA or was deemed such under Section 4068(f) of ERJSA,
(c) the termination of such Pension Plan, the filing of a notice of intent to terminate the Pension Plan or the treatment of an amendment
of such Pension Plan as a termination under Section 4041 of ERJSA, (d) the institution by the PBGC of proceedings to terminate such Pension
Plan or


(e)
any event or condition that might constitute grounds under Section 4042 ofERJSA for the termination of, or appointment of a trustee to
administer, such Pension Plan.


Total
Plan Liability means, at any time, the present value of all vested and unvested accrued benefits under all Pension Plans, determined
as of the then most recent valuation date for each Pension Plan, using PBGC actuarial assumptions for single employer plan terminations.




    	9



    	 



    



UCC
is defined in the Security Agreement.




Unfunded
Liability means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Pension Plans
exceeds the fair market value of all assets allocable to those benefits, all determined as of the then most recent valuation date for
each Pension Plan, using PBGC actuarial assumptions for single employer plan terminations.


Unmatured
Event of Default means any event that, if it continues uncured, will, with lapse of time or notice or both, constitute an Event of
Default.




Wholly-Owned
Subsidiary means, as to any Person, a Subsidiary all of the Capital Securities of which (except directors' qualifying Capital Securities)
are at the time directly or indirectly owned by such Person and/or another Wholly-Owned Subsidiary of such Person.


Working
Capital means, at any date, Borrower's total current assets less Borrower's total current liabilities, each determined in accordance
with GAAP as of such date.


1.2 Other
Intemretive Provisions




(a)(i)The
meanings of defined terms are equally applicable to the singular and plural fonns of the defined terms.




(ii)
specified.


(iii)


Section,
Schedule and Exhibit references are to this Agreement unless otherwise




The
term "including" is not limiting and means "including without limitation."


(iv) 
In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding", and the word "through"
means ''to and including."




(v) 
Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement and the other Loan Documents) and
other contractual instruments shall be deemed to include all subsequent amendments, restatements, supplements and other modifications
thereto, but only to the extent such amendments, restatements, supplements and other modifications are not prohibited by the terms of
any Loan Document, and (ii) references to any statute or regulation shall be construed as including all statutory and regulatory provisions
amending, replacing, supplementing or interpreting such statute or regulation.




(vi) 
This Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and each shall be performed in accordance with its terms.


(vii) 
This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Borrower and
the Lender and are the products of both parties. Accordingly, they shall not be construed against the Lender merely because of the Lender's
involvement in their preparation.


SECTION
2COMMITMENTS OF THE LENDER; BORROWING




2.1 
Commitments. On and subject to the terms and conditions of this Agreement, the Lender agrees to make loans to the Borrower as
follows:




    	10



    	 



    



(a) 
Revolving Loan Commitment. The Lender agrees to make loans on a revolving basis ("Revolving Loans") from time to time
until the Revolving Loan Termination Date in such amounts as the Borrower may request; provided that the Revolving Outstandings will
not at any time exceed the maximum amount of the Revolving Commitment. The entire unpaid balance of the Revolving Loans shall be immediately
due and payable in full in immediately available funds on the Revolving Loan Termination Date if not sooner paid in full.


		(b)	[RESERVED]



		(c)	[RESERVED]



2.2 
Loan Procedures. The Borrower shall give notice (written or telephonic notice) to the Lender of each proposed borrowing not later
than 11:00 A.M., Muncie, Indiana time, at least one Business Day prior to the proposed date of such borrowing. Each such notice shall
be effective upon receipt by the Lender, shall be irrevocable, and shall specify the date and amount of borrowing. So long as the Lender
has not received written notice that the conditions precedent set forth in Section 12 with respect to such borrowing have not
been satisfied, the Lender shall pay over the funds to the Borrower on the requested borrowing date. Each borrowing shall be on a Business
Day.


2.3 
Certain Conditions. Lender shall have no obligation to make any Loan if an Event of Default or Unmatured Event of Default exists.


SECTION
3EVIDENCING OF LOANS.




3.1 
Notes. The Revolving Loan shall be evidenced by the Note, with appropriate insertions, payable to the order of the Lender in a
face principal amount equal to the Revolving Loan Commitment.


3.2 
Recordkee ping. The Lender shall record in its records, the date and amount of each Loan made by the Lender, each repayment thereof
and, in the case of each LIBOR Loan or Prime Loan, the dates on which each Interest Period for such Loan shall begin and end. The aggregate
unpaid principal amount so recorded shall be presumptive evidence of the principal amount of the Loans owing and unpaid. The failure
to so record any such amount or any error in so recording any such amount shall not, however, limit or otherwise affect the Obligations
of the Borrower hereunder or under any Note to repay the principal amount of the Loans hereunder, together with all interest accruing
thereon.


SECTION
4INTEREST.




4.1 
Interest Rates. The Borrower promises to pay interest on the unpaid principal amount of each Loan for the period commencing on
the date of such Loan until such Loan is paid in full as follows:




(a) 
at all times while the Revolving Loan is outstanding, the Revolving Loan shall accrue interest at a rate per annum equal to the sum of
the LIBOR Rate applicable to each Interest Period plus Two Hundred Twenty-Four (224) Basis Points (2.240%); and




		(b)	[RESERVED]





		(c)	[RESERVED]





provided
that at any time an Event of Default has occurred and is continuing, Lender may, at its option and without notice to the Borrower,
increase the interest rate applicable to each Loan by Five Hundred


(500)
Basis Points. Notwithstanding the foregoing, upon the occurrence of an Event of Default under Sections 13.1.1 or 13.1.4,
such increase shall occur automatically.




    	11



    	 



    





		4.2	Payment
                                            Dates ; Re paymen t. Each Loan shall be payable as follows:





(a) 
Accrued interest on the Revolving Loan shall be payable in arrears on the first Business Day of each month commencing February 1, 2013.
Upon the Revolving Loan Termination Date, all unpaid principal and accrued but unpaid interest, together with all other amounts due under
the Revolving Loan, including any late charges and reimbursable expenses, shall be due and payable in full.


		(b)	[RESERVED]





		(c)	[RESERVED]





(d) 
After maturity, and at any time an Event of Default exists, accrued interest on all Loans shall be payable on demand.


(e) 
Upon the occurrence of an Event of Default and during the continuation thereof, and after maturity, including maturity upon acceleration,
Lender, at its option, may, if permitted under applicable law, do one or both of the following: (i) increase the interest rate under
the Notes to the rate that is five percent (5%) above the rate that would otherwise be payable hereunder, and (ii) add any unpaid accrued
interest to principal and such sum will bear interest therefrom until paid at the rate provided in the Note (including any increased
rate). The interest rate under the Note will not exceed the maximum rate pennitted by applicable law under any circumstances.


(f) 
If Borrower fails to pay any amount due under any Note or this Agreement, or any fee in connection herewith, in full within seven (7)
days after its due date, Borrower, in each case, shall incur and shall pay a late charge equal to the greater of Twenty-Five and No/100
Dollars ($25.00) or Five Percent (5%) of the unpaid amount and an additional late charge for purposes of defraying the expense incidental
to handling on the first day of each successive calendar month equal to the greater of Twenty Five and No/100 Dollars ($25.00) or Five
Percent (5%) of the unpaid amount until such amount has been paid in full. After acceleration of repayment of Loans by the Lender, the
payment of a late charge will not cure or constitute a waiver of any Event of Default under the Note or this Agreement.


(g) 
All amounts which shall be paid with respect to the Note shall be applied first to the payment of interest due on the balance of the
principal sum or so much thereof as shall from time to time remain unpaid, second to the principal amount of the Note which may then
currently due and payable, third to any later charges then due and payable under the Note and last to any costs of collection and expenses
reimbursable by the Borrower to the Lender.


4.3 
Setting and Notice ofLIBOR Rates. The applicable LIBOR Rate for each Interest Period shall be determined by the Lender, and notice
thereof shall be given by the Lender promptly to the Borrower. Each determination of the applicable LIBOR Rate by the Lender shall be
conclusive and binding upon the parties hereto, in the absence of demonstrable error. The Lender shall, upon written request of the Borrower,
deliver to the Borrower a statement showing the computations used by the Lender in determining any applicable LIBOR Rate hereunder.


4.4 
Computation oflnterest. Interest accruing on each of the Loans shall be computed for the actual number of days elapsed on the
basis of a year of 360 days.




SECTION
5FEES.




5.1
Commitment Fee. The Borrower agrees to pay to the Lender a commitment fee associated with the Revolving Commitment in the amount
of One Hundred Ninety-Five and Noll 00




    	12



    	 



    



Dollars
($195.00) as of the Closing Date, which amount shall not be refundable, in whole or in part, for any reason.


SECTION
6REDUCTION OF THE LOANS; PREPAYMENTS.




6.1 
Mandatory Reductions of Revolving Commitment. On the date of any Mandatory Prepayment Event, the Revolving Commitment shall be
permanently reduced by an amount (if any) equal to the Designated Proceeds of such Mandatory Prepayment Event.


		6.2	Prepayments.





6.2.
l Voluntary Pre pa yments. The Loans, or any of them, may be prepaid, in whole or in part at any time and from time to time without
premium or penalty.




		6.2.2	Mandatory
                                            Pre payments.





(a) 
The Borrower shall make a prepayment of the Loan until paid in full upon the occurrence of any of the following (each a "Mandatory
Pre payment Event") at the following times and in the following amounts (such applicable amounts being referred to as "Designated
Proceeds"):




		(i)	Concurrently
                                            with the receipt by any Loan Party of any Net Cash Proceeds from any Asset Disposition with
                                            proceeds exceeding $50,000 in any calendar year, in an amount equal to 100% of such Net Cash
                                            Proceeds.



		(ii)	Concurrently
                                            with the receipt by any Loan Party of any Net Cash Proceeds from any issuance of Capital
                                            Securities of any Loan Party (excluding (x) any issuance of Capital Securities pursuant to
                                            any employee or director option program, benefit plan or compensation program, and (y) any
                                            issuance by a Subsidiary to the Borrower or another Subsidiary), in an amount equal to 100%
                                            of such Net Cash Proceeds.



		(iii)	Concurrently
                                            with the receipt by any Loan Party of any Net Cash Proceeds from any issuance of any Debt
                                            of any Loan Party (excluding Debt permitted by Section I I. 1), in an amount equal
                                            to 100% of such Net Cash Proceeds.





(b) 
If on any day on which the Revolving Commitment is reduced pursuant to Section 6.1. the Revolving Outstandings exceeds the Revolving
Commitment, the Borrower shall within one Business Day prepay Revolving Loans in an amount sufficient to eliminate such excess.




6.3 
Manner of Prepa yments. Any prepayment of a LIBOR Loan on a day other than the last day of an Interest Period therefor shall include
interest on the principal amount being repaid and shall be subject to Section 8.4.


SECTION
7MAKING OF PAYMENTS; SETOFF; TAXES.




7.1 
Making of Payments. Except as otherwise provided in any other agreements entered into between the Lender and the Borrower from
time to time, all payments of principal or interest on the Notes, and of all fees, shall be made by the Borrower to the Lender in immediately
available funds at the office specified by the Lender not later than noon, Muncie, Indiana time, on the date due; and funds received
after that hour shall be deemed to have been received by the Lender on the following Business




    	13



    	 



    



Day.
All payments under Section 8.1 shall be made by the Borrower directly to the Lender entitled thereto without setoff, counterclaim
or other defense.




7.2 
Application of Certain Payments. So long as no Unmatured Event of Default or Event of Default has occurred and is continuing,
(a) payments matching specific scheduled payments then due shall be applied to those scheduled payments and (b) voluntary and mandatory
prepayments shall be applied as set forth in Sections 6.2 and 6.3. After the occurrence and during the continuance of an
Unmatured Event of Default or Event of Default, all amounts collected or received by the Lender as proceeds from the sale of, or other
realization upon, all or any part of the Collateral shall be applied as the Lender shall determine in its discretion.


7.3 
Due Date Extension. If any payment of principal or interest with respect to any of the Loans, or of any fees, falls due on a day
which is not a Business Day, then such due date shall be extended to the immediately following Business Day (unless, in the case of a
LIBOR Loan, such immediately following Business Day is the first Business Day of a calendar month, in which case such due date shall
be the immediately preceding Business Day) and, in the case of principal, additional interest shall accrue and be payable for the period
of any such extension.




7.4 
Setoff. The Borrower, for itself and each other Loan Party, that the Lender has all rights of set-off and bankers' lien provided
by applicable law, and in addition thereto, the Borrower agrees that at any time any Event of Default exists, the Lender may apply to
the payment of any Obligations of the Borrower, whether or not then due, any and all balances, credits, deposits, accounts or moneys
of the Borrower then or thereafter with the Lender.


		7.5	Taxes.





(a) 
All payments made by the Borrower hereunder or under any Loan Documents shall be made without setoff, counterclaim, or other defense.
To the extent permitted by applicable law, all payments hereunder or under the Loan Documents (including any payment of principal, interest,
or fees) to, or for the benefit, of any person shall be made by the Borrower free and clear of and without deduction or withholding for,
or account of, any Taxes now or hereinafter imposed by any taxing authority.




(b) 
If the Borrower makes any payment hereunder or under any Loan Document in respect of which it is required by applicable law to deduct
or withhold any Taxes, the Borrower shall increase the payment hereunder or under any such Loan Document such that after the reduction
for the amount of Taxes withheld (and any taxes withheld or imposed with respect to the additional payments required under this Section
7.5(b)), the amount paid to the Lender equals the amount that was payable hereunder or under any such Loan Document without regard
to this Section 7.5{b). To the extent the Borrower withholds any Taxes on payments hereunder or under any Loan Document, the Borrower
shall pay the full amount deducted to the relevant taxing authority within the time allowed for payment under applicable law and shall
deliver to the Lender within 30 days after it has made payment to such authority a receipt issued by such authority (or other evidence
satisfactory to the Lender) evidencing the payment of all amounts so required to be deducted or withheld from such payment.




(c) 
If the Lender is required by law to make any payments of any Taxes on or in relation to any amounts received or receivable hereunder
or under any other Loan Document, or any Tax is assessed against the Lender with respect to amounts received or receivable hereunder
or under any other Loan Document, the Lender shall deliver a




    	14



    	 



    



certificate
to the Borrower detailing such taxes and the Borrower will indemnify the Lender against (i) such Tax (and any reasonable counsel fees
and expenses associated with such Tax), and (ii) any taxes imposed as a result of the receipt of the payment under this Section 7.S(c).
A certificate prepared in good faith as to the detail and amount of such payment by the Lender shall, absent manifest error, be final,
conclusive, and binding on all parties.




SECTION
8INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.




8.1 
Increased Costs. (a) If, after the date hereof, the adoption of, or any change in, any applicable law, rule or regulation, or
any change in the interpretation or administration of any applicable law, rule or regulation by any governmental authority, central bank
or comparable agency charged with the interpretation or administration thereof, or compliance by the Lender with any request or directive
(whether or not having the force of law) of any such authority, central bank or comparable agency: (i) shall impose, modify or deem applicable
any reserve (including any reserve imposed by the FRB, but excluding any reserve included in the determination of the LIBOR Rate pursuant
to Section 4), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended
by the Lender; or (ii) shall impose on the Lender any other condition affecting its LIBOR Loans, its Note or its obligation to make LIBOR
Loans; and the result of anything described in clauses (i) and (ii) above is to increase the cost to (or to impose a cost on) the Lender
(or any LIBOR Office of the Lender) of making or maintaining any LIBOR Loan, or to reduce the amount of any sum received or receivable
by the Lender (or its LIBOR Office) under this Agreement or under its Note with respect thereto, then upon written demand by the Lender
(which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in
reasonable detail, a copy of which shall be furnished by the Lender), the Borrower shall pay directly to the Lender such additional amount
as will compensate the Lender for such increased cost or such reduction, so long as such amounts have accrued on or after the day which
is 180 days prior to the date on which the Lender first made demand therefor.


(b)
If the Lender shall reasonably determine that any change in, or the adoption or phase-in of, any applicable law, rule or regulation regarding
capital adequacy, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or the compliance by the Lender or any Person controlling the Lender
with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of reducing the rate of return on the Lender's or such controlling Person's capital
as a consequence of the Lender's obligations hereunder to a level below that which the Lender or such controlling Person could have achieved
but for such change, adoption, phase-in or compliance (taking into consideration the Lender's or such controlling Person's policies with
respect to capital adequacy) by an amount deemed by the Lender or such controlling Person to be material, then from time to time, upon
written demand by the Lender (which demand shall be accompanied by a written statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be furnished by the Lender), the Borrower shall pay to
the Lender such additional amount as will compensate the Lender or such controlling Person for such reduction so long as such amounts
have accrued on or after the day which is 180 days prior to the date on which the Lender first made demand therefor.




		8.2	Basis
                                            for Determining Interest Rate Inadequate or Unfair. If:





(a) 
the Lender reasonably determines (which determination shall be binding and conclusive on the Borrower) that by reason of circumstances
affecting the interbank




    	15



    	 



    



LIBOR
market adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate; or




(b) 
the Lender determines that the LIBOR Rate will not adequately and fairly reflect the cost to the Lender of maintaining or funding LIBOR
Loans for such Interest Period (taking into account any amount to which the Lender may be entitled under Section 8.1) or that
the making or funding of LIBOR Loans has become impracticable as a result of an event occurring after the date of this Agreement which
in the opinion of the Lender materially affects such Loans;




then
the Lender shall promptly notify in writing the Borrower thereof and, so long as such circumstances shall continue, any Loan accruing
interest based on the LIBOR Rate shall be converted to a Loan accruing interest based on the Prime Rate plus the Applicable Margin.




8.3 
Changes in Law Rendering LIBOR Loans Unlawful. If any change in, or the adoption of any new, law or regulation, or any change
in the interpretation of any applicable law or regulation by any governmental or other regulatory body charged with the administration
thereof, should make it (or in the good faith judgment of the Lender cause a substantial question as to whether it is) unlawful for the
Lender to make, maintain or fund LIBOR Loans, then the Lender shall promptly notify in writing the Borrower and, so long as such circumstances
shall continue, (a) the Lender shall have no obligation to make a LIBOR Loan and (b) on the last day of the current Interest Period for
each LIBOR Loan of the Lender (or, in any event, on such earlier date as may be required by the relevant law, regulation or interpretation),
such LIBOR Loan shall, unless then repaid in full, automatically convert any Loan accruing interest based on the LIBOR Rate to a Loan
accruing interest based on the Prime Rate plus the Applicable Margin.


8.4 
Funding Losses. The Borrower hereby agrees that upon demand by the Lender (which demand shall be accompanied by a written statement
setting forth the basis for the amount being claimed, a copy of which shall be furnished by the Lender), the Borrower will indemnify
the Lender against any net loss or expense which the Lender may sustain or incur (including any net loss or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by the Lender to fund or maintain any LIBOR Loan), as reasonably
determined by the Lender, as a result of (a) any payment, prepayment or conversion by the Borrower of any LIBOR Loan of the Lender on
a date other than the last day of an Interest Period for such Loan (including any conversion pursuant to Section 8.3) or (b) any
failure of the Borrower to borrow, convert or continue any Loan on a date specified therefor in a notice of borrowing, conversion or
continuation pursuant to this Agreement.




8.5 
Right of Lender to Fund through Other Offices. The Lender may, if it so elects, fulfill its commitment as to any LIBOR Loan by
causing a foreign branch or Affiliate of the Lender to make such Loan; provided that in such event for the purposes of this Agreement
such Loan shall be deemed to have been made by the Lender and the obligation of the Borrower to repay such Loan shall nevertheless be
to the Lender and shall be deemed held by it, to the extent of such Loan, for the account of such branch or Affiliate.


8.6 
Discretion of Lender as to Manner of Funding. Notwithstanding any provision of this Agreement to the contrary, the Lender shall
be entitled to fund and maintain its funding of all or any part of its Loans in any reasonable manner, it being understood, however,
that for the purposes of this Agreement all determinations hereunder shall be made as if the Lender had actually funded and maintained
each LIBOR Loan during each Interest Period for such Loan through the purchase of deposits




    	16



    	 



    



having
a maturity corresponding to such Interest Period and bearing an interest rate equal to the LIBOR Rate for such Interest Period.




SECTION
9REPRESENTATIONS AND WARRANTIES.




To
induce the Lender to enter into this Agreement and to induce the Lender to make Loans hereunder, the Borrower represents and warrants
to the Lender that:




9.1 
Organization. Each Loan Party is validly existing under the laws of its jurisdiction of organization; and each Loan Party is duly
qualified to do business in each jurisdiction where, because of the nature of its activities or properties, such qualification is required,
except for such jurisdictions where the failure to so qualify would not have a Material Adverse Effect.


9.2 
Authorization ; No Conflict. Each Loan Party is duly authorized to execute and deliver each Loan Document to which it is a party,
the Borrower is duly authorized to borrow monies hereunder and each Loan Party is duly authorized to perform its Obligations under each
Loan Document to which it is a party. The execution, delivery and performance by each Loan Party of each Loan Document to which it is
a party, and the borrowings by the Borrower hereunder, do not and will not (a) require any consent or approval of any governmental agency
or authority (other than any consent or approval which has been obtained and is in full force and effect), (b) conflict with (i) any
provision oflaw, (ii) the charter, by-laws or other organizational documents of any Loan Party or (iii) any agreement, indenture, instrument
or other document, or any judgment, order or decree, which is binding upon any Loan Party or any of their respective properties or (c)
require, or result in, the creation or imposition of any Lien on any asset of any Loan Party (other than Liens in favor of the Lender
created pursuant to the Collateral Documents).


9.3 
Validity and Binding Nature. This Agreement and each other Loan Document to which any Loan Party is a party is the legal, valid
and binding obligation of such Person, enforceable against such Person in accordance with its terms, subject to bankruptcy, insolvency
and similar laws affecting the enforceability of creditors' rights generally and to general principles of equity.


9.4 
Financial Condition. The audited consolidated financial statements of the Borrower as at October 31, 2011, copies of which have
been delivered to the Lender, were prepared in accordance with GAAP and present fairly in all material respects the consolidated financial
condition of the Borrower and its Subsidiaries as at such dates and the results of their operations for the periods then ended.


9.5 
No Material Adverse Change. Since October 31, 2011, there has been no material adverse change in the financial condition, operations,
business or assets (taken as a whole) of the Loan Parties.


9.6 
Litigation and Contingent Liabilities. No litigation (including derivative actions), arbitration proceeding or governmental investigation
or proceeding is pending or, to the Borrower's knowledge, threatened against any Loan Party which might reasonably be expected to have
a Material Adverse Effect.


9.7 
Ownership of Properties: Liens. Each Loan Party owns good and, in the case of real property, marketable title to all of its properties
and assets, real and personal, tangible and intangible, of any nature whatsoever (including patents, trademarks, trade names, service
marks and copyrights), free and clear of all Liens, charges and claims (including infringement claims with respect to patents, trademarks,
service marks, copyrights and the like) except as permitted by Section 11.2.




    	17



    	 



    



9.8 
Equity Ownership; Subsidiaries. All issued and outstanding Capital Securities of each Loan Party are duly authorized and validly
issued, fully paid, non-assessable, and free and clear of all Liens other than those in favor of the Lender, and such securities were
issued in compliance with all applicable state and federal laws concerning the issuance of securities. All of the issued and outstanding
Capital Securities of each Wholly-Owned Subsidiary is, directly or indirectly, owned by the Borrower. As of the Closing Date, there are
no pre-emptive or other outstanding rights, options, warrants, conversion rights or other similar agreements or understandings for the
purchase or acquisition of any Capital Securities of any Loan Party.


9.9 
Pension Plans. (a) The Unfunded Liability of all Pension Plans does not in the aggregate exceed twenty percent of the Total Plan
Liability for all such Pension Plans. Each Pension Plan complies in all material respects with all applicable requirements of law and
regulations. No contribution failure under Section 412 of the Code, Section 302 of BRISA or the terms of any Pension Plan has occurred
with respect to any Pension Plan, sufficient to give rise to a Lien under Section 302(f) of ERISA, or otherwise to have a Material Adverse
Effect. There are no pending or, to the knowledge of Borrower, threatened, claims, actions, investigations or lawsuits against any Pension
Plan, any fiduciary of any Pension Plan, or Borrower or other any member of the Controlled Group with respect to a Pension Plan or a
Multiemployer Pension Plan which could reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any other member
of the Controlled Group has engaged in any prohibited transaction (as defined in Section 4975 of the Code or Section 406 of BRISA) in
connection with any Pension Plan or Multiemployer Pension Plan which would subject that Person to any material liability. Within the
past five years, neither the Borrower nor any other member of the Controlled Group has engaged in a transaction which resulted in a Pension
Plan with an Unfunded Liability being transferred out of the Controlled Group, which could reasonably be expected to have a Material
Adverse Effect. No Termination Event has occurred or is reasonably expected to occur with respect to any Pension Plan, which could reasonably
be expected to have a Material Adverse Effect.


(b)
All contributions (if any) have been made to any Multiemployer Pension Plan that are required to be made by the Borrower or any other
member of the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable law; neither the
Borrower nor any other member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Pension Plan, incurred
any withdrawal liability with respect to any such plan or received notice of any claim or demand for withdrawal liability or partial
withdrawal liability from any such plan, and no condition has occurred which, if continued, could result in a withdrawal or partial withdrawal
from any such plan; and neither the Borrower nor any other member of the Controlled Group has received any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition
of any excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become insolvent.




9.10 
Investment Borrower Act. No Loan Party is an "investment company" or a company "controlled" by an "investment
company" or a "subsidiary" of an "investment company," within the meaning of the Investment Borrower Act of
1940.


9.11 
Regulation U. The Borrower is not engaged principally, or as one of its important activities, in the business of extending credit
for the purpose of purchasing or carrying Margin Stock.


9.12 
Taxes. Each Loan Party has timely filed all tax returns and reports required by law to have been filed by it and has paid all
taxes and governmental charges due and payable with respect to such return, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set




    	18



    	 



    



aside
on its books. The Loan Parties have made adequate reserves on their books and records in accordance with GAAP for all taxes that have
accrued but which are not yet due and payable. No Loan Party has participated in any transaction that relates to a year of the taxpayer
(which is still open under the applicable statute of limitations) which is a "reportable transaction" within the meaning of
Treasury Regulation Section l.6011-4(b)(2) (irrespective of the date when the transaction was entered into).


9.13 
Solvency. etc. On the Closing Date, and immediately prior to and after giving effect to each borrowing hereunder and the use of
the proceeds thereof, with respect to each Loan Party, individually, (a) the fair value of its assets is greater than the amount of its
liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated in accordance
with GAAP, (b) the present fair saleable value of its assets is not less than the amount that will be required to pay the probable liability
on its debts as they become absolute and matured , (c) it is able to realize upon its assets and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business, (d) it does not intend
to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature and
(e) it is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which its property would
constitute unreasonably small capital.


9.14 
Environmental Matters.The on-going operations of each Loan Party comply in all material respects with all Environmental Laws,
except such non-compliance which could not (if enforced in accordance with applicable law) reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect. Each Loan Party has obtained, and maintained in good standing, all licenses, permits,
authorizations, registrations and other approvals required under any Environmental Law and required for their respective ordinary course
operations, and for their reasonably anticipated future operations, and each Loan Party is in compliance with all terms and conditions
thereof, except where the failure to do so could not reasonably be expected to result in material liability to any Loan Party and could
not reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.No Loan Party or any
of its properties or operations is subject to, or reasonably anticipates the issuance of, any written order from or agreement with any
Federal, state or local governmental authority, nor subject to any judicial or docketed administrative or other proceeding, respecting
any Environmental Law, Environmental Claim or Hazardous Substance which could reasonably be expected to have a Material Adverse Effect.
There are no Hazardous Substances or other conditions or circumstances existing with respect to any property, arising from operations
prior to the Closing Date, or relating to any waste disposal, of any Loan Party that would reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect. No Loan Party has any underground storage tanks that are not properly registered or
permitted under applicable Environmental Laws or that at any time have released, leaked, disposed of or otherwise discharged Hazardous
Substances.




9.15 
Insurance. Set forth on Schedule 9.15 is a complete and accurate list of the property and casualty insurance program
of the Loan Parties as of the Closing Date (including the names of all insurers, policy numbers, expiration dates, amounts and types
of coverage, annual premiums, deductibles, self-insured retention, and a description in reasonable detail of any self-insurance program,
retrospective rating plan, fronting arrangement or other risk assumption arrangement involving any Loan Party). Each Loan Party and its
properties are insured with financially sound and reputable insurance companies which are not Affiliates of the Loan Parties, in such
amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where such Loan Parties operate.




9.16 
Real Property. Set forth on Schedule 9.16 is a complete and accurate list, as of the Closing Date, of the address
of all real property owned or leased by any Loan Party, including the




    	19



    	 



    



Premises
(collectively, the "Real Property"), together with, in the case of leased property, the name and mailing address of the lessor
of such property.


9.17 
Information. All information heretofore or contemporaneously herewith furnished in writing by any Loan Party to the Lender for
purposes of or in connection with this Agreement and the transactions contemplated hereby is, true and accurate in every material respect
on the date as of which such informat ion is dated or certified, and none of such information is incomplete by omitting to state any
material fact necessary to make such information not misleading in light of the circumstances under which made (it being recognized by
the Lender that any projections and forecasts provided by the Borrower are based on good faith estimates and assumptions believed by
the Borrower to be reasonable as of the date of the applicable projections or assumptions and that actual results during the period or
periods covered by any such projections and forecasts may differ from projected or forecasted results).


9.18 
Intellectual Propertv. Each Loan Party owns and possesses or has a license or other right to use all patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, service marks, service mark rights and copyrights (collectively, "Intellectual
Property") as are necessary for the conduct of the businesses of the Loan Parties, without any infringement upon rights of others
which could reasonably be expected to have a Material Adverse Effect. Set forth on Schedule 9.18 is a complete and accurate
list, as of the Closing Date, of all registered Intellectual Property owned by the Loan Parties.


9.19 
Burdensome Obligations. No Loan Party is a party to any agreement or contract or subject to any restriction contained in its organizational
documents which could reasonably be expected to have a Material Adverse Effect.


9.20 
Labor Matters. No Loan Party is subject to any collective bargaining agreement. There are no existing or threatened strikes, lockouts
or other labor disputes involving any Loan Party that singly or in the aggregate could reasonably be expected to have a Material Adverse
Effect. Hours worked by and payment made to employees of the Loan Parties are not in violation of the Fair Labor Standards Act or any
other applicable law, rule or regulation dealing with such matters.


9.21 
No Default. No Event of Default or Unrnatured Event of Default exists or would result from the incurrence by any Loan Party of
any Debt hereunder or under any other Loan Document.


SECTION
10AFFIRMATIVE COVENANTS.




Until
the expiration or termination of the Commitments and thereafter until all Obligations hereunder and under the other Loan Documents are
paid in full, the Borrower agrees that, unless at any time the Lender shall otherwise expressly consent in writing, it will:




		10.1	Reports,
                                            Certificates and Other Information. Furnish to the Lender:





10.1.1 
Annual Report. As soon as practicable and in any event within 90 days after the close of each Fiscal Year commencing with Fiscal
Year 2012, consolidated balance sheets and statements of income, earnings, cash flows and expenses of the Borrower and its Subsidiaries
as at the end of such Fiscal Year, audited by independent auditors and prepared in accordance with GAAP, on a basis consistent with prior
practice unless specifically noted thereon, by Certified Public Accountants of recognized standing selected by the Borrower and reasonably
acceptable to the Lender.




10.1.2 
Interim Reports. Promptly when available and in any event within 30 days after the end of each Fiscal Quarter, consolidated balance
sheet of the Borrower and its




    	20



    	 



    



Subsidiaries
as of the end of such Fiscal Quarter, together with consolidated statement of income, earnings, cash flows and expenses for such preceding
Fiscal Quarter and for the period beginning with the first day of such Fiscal Year and ending on the last day of such Fiscal Quarter,
and certified by a Senior Officer of the Borrower.




10.1.3 
Acquisition Reports. As soon as practicable and in any event prior to any business acquisition, consolidated balance sheet of
the Borrower, its Subsidiaries and the targeted acquisition company, together with consolidated statement of income, earnings , cash
flows and expenses, for the immediately preceding 12-month period, and certified by a Senior Officer of the Borrower, demonstrating the
consolidated company's ability to meet the :financial covenants set forth by Lender.




10.1.4 
Compliance Certificates. Contemporaneously with the furnishing of a copy of each annual financial statements pursuant to Section
10.1.1 and promptly when available and in any event within 30 days after the end of each quarterly period for the first three Fiscal
Quarters of each year, a duly completed compliance certificate in the form of Exhibit B, with appropriate insertions, dated
the date of such annual report or such monthly period and signed by a Senior Officer of the Borrower, containing (i) a computation of
each of the financial ratios and restrictions set forth in Section 11.14 and to the effect that such officer has not become aware
of any Event of Default or Unmatured Event of Default that has occurred and is continuing or, if there is any such event, describing
it and the steps, if any, being taken to cure it and (ii) a written statement of the Borrower 's management setting forth a discussion
of the Borrower's financial condition, changes in financial condition and results of operations.




10.1.5 
Notice of Default, Litigation and ERISA Matters. Promptly upon becoming aware of any of the following, written notice describing
the same and the steps being taken by the Borrower or the Subsidiary affected thereby with respect thereto:




		(a)	the
                                            occurrence of an Event of Default or an Unmatured Event of Default;





(b) 
any litigation, arbitration or governmental investigation or proceeding not previously disclosed by the Borrower to the Lender which
has been instituted or, to the knowledge of the Borrower, is threatened against any Loan Party or to which any of the properties of any
thereof is subject which might reasonably be expected to have a Material Adverse Effect;




(c) 
any cancellation or material change in any insurance maintained by any Loan Party; or




(d) 
any other event (including (i) any violation of any Environmental Law or the assertion of any Environmental Claim or (ii) the enactment
or effectiveness of any law, rule or regulation) which might reasonably be expected to have a Material Adverse Effect.




10.1.6 
Other Information. Promptly from time to time, such other information concerning the Loan Parties as the Lender may reasonably
request.




10.2 
Books, Records and Inspections. Keep, and cause each other Loan Party to keep, its books and records in accordance with sound
business practices sufficient to allow the preparation of financial statements in accordance with GAAP; permit, and cause each other
Loan Party to permit, the Lender or any representative thereof to inspect the properties and operations of the Loan Parties; and




    	21



    	 



    



permit,
and cause each other Loan Party to permit, at any reasonable time and with reasonable notice (or at any time without notice if an Event
of Default exists), the Lender or any representative thereof to visit any or all of its offices, to discuss its financial matters with
its officers and its independent auditors (and the Borrower hereby authorizes such independent auditors to discuss such financial matters
with the Lender or any representative thereof), and to examine (and, at the expense of the Loan Parties, photocopy extracts from) any
of its books or other records; and permit, and cause each other Loan Party to permit, the Lender and its representatives to inspect the
Inventory and other tangible assets of the Loan Parties, to perform appraisals of the equipment of the Loan Parties, and to inspect,
audit, check and make copies of and extracts from the books, records, computer data, computer programs, journals, orders, receipts, correspondence
and other data relating to Inventory, Accounts and any other collateral. All such inspections or audits by the Lender shall be at the
Borrower's expense, provided that so long as no Event of Default or Unmatured Event of Default exists, the Borrower shall not be required
to reimburse the Lender for inspections or audits more frequently than once each Fiscal Year.


10.3 
Maintenance of Property; Insurance. (a) Keep, and cause each other Loan Party to keep, all property necessary in the business
of the Loan Parties in such order and condition as it is on the date hereof, ordinary wear and tear and insured casualty loss excepted.


(b) 
Maintain, and cause each other Loan Party to maintain, with responsible insurance companies, such insurance coverage as may be required
by any law or governmental regulation or court decree or order applicable to it and such other insurance, to such extent and against
such hazards and liabilities, as is customarily maintained by companies similarly situated, but which shall insure against all risks
and liabilities of the type identified on Schedule 9.15 and shall have insured amounts not materially less than, and deductibles
not materially higher than, those set forth on such schedule; and, upon request of the Lender, furnish to the Lender a certificate setting
forth in reasonable detail the nature and extent of all insurance maintained by the Loan Parties. The Borrower shall cause each issuer
of an insurance policy to provide the Lender with an endorsement (i) showing the Lender as loss payee with respect to each policy of
property or casualty insurance and naming the Lender as an additional insured with respect to each policy of liability insurance, (ii)
providing that 30 days' notice will be given to the Lender prior to any cancellation of, material reduction or change in coverage provided
by or other material modification to such policy and (iii) reasonably acceptable in all other respects to the Lender. Upon request of
the Lender, the Borrower shall execute and deliver to the Lender a collateral assignment, in form and substance satisfactory to the Lender,
of each business interruption insurance policy maintained by the Borrower.




(c) 
UNLESS THE BORROWER PROVIDES THE LENDER WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE LENDER MAY PURCHASE INSURANCE
AT THE BORROWER'S EXPENSE TO PROTECT THE LENDER AND THE LENDER'S INTERESTS IN THE COLLATERAL.
THIS INSURANCE MAY, BUT NEED NOT, PROTECT ANY LOAN PARTY'S INTERESTS. THE COVERAGE THAT THE LENDER PURCHASES MAY NOT PAY ANY CLAIM THAT
IS MADE AGAINST ANY LOAN PARTY IN CONNECTION WITH THE COLLATERAL. THE BORROWER MAY LATER CANCEL
ANY INSURANCE PURCHASED BY THE LENDER, BUT ONLY AFTER PROVIDING THE LENDER WITH EVIDENCE THAT THE COMPANY HAS OBTAINED INSURANCE AS REQUIRED
BY THIS AGREEMENT. IF THE LENDER PURCHASES INSURANCE FOR THE COLLATERAL, THE BORROWER WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE,
INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION
OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE




    	22



    	 



    



PRINCIPAL
AMOUNT OF THE LOANS OWING HEREUNDER. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF THE INSURANCE THE LOAN PARTIES MAY BE ABLE
TO OBTAIN ON THEIR OWN.




10.4 
Compliance with Laws: Payment of Taxes and Liabilities. (a) Comply, and cause each other Loan Party to comply, in all material
respects with all applicable laws, rules, regulations, decrees, orders, judgments, licenses and permits, except where failure to comply
could not reasonably be expected to have a Material Adverse Effect; (b) without limiting clause (a) above, ensure, and cause each other
Loan Party to ensure, that no person who owns a controlling interest in or otherwise controls a Loan Party is or shall be (i) listed
on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control ("OFAC"),
Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or
regulation or (ii) a person designated under Section l(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any related
enabling legislation or any other similar Executive Orders, (c) without limiting clause (a) above, comply, and cause each other Loan
Party to comply, with all applicable Bank Secrecy Act ("BSA") and anti money laundering laws and regulations and (d) pay, and
cause each other Loan Party to pay, prior to delinquency, all taxes and other governmental charges against it or any collateral, as well
as claims of any kind which, if unpaid, could become a Lien on any of its property; provided that the foregoing shall not require any
Loan Party to pay any such tax or charge so long as it shall contest the validity thereof in good faith by appropriate proceedings and
shall set aside on its books adequate reserves with respect thereto in accordance with GAAP and, in the case of a claim which could become
a Lien on any collateral, such contest proceedings shall stay the foreclosure of such Lien or the sale of any portion of the collateral
to satisfy such claim.


10.5 
Maintenance of Existence. etc. Maintain and preserve, and (subject to Section 11.5) cause each other Loan Party to maintain
and preserve, (a) its existence and good standing in the jurisdiction of its organization and (b) its qualification to do business and
good standing in each jurisdiction where the nature of its business makes such qualification necessary (other than such jurisdictions
in which the failure to be qualified or in good standing could not reasonably be expected to have a Material Adverse Effect).


10.6 
Use of Proceeds. Use the proceeds of the Loans solely for working capital purposes, for Capital Expenditures, for other general
business purposes, to repay existing indebtedness and pay transaction related expenses; and not use or permit any proceeds of any Loan
to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of "purchasing or carrying"
any Margin Stock.


		10.7	Employee
                                            Benefit Plans.





(a) 
Maintain, and cause each other member of the Controlled Group to maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.




(b) 
Make, and cause each other member of the Controlled Group to make, on a timely basis, all required contributions to any Multiemployer
Pension Plan.




(c) 
Not, and not permit any other member of the Controlled Group to (i) seek a waiver of the minimum funding standards of BRISA, (ii) terminate
or withdraw from any Pension Plan or Multiemployer Pension Plan or (iii) take any other action with respect to any Pension Plan that
would reasonably be expected to entitle the PBGC to terminate, impose liability in respect of, or cause a trustee to be appointed to
administer,




    	23



    	 



    



any
Pension Plan, unless the actions or events described in clauses (i), (ii) and (iii) individually or in the aggregate would not have a
Material Adverse Effect.




10.8 
Environmental Matters. If any release or threatened release or other disposal of Hazardous Substances shall occur or shall have
occurred on any real property or any other assets of any Loan Party, the Borrower shall, or shall cause the applicable Loan Party to,
cause the prompt containment and removal of such Hazardous Substances and the remediation of such real property or other assets as necessary
to comply with all Environmental Laws and to preserve the value of such real property or other assets. Without limiting the generality
of the foregoing, the Borrower shall, and shall cause each other Loan Party to, comply with any Federal or state judicial or administrative
order requiring the performance at any real property of any Loan Party of activities in response to the release or threatened release
of a Hazardous Substance. To the extent that the transportation of Hazardous Substances is permitted by this Agreement, the Borrower
shall, and shall cause its Subsidiaries to, dispose of such Hazardous Substances, or of any other wastes, only at licensed disposal facilities
operating in compliance with Environmental Laws.


10.9 
Further Assurances. Take, and cause each other Loan Party to take, such actions as are necessary or as the Lender may reasonably
request from time to time to ensure that the Obligations of each Loan Party under the Loan Documents are secured by substantially all
of the assets of the Borrower and each domestic Subsidiary and guaranteed by each domestic Subsidiary (including, upon the acquisition
or creation thereof, any Subsidiary acquired or created after the Closing Date), in each case as the Lender may determine, including
(a) the execution and delivery of guaranties, security agreements , pledge agreements, mortgages, deeds of trust, financing statements
and other documents, and the filing or recording of any of the foregoing and (b) the delivery of certificated securities and other Collateral
with respect to which perfection is obtained by possession.


		10.10	Financial
                                            Covenants.





10.10.1 
Tangible Net Worth. Maintain at all time Tangible Net Worth in excess of Five Million and No/100 Dollars ($5,000,000.00) commencing
as of December 31, 2012.




10.10.2 
Fixed Charge Coverage Ratio. Maintain the Fixed Charge Coverage Ratio, measured as of the last day of any Computation Period and
measured on a rolling four consecutive fiscal quarter basis, of not less that 1.25 to 1.0 commencing as of December 31, 2012.




10.10.3 
Minimum Working Capital. Maintain at all times Working Capital in excess of One Million Five Hundred Thousand and No/100 Dollars
($1,500,000.00) commencing as of December 31, 2012.




10.11 
Additional Actions. Take, and cause each other Loan Party to take, such actions as are necessary or as the Lender may reasonably
request from time to time to ensure that the Obligations of each Loan Party under the Loan Documents are secured by substantially all
of the assets of the Borrower and each domestic Subsidiary and guaranteed by each domestic Subsidiary (including, upon the acquisition
or creation thereof, any Subsidiary acquired or created after the Closing Date), in each case as the Lender may determine, including
(a) the execution and delivery of guaranties, security agreements, pledge agreements, mortgages, deeds of trust, financing statements
and other documents, and the filing or recording of any of the foregoing and (b) the delivery of certificated securities and other Collateral
with respect to which perfection is obtained by possession.




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10.12 
Deposit Accounts/Cash Management Services. Unless the Lender otheiwise consents in writing, in order to facilitate the Lender's
maintenance and monitoring of its security interests in the Collateral, while this Agreement is in effect, maintain all of its deposit
accounts and treasury management services with the Lender.


SECTION
11 NEGATIVE COVENANTS




Until
the expiration or termination of the Commitments and thereafter until all Obligations hereunder and under the other Loan Documents are
paid in full, the Borrower agrees that it will, unless at any time and for the particular time indicated the Lender consents in writing:




11.1 
Debt. Not, and not permit any other Loan Party to, create, incur, assume or suffer to exist any Debt, except:




		(a)	Obligations
                                            under this Agreement and the other Loan Documents;





(b) 
Debt secured by Liens permitted by Section 1l. 2(d), and extensions, renewals and refinancings thereof; provided that the
aggregate amount of all such Debt at any time outstanding shall not exceed $50,000;




(c) 
Hedging Obligations incurred in favor of the Lender or an Affiliate thereof for bona fide hedging purposes and not for speculation;




(d) 
Debt described on Schedule 11.1 and any extension, renewal or refinancing thereof so long as the principal amount thereof
is not increased;




(e) 
the Debt to be Repaid (so long as such Debt is repaid on the Closing Date with the proceeds of the initial Loans hereunder); and




(f) 
up to the amount of acquired debt equal to $50,000 assumed in Acquisitions permitted under Section 11.5.




11.2 
Liens. Not, and not permit any other Loan Party to, create or permit to exist any Lien on any of its real or personal properties,
assets or rights of whatsoever nature (whether now owned or hereafter acquired), except:




(a) 
Liens for taxes or other governmental charges not at the time delinquent or thereafter payable without penalty or being contested in
good faith by appropriate proceedings and, in each case, for which it maintains adequate reserves;




(b) 
Liens arising in the ordinary course of business (such as (i) Liens of carriers, warehousemen, mechanics and materialmen and other similar
Liens imposed by law and (ii) Liens in the form of deposits or pledges incurred in connection with worker's compensation, unemployment
compensation and other types of social security (excluding Liens arising under BRISA) or in connection with surety bonds, bids, performance
bonds and similar obligations) for sums not overdue or being contested in good faith by appropriate proceedings and not involving any
advances or borrowed money or the deferred purchase price of property or services and, in each case, for which it maintains adequate
reserves;




		(c)	Liens
                                            described on Schedule 11.2 as of the Closing Date;





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(d) 
subject to the limitation set forth in Section 11.1(b), (i) Liens ansmg in connection with Capital Leases (and attaching only
to the property being leased), (ii) Liens existing on property at the time of the acquisition thereof by any Loan Party (and not created
in contemplation of such acquisition) and (iii) Liens that constitute purchase money security interests on any property securing debt
incurred for the purpose of financing all or any part of the cost of acquiring such property, providedthat any such Lien attaches
to such property within 20 days of the acquisition thereof and attaches solely to the property so acquired;




(e) 
attachments, appeal bonds, judgments and other similar Liens, for sums not exceeding $50,000 arising in connection with court proceedings.
provided the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;




(f) 
easements, rights of way, restrictions, minor defects or irregularities in title and other similar Liens not interfering in any material
respect with the ordinary conduct of the business of any Loan Party;




		(g)	Liens
                                            arising under the Loan Documents and the Subordinated Debt Documents;



and




(h) 
the replacement, extension or renewal of any Lien permitted by clause (c) above upon or in the same property subject thereto arising
out of the extension, renewal or replacement of the Debt secured thereby (without increase in the amount thereof).




11.3 
Ope rating Leases. Not permit the aggregate amount of all rental payments under Operating Leases made (or scheduled to be made)
by the Loan Parties (on a consolidated basis) to exceed


$50,000
in any Fiscal Year, excluding rental payments due under leases or occupancy agreements associated with the Real Property.


11.4 
Restricted Payments. Not, and not permit any other Loan Party to, (a) purchase or redeem any of its Capital Securities, (b) pay
any management fees or similar fees to any of its equityholders or any Affiliate thereof, or (c) set aside funds for any of the foregoing.
So long as no Event of Default or Unmatured Event of Default exists or would result therefrom, Borrower may pay dividends or make other
distributions to the holders of its Capital Securities.


11.5 
Mergers. Consolidations. Sales. Not, and not permit any othe.r Loan Party to, (a) be a party to any merger or consolidation, or
purchase or otherwise acquire all or substantially all of the assets or any Capital Securities of any class of, or any partnership or
joint venture interest in, any other Person involving total consideration in excess of $50,000 and provided such acquired Person is in
substantially the same line of business as the Borrower, (b) sell, transfer, convey or lease all or any substantial part of its assets
or Capital Securities (including the sale of Capital Securities of any Subsidiary) except for sales of inventory in the ordinary course
of business, or (c) sell or assign with or without recourse any receivables, except for (i) any merger, consolidation, sale, transfer,
conveyance, lease or assignment of or by, any Wholly-Owned Subsidiary into the Borrower or into any other domestic Wholly-Owned Subsidiary;
(ii) any such purchase or other acquisition by the Borrower or any domestic Wholly-Owned Subsidiary of the assets or Capital Securities
of any Wholly-Owned Subsidiary; or (iii) sales and dispositions of assets (including the Capital Securities of Subsidiaries) for at least
fair market value (as determined by the Board of Managers of the Borrower) so long as the net book value of all assets sold or otherwise
disposed of in any Fiscal Year does not exceed 10% of the net book value of the consolidated assets of the Loan Parties as of the last
day of the preceding Fiscal Year.




    	26



    	 



    



11.6 
Modification of Organizational Documents. Not pennit the organizational documents of any Loan Party to be amended or modified
in any way which could reasonably be expected to materially adversely affect the interests of the Lender; not change, or allow any Loan
Party to change, its state of fonnation or its organizational form.


11.7 
Transactions with Affiliates. Not, and not pennit any other Loan Party to, enter into, or cause, suffer or permit to exist any
transaction, arrangement or contract with any of its other Affiliates (other than the Loan Parties) which is on terms which are less
favorable than are obtainable from any Person which is not one of its Affiliates.


11.8 
Unconditional Purchase Obligations. Not, and not permit any other Loan Party to, enter into or be a party to any contract for
the purchase of materials, supplies or other property or services if such contract requires that payment be made by it regardless of
whether delivery is ever made of such materials, supplies or other property or services.


11.9 
Inconsistent Agreements. Not, and not permit any other Loan Party to, enter into any agreement containing any provision which
would (a) be violated or breached by any borrowing by the Borrower hereunder or by the performance by any Loan Party of any of its Obligations
hereunder or under any other Loan Document, (b) prohibit any Loan Party from granting to the Lender, a Lien on any of its assets or (c)
create or permit to exist or become effective any encumbrance or restriction on the ability of any Subsidiary to (i) pay dividends or
make other distributions to the Borrower or any other Subsidiary, or pay any Debt owed to the Borrower or any other Subsidiary, (ii)
make loans or advances to any Loan Party or (iii) transfer any of its assets or properties to any Loan Party, other than (A) customary
restrictions and conditions contained in agreements relating to the sale of all or a substantial part of the assets of any Subsidiary
pending such sale, provided that such restrictions and conditions apply only to the Subsidiary to be sold and such sale is permitted
hereunder (B) restrictions or conditions imposed by any agreement relating to purchase money Debt, Capital Leases and other secured Debt
permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Debt and


(C)
customary provisions in leases and other contracts restricting the assignment thereof.


11.10 
Business Activities: Issuance of Equity. Not, and not permit any other Loan Party to, (a) engage in any line of business other
than the businesses engaged in on the date hereof and businesses reasonably related thereto, or (b) issue any Capital Securities resulting
in a Change in Control and except for (i) any issuance of Capital Securities pursuant to any employee, manager or director option program,
benefit plan or compensation program, or (ii) any issuance by a Subsidiary to the Borrower or another Subsidiary in accordance with Section
11.4.




11.11 
Investments. Not, and not permit any other Loan Party to, make or pennit to exist any Investment in any other Person, except the
following:


(a) 
contributions by the Borrower to the capital of any Wholly-Owned Subsidiary, or by any Subsidiary to the capital of any other domestic
Wholly-Owned Subsidiary, so long as the recipient of any such capital contribution has guaranteed the Obligations and such guaranty is
secured by a pledge of all of its Capital Securities and substantially all of its real and personal property, in each case in accordance
with Section 11.1O;




		(b)	Investments
                                            constituting Debt permitted by Section 11.1;





(c) 
Contingent Liabilities constituting Debt permitted by Section 11.1 or Liens pennitted by Section 11.2;




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		(d)	Cash
                                            Equivalent Investments;





(e) 
Bank deposits in the ordinary course of business, provided that the aggregate amount of all such deposits (excluding (i) accounts maintained
by the Borrower which are being transitioned to the Lender and which deposits are promptly transferred to the accounts maintained with
the lender (ii) amounts in payroll account or (iii) for accounts payable, in each case to the extent that checks have been issued to
third parties) which are maintained with any bank other than the Lender shall not at any time exceed $75,000.00; and




(f) 
Investments in securities of Account Debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy
or insolvency of such account debtors.




provided
that (x) any Investment which when made complies with the requirements of the definition of the term "Cash Equivalent Investment"
may continue to be held notwithstanding that such Investment if made thereafter would not comply with such requirements; (y) no Investment
otherwise permitted by clause (b), or (c), shall be permitted to be made if, immediately before or after giving effect thereto,


any
Event of Default or Unmatured Event of Default exists.




		11.12	Fiscal
                                            Year. Not change its Fiscal Year.





11.13 
Cancellation of Debt. Not, and not permit any other Loan Party to, cancel any claim or debt owing to it, except for reasonable
consideration or in the ordinary course of business, and except for the cancellation of debts or claims not to exceed $50,000 in any
Fiscal Year. ·


SECTION
12 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.




The
obligation of the Lender to make the Loans is subject to the following conditions precedent:




12.1 
Initial Credit Extension. The obligation of the Lender to make the initial Loans is, in addition to the conditions precedent specified
in Section 12.2, subject to the conditions precedent that (a) all Debt to be Repaid has been (or concurrently with the initial
borrowing will be) paid in full, and that all agreements and instruments governing the Debt to be Repaid and that all Liens securing
such Debt to be Repaid have been (or concurrently with the initial borrowing will be) terminated and (b) the Lender shall have received
all of the following, each duly executed (if applicable) and dated the Closing Date (or such earlier date as shall be satisfactory to
the Lender), in form and substance satisfactory to the Lender (and the date on which all such conditions precedent have been satisfied
or waived in writing by the Lender is called the "Closing Date"):


		12.1.1	Notes.
                                            A Note evidencing each of the Revolving Loan.





12.1.2 
Authorization Documents. For each Loan Party, such Person's (a) charter (or similar formation document), certified by the appropriate
governmental authority;


(b)
good standing or existence certificates in its state of organization (or formation) and in each other state requested by the Lender;
(c) bylaws (or similar governing document); (d) resolutions of its board of directors (or similar governing body) approving and authorizing
such Person's execution, delivery and performance of the Loan Documents to which it is party and the transactions contemplated thereby;
and (e) signature and incumbency certificates of its officers, managers or other representatives executing any of the Loan Documents
(it being understood that the Lender may conclusively rely on each such certificate until formally advised by a like certificate of any
changes therein), all certified by its secretary or an assistant secretary (or similar officer) as being in full force and effect without
modification.




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12.1.3 
Consents. etc. Certified copies of all documents evidencing any necessary corporate action, consents and governmental approvals
(if any) required for the execution, delivery and performance by the Loan Parties of the documents referred to in this Section 12.




12.1.4 
Letter of Direction. A letter of direction containing funds flow information with respect to the proceeds of the Loans on the
Closing Date.




12.1.5 
Security Agreement. A counterpart of the Security Agreement and Perfection Certificate executed by the Borrower, together with
all instruments, transfer powers and other items required to be delivered in connection therewith.




12.1.6 
Opinion of Counsel. Opinion of counsel for Borrower as reasonably requested by the Lender.




12.1.7 
Insurance. Evidence of the existence of insurance required to be maintained pursuant to Section 10.3 (b), together with
evidence that the Lender has been named as a lender's loss payee and an additional insured on all related insurance policies.




12.1.8 
Payment of Fees. Evidence of payment by the Borrower of all accrued and unpaid fees, costs and expenses to the extent then due
and payable on the Closing Date, together with all Attorney Costs of the Lender to the extent invoiced prior to the Closing Date, plus
such additional amounts of Attorney Costs as shall constitute the Lender's reasonable estimate of Attorney Costs incurred or to be
incurred by the Lender through the closing proceedings ( provided that such estimate shall not thereafter preclude final settling
of accounts between the Borrower and the Lender).




12.1.9 
Search Results: Lien Terminations. Certified copies of Uniform Commercial Code search reports dated a date reasonably near
to the Closing Date, listing all effective financing statements which name any Loan Party (under their present names and any previous
names) as debtors, together with (a) copies of such financing statements, (b) payoff letters evidencing repayment in full of all Debt
to be Repaid, the termination of all agreements relating thereto and the release of all Liens granted in connection therewith, with Uniform
Commercial Code or other appropriate termination statements and documents effective to evidence the foregoing (other than Liens permitted
by Section 11.2) and (c) such other Uniform Commercial Code termination statements as the Lender may reasonably request.




12.1.10 
Filings, Registrations and Recordings. The Lender shall have received each document (including Uniform Commercial Code financing
statements) required by the Collateral Documents or under law or reasonably requested by the Lender to be filed, registered or recorded
in order to create in favor of the Lender, a perfected Lien on the collateral described therein, prior to any other Liens (subject only
to Liens permitted pursuant to Section 11.2), in proper form for filing, registration or recording.




12.1.11 
Compliance Certificate. A Compliance Certificate (only regarding Borrower's compliance with the financial covenants as set forth
in Subsections 11.14) dated as of the Closing Date.




 12.1.12
Other. Such other documents as the Lender may reasonably request.


 






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12.2 
Conditions. The obligation of the Lender to make each Loan is subject to the following further conditions precedent that:




12.2.1 
Compliance with Warranties, No Default, etc. Both before and after giving effect to any borrowing, the following statements shall
be true and correct:




(a) 
the representations and warranties of each Loan Party set forth in this Agreement and the other Loan Documents shall be true and correct
in all respects with the same effect as if then made (except to the extent stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct as of such earlier date); and




(b) 
no Event of Default or Unmatured Event of Default shall have then occurred and be continuing.




12.2.2 
Confirmato ry Certificate. If requested by the Lender, the Lender shall have received a certificate dated the date of such requested
Loan and signed by a duly authorized representative of the Borrower as to the matters set out in Section 12.2.1 (it being understood
that each request by the Borrower for the making of a Loan shall be deemed to constitute a representation and warranty by the Borrower
that the conditions precedent set forth in Section 12.2.1 will be satisfied at the time of the making of such Loan, together with
such other documents as the Lender may reasonably request in support thereof.




SECTION
13EVENTS OF DEFAULT AND THEIR EFFECT.




13.1 
Events of Default. Each of the following shall constitute an Event of Default under this Agreement:




13.1.1 
Non-Payment of the Loans, etc. Default in the payment within ten (10) days of when due of the principal of any Loan or in the
payment when due of any interest , fee, reimbursement obligation with respect to any other amount payable by the Borrower hereunder or
under any other Loan Document.




13.1.2 
Non-Payment of Other Debt. Any default shall occur under the terms applicable to any Debt of any Loan Party in an aggregate amount
(for all such Debt so affected and including undrawn committed or available amounts and amounts owing to all creditors under any combined
or syndicated credit arrangement) exceeding $20,000 and such default shall (a) consist of the failure to pay such Debt when due, subject
to any applicable cure or grace periods, whether by acceleration or otherwise, and (b) cause the acceleration of the maturity of such
Debt or permit the holder or holders thereof, or any trustee or agent for such holder or holders, to cause such Debt to become due and
payable (or require any Loan Party to purchase or redeem such Debt or post cash collateral in respect thereof) prior to its expressed
maturity.




13.1.3 
Other Material Obligations. Default in the payment when due, or in the performance or observance of, any material obligation of,
or condition agreed to by, any Loan Party with respect to any material purchase or lease of goods or services where such default, singly
or in the aggregate with all other such defaults, might reasonably be expected to have a Material Adverse Effect.




13.1.4 
Bankruptcy, Insolvency, etc. Any Loan Party becomes insolvent or generally fails to pay, or admits in writing its inability or
refusal to pay, debts as they become




    	30



    	 



    



due;
or any Loan Party applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other custodian for such Loan
Party or any property thereof, or makes a general assignment for the benefit of creditors; or, in the absence of such application, consent
or acquiescence, a trustee, receiver or other custodian is appointed for any Loan Party or for a substantial part of the property of
any thereof and is not discharged within 60 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is commenced in respect of any Loan Party, and if such
case or proceeding is not commenced by such Loan Party, it is consented to or acquiesced in by such Loan Party, or remains for 60 days
undismissed; or any Loan Party takes any action to authorize, or in furtherance of, any of the foregoing.




13.1.5 
Non-Compliance with Loan Documents. (a) Failure by any Loan Party to comply with or to perform any covenant set forth in Sections
10.1.5, 10.3(b) or 10.5 or Section 11; or (b) failure by any Loan Party to comply with or to perform any other provision
of this Agreement or any other Loan Document (and not constituting an Event of Default under any other provision of this Section 13)
and continuance of such failure described in this clause


®
for 30 days.


13.1.6 
Representations: Warranties. Any representation or warranty made by any Loan Party herein or any other Loan Document is breached
or is false or misleading in any material respect, or any schedule, certificate, financial statement, report, notice or other writing
furnished by any Loan Party to the Lender in connection herewith is false or misleading in any material respect on the date as of which
the facts therein set forth are stated or certified.




13.1.7 
Pension Plans. (a) Any Person institutes steps to Terminate a Pension Plan if as a result of such termination the Borrower or
any member of the Controlled Group could be required to make a contribution to such Pension Plan, or could incur a liability or obligation
to such Pension Plan, in excess of $250,000.00; (b) a contribution failure occurs with respect to any Pension Plan sufficient to give
rise to a Lien under Section 302(f) of ERISA;


(c) 
the Unfunded Liability exceeds twenty percent of the Total Plan Liability, or (d) there shall occur any withdrawal or partial withdrawal
from a Multiemployer Pension Plan and the withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans as a result
of such withdrawal (including any outstanding withdrawal liability that the Borrower or any member of the Controlled Group have incurred
on the date of such withdrawal) exceeds


$250,000.00.




13.1.8 
Judgments. Final judgments which exceed an aggregate of$20,000 shall be rendered against any Loan Party and shall not have been
paid, discharged or vacated or had execution thereof stayed pending appeal within 60 days after entry or filing of such judgments.




13.1.9 
Invalidity of Collateral Documents, etc. Through no fault of the Lender, any Collateral Document shall cease to be in full force
and effect; or any Loan Party (or any Person by, through or on behalf of any Loan Party) shall contest in any manner the validity, binding
nature or enforceability of any Collateral Document.




13.1.10
Change of Control. A Change of Control shall occur.


 






13.1.11 
Material Adverse Effect. The occurrence of any event having a Material Adverse Effect not otherwise addressed in this Agreement
or the Loan Documents.




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13.2 
Effect of Event of Default. If any Event of Default described in Section 13.1.4 shall occur in respect of the Borrower,
the Commitments shall immediately terminate and the Loans and all other Obligations hereunder shall become immediately due and payable,
all without presentment, demand, protest or notice of any kind; and, if any other Event of Default shall occur and be continuing, the
Lender may declare the Commitments to be terminated in whole or in part and/or declare all or any part of the Loans and all other Obligations
hereunder to be immediately due and payable (in whole or in part, as applicable), all without presentment, demand, protest or notice
of any kind. The Lender shall promptly advise the Borrower of any such declaration, but failure to do so shall not impair the effect
of such declaration.


SECTION
14[RESERVED].




SECTION
15GENERAL.




15.1 
Waiver: Amendments. No delay on the part of the Lender in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by any of them of any right, power or remedy preclude other or further exercise thereof,
or the exercise of any other right, power or remedy. No amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement or the other Loan Documents shall in any event be effective unless the same shall be in writing and acknowledged by
the Lender, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.


15.2 
Notices. Except as otherwise provided herein, all notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown below or at such other address as such party may, by written notice received
by the other parties, have designated as its address for such purpose. Notices sent by facsimile transmission shall be deemed to have
been given when sent provided a confirmation of such transmission exists; notices sent by mail shall be deemed to have been given three
Business Days after the date when sent by registered or certified mail, postage prepaid; and notices sent by hand delivery or overnight
courier service shall be deemed to have been given when received. For purposes of Section 2.2, the Lender shall be entitled to
rely on telephonic instructions from any person that the Lender in good faith believes is an authorized officer or employee of the Borrower,
and the Borrower shall hold the Lender harmless from any loss, cost or expense resulting from any such reliance.





	Lender:	First
  Merchants Bank, National Association
	 	200
  East Jackson Street
	 	Muncie,
  Indiana 47305
	 	Attn:
  W. Scott McKee, Vice President
	 	Fax:
  765.282.6304
	 	 
	With
  a copy	 
	(which
  shall not constitute notice to:	Krieg
  DeVault LLP
	 	12800
  North Meridian Street
	 	Suite
  300
	 	Carmel,
  Indiana 46032
	 	Attn:
  Bradley S. Fuson, Esq.
	 	Fax:
  317.636.1507
	 	 
	Borrower:	International
  Baler Corporation
	 	5400
  Rio Grande Avenue
	 	Jacksonville,
  Florida 32254
	 	Attn:
  Roger Griffin
	 	 



 




    	32



    	 



    












15.3 
Computations. Where the character or amount of any asset or liability or item of income or expense is required to be determined,
or any consolidation or other accounting computation is required to be made, for the purpose of this Agreement, such determination or
calculation shall, to the extent applicable and except as otherwise specified in this Agreement, be made in accordance with GAAP, consistently
applied; provided that if the Borrower notifies the Lender that the Borrower wishes to amend any covenant in Sections 10 or 11.14
(or any related definition) to eliminate or to take into account the effect of any change in GAAP on the operation of such covenant,
then the Borrower's compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant
change in GAAP became effective, until either such notice is withdrawn or such covenant (or related definition) is amended in a manner
satisfactory to the Borrower.




15.4 
Costs, Expenses and Taxes. The Borrower agrees to pay on demand all reasonable out- of-pocket costs and expenses of the Lender
(including Attorney Costs and any Taxes) in connection with the preparation, execution, delivery and administration (including perfection
and protection of any Collateral) of this Agreement, the other Loan Documents and all other documents provided for herein or delivered
or to be delivered hereunder or in connection herewith (including any amendment, supplement or waiver to any Loan Document), whether
or not the transactions contemplated hereby or thereby shall be consummated, and all reasonable out-of-pocket costs and expenses (including
Attorney Costs and any Taxes) incurred by the Lender after an Event of Default in connection with the collection of the Obligations or
the enforcement of this Agreement the other Loan Documents or any such other documents or during any workout, restructuring or negotiations
in respect thereof. In addition, the Borrower agrees to pay, and to save the Lender harmless from all liability for, any fees of the
Borrower's auditors in connection with any reasonable exercise by the Lender of its rights pursuant to Section 10.2. All Obligations
provided for in this Section 15.4 shall survive repayment of the Loans, cancellation of the Notes and termination of this Agreement.




15.5 
Participations. The Lender may at any time sell to one or more Persons participating interests in its Loans, Commitments or other
interests hereunder (any such Person, a "Participant"). In the event of a sale by the Lender of a participating interest to
a Participant, (a) the Lender's obligations hereunder shall remain unchanged for all purposes, (b) the Borrower shall continue to deal
solely and directly with the Lender in connection with the Lender's rights and obligations hereunder, and (c) all amounts payable by
the Borrower shall be determined as if the Lender had not sold such participation and shall be paid directly to the Lender. The Borrower
agrees that if amounts outstanding under this Agreement are due and payable (as a result of acceleration or otherwise), each Participant
shall be




    	33



    	 



    



deemed
to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if
the amount of its participating interest were owing directly to it as the Lender under this Agreement.


15.6 
GOVERNING LAW. THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF INDIANA
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.


15.7 
Severability. Whenever possible each provision of this Agreement shall be interpreted in such manner as. to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Agreement. All obligations of the Borrower and rights of the Lender expressed herein or in any other Loan Document
shall be in addition to and not in limitation of those provided by applicable law.


15.8 
Nature of Remedies. All Obligations of the Borrower and rights of the Lender expressed herein or in any other Loan Document shall
be in addition to and not in limitation of those provided by applicable law. No failure to exercise and no delay in exercising, on the
part of the Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.


15.9 
Entire Agreement. This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among
the parties hereto and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating
to the subject matter hereof and thereof and any prior arrangements made with respect to the payment by the Borrower of (or any indemnification
for) any fees, costs or expenses payable to or incurred (or to be incurred) by or on behalf of the Lender.


15.10 
Counte rparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts
and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same
Agreement. Receipt of an executed signature page to this Agreement by facsimile or other electronic transmission shall constitute effective
delivery thereof. Electronic records of executed Loan Documents maintained by the Lender shall deemed to be originals.




15.11 
Successors and Assi tms. This Agreement shall be binding upon the Borrower, the Lender and their respective successors and assigns,
and shall inure to the benefit of the Borrower, the Lender and the successors and assigns of the Lender. No other Person shall be a direct
or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of
the other Loan Documents. The Borrower may not assign or transfer any of its rights or Obligations under this Agreement without the prior
written consent of the Lender.


15.12 
Captions. Section captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.




15.13 
Customer Identification - USA Patriot Act Notice. The Lender hereby notifies the Loan Parties that, pursuant to the requirements
of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001 (the "Act"), it is required to obtain,
verify and record information that identifies the




    	34



    	 



    



Loan
Parties, which information includes the name and address of the Loan Parties and other information that will allow the Lender to identify
the Loan Parties in accordance with the Act.


15.14 
INDEMNIFICATION BY THE BORROWER.IN CONSIDERATION OF THE EXECUTION AND DELIVERY OF THIS AGREEMENTBY THE LENDER AND THE
AGREEMENT TO EXTEND THE COMMITMENTS PROVIDED HEREUNDER, THE BORROWER HEREBY AGREES TO INDEMNIFY, EXONERATE AND HOLD THE LENDER AND EACH
OF THE OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES, REPRESENTATIVES AND AGENTS OF THE LENDER (EACH A "LENDER PARTY") FREE AND
HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, LOSSES, LIABILITIES, DAMAGES AND EXPENSES, INCLUDING ATTORNEY
COSTS (AS SUCH TERM IS DEFINED IN THIS AGREEMENT) (COLLECTIVELY, THE "INDEMNIFIED LIABILITIES"), INCURRED BY THE LENDER PARTIES
OR ANY OF THEM AS A RESULT OF, OR ARISING OUT OF, OR RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF CAPITAL SECURITIES, PURCHASE
OF ASSETS OR OTHER SIMILAR TRANSACTION FINANCED OR PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITH THE PROCEEDS
OF ANY OF THE LOANS, (B) THE USE, HANDLING, RELEASE, EMISSION, DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS
SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY, (C) ANY VIOLATION OF ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT
ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY OR THE OPERATIONS CONDUCTED THEREON, (D) THE INVESTIGATION, CLEANUP OR REMEDIATION OF
OFFSITE LOCATIONS AT WHICH ANY LOAN PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR INDIRECTLY DISPOSED OF HAZARDOUS
SUBSTANCES OR (E) THE EXECUTION, DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BY ANY OF THE LENDER
PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCTAS DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION. IF AND TO THE EXTENT THAT THE FOREGOING
UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, THE BORROWER HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION
OF EACH OF THE INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE LAW. ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION 15.14
SHALL SURVIVE REPAYMENT OF THE LOANS, CANCELLATION OF THE NOTES, ANY FORECLOSURE UNDER, OR ANY MODIFICATION, RELEASE OR DISCHARGE
OF, ANY OR ALL OF THE COLLATERAL DOCUMENTS AND TERMINATION OF THIS AGREEMENT.


15.15 
Nonliabilitv of Lender. The relationship between the Borrower on the one hand and the Lender on the other hand shall be solely
that of borrower and lender. The Lender has no fiduciary relationship with or duty to any Loan Party arising out of or in connection
with this Agreement or any of the other Loan Documents, and the relationship between the Loan Parties, on the one hand, and the Lender,
on the other hand, in connection herewith or therewith is solely that of debtor and creditor. The Lender undertakes no responsibility
to any Loan Party to review or inform any Loan Party of any matter in connection with any phase of any Loan Party's business or operations.
The Borrower agrees, on behalf of itself and each other Loan Party, that the Lender shall have no liability to any Loan Party (whether
sounding in tort, contract or otherwise) for losses suffered by any Loan Party in connection with, arising out of, or in any way related
to the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted
from the




    	35



    	 



    



gross
negligence or willful misconduct of the party from which recovery is sought. NO
LENDER PARTY SHALL BE LIABLE FOR ANY DAMAGES, AND THE BORROWER ON BEHALF OF ITSELF AND EACH OTHER LOAN PARTY, HEREBY WAIVES, RELEASES
AND AGREES NOT TO SUE FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR ARISING OUT OF ITS ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH (WHETHER
BEFORE OR AFTER THE CLOSING DATE). The Borrower


acknowledges
that it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which
it is a party. No joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby with the Lender or among the Loan Parties and the Lender.


15.16 
FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF INDIANA OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF INDIANA; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE
TO PRECLUDE THE LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF INDIANA AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
INDIANA FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF INDIANA. THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BYLAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.


15.17 
WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR .AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING
IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY.






[signature
page follows]




    	36



    	 



    








The
parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers or other representatives
as of the date first set forth above.





	 	INTERNATIONAL
  BALER CORPORATION
	 	 
	 	By:
  /s/ David R. Griffin
	 	David
  R. Griffin,, Chief Executive Officer
	 	 
	 	By:
  /s/ William E. Nielsen
	 	William
  E. Nielsen, Chief Financial Officer
	 	 
	 	 
	 	FIRST
  MERCHANTS BANK, N.A.
	 	 
	 	By:
  W. Scott Mckee
	 	W. Scott
  McKee, Vice President



 




    	37



    	 



    






Schedule
9.15


Insurance 


International
Baler Corp.


Insurance
Summary 


	Policy
    Period for all:	4-1-12
    to 3-31-13
	Workers
    Compensation
	carrier:	Amerisure
	Annual
    Premium:	$79,055
    + 17,000 est. 96,055
	General
    Liability/Products Liability ·
	carrier:	XL
    America, Indian harbor
	Annual
    Premium:	$486,400
	Policy
    Limit:	$3,000,000
    General Aggregate
	 	$3,000,000
    Products Aggregate
	 	$3,000,000
    Each Occurrence Limit
	Deductible:	$25,000
	Umbrella
	Carrier:	None
	Annual
    Premium:	0
	Deductible:	None
	Property
    Insurance
	carrier:	Amerisure
	Annual
    Premium:	$49,186
	Deductible:	$2,500
	Total
    Bldgs:	$2,796,300
	Total
    Contents:	$2,006,131
	Total
    BI:	$3,347,500
	Business
    Auto
	carrier:	Amerisure
	Annual
    Premium:	$4,013
	Policy
    Limit:	$1,000,000
	Deductible:	$500
	Inland
    Marine
	carrier:	Amerisure
	Annual
    Premium:	$1,804
	Policy
    Limit:	$225,000
	Deductible:	$1,000
	International
    General Liability
	Carrier:	Ace
    American
	Annual
    Premium:	$2,500
	Policy
    Limit:	$1,000,000
	Directors
    and Officers Insurance
	carrier:	St.
    Paul Mercury
	Annual
    Premium:	$11,422
	Policy
    Limit:	$1,000,000
	Deductible:
     
	Non
    SEC:	$50,000
	SEC:	$100,000




 





    	38



    	 



    








Schedule
9.16


Real
Pro perty




 


5400
Rio Grande Avenue, Jacksonville, FL 32254


5420
Kankakee Blvd, Jacksonville, FL 32254




    	39



    	 



    



Schedule
9.18


Intellectual
Pro per ty






None




    	40



    	 



    



Schedule
11.1




Existing
Debt








None




    	41



    	 



    



Schedule
11.2




Existing
Liens










None




    	42



    	 



    



Schedule
11.11






Investments








None




    	43



    	 



    







Schedule
12.1


Debt
to be Repaid




Revolving
line of credit extended by Center State Bank (which has no outstanding balance)




    	44



    	 



    



 


EXHIBIT
A


 


FORM
OF REVOLVING NOTE


  


PROMISSORY
NOTE


(Revolving
Loan)




	$1,650,000.00	 	 	 	Dated
                                            as of January 7, 2013	 
		 	 	 	Final
                                            Maturity: December 31, 2014	 






 


On
or before December 31, 2014 ("Final Maturity"), INTERNATIONAL BALER CORPORATION, a Delaware corporation (the "Borrower"),
promises to pay to the order of FIRST MERCHANTS BANK, NATIONAL ASSOCIATION (the "Lender") at the offices of the Lender
at 200 East Jackson Street, Muncie, Indiana 47305, the principal sum of One Million Six Hundred Fifty and Noll 00 Dollars ($1,650,000.00)
or so much of the principal amount of the Revolving Loan represented by this Note as may be disbursed by the Lender under the terms of
the Credit Agreement described below, and to pay interest on the unpaid principal balance outstanding from time to time as provided in
the Credit Agreement (as hereinafter defined).




This
Note evidences indebtedness under a revolving line of credit loan (the "Revolving Loan") incurred or to be incurred by the
Borrower under a revolving line of credit extended to the Borrower by the Lender under a certain Credit Agreement dated as of even date
herewith, as the same may be amended from time to time (the "Credit Agreement"). All references in this Note to the Credit
Agreement shall be construed as references to that Credit Agreement as it has been or may be amended from time to time. The Revolving
Loan is referred to in the Credit Agreement as the "Revolving Loan." Subject to the terms and conditions of the Credit Agreement,
the proceeds of the Revolving Loan may be advanced and repaid and readvanced until Final Maturity. The principal amount of the Revolving
Loan outstanding from time to time shall be determined by reference to the books and records of the Lender on which all advances under
the Revolving Loan and all payments by the Borrower on account of the Revolving Loan shall be recorded. Such books and records shall
be deemed prima facie to be correct as to such matters.




The
entire outstanding principal balance of this Note shall be due and payable, together with all accrued but unpaid interest, at Final Maturity.
Reference is made to the Credit Agreement for the maximum available principal amount available to Borrower under this Note. Principal
may be prepaid in whole or in part at any time and from time to time without premium or penalty as provided in the Credit Agreement.




Reference
is made to the Credit Agreement which provides for acceleration of the maturity of this Note upon the happening of any "Event of
Default" as defined therein. In addition to the effects of an Event of Default set forth in the Credit Agreement, upon the occurrence
and during the continuation of an Event of Default, including, but not limited to, upon maturity of this Note, whether by acceleration
or otherwise, the Lender, at its option, may, if permitted under applicable law, do one or both of the following: (i) increase the interest
rate under this N0te to the rate that is five percent (5%) above the rate that would otherwise be payable hereunder, and (ii) add any
unpaid accrued interest to principal and such sum will bear interest therefrom until paid at the rate provided under this Note (including
any increased rate) by reference to the Credit Agreement. The interest rate under this Note will not exceed the maximum rate permitted
by applicable law under any circumstances.




    	45



    	 



    



The
Borrower and any endorsers severally waive demand, presentment for payment and notice of nonpayment of this Note, and each of them consents
to any renewals or extensions of the time of payment of this Note without notice.




The
Borrower agrees that the Lender has all rights of set-off and bankers' lien provided by applicable law, and in addition thereto, the
Borrower agrees that at any time any Event of Default exists, the Lender may apply to the payment of any Obligations of the Borrower,
whether or not then due, any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter with the Lender.




All
amounts payable under the terms of this Note shall be payable with expenses of collection, including attorneys' fees, and without offset
or other reduction and without relief from valuation and appraisement laws.




The
Borrower agrees that the Lender may provide any information the Lender may have about the Borrower or about any matter relating to this
Note to any of its subsidiaries or affiliates or their successors, or to any one or more purchasers or potential purchasers of this Note.
The Borrower agrees that the Lender may at any time sell, assign or transfer one or more interests or participation in all or any part
of its rights or obligations in this Note to one or more purchasers whether or not related to the Lender to the extent permitted by the
Credit Agreement.




This
Note is made under and will be governed in all cases by the substantive laws of the State of Indiana, notwithstanding the fact that conflicts
of law rules (of the State of Indiana or any other jurisdiction) might otherwise require application of the substantive laws of another
jurisdiction.




The
obligations of the Borrower under this Note shall be absolute and unconditional and shall remain in full force and effect until the entire
principal, interest, penalties, premiums and late charges, if any, on this Note and all additional payments, if any, due pursuant to
any other Loan Document (as defined in the Credit Agreement) (collectively, the "Obligations") shall have been paid and, until
such payment has been made, shall not be discharged, affected, modified or impaired on the happening from time to time of any event,
including, without limitation, any of the following, whether or not with notice to or the consent of the Borrower:




a. 
the waiver, compromise, settlement, release, termination or amendment (including, without limitation, any extension or postponement of
the time for payment or performance or renewal or refinancing) of any or all of the obligations or agreements of the Borrower under this
Note or any other Loan Document;




b. 
the failure to give notice the Borrower of the occurrence of a default under the terms and provisions of this Note or any other Loan
Document;




c. 
the release, substitution or exchange by the holder of this Note of any collateral securing any of the Obligations (the "Collateral")
(whether with or without consideration) or the acceptance by the holder of this Note of any additional collateral or the availability
or claimed availability of any other collateral or source of repayment or any nonperfection or other impairment of any Collateral;




d. 
the release of any person primarily or secondarily liable for all or any part of the Obligations, whether by Lender or any other holder
of the Note or in connection with any voluntary or involuntary liquidation, dissolution, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors or similar event or proceeding affecting the Borrower or any other person or entity who, or any of whose
property, shall at the time in question be obligated in respect of the Obligations or any part thereof; or




    	46



    	 



    





e. 
to the extent permitted by law, any other event, occurrence, action or circumstance that would, in the absence of this clause, result
in the release or discharge of the Borrower from the performance or observance of any obligation, covenant or agreement contained in
this Note.




The
obligations of the Borrower to Lender under this Note shall remain in full force and effect (or be reinstated) until the Lender has received
payment in full of all Obligations and the expiration of any applicable preference or similar period pursuant to any bankruptcy, insolvency,
reorganization, moratorium or similar law, or at law or equity, without any claim having been made before the expiration of such period
against all or any part of any payment(s) received by Lender.




THE
BORROWER AND THE LENDER BY ITS ACCEPTANCE HEREOF EACH HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A. TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO TIDS NOTE, THE CREDIT AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). THE BORROWER CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER OR ANY OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.


SMALL
BUSINESS JOBS ACT CERTIFICATION: The following information is requested pursuant to Section 4107(d)(2) of the Small Business Jobs Act
of 2010. As required by Section 4107(d)(2) of the Small Business Jobs Act of 2010, by signing below, Borrower hereby certifies to Lender
that the principals of Borrower and its affiliates have not been convicted of, or pleaded nolo contender to, a sex offense against a
minor (as such terms are defined in Section 111 of the Sex Offender Registration and Notification Act (42 U.S.C. 16911)). The term "principals"
for the purpose of the Small Business Jobs Act certification is defined as follows: if a sole proprietorship, the proprietor; if a partnership,
each managing partner and each partner who is a natural person and holds a 20% or more ownership interest in the partnership; and if
a corporation, limited liability company, association or a development company, each director, each of the five most highly compensated
executives or officers of the entity, and each natural person who is a direct or indirect holder of 20% or more of the ownership stock
or stock equivalent of the entity.






[SIGNATURE
PAGE FOLLOWS]




    	47



    	 



    







 





	 	INTERNATIONAL
  BALER CORPORATION
	 	 
	 	By:
  EXHIBIT - DO NOT EXECUTE
	WITNESS:	 
	 	 
	By:	 
	W. Scott
  McKee	 



 







    	48



    	 



    





EXHIBIT
B 


FORM
OF COMPLIANCE CERTIFICATE




To
First Merchants Bank, National Association:




Please
refer to the Credit Agreement dated as of January 7, 2013 (as amended, restated, supplemented or otherwise modified from time to time,
the "Credit Agreement") between INTERNATIONAL BALER CORPORATION (the "Borrower") and FffiST MERCHANTS
BANK, NATIONAL ASSOCIATION (the


"Lender").
Terms used but not otherwise defined herein are as defined in the Credit Agreement.




I.
Reports. Enclosed herewith is a copy of the [annual audited/quarterly] report of the Borrower as at




20  (the
"Computation Date"), which report fairly presents in all material


respects
the financial condition and results of operations (subject to the absence of footnotes and to normal year end adjustments) of the Borrower
as of the Computation Date and has been prepared in accordance with GAAP consistently applied.




II.
Financial Tests. The Borrower hereby certifies and warrants to you that the following is a true and correct computation as at
the Computation Date of the following ratios and/or financial restrictions contained in the Credit Agreement.


 






	A.	Section
    11.14.1- Minimum Fixed Charge Coverage Ratio
	 	Minimum
                                            Allowed
	1.25
    to 1.0

	B.	Section
    11.14.2 -Minimum Tangible Net Worth
	 	Minimum
                                            Allowed
	 $5,000,000.00

	B.	Section
    11.14.3 -Minimum Working Capital	$1,500,000.00
	 	 




 


The
Borrower further certifies to you that no Event of Default or Unmatured Event of Default has occurred and is continuing. The Borrower
has caused this Certificate to be executed and delivered by its duly authorized officer on_________, 201_.


	 	INTERNATIONAL
  BALER CORPORATION
	 	 
	 	 








    	49



    	 



    












PROMISSORY
NOTE


(Revolving
Loan)




	$1
    , 650,000.00	 	 	 	Dated
                                            as of January 7, 2013
		 	 	 	Final
                                            Maturity: December 31, 2014









On
or before December 31, 2014 ("Final Maturity "), INTERNATIONAL BALER CORPORATION, a Delaware corporation (the "Borrower"),
promises to pay to the order of FIRST MERCHANTS BANK, NATIONAL ASSOCIATION (the "Lender") at the offices of the Lender
at 200 East Jackson Street, Muncie, Indiana 47305, the principal sum of One Million Six Hundred Fifty and No/I 00 Dollars ($1 ,650 ,000
..00) or so much of the principal amount of the Revolving Loan represented by this Note as may be disbursed by the Lender under the terms
of the Credit Agreement described below, and to pay interest on the unpaid principal balance outstanding from time to time as provided
in the Credit Ag reement (as hereinafter defined).




This
Note evidences indebtedness under a revolving line of credit loan (the "Revolving Loan" ) incurred or to be incurred by the
Borrower under a revolving line of credit extended to the Borrower by the Lender under a certain Credit Agreement dated as of even date
herewith , as the same may be amended from time to time (the "Credit Agreement"). All references in this Note to the Credit
Agreement shall be construed as references to that Credit Agreeinent as it has been or may be amended from time to time. The Revolving
Loan is referred to in the Credit Agreement as the " Revolving Loan." Subject to the terms and conditions of the Credit Agreement
, the proceeds of the Revolving Loan may be advanced and repaid and readvanced until Final Maturity. The principal amount of the Revolving
Loan outstanding from time to time shall be determined by reference to the books and records of the Lender on which all advances under
the Revolving Loan and all payments by the Borrower on account of the Revo lving Loan shall be recorded. Such books and records shall
be deemed prima facie to be correct as to such ma tters.




The
entire outstanding principal balance of this Note shall be due and payable, together with all accrued but unpaid interest, at Final Maturity.
Reference is made ·to the Credit Agreement for the maximum available principal amount available to Borrower under this Note. Principal
may be prepaid in whole or in part at any time and from time to time without premium or penalty as provided in the Credit Agreement.·




Reference
is made to the Credit Agreement which provides for acseleration of the maturity of this Note upon the happening of any " Event of
Default" as defined therein. In addition to the effects of an Event of Default set forth in the Credit Agreement, upon the occurrence
and during the continuation of an Event of Default, including, but not limited to, upon maturity of this Note, whether by acceleration
or otherwise, the Lender, at its option , may, if permitted under applica ble law, do one or both of the following: (i) increase the
interest rate under this Note to the rate that is five percent (5%) above the rate that would otherwise be payable hereunder , and (ii)
add any unpaid accrued int erest to principal and such sum will bear interest therefrom until paid at the rate provided under this Note
(including any increased rate) by reference to the Credit Agreement. The interest rate under this Note will not exceed the maximum rate
permitted by applicable law under any circumstances.




The
Borrower and any endorsers severally waive demand, presentment for payment and notice of nonpayment of this Note, and each of them consents
to any renewals or extensions of the time of payment of this Note without notice.




The
Borrower agrees that the Lender has all rights of set-off and bankers' lien provided by applicable law, and in addition thereto, the
Borrower agrees that at any time any Event of Default exis ts,















    	50



    	 



    

 


the
Lender may apply to the payment of any Obiigations of the Borrower, whether or not then due, any and all balances, credits, deposits,
accounts or moneys of the Borrower then or thereafter with the Lender.




All
amounts payable under the terms of this Note shall be payable with expenses of collection, including attorneys' fees, and without offset
or other reduction and without relief from valuation and appraisement laws.




The
Borrower agrees that the Lender may provide any information the Lender may have about the Borrower or about any matter relating to this
Note to any of its subsidiaries or affiliates or their successors, or to any one or more purchasers or potential purchasers of this Note.
The Borrower agrees that the Lender may at any time sell, assign or transfer one or more interests or participation in all or any part
of its rights or obligations in this Note to one or more purchasers whether or not related to the Lender to the extent permitted by the
Credit Agreement.




This
Note is made under and will be governed in all cases by the substantive laws of the State of Indiana, notwithstanding the fact that conflicts
of law rules (of the State of Indiana or any other jurisdiction) might otherwise require application of the substantive laws of another
jurisdiction.




The
obligations of the Borrower under this Note shall be absolute and unconditional and shall remain in full force and effect until the entire
principal, interest, penalties, premiums and late charges, if any, on this Note and all additional payments, if any, due pursuant to
any other Loan Document (as defined in the Credit Agreement) (collectively, the "Obligations") shall have been paid and, until
such payment has been made, shall not be discharged, affected, modified or impaired on the happening from time to time of any event,
including, without limitation, any of the following, whether or not with notice to or the consent of the Borrower:




a. 
the waiver, compromise, settlement, release, termination or amendment (including, without limitation, any extension or postponement of
the time for payment or performance or renewal or refinancing) of any or all of the obligations or agreements of the Borrower under this
Note or any other Loan Document;




b. 
the failure to give notice the Borrower of the occurrence of a default under the terms and provisions of this Note or any other Loan
Document;




c. 
the release, substitution or exchange by the holder of this Note of any collateral securing any of the Obligations (the "Collateral")
(whether with or without consideration) or the acceptance by the holder of this Note of any additional collateral or the availability
or claimed availability of any other collateral or source of repayment or any nonperfection or other impairment of any Collateral;




d. 
the release of any person primarily or secondarily liable for all or any part of the Obligations, whether by Lender or any other holder
of the Note or in connection with any voluntary or involuntary liquidation, dissolution, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors or similar event or proceeding affecting the Borrower or any other person or entity who, or any of whose
property, shall at the time in question be obligated in respect of the Obligations or any part thereof; or




e. 
to the extent permitted by law, any other event, occurrence, action or circumstance that would, in the absence of this clause, result
in the release or discharge of the Borrower from the performance or observance of any obligation, covenant or agreement contained in
this Note.




    	51



    	 



    

The
obligations of the Borrower to Lender under this Note shall remain in full force and effect (or be reinstated) until the Lender has received
payment in full of all Obligations and the expiration of any applicable preference or similar period pursuant to any bankruptcy, insolvenc
y, reorganization, moratorium or similar la w, or at law or equity, without any claim having been made before the expiration of such
period against all or any part of any payment(s) received by Lender.




THE
BORROWER AND THE LENDER BY ITS ACCEPTANCE HEREOF EACH HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS NOTE, THE CREDIT AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). THE BORROWER CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER OR ANY OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.




SMALL
BUSINESS JOBS ACT CERTIFICATION: The following information is requested pursuant to Section 4107(d)(2) of the Small Business Jobs Act
of 2010. As required by Section 4107(d)(2) of the Small Business Jobs Act of 2010, by signing below, Borrower hereby certifies to Lender
that the principals of Borrower and its affiliates have not been convicted of, or pleaded nolo contender to, a sex offense against a
minor (as such terms are defined in Section 111 of the Sex Offender Registration and Notification Act (42 U.S.C. 16911)). The term "principals"
for the purpose of the Small Business Jobs Act certification is defined as follows: if a sole proprietorship, the proprietor; if a partnership,
each managing partner and each partner who is a natural person and holds a 20% or more ownership interest in the partnership; and if
a corporation, limited liability company, association or a development company, each director, each of the five most highly compensated
executives or officers of the entity, and each natural person who is a direct or indirect 'holder of 20% or more of the ownership stock
or stock equivalent of the entity.






[SIGNATURE
PAGE FOLLOWS]




    	52



    	 



    



 


INTERNATIONAL
BALER CORPORATION


By:
/s/ David R. Griffin 


David
R. Griffin, President


By:
/s/ William E. Nielsen, Chief Financial Officer


William
E. Nielsen, Chief Financial Officer


 


STATE
OF FLORIDA


COUNTY
OF DUVAL




Before
me, a Notary Public in and for said Co unt y and State, personally appeared David R. Griffin and William E. Nielsen, the President and
Chie f Financial Officer, res pectively, of Internationa l Baler Corporation, a Delaware corporation, who, having been duly sworn, acknowledged
the execution of the foregoing Promissory Note for and on behalf of such entity as such officers and stated that all representations
therein contained are true.




WITNESS
my hand and Notarial Seal this _day of January, 2013.


/s/
Melissa Stalter


Notary
Public


 Melissa
Stalter 


Notary
Public (Printed)


My
Country of Residence:


Duval




    	53



    	 



    

 


SECURITY
AGREEMENT






SECURITY
AGREEMENT, dated as of January 7, 2013, between INTERNATIONAL BALER CORPORATION, a Delaware corporation (the "Company"),
and FIRST MERCHANTS BANK, NATIONAL ASSOCIATION, a national banking association (the "Lender") .




WHEREAS,
the Company has entered into a Credit Agreement dated as of even date (as amended and in effect from time to time, the "Credit Agreement")
, with the Lender, pursuant to which the Lender, subject to the terms and conditions contained therein, is to make loans or otherwise
to extend credit to the Company; and




WHEREAS,
it is a condition precedent to the Lender' s making any loa_ns or otherwise extending


credit
to the Company under the Credit Agreement that the Company execute and deli ver to the Lender a security agreement in substantially the
form hereof, and




WHEREAS,
the Company wishes to grant security interests in favor of the Lender as herein provided.·




NOW,
THEREFORE, in conside ration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:




I. Definitions.
AII capitalized terms used herein without definitions shall have the respective meanings provided therefor in the Credit Agreement.
The term "State", as used herein, means the State of Indiana. All terms defined in the Uniform Commercial Code of the State
and used herein shall have the same definitions herein as specified therein. However , if a term is defined in Article 9 of the
Uniform Commercial Code of the State differently than in another Article of the Uniform Commercial Code of the State, the term has the
meaning specified in Article 9. The term "Obl iga tio ns", as used herein, means all of the indebtedness, Hedge Obligations
(as defined in the Credit Agreement ), obligations and liabilities of the Company to the Lender, individually or collectively , whether
direct or indirect , joint or several, absolute or contingent, due or to become due, now existing or herea fter arisi ng under or in
respect of the Credit Agreement , any promissory notes, Hedge Agreements (as defined in the Credit Agreement) , guaranties or other instruments
or agreements executed and delivered pursuant thereto or in connection therewith or this Agreement , and the term "Event of Default",
as used herein, means the failure of the Company to pay or perform any of the Obligations as and when due to be paid or performed under
the terms of the Credit Agreement.




2. 
Grant of Security Interest. The Company hereby grants to the Lender, to secure the payment and performance in full of all
of the Obligations, a security in terest in and so pledges and assigns to the Lender the following properties , assets and rights of
the Company, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof (all of the
same being hereinafter called the "Collateral"): all personal and fixture property of every kind and nature including without
limitation all goods (including inventory, equipment and any accessions thereto), instruments (including promissory notes) , documents,
accounts (including health-care insurance receivables) , c hattel paper (whether tangible or electronic), deposit accounts, letter-of-credit
rights (whether or not the letter of credit is evidenced by a writing) , commercial tort claims, sec urit ie s and all other investment
property, sup porting obligations , any other contract rights or rights to the payment of money, insurance claims and




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proceeds,
tort claims, and all general intangibles including, without limitation, all payment intangibles, patents, patent applications, trademarks,
trademark applications, trade names, copyrights, copyright applications, software, engineering drawings, service marks, customer lists,
goodwill, and all licenses, pennits, agreements of any kind or nature pursuant to which the Company possesses, uses or has authority
to possess or use property (whether tangible or intangible) of others or others possess, use or have authority to possess or use property
(whether tangible or intangible) of the Company, and all recorded data of any kind or nature, regardless of the medium of recording includ
ing, without limitation, all software, writings, plans, specifications and schematics. The Lender acknowledges that the attachment of
its security interest in any commercial tort claim as original collateral is subject to the Company's compliance with Section 4.7 hereof.




3. 
Authorization to File Financing Statements. The Company hereby irrevocably authorizes the Lender at any time and from time
to time to file in any Unifonn Commercial Code jurisdiction any initial financing statements and amendments thereto that (a) indicate
the Collateral (i) as all assets of the Company or words of similar effect, regardless of whether any particular asset compris e d in
the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of the State or such Jurisdiction, or (ii) as being
of an equal or lesser scope or with greater detail, and (b) contain any other infonnation required by part 5 of Article 9 of the Unifonn
Commercial Code of the State for the sufficiency or filing office acceptance of any financing statement or amendment, including (i) whether
the Company is an organization, the type of organization and any organization identification number issued to the Company and, (ii) in
the case of a financing statement filed as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut,
a sufficient description of real property to which the Collateral relates. The Company agrees to furnish any such information to the
Lender promptly upon request. The Company also ratifies its authorization for the Lender to have filed in any Uniform Commercial Code
Jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof.




4. 
Other Actions. Further to insure the attachment, perfection and first priority of, and the ability of the Lender to enforce,
the Lender's security interest in the Collateral, the Company agrees, in each case at the Company's own expense, to take the following
actions with respect to the following Collateral:




4.1.
Promissory Notes and Tangible Chattel Paper. If the Company shall at any time hold or acquire any promissory notes or tangible
chattel paper, the Company shall forthwith endorse, assign and deliver the same to the Lender, accompanied by such instruments of transfer
or assignment duly executed in blank as the Lender may from time to time specify.


 






4.2.
Deposit Accounts. For each deposit account that the Company at any time opens or maintains, the Company shall, at the Lender
' s request and option, pursuant to an agreement in fonn and substance satisfactory to the Lender, either


 




(a) 
cause the depositary bank to agree to comply at any time with instructions from the Lender to such depositary bank directing the dispo
sitio n of funds from time to time credited to such deposit account, without further consent of the Company, or (b) arrange for the Lender
to become the customer of the depositary bank with respect to the deposit account, with the Company being pennitted, only with the consent
of the Lender, to exercise rights to withdraw funds from such deposit account. The Lender agrees with the Company that the Lender shall
not give any such instructions or withhold any withdrawal rights from the




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Company,
unless an Event of Default has occurred and is continuing, or, after giving effect to any withdrawal not otherwise pennitted by the Loan
Documents, would occur. The provisions of this paragraph shall not apply to (i) any deposit account for which the Company, the depositary
bank and the Lender have entered into a cash collateral agreement specially negotiated among the Company, the depositary bank and the
Lender for the specific purpose set forth therein, (ii) deposit accounts for which the Lender is the depositary, and (iii) deposit accounts
specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of the Company's
salaried employees .




4.3.
Investment Property. If the Company shall at any time hold or acquire any certificated securities, the Company shall forthwith
endorse, assign and deliver the same to the Lender, accompanied by such instruments of transfer or assignment duly executed in blank
as the Lender may from time to time specify. If any securities now or hereafter acquired by the Company are uncertificated and are issued
to the Company or its nominee directly by the issuer thereof, the Company shall immediately notify the Lender thereof and, at the Lender's
request and option, pursuant to an agreement in form and substance satisfactory to the Lender, either (a) cause the issuer to agree to
comply with instructions from the Lender as to such sec urities, without further consent of the Company or such nominee, or (b) arrange
for the Lender to become the registered owner of the securities. If any securities, whether certificated or uncertificated, or other
investment property now or hereafter acquired by the Company are held by the Company or its nominee through a securities intermediary
or commodity intermediary, the Company shall immediately notify the Lender thereof and, at the Lender's request and option, pursuant
to an agreement in form and substance satisfactory to the Lender, either (i) cause such securities intermediary or (as the case may be)
commodity inTermediary to agree to comply with entitlement orders or other instructions from the Lender to such securities intermediary
as to such securities or other investment property, or (as the case may be) to apply any value distributed on account of any commodity
contract as directed by the Lender to such commodity intermediary, in each case without further consent of the Company or such nominee,
or (ii) in the case of financial assets or other investment property held through a securities intermedia ry, arrange for the Lender
to become the entitlement holder with respect to such investment property, with the Company being permitted, only with the consent of
the Lender, to exercise rights to withdraw or otherwise deal with such investment property. The Lender agrees with the Company that the
Lender shall not give any such entitlement orders or instructions or directions to any such issuer , securities inTermediary or commodity
intermedia ry, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by the Company, unless an Event
of Default has occurred and is continuing, or, after giving effect to any such investment and withdrawal rights not otherwise permitted
by the Loan Documents, would occur. The provisions of this paragraph shall not apply to any financial assets credited to a securities
account for which the Lender is the securities intermediary.


 






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4.4
Collateral in the Possession of a Bailee. If any goods are at any time in the possession of a bailee, the Company shall promptly
notify the Lender thereof and, if requested by the Lender, shall promptly obtain an acknowledgment from the bailee, in form and substance
satisfactory to the Lender, that the bailee holds such Collateral for the benefit of the Lender and shall act upon the instructions of
the Lender, without the further consent of the Company. The Lender agrees with the Company that the Lender shall not give any such instructions
unless an Event of Default has occurred and is continuing or would occur after taking into account any action by the Company with respect
to the bailee.




4.5
Electronic Chattel Paper and Transferable Records. If the Company at any time holds or acquires an interest in any electronic
chattel paper or any "transferable record," as that term is defined in Section 201 of the federal Electronic Signatures in
Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction
, the Company shall promptly notify the Lender thereof and, at the request of the Lender, shall take such action as the Lender may reasonably
request to vest in the Lender control, under § 9.1-105 of the Uniform Commercial Code, of such electronic chattel paper or control
under Section 201 of the federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section


16
of the Uniform Electronic Transactions Act, as so in effect in such Jurisdiction, of such transferable record. The Lender agrees with
the Company that the Lender will arrange, pursuant to procedures satisfactory to the Lender and so long as such procedures will not result
in the Lender's loss of control, for the Company to make alterations to the electronic chattel paper or transferable record permitted
under UCC § 9.1-105 or, as the case may be, Section 201 of the federal Electronic Signatures in Global and National Commerce Act
or Section 16 of the Uniform Electronic Transactions Act for a party in control to make without loss of control, unless an Event of Default
has occurred and is continuing or would occur after taking into account any action by the Company with respect to such electronic chattel
paper or transferable record.




4.6
Letter-of-Credit Rights. If the Company is at any time a beneficiary under a letter of credit now or hereafter issued in favor
of the Company, the Company shall promptly notify the Lender thereof and, at the request and option of the Lender, the Company shall,
pursuant to an agreement in form and substance satisfactory to the Lender, either (i) arrange for the issuer and any confirmer of such
letter of credit to consent to an assignment to the Lender of the proceeds of any drawing under the letter of credit, or (ii) arrange
for the Lender to become the transferee beneficiary of the letter of credit, with the Lender agreeing, in each case, that the proceeds
of any drawing under the letter to credit are to be applied as provided in the Credit Agreement.




4.7
Commercial Tort Claims. If the Company shall at any time hold or acquire a commercial tort claim, the Company shall immediately
notify the Lender in a writing signed by the Company of the brief details thereof and grant to the Lender in such writing a security
interest therein and in the proceeds thereof, all upon the Terms of this Agreement, with such writing to be in form and substance satisfactory
to the Lender.




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4.8.
Other Actions as to any and all Collateral. The Company further agrees to take any other action reasonably requested by
the Lender to insure the attachment, perfection and first priority of, and the ability of the Lender to enforce, the Lender's security
interest in any and all of the Collateral including, without limitation, (a) executing, delivering and, where appropriate, filing financing
statements and amendments relating thereto under the Uniform Commercial Code , to the extent, if any, that the Company's sig nature thereon
is required therefor, (b) causing the Lender ' s name to be noted as secured party on any certificate of title for a titled good if such
notation is a condition to attachment, perfection or priority of, or ability of the Lender to enforce, the Lender' s security interest
in such Collateral , (c) complying with any provision of any statute, regulation or treaty of the United States as to any Collateral
if compliance with such provision is a condition to attachment, perfection or priority of, or ability of the Lender to enforce, the Lender's
security interest in such Co lla te ral, (d) obtaining governmental and other third party consents and approvals, including without limitation
any consent of any licensor, lessor or other person obligated on Collateral, (e) obtaining waivers from mortgagees and landlords in form
and substance satisfactory to the Lender, and (f) taking alt actions required by any earlier versions of the Uniform Commercial Code
or by other law, as applicable in any relevant Uniform Commercial Code jurisdiction, or by other law as applicable in any foreign jurisdiction.




5. 
Relation to Other Security Documents. The provisions of this Agreement supplement the provisions of any real estate mortgage
or deed of trust granted by the Company to the Lender and securing the payment or performance of any of the Obligations. Nothing contained
in any such real estate mortgage or deed of trust shalt derogate from any of the rights or remedies of the Lender hereunder. In addition,
the provisions of this Agreement shall be read and construed with the other Security Documents indicated below in the manner so indicated.




6. 
Representations and Warranties Concerning Company's Legal Status.  The Company has previously delivered to the Lend er
a certificate signed by the Company and entitled "Perfection Certificate" (the " Perfection Certificate") in substantially
the form attached hereto as Appendix I. The Company represents and warrants to the Lender as follows: (a) the Company's
exact legal name is that indicated on the Perfection Certificate and on the signature page hereof, (b) the Company is an organization
of the type and organized in the jurisdiction set forth in the Perfection Certificate, (c) the Perfection Certificate accurately sets
forth the Company' s organizational identification number or accurately states that the Company has none , (d) the Perfection Certificate
accurately sets forth the Company's place of business or, if more than one, its chief executive office as welt as the Company' s mailing
address if different , and (e) all other information set forth on the Perfection Certificate pertaining to the Company is accurate and
complete.




7. 
Covenants Concerning Company's Legal Status. The Company covenants with the Lender as follows: (a) without providing at
least thirty (30) days prior written notice to the Lender, the Company wilt not change its name, its place of business or, if more than
one, chief executive office, or its mailing address or organizational identification numb er ifit has one, (b) if the Company does not
have an organizational identification number and late r obtains one, the Company shalt forthwith notify the Lender of such organizational
id entification number , and (c) the Company will not change its type of organization, jurisdiction of organization or other legal struct
ure.




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8. 
Representations and Warranties Concerning Collateral, Etc. The Company further represents and warrants to the Lender as
follows: (a) the Company is the owner of or has other rights in or power to transfer the Collateral, free from any adverse lien, security
interest or other encumbrance, except for the security interest created by this Agreement and other liens permitted by the Credit Agreement,
(b) none of the Collateral constitutes, or is the proceeds of, "farm products" as defined in § 9.1-l02(a)(34) of the Uniform
Commercial Code of the State, (c) none of the account debtors or other persons obligated on any of the Collateral is a governmental authority
subject to the federal Assignment of Claims Act or like federal, state or local statute or rule in respect of such Collateral, (d) the
Company holds no commercial tort claim except as indicated on the Perfection Certificate, (e) the Company has at all times operated its
business in compliance with all applicable provisions of the federal Fair Labor Standards Act, as amended, and with all applicable provisions
of federal, state and local statutes and ordinances dealing with the control, shipment, storage or disposal of hazardous materials or
substances, and (t) all other information set forth on the Perfection Certificate pertaining to the Collateral is accurate and complete.




9. 
Covenants Concerning Collateral, Etc. The Company further covenants with the Lender as follows: (a) the Collateral, to
the extent not delivered to the Lender pursuant to Section 4 hereof , will be kept at those locations listed on the Perfection Certificate
and the Company will not remove the Collateral from such locations, without providing at least thirty (30) days prior written notice
to the Lender, (b) except for the security interest herein granted and liens permitted by the Credit Agreement, the Company shall be
the owner of or have other rights in the Collateral free from any lie n, security interest or other encumbrance, and the Company shall
defend the same against all claims and demands of all persons at any time claiming the same or any intere sts therein adverse to the
Lender, (c) the Company shall not pledge , mortgage or create, or suffer to exist a security int eres t in the Collateral in favor of
any person other than the Lender except for liens permitted by the Credit Agreement, (d) the Company will keep the Collateral in good
order and repair and will not use the same in violation oflaw or any policy of insurance thereon, (e) as provided in the Credit Agreement,
the Company will permit the Lender , or its designee, to inspect the Collateral at any reasonable time, wherever located , (t) the Company
will pay promptly when due all taxes, assessments, governmental charges and levies upon the Collateral or incurred in connection with
the use or operation of such Collateral or incurred in connection with this Agreement, (g) the Company will continue to operate its business
in compliance with all applicable provisions of the federal Fair Labor Standards Act, as amended, and with all applicable provisions
of federal, state and local statutes and ordinances dealing with the control, shipment, storage or


.
disposal of hazardous materials or substances, and (h) the Company will not sell or otherwise dispose, or


offer
to sell or otherwise dispose, of the Collateral or any interest therein except for (i) sales of inventory in the ordinary course of business
and (ii) so long as no Event of Defa ult has occurred and is continuing, sales or other dispositions of obsolescent items of equipment
in the ordinary course of business consistent with past practices.




I
0 .Insurance.




10.1.
Maintenance of Insurance. The Company will maintain with financially sound and reputable insurers insurance with respect
to its properties and business against such casualties and contingencies as shall be in accordance with general practices of businesses
engaged in similar activities in similar geographic areas. Such ins urance shall be in such minimum amounts that the Company will not
be deemed a coinsurer under applicable insurance laws, regulatio ns and policies and otherwise shall be in such amounts, contain such
terms , be in such forms and be for such periods as may be reasonably satisfactory to the Lender. In addition, all






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such
insurance shall be payable to the Lender as loss payee. Without limiting the foregoing, the Company will (i) keep all of its physical
property insured with casualty or physical hazard insurance on an "all risks" basis, with broad form flood and earthquake coverages
and electronic data processing coverage, with a full replacement cost endorsement and an "agreed amount" clause in an amount
equal to I 00% of the full replacement cost of such property, (ii) maintain all such workers' compensation or similar insurance as may
be required by law , and (iii) maintain, in amounts and with deductibles equal to those generally maintained by businesses engaged in
s imilar activities in similar geographic areas, general public liability insurance against claims of bodily inju ry, death or property
damage occurring, on, in or about the properties of the Company; business interruption insurance; and product liability insurance.




10.2.
Insurance Proceeds. The proceeds of any casualty insurance in respect of any casualty loss of any of the Collateral shall,
subject to the rig hts, if any, of other parties with a prior interest in the property covered thereby, (i) so long as no Default or
Event of Default has occurred and is continuing and to the extent that the amount of such proceeds is less than $50,000.00, be disbursed
to the Company for direct application by the Company solely to the repair or replacement of the Company's property so damaged or destroyed,
and (ii) in all other circumstances, be held by the Lender as cash collate ral for the Obligations. The Lender may, at its sole option,
disburse from time to time all or any part of such proceeds so held as cash collate ral, upon such terms and conditions as the Lender
may reasonably prescribe, for direct application by the Company solely to the repair or replacement of the Company' s property so damaged
or destroyed, or the Lender may apply all or any part of such proceeds to the Obligations.


 






10.3.
Notice of Cancellation. Etc. All policies of insurance shall provide for at least thirty (30) days prior written cancellation
notice to the Lender. In the event of failure by the Company to provide and maintain insurance as herein provided, the Lender may, at
its option, provide such insurance and charge the amount thereof to the Company. The Company shall furnish the Lender with certificates
of ins uran ce and poli cies evidencing compliance with the foregoing insurance provision.


 






11.
Collateral Protection Expenses: Preservation of Collateral.






 


11.1.
Expenses Incurred by Lender. In its discretion, the Lender may discharge taxes and other encumbrances at any time levied
or placed on any of the Collateral, make repairs thereto and pay any necessary filing fees or, if the debtor fails to do so, insurance
premiums. The Company agres to reimburse the Lender on demand for any and all expenditures so made. The Lender shall have no obligation
to the Company to make any such expenditures, nor shall the making thereof relieve the Company of any default.


 






11.2.
Lender's Obligations and Duties. Anything herein to the contrary notwithstanding, the Company shall remain liable under
each contract or agreement comprised in the Collateral to be observed or performed by the Company thereunder. The Lender shall not have
any obligation or liability under


 






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any
such contract or agreement by reason of or arising out of this Agreement or the receipt by the Lender of any payment relating to any
of the Collateral , nor shall the Lender be obligated in any manner to perform any of the obligations of the Company under or pursuant
to any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment received by the Lender in respect of
the Collateral or as to the sufficiency of any performance by any party under any such contract or agreement, to present or file any
claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to the Lender
or to which the Lender may be entitled at any time or times. The Lender's sole duty with respect to the custody, safe keeping and physical
preservation of the Collateral in its possession, under§ 9.1-207 of the Uniform Commercial Code of the State or otherwise, shall
be to deal with such Collateral in the same manner as the Lender deals with similar property for its own account.




12. 
Securities and Deposits. The Lender may at any time following and during the continuance of a Default and Event of Default,
at its option, transfer to itself or any nominee any securities constituting Collateral, receive any income thereon and hold such income
as additional Collateral or apply it to the Obligations. Whether or not any Obligations are due, the Lender may, following and during
the continuance of a Default and Event of Default demand, sue for, collect, or make any settlement or compromise which it deems desirable
with respect to, the Collateral. Regardless of the adequacy of Collateral or any other security for the Obligations, any deposits or
other sums at any time credited by or due from the Lender to the Company may at any time be applied to or set off against any of the
Obligations then due and owing.




13. 
Notification to Account Debtors and Other Persons Obligated on Collateral. If an Event of Default shall have occurred and
be continuing, the Company shall, at the request of the Lender, notify account debtors and other persons obligated on any of the Collateral
of the security interest of the Lender in any account, chattel paper, general intangible, instrument or other Collateral and that payment
thereof is to be made directly to the Lender or to any financial institution designated by the Lender as the Lender's agent therefor,
and the Lender may its elf, if a Default or an Event of Default shall have occurred and be continuing, without notice to or demand upon
the Company, so notify account debtors and other persons obligated on Collateral. After the making of such a request or the giving of
any such notification , the Company shall hold any proceeds of collection of accounts, chattel paper, general intangibles, instruments
and other Collateral received by the Company as trustee for the Lender without commingling the same with other funds of the Company and
shall turn the same over to the Lender in the identical form received, together with any necessary endorsements or assignments. The Lender
shall apply the proceeds of collection of accounts , chattel paper, general intangibles , instruments and other Collateral received by
the Lender to the Obligations, such proceeds to be immediately entered after final payment in cash or other immediately available funds
of the items giving rise to them.




14.
Power of Attorney. 


 






14.1.
Appointment and Powers of Lender. The Company hereby irrevoc ably constitutes and appoints the Lender and any officer or
agent thereof, with full power of substitut io n, as its true and lawful attorneys-in-fact with full irrevocable power and authority
in the place and stead of the Company or in the Lender' s own name, for the purpose of carrying out the terms of this Agreement , to
take any and all appropriate action and to execute any and all documents and


 






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instruments
that may be necessary or desirable to accomplish the purposes of this Agreement and, without limiting the generality of the foregoing,
hereby gives said attorneys the power and right, on behalf of the Company, without notice to or assent by the Company, to do the following:




(a)
upon the occurrence and during the continuance of an Event of Default, generally to sell, transfer, pledge, make any agreement with respect
to or otherwise deal with any of the Collateral in such manner as is consistent with the Uniform Commercial Code of the State and as
fully and completely as though the Lender were the absolute owner thereof for all purposes, and to do at the Company's expense, at any
time, or from time to time, all acts and things which the Lender deems necessary to protect, preserve or realize upon the Collateral
and the Lender's security interest therein, in order to effect the intent of this Agreement, all as fully and effectively as the Company
might do, including, without li mitation , (i) the filing and prosecuting of registration and transfer applications with the appropriate
federal or local agencies or authorities with respect to trademarks, copyrights and patentable inventions and processes, (ii) upon written
notice to the Company, the exercise of voting rights with respect to voting securities, which rights may be exercised, if the Lender
so elects, with a view to causing the liquidation in a commercially reasonable manner of assets of the issuer of any such securities,
and (iii) the execution, delivery and recording, in connection with any sale or other disposition of any Collateral, of the endorsements,
assignments or other instruments of conveyance or transfer with respect to such Collateral; and


 






(b)
to the extent that the Company's authorization given in Section 3 is not sufficient, to file such financing statements with respect hereto,
with or without the Company' s signature, or a photocopy of this Agreement in substitution for a financing statement, as the Lender may
deem appropriate and to execute in the Company' s name such financing statements and amendments thereto and continuation statements which
may require the Company's signature.


 






14.2.
Ratification by Company. To the extent permitted by law, the Company hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.


 






14.3.
No Duty on Lender. The powers conferred on the Lender hereunder are solely to protect its interests in the Collateral and
shall not impose any duty upon it to exercise any such powers. The Lender shall be accountable only for the amounts that it actually
receives as a result of the exercise of such powers and neither it nor any of its officers, directors, employees or agents shall be responsible
to the Company for any act or failure to act, except for the Lender's own gross negligence or willful misconduct.











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15. 
Remedies. If an Event of Default shall have occurred and be continuing, the Lender may, without notice to or demand upon
the Company, declare this Agreement to be in default, and the Lender shall thereafter have in any jurisdiction in which enforcement hereof
is sought, in addition to all other rights and remedies , the rights and remedies of a secured party under the Uniform Commercial Code
of the State or of any jurisdiction in which Collateral is located, including, without limitation, the right to take possession of the
Collateral , and for that purpose the Lender may, so far as the Company can give authority therefor, enter upon any premises on which
the Collateral may be situated and remove the same therefrom. The Lender may in its discretion require the Company to assemble all or
any part of the Collateral at such location or locations within the jurisdictions of the Company's princ ipal office(s) or at such other
locations as the Lender may reasonably designate. Unle ss the Collateral is perishable or threatens to decline speedily in value or is
of a type customarily sold on a recognized market , the Lender shall give to the Company at least five (5) Business Days prior written
notice of the time and place of any public sale of Collateral or of the time after which any private sale or any other intended disposition
is to be made . The Company hereby acknowledges that five (5) Business Days prior written notice of such sale or sales shall be reasonable
notice. In addition, the Company waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any
of the Lender ' s rights hereunder , including, without limitation , its right following an Event of Default to take immediate possession
of the Collateral and to exercise its rights with respect thereto.




16. 
Standards for Exercising Remedies. To the extent that applicable law imposes duties on the Lender to exercise remedies
in a commercially reasonable manner, the Company acknowledges and agrees that it is not commercially unreasonable for the Lender (a)
to fail to incur expenses reasonably deemed significant by the Lender to prepare Collateral for disposition or otherwise to complete
raw material or work in process into finished goods or other finished products for disposition, (b) to fail to obtain third party consents
for access to Collateral to be disposed of, or to obtain or, if not required by other la w, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or dis posed of, (c) to fail to exercise collection remedies
against account debtors or other persons obligated on Collateral or to remove liens or encumbrances on or any adverse claims against
Collateral, (d) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through
the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications or
media of general circulation, whether or not the Collateral is of a specialized nature , (f) to contact other persons, whether or not
in the same business as the Company, for expressions of interest in acquiring all or any portion of the Collateral, (g) to hire one or
more professional auctioneers to assist in the disposition of Collateral, whether or not the collateral is of a specialized nature, (h)
to dis pose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale
rather than retail market s, 0) to disclaim disposition warranties, (k) to purcha se insurance or credit enhancements to insure the Lender
against risks ofloss, collection or dis positio n of Collateral or to provide to the Lender a guaranteed return from the collection or
disposition of Collateral, or (I) to the extent deemed appropriate by the Lender, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Lender in the collection or disposition of any of the Collateral. The Company
acknowledges that the purpose of this Section 16 is to provide non-exhaustive indic at ions of what actions or omissions by the Lender
would not be commercially unreasonable in the Lender's exercise of remedies against the Collateral and that other actio ns or omissions
by the Lender shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 16. Without limitation
upon the


.
foregoing, nothing contained in this Section 16 shall be construed to grant any rig hts to the Company or to impose any duties on the
Lender that would not have been granted or impo sed by this Agreement or by applicable law in the absence of this Section 16.




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17. 
No Waiver by Lender, Etc. The Lender shall not be deemed to have waived any of its rights upon or under the Obligations
or the Collateral unless such waiver shall be in writing and signed by the Lender. No delay or omission on the part of the Lender in
exercising any right shall operate as a waiver of such right or any other right: A waiver on any one occasion shall not be construed
as a bar to or waiver of any right on any future occasion. All rights and remedies of the Lender with respect to the Obligations or the
Collateral, whether evidenced hereby or by any other instrument or papers, shall be cumulative and may be exercised singularly, alternatively,
successively or concurrently at such time or at such times as the Lender deems expedient.




18. 
Suretyship Waivers by Company. The Company waives demand, notice, protest, notice of acceptance of this Agreement, notice
of loans made, credit extended, Collateral received or delivered or other action taken in reliance hereon and all other demands and notices
of any description. With respect to both the Obligations and the Collateral, the Company assents to any extension or postponement of
the time of payment or any other indulgence, to any substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily or secondarily liable, to the acceptance of partial payment
thereon and the settlement, compromising or adjusting of any thereof, all in such manner and at such time or times as the Lender may
deem advisable. The Lender shall have no duty as to the collection or protection of the Collateral or any income thereon, nor as to the
preservation of rights against prior parties, nor as to the preservation of any rights pertaining thereto beyond the safe custody thereof
as set forth in Section 11.2. The Company further waives any and all other suretyship defenses.




19. 
Marshalling. The Lender shall not be required to marshal any present or future collateral security (including but not limited
to this Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral
security or other assurances of payment in any particular order, and all of its rights hereunder and in respect of such collateral security
and other assurances of payment shall be cumulative and in addition to all other rights, however existing or arising. To the extent that
it lawfully may, the Company hereby agrees that it will not invoke any law relating to the marshalling of collateral which might cause
delay in or impede the enforcement of the Lender's rights under this Agreement or under any other instrument creating or evidencing any
of the Obligations or under which any of the Obiigations is outstanding or by which any of the Obligations is secured or payment thereof
is otherwise assured, and, to the extent that it lawfully may, the Company hereby irrevocably waives the benefits of all such laws.




20. 
Proceeds of Dispositions; Expenses. The Company shall pay to the Lender on demand any and all expenses, including reasonable
attorneys' fees and disbursements, incurred or paid by the Lender in protecting, preserving or enforcing the Lender's rights under or
in respect of any of the Obligations or any of the Collateral. After deducting all of said expenses, the residue of any proceeds of collection
or sale of the Obligations or Collateral shall, to the extent actually received in cash, be applied to the payment of the Obligations
in such order or preference as the Lender may determine, proper allowance and provision being made for any Obligations not then due.
Upon the final payment and satisfaction in full of all of the Obligations and after making any payments required by Sections 9.1- 608(a)
(I) (C) or 9.1-6 l 5 (a) (3) of the Uniform Commercial Code of the State, any excess shall be returned to the Company, and the Company
shall remain liable for any deficiency in the payment of the Obligations.




    	64



    	 



    



21. 
Overdue Amounts. Until paid, all amounts due and payable by the Company hereunder shal I be a debt secured by the Collateral
and shall bear, whether before or after judgment, interest at the rate of interest for overdue principal set forth in the Credit Agreement.




22. 
Governing Law; Consent to Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE. The Company agrees that any suit for the enforcement of this Agreement may be brought in the courts of the State or any
federal court sitting therein and consents to the non-exclusive Jurisdiction of such court and to service of process in any such suit
being made upon the Company by mail at the address specified in the Credit Agreement. The Company hereby waives any objection that it
may now or hereafter have to the venue of any such suit or any such court or that such suit is brought in an inconvenient court.




23. 
Waiver of Jury Trial. THE COMPANY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT , ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS.
Except as prohibited by law, the Company waives any right which it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages.
The Company (i) certifies that neither the Lender nor any representative, agent or attorney of the Lender has represented, expressly
or otherwise, that the Lender would not, in the event of litigation , seek to enforce the foregoing waivers and ( ii) acknowledges that,
in entering into the Credit Agreement and the other Loan Documents to which the Lender is a party, the Lender is relying upon, among
other things, the waivers and certifications contained in this Section 23.




24. 
Miscellaneous. The headings of each section of this Agreement are for convenience only and shall not define or limit the
provisions thereof. This Agreement and all rights and obligations hereunder shall be binding upon the Company and its respective successors
and assigns, and shall inure to the benefit of the Lender and its successors and assigns. If any term of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby, and this Agreement
shall be construed and be enforceable as if such invalid , illegal or unenforceable term had not been included herein. The Company acknowledges
receipt of a copy of this Agreement.




    	65



    	 



    



IN
WITNESS WHEREOF, intending to be legally bound, the Company has caused this Agreement to be duly executed as of the date first above
written.



INTERNATIONAL
                                            BALER CORPORATION


By:
/s/ David R. Griffin 


David
R. Griffin, President


By:
/s/ William E. Nielsen, Chief Financial Officer


William
E. Nielsen, Chief Financial Officer


Accepted:


FIRST
MERCHANTS BANK, NATIONAL ASSOCIATION


By:


W.
Scott McKee, Vice President


STATE
OF FLORIDA


COUNTY
OF DUVAL




Before
me, a Notary Public in and for said Co unt y and State, personally appeared David R. Griffin and William E. Nielsen, the President and
Chie f Financial Officer, res pectively, of Internationa l Baler Corporation, a Delaware corporation, who, having been duly sworn, acknowledged
the execution of the foregoing Promissory Note for and on behalf of such entity as such officers and stated that all representations
therein contained are true.




WITNESS
my hand and Notarial Seal this _day of January, 2013.


/s/
Melissa Stalter


Notary
Public


 Melissa
Stalter 


Notary
Public (Printed)


My
Country of Residence:


Duval





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APPENDIX
I




PERFECTION
CERTIFICATE






The
undersigned, the Presdient of INTERNATIONAL BALER CORPORATION (the "Company "), hereby certifies, with reference to
a certain Security Agreement dated as of January 7, 2013 (terms defined in such Security Agreement having the same meanings herein as
specified therein), between the Company and FIRST MERCHANTS BANK, NATIONAL ASSOCIATION  (the "Lender"), to the Lender
as follows:·




I. Name.
The exact legal name of the Company as that name appears on its Certificate of Incorporation is as follows:








2.
Other Identifying Factors.






 


(a)
The following is the mailing address of the Company:


 












(b)
If different from its mailing address, the Company's place of business or, if more than one, its chief executive office is located at
the following address:










 





	Address	County	State



 





(c)
The following is the type of organization of the Company:


  












(d)
The following is the Jurisdiction of the Company' s organization:


 












(e)
The following is the Company ' s state issued organizational identification number 




[state
" None" if the state does not issue such a number]:


3.
Other Names, Etc.


 






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(a)
The following is a list of all other names (including trade names or similar appellations) used by the Company, or any other business
or organization to which the Company became the successor by merger, consolidation, acquisition , change in form, nature or jurisdiction
of organization or otherwise, now or at any time during the past five (5) years:


 












(b)
Attached hereto as Schedule 3 is the information required in Section 2 for any other business or organization to which
the Company became the successor by merger, consolidation, acquisition, change in form, nature or Jurisdiction of organization or otherwise,
now or at any time during the past five (5) years:


 










4.
Other Current Locations.


 






(a)
The following are all other locations in the United States of America in which the Company maintains any books or records relating to
any of the Collateral consisting of accounts, instruments, chattel paper, general intangibles or mobile goods:


 





	Address	County	State


 

















(b)
The following are all other places of business of the Company in the United States of America:


 





	Address	County	State





 






    	68



    	 



    

 







(c)
The following are all other locations in the United States of America where any of the Collateral consisting of inventory or equipment
is located:


 





	Address	County	State


 














(d)
The following are the names and addresses of all persons or entities other than the Company, such as lessees, consignees, warehousemen
or purchasers of chattel paper, which have possession or are intended to have possession of any of the Collateral consisting of instruments,
chattel paper, inventory or equipment:


 





	Name	Mailing
  Address	County	State


 














5.
Prior Locations.


 






(a)
Set forth below is the information required by Sections 4(a) or (b) with respect to each location or place of business previously maintained
by the Company at any time during the past five (5) years in a state in which the Company has previously maintained a location or place
of business at any time during the past four months:


 





	Address	County	State


 

















(b)
Set forth below is the information required by Sections 4(c) or (ct) with respect to each other location at which, or other person or
entity with which, any of the Collateral consisting of inventory or equipment has been previously held at any time during the past twelve
months:


 





	Address	County	State


 







    	69



    	 



    





6. 
Fixtures. Attached hereto as Schedule 6 is the information required by UCC § 9. l- 502(b) or
former UCC § 9.1-402(5) of each state in which any of the Collate ral consisting of fixtures are or are to be located and
the name and address of each real estate recording office where a mortgage on the real estate on which such fixtures are or are to be
located would be recorded.






IN
WITNESS WHEREOF, the undersigned have hereunto signed this Certificate on January 7, 2013.




APPENDIX
- DO NOT EXECUTE


David
R. Griffin, President









    	70



    	 



    

 


SCHEDULE
3 TO PERFECTION CERTIFICATE




    	71



    	 



    



 


SCHEDULE
6 TO PERFECTION CERTIFICATE




    	72



    	 



    



PERFECTION
CERTIFICATE






The
undersigned, the President of INTERNATIONAL BALER CORPORATION (the "Company"), hereby certify, with reference to a certain
Security Agreement dated as of January 7, 2013 (terms defined in such Security Agreement having the same meanings herein as specified
therein) , between the Company and FIRST MERCHANTS BANK, NATIONAL ASSOCIATION  (the "Lender"), to the Lender as follows:




I. Name.
The exact legal name of the Company as that name appears on its Certificate of Incorporation is as follows:








2.
· Other Identifying Factors.


 




(a)
The following is the mailing address of the Company:


International
Baler Corporation




5400
Rio Grande Avenue


Jacksonville,
FL 32254


 










(b)
If different from its mailing address, the Company's place of business or, if more than one, its chief executive office is lo c ate d
at the following address:


 





	Address	County	State


 


 


(c)
The following is the type ofo rganiza tion of the Company:






Corporation






 


(d)
The following is the Jurisdiction of the Company' s organization:






Delaware






(e)
The following is the Company' s state issued organizational identification number




{slate
" None" if the state do es not issue such a number]:


	
	Delaware	0816130
	Florida
    Document No.	F98000005732
	Federal
    EIN	13
    -284 2053



 





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3.
Other Names, Etc.






 


(a)
The following is a list of all other names (including trade names or similar appellations) used by the Company, or any other business
or organization to which the Company became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction
of organization or otherwise, now or at any time during the past five (5) years:






 


Waste
Technology Corporation




This
company was a holding company of International Baler Corporation. In 2009, International Baler Corporation was merged into Waste Technology
Corporation (WTC) and WTC changed its name to International Baler Corporation.




(b)
Attached hereto as Schedule 3 is the information required in Section 2 for any other business or organization to which
the Company became the successor by merger, consolidation, acquisition, change in form, nature or Jurisdiction of organization or otherwise,
now or at any time during the past five (5) years:









None




4.
Other Current Locations.






(a)
The following are all other locations in the United States of America in which the Company maintains any books or records relating to
any of the Collateral consisting of accounts, instruments, chattel paper, general intangibles or mobile goods:




 


	Address	County	State





 


None


 


(b)
The following are all other places of business of the Company in the United States of America:


 





	Address	County


 


None


 




    	74



    	 



    



 


(c)
The following are all other locations in the United States of America where any of the Collateral consisting of inventory or equipment
is located:


 





	Address	County


  


None










 


(d)
The following are the names and addresses of all persons or entities other than the Company, such as lessees, consignees, warehousemen
or purchasers of chattel paper, which have possession or are intended to have possession of any of the Collateral consisting of instruments
, chattel paper, inventory or equipment :


 





	Address	Mailing
  Address	County


 


None


 




5.
Prior Locations.






 


(a)
Set forth below is the information required by Sections 4(a) or (b) with respect to each location or place of business pre_viously maintained
by the Company at any time during the past five (5) years in a state in which the Company has previously maintained a location or place
of business at any time during the past four months:


 





	Address	County


 


None








 


(b)
Set forth below is the information required by Sections 4(c) or (d) with respect to each other location at which, or other person or
entity with which, any of the Collateral consisting of inventory or' equipment has been previously held at any time during the past twelve
months:


 





	Address	County	State


 


None


 




    	75



    	 



    



6. 
Fixtures. Attached hereto as Schedule 6 is the information required by UCC § 9. l- 502(b) or former
UCC § 9.1-402(5) of each state in which any of the Collateral consisting of fixtures are or are to be located and the name and address
of each real estate recording office where a mortgage on the real estate on which such fixtures are or are to be located would be recorded.






IN
WITNESS WHEREOF, the undersigned have hereunto signed this Certificate on January 7, 2013.





	 	 	/s/
  David R. Griffin
	 	 	David
  R. Griffin, President



 




    	76



    	 



    

 


SCHEDULE
3 TO PERFECTION CERTIFICATE


 




    	77



    	 



    



 


SCHEDULE
6 TO PERFECTION CERTIFICATE




    	78



    	 



    

AMENDMENT
NO. 1 TO CREDIT AGREEMENT






This
Amendment No. 1 to Credit Agreement ("Amendment No. 1") executed effective as of November 6, 2014 by and between INTERNATIONAL
BALER CORPORATION, a Delaware corporation (the "Borrower"), and FIRST MERCHANTS BANK, NATIONAL ASSOCIATION (the
"Lender").




WITNESSETH:




WHEREAS,
the Borrower and the Lender are parties to that certain Credit Agreement dated as of January 7, 2013 (hereinafter referred to as "Agreement");
and




WHEREAS,
the Borrower and the Lender are parties to that certain Business Loan Agreement dated as of April 16, 2014 (hereinafter referred to as
"Business Loan Agreement"); and




WHEREAS,
the Borrower and the Lender desire to amend the Agreement as contemplated herein and to supersede and replace the Business Loan Agreement.




NOW,
THEREFORE, in consideration of the premises, the mutual covenants hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:




Section
1.Effect of this Amendment No. 1. This Amendment No. 1 shall not change, modify, amend or revise the terms, conditions
and provisions of the Agreement, the terms and provisions of which are incorporated herein by reference, except as expressly provided
herein and agreed upon by the parties hereto. This Amendment No. I is not intended to be nor shall it constitute a novation or accord
and satisfaction of the outstanding instruments by and between the parties hereto. Borrower and Lender agree that, except as expressly
provided herein, all terms and conditions of the Agreement shall remain and continue in full.force and effect. The Borrower acknowledges
and agrees that the indebtedness under the Agreement remains outstanding and is not extinguished, paid, or retired by this Amendment
No. 1, or any other agreements between the parties hereto prior to the date hereof, and that Borrower is and continues to be fully liable
for all obligations to the Lender contemplated by or arising out of the Agreement. Except as expressly provided otherwise by this Amendment
No. 1, the credit facilities contemplated by this Amendment No. I shall be made according to and pursuant to all conditions, covenants,
representations and warranties contained in the Agreement.




Section
2.Definitions. Terms defined in the Agreement which are used herein shall have the same meaning as set forth in the Agreement
unless otherwise specified herein.




Section
3.Amendments of Agreement.Subject to the satisfaction of the conditions precedent set forth in Section 5 herein:




(a) 
The following definitions as set forth at Section 1.1 of the Agreement are amended and replaced with the following:




Loan
or Loans means, as the context may require, the Revolving Loan and the Revolving Loan #2.




Notes
means any promissory notes executed and delivered by Borrower and payable to Lender from time to time evidencing the Loans, together
with all renewals, substitutions and replacements thereof.




    	79



    	 



    












(b)
Section L1 of the Agreement is amended by adding the following defined terms:


 






Revolving
Loan #2 Commitment means One Million and No/100 Dollars ($1,000,000.00), as reduced from time to time pursuant to Section 6.1.




Revolving
Loans #2 - see Section 2.l(b).




Revolving
Loan #2 Termination Date means the earlier to occur of (a) April I6, 2014, or (b) such other date on which the Revolving Commitment
terminates pursuant to Section 6 or Section 13.


Revolving
Loan #2 Outstandings - means, at any time, the sum of the agreement principal amount of all outstanding Revolving Loans #2.




(c)
Section 2.1(b) of the Agreement is amended and replaced with the following:


 






(b)
Revolving Loan #2 Commitment. The Lender agrees to make loans on a revolving basis ("Revolving Loans #2") from time
to time until the Revolving Loan #2 Termination Date in such amounts as the Borrower may request; provided that the Revolving Outstandings
#2 will not at any time exceed the maximum amount of the Revolving Loan #2 Commitment. The entire unpaid balance of the Revolving Loans
#2 shall be immediately due and payable in full in immediately available funds on the Revolving Loan #2 Termination Date if not sooner
paid in full.


(d)
Section 3.1 of the Agreement is amended and replaced with the following:


 




3.1
Notes. The Revolving Loan shall be evidenced by the Note, with appropriate insertions, payable to the order of the Lender in a
face principal amount equal to the Revolving Loan Commitment. The Revolving Loan #2 shall be evidenced by the Note, with appropriate
insertions, payable to the order of the Lender in a face principal amount equal to the Revolving Loan #2 Commitment.




(e)
Section 4.l (b) of the Agreement is amended and replaced with the following:


 




(b)
at all times while the Revolving Loan #2 is outstanding, the Revolving Loan #2 shall accrue interest at a rate per annum equal to the
Prime Rate; and




(f)
Section 4.2(b) of the Agreement is amended and replaced with the following:


(b)
Accrued interest on the Revolving Loan #2 shall be payable in arrears on the first Business Day of each month commencing November 1,
2014. Upon the Revolving Loan #2 Termination Date, all unpaid principal and accrued but unpaid interest, together with all other amounts
due under the Revolving Loan #2, including any late charges and reimbursable expenses, shall be due and payable in full.


(g) A
new Section 4.5 is added to the Agreement as follows:


4.5 Letters
of Credit.


(a) 
Subject to the terms and conditions hereof, at the option of Borrower upon delivery of a proper Letter of Credit Application, in the
form prescribed by Bank, Bank shall issue letters of credit (collectively, "Letters of Credit") for the account of Borrower.
The aggregate of the Letters of Credit outstanding at any time plus the aggregate amount of unreimbursed drawings under the Letters of
Credit shall not exceed The Revolving Loan #2 Commitment. The amount of any Letter of Credit outstanding at any time for all purposes
hereof shall be the maximum amount which could be drawn thereunder under any circumstances from and after the date of determination.
The Letters of Credit and each unreimbursed drawing thereunder shall count against and reduce the available amount under the Revolving
Loan #2 by the amount of any Letter of Credit outstanding unless and until such Letter of Credit expires by its terms or otherwise terminates
or the amount of a drawing thereunder is reimbursed, in which event the Letter of




    	80



    	 



    


















Credit
Line shall be reinstated by the amount of such Letter of Credit or the amount of such reimbursement, as the case may be. Each such Letter
of Credit shall conform to the general requirements of Ban1c for the issuance of such credits, as to form and substance, shall be subject
to the Uniform Customs and Practices for Documentary Credits (2007 Revision) International Chamber of Commerce Publication No. 600 and
shall be a letter of credit which Ban1c may lawfully issue. If and to the extent a drawing is any time made under any Letter of Credit,
Borrower agrees to pay to Ban1c immediately and unconditionally upon demand for reimbursement, in lawful money of the United States,
an amount equal to each amount which shall be so drawn, together with interest from the date of such drawing to and including the date
such payment is reimbursed to Ban1c in accordance with the terms of Section 4.2(b) hereof. Ban1c shall convert automatically the reimbursement
obligations of Borrower arising out of any such drawing into an advance under the Revolving Loan #2 so long as the Revolving Loan #2
has not expired, evidenced by the Revolving Note and for all purposes under, on and subject to the terms and conditions of this Agreement.
This Agreement and the other Loan Documents shall supersede any terms of any letter of credit applications or other documents which are
irreconcilably inconsistent with the terms hereof or thereof.. Borrower agrees to pay to Ban1c, at the time of issuance, per annum Letter
of Credit fees in the amounts as set forth in the letter of credit applications or other documents executed associated with such Letter
of Credit. Such Letter of Credit fees shall be due and payable in full upon issuance of the Letter of Credit and shall be calculated
on the basis that an entire year consists of three hundred sixty


(360)
days. Borrower shall also pay Ban1c's reasonable and customary costs of issuing, servicing, and negotiating draws under the Letters of
Credit. Borrower hereby authorizes Ban1c to collect such fees by deducting the amount thereof from any account of Borrower at Ban1c.


(b) 
The obligations of Borrower to reimburse any drawing under the Letters of Credit shall be absolute, unconditional and irrevocable and
shall be paid and performed strictly in accordance with the terms of this Agreement, as applicable, under all circumstances, whatsoever,
including, without limitation, the following:


(i)
any lack of validity or enforceability of any Letter of Credit or any Loan Document;


 




(ii) 
any amendment or waiver of or consent to departure from the terms of any Loan Document;


(iii) 
· the existence of any claim, setoff, defense or other right which Borrower may have at any time against the beneficiary of a
Letter of Credit, any transferee thereof, Ban1c or any other Person, whether in connection with the Loan Documents, any Letter of Credit
or any unrelated transaction;


(iv) 
any statement, draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect whatsoever;


(v) 
the surrender or impairment of any security for the performance or observance of the terms _of the Loan Documents or any Letter of Credit;
or


(vi) 
any circumstance, happening or omission whatsoever, whether or not similar to any of the foregoing, including, without limitation, those
matters described in Section 2.1(e)(iii) hereof.


(c) 
Except as expressly set forth herein, Borrower assumes all risk for the acts, omissions and/or misrepresentations of the parties benefited
by a Letter of Credit. Neither Ban1c nor any of its affiliates or correspondents shall be responsible for the validity, sufficiency,
truthfulness or genuineness of any document required to draw under a Letter of Credit even if such document should in fact prove to be
in any or all respects invalid, insufficient, fraudulent or forged, provided only that the document appears on its face to be in accordance
with the terms of such Letter of Credit and provided Bank is not grossly negligent or engaging in willful misconduct, or for failure
of any draft to bear reference or adequate reference to a Letter of Credit or failure of any Person to note the amount of any draft on
a Letter of Credit or to surrender or take up a Letter of Credit, each of which provisions may be waived by Ban1c, or for errors, omissions,
interruptions, or delays in transmission or delivery of any messages or




    	81



    	 



    

documents.
Without limiting the generality of the foregoing, Borrower agrees that any action taken by Bank or any of its correspondents under or
in connection with any Letter of Credit, if taken in good faith and without gross negligence, shall be binding upon Borrower and shall
not put Bank or any such correspondent under any resulting liability to Borrower, and Borrower likewise agrees as to any omission unless
in breach of good faith or grossly negligent. Bank is expressly authorized to honor any request for payment which is made under and in
compliance with the terms of a Letter of Credit without regard to and without any duty on its part to inquire into the existence of any
disputes or controversies between Borrower and the beneficiary of a Letter of Credit or any other Person or into the respective rights,
duties or liabilities of any of them or whether any facts or occurrences represented in any of the documents presented under a Letter
of Credit are true and correct. No Person, other than the parties hereto, shall have any rights of any nature under this Agreement or
by reason hereof. In no event shall Bank's reliance and payment against documents presented under any Letter of Credit appearing on its
face to substantially comply with the terms thereof be deemed to constitute gross negligence or willful misconduct.


(h)
References in Section 6 of the Agreement to the Revolving Commitment are amended to reference the Revolving Commitment and the Revolving
Loan #2 Commitment, collectively.


Section
4.Reimbursement of Fees and Expenses. All out-of-pocket expenses of the Lender associated with this Amendment No. I, including
without limitation, filing fees, recording fees and legal fees and disbursements, are to be paid by Borrower promptly upon demand therefor.




Section
5.Conditions Precedent.This Amendment No. I shall become and be deemed effective in accordance with its terms immediately
upon the Lender receiving:




(a) 
Two (2) copies of this Amendment No. I duly executed by the authorized officers of the Borrower and the Lender.




(b)
Such other documents and items as the Lender may reasonably request.


 






Section
6.Representations and Warranties of the Borrower. The Borrower hereby represents and warrants, in addition to any other
representations and warranties contained herein, in the Agreement, the Loan Documents (as defined in the Agreement) or any other document,
writing or statement delivered or mailed to the Lender or its agent by the Borrower, as follows:




(a) 
This Amendment No. I constitutes a legal, valid and binding obligation of the Borrower enforceable in accordance with its terms. The
Borrower has taken all necessary and appropriate corporate action for the approval of this Amendment No. l and the authorization of the
execution, delivery and performance thereof.




(b)
As of the date hereof, there is no Event of Default under the Loan Documents.


 






(c) 
The Borrower hereby specifically confirms and ratifies its obligations, waivers and consents under each of the Loan Documents.




(d) 
Except as specifically amended herein, all representations, warranties and other assertions of fact contained in the Agreement and the
Loan Documents continue to be true, accurate and complete.




(e) 
There have been no changes to the Articles oflncorporation, By-Laws, the identities of the officers or members of the Board of Directors
of the Borrower since execution of the Agreement.




(f) 
Borrower acknowledges that the definition "Loan Documents" shall include this Amendment No. 1 and all the documents executed
contemporaneously herewith.




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Section
7.Affirmative Covenants. By entering into this Amendment No. 1, Borrower further specifically undertakes to comply with
the obligations, terms and covenants as contained in the Agreement and agrees to comply therewith as such relate to the credit facilities
and accommodations as provided to the Borrower pursuant to the terms of this Amendment No. 1.




Section
8. Governing Law. This Amendment No. 1 has been executed and delivered and is intended to be performed in the State of Indiana
and shall be governed, construed and enforced in all respects in accordance with the substantive laws of the State of Indiana.




Section
9.Headings. The section headings used in this Amendment No. 1 are for convenience only and shall not be read or construed
as limiting the substance or generality of this Amendment No. 1.




Section
10. Survival. All representations, warranties, and covenants of the Borrower herein or any certificate, agreement or other instrument
delivered by or on its behalf under this Amendment No. I shall be considered to have been relied upon by the Lender. All statements and
any such certificate or other instrument shall constitute warranties and representations hereunder by the Borrower, as the case maybe.




Section
11. Counterparts. This Amendment No. 1 may be signed in one or more counterparts, each of which shall be considered an original,
with the same effect as if the signatures were upon the same instrument.




Section
12. Modification: Entire Agreement. This Amendment No. 1 may be amended, modified, renewed or extended only by written instrument
executed in the manner of its original execution. This Amendment No. 1, together with the other Loan Documents, embodies the entire agreement
and understanding among the parties hereto and supersedes all prior or contemporaneous agreements and understandings of such Persons,
verbal or written, relating to the subject matter hereof and thereof and any prior arrangements made with respect to the payment by the
Borrower of (or any indemnification for) any fees, costs or expenses payable to or incurred (or to be incurred) by or on behalf of the
Lender and by execution of this Amendment No. 1, the Business Loan Agreement is superseded and replaced and of no further force or effect.




Section
13. Waiver of Certain Rights. The Borrower waives acceptance or notice of acceptance hereof and agrees that the Agreement,
this Amendment No. I, the Notes, and all of the other Loan Documents shall be fully valid, binding, effective and enforceable as of the
date hereof, even though this Amendment No. 1 and any one or more of the other Loan Documents which require the signature of the Lender,
may be executed by and on behalf of the Lender on other than the date hereof.




Section
14. Waiver of Defenses and Claims. In consideration of the financial accommodations provided to the Borrower by the Lender
as contemplated by this Amendment No. 1, Borrower hereby waives, releases and forever discharges the Lender from and against any and
all rights, claims or causes of action against the Lender arising under the Lender's actions or inactions with respect to the Loan Documents
or any security interest, lien or collateral in connection therewith as well as any and all rights of set off, defenses, claims, causes
of action and any other bar to the enforcement of the Loan Documents which exist as of the date hereof·.




    	83



    	 



    

IN
WITNESS WHEREOF, Borrower and Lender have executed this Amendment No. 1 to Credit Agreement by their duly authorized officers or other
representatives effective as of the date indicated above.


	 	 	INTERNATIONAL
  BALER CORPORATION
	 	 	 
	 	 	By:
  /s/ David R. Griffin
	 	 	David
  R. Griffin, Chief Executive Officer
	 	 	 
	 	 	 
	 	 	By:
  /s/ William E. Nielsen
	 	 	William
  E. Nielsen, Chief Financial Officer
	 	 	 
	 	 	 
	 	 	FIRST
  MERCHANTS BANK, N.A.
	 	 	 
	 	 	By:
  /s/ W. Scott Mckee
	 	 	W. Scott
  McKee, Vice President
	 	 	 
	STATE
  OF FLORIDA	 	 
	COUNTY
  OF DUVAL	 	 



 


Before
me, a Notary Public in and for said County and State, personally appeared David R. Griffin and William E. Nielsen, the President and
Chief Financial Officer, respectively, of International Baler Corporation, a Delaware corporation, who, having been duly sworn, acknowledged
the execution of the foregoing instrument for and on behalf of such entity as such officers and stated that all representations therein
contained are true.


WITNESS
my hand and Notarial Seal this 6th day of November, 2014





	 	 	/s/
  Kelly Anne Brow
	 	 	Notary
  Public
	 	 	 
	 	 	Kelly
  Anne Brow
	 	 	Notary
  Public (Printed)
	 	 	 
	 	 	 
	My Commission
  Expires:	 	My Country
  of Residence:
	March
  26, 2017	 	Duval



 




    	84



    	 



    













REVOLVING
NOTE AND CREDIT AGREEMENT MODIFICATION AGREEMENT




This
Revolving Note and Credit Agreement Modification Agreement (the "Agreement") is made andenteredintoeffectiveasofDecember
9, 2014 (the "Agreement Date"), by and between INTERNATIONAL BALER CORPORATION, a Delaware corporation (the "Borrower"),
and FIRST MERCHANTS BANK, NATIONAL ASSOCIATION, a national banking association (the "Lender").




WITNESSETH:




WHEREAS,
Borrower and Lender previously entered into a Credit Agreement dated January 7, 2013 (as same may have been amended or modified from
time to time, the "Credit Agreement"); and




WHEREAS,
Borrower heretofore executed a Revolving Note in the principal amount of


$1,000,000.00
dated January 7, 2013 in favor of Lender (as same may have been amended or modified from time to time, the "Promissory Note");
and




WHEREAS,
the Promissory Note has at all times been, and is now, continuously and without interruption outstanding in favor of Lender; and




WHEREAS,
Borrower has requested that the Credit Agreement and the Promissory Note be modified to the limited extent as hereinafter set forth;
and




WHEREAS,
Lender has agreed to such modification;




NOW
THEREFORE, by mutual agreement of the parties and in mutual consideration of the agreements contained herein and for other good and valuable
considerations, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that the Credit Agreement, the
Promissory Note and the Loan Documents are modified as hereinafter indicated.




1.
ACCURACY OF RECITALS; DEFINITIONS.


 


Borrower
acknowledges the accuracy of the Recitals, stated above. Additionally, capitalized terms appearing in this Agreement but not otherwise
defined herein shall have the meanings ascribed to such terms as in the Promissory Note and the Credit Agreement.




2.
MODIFICATION OF PROMISSORY NOTE.


 






The
maturity date of the Promissory Note is changed from December 31, 2014 to March 15, 2015. On the revised maturity date, Borrower shall
pay to Lender the unpaid principal, accrued and unpaid interest, and all other amounts payable by Borrower under the Promissory Note
and Loan Documents.




3.
MODIFICATION OF CREDIT AGREEMENT.


 






The
defined term "Revolving Loan Termination Date: as set forth in Section 1 of the Credit Agreement is amended and replaced with the
following:




Revolving
Loan Termination Date means the earlier to occur of (a) March 15, 2015, or (b) such other date on which the Revolving Commitment
terminates pursuant to Section 6 or Section 13.




    	85



    	 



    





 


4.
RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL.


 






The
Loan Documents are ratified and affirmed by Borrower and shall remain in full force and effect as modified herein. Any property or rights
to or interest in property granted as security in the Loan Documents shall remain as security for the Joan and the obligations of Borrower
in the Loan Documents.




5.
BORROWER REPRESENTATIONS AND WARRANTIES.


 






		5.1	No
                                            default or event of default under any of the Loan Documents as modified hereby, nor any event,
                                            that, with the giving of notice or the passage of time or both, would be a default or an
                                            event of default under the Loan Documents as modified herein has occurred and is continuing.





		5.2	There
                                            has been no material adverse change in the financial conditions of Borrower or any other
                                            person whose financial statement has been delivered to Lender in connection with the Promissory
                                            Note from the most recent financial statement received by Lender.





		5.3	Each
                                            and all representations and warranties of Borrower in the Loan Documents are accurate on
                                            the date hereof.





		5.4	Borrower
                                            has no claims, counterclaims, defenses, or set-offs with respect to the Loan or the Loan
                                            Documents as modified herein.





		5.5	The
                                            Credit Agreement, Promissory Note and Loan Documents as modified herein are the legal, valid,
                                            and binding obligation of Borrower, enforceable against Borrower in accordance with their
                                            terms.





		5.6	Borrower
                                            is validly existing under the laws of the state of its formation or organization and has
                                            the requisite power and authority to execute and deliver this Agreement and to perform the
                                            Loan Documents as modified herein. The execution and delivery of this Agreement and the performance
                                            of the Loan Documents as modified herein have been duly authorized by all requisite action
                                            by or on behalf of Borrower. This Agreement has been duly executed and delivered on behalf
                                            of Borrower.





 


6.
BORROWER COVENANTS.


 




Borrower
covenants with Lender:




		6.1	Borrower
                                            shall execute, deliver, and provide to Lender such additional agreements, documents, and
                                            instruments as reasonably required by Lender to effectuate the intent of this Agreement.





		6.2	Borrower
                                            fully, finally, and forever releases and discharges Lender and its successors, assigns, directors,
                                            officers, employees, agents, and representatives from any and all actions, causes of action,
                                            claims, debts, demands, liabilities, obligations, and suits, of whatever kind or nature,
                                            in law or equity of Borrower, whether now known or unknown to Borrower, (i) in respect of
                                            the Loan, the Loan Documents, or the actions or omissions





    	86



    	 



    













of
Lender in respect of the Loan or the Loan Documents and (ii) arising from events occurring prior to the date of this Agreement. As used
in this Agreement, "Loan Documents" shall include the Promissory Note and all documents executed by Borrower in connection
with the Loan which is represented by the Promissory Note.




7.
EXECUTION AND DELIVERY OF AGREEMENT BY LENDER. 


 




Lender
shall not be bound by this Agreement until (i) Lender as executed and delivered this Agreement, and (ii) Borrower has performed all of
the obligations of Borrower under this Agreement to be performed contemporaneously with the execution and delivery of this Agreement.




8.
INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE,
TERMINATION, OR WAIVER.


 




The
Loan Documents as modified herein contain the complete understanding and agreement of Borrower and Lender in respect of the Loan and
supersede all prior representations, warranties, agreements, arrangements, understandings, and negotiations. No provision of the Loan
Documents as modified herein may be changed, discharged, supplemented, terminated, or waived except in a writing signed by the parties
thereto.




9.
BINDING EFFECT.


 




The
Loan Documents as modified herein shall be binding upon and shall inure to the benefit of Borrower and Lender and their successors and
assigns and the executors, legal administrators, personal representatives, heirs, devisees, and beneficiaries of Borrower, provided,
however, Borrower may not assign any of its right to delegate any of its obligation under the Loan Documents and any purported assignment
or delegation shall be void.




10.
CHOICE OF I,AW.


 




This
Agreement shall be governed by and construed in accordance with the laws of the State of lndi a without giving effect to conflicts of
law principles.




11.
COUNTERPART EXECUTION.


 




This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Agreement to physically
from one document.




12.
NOT A NOVAJION.


 




This
Agreement is a modification only and not a novation. Except for the above-referenced modification(s), the Promissory Note, the Agreement,
the Loan Documents and any other agreement or security document, and all the terms and conditions thereof, shall be and remain in full
force and effect with the changes herein deemed to be incorporated therein. This Agreement is to be considered attached to the Promissory
Note and made a part thereof. This Agreement shall not release or affect the liability of any guarantor, surety or endorser of the Promissory
Note or release any owner of collateral securing the









    	87



    	 



    

 


Promissory
Note. The validity, priority and enforceability of the Promissory Note shall not be impaired hereby.





	 	INTERNATIONAL
  BALER CORPORATION
	 	 
	 	By:
  /s/ David R. Griffin
	 	David
  R. Griffin, Chief Executive Officer
	 	 
	 	By:
  /s/ William E. Nielsen
	 	William
  E. Nielsen, Chief Financial Officer



 




LENDER'S
ACCEPTANCE


The
foregoing Revolving Note and Credit Agreement Modification Agreement is hereby agreed to and acknowledged thisday of December,
2014.





	 	FIRST
  MERCHANTS BANK, N.A.
	 	 
	 	By:
  /s/ W. Scott McKee, vp
	 	W. Scott
  McKee, Vice President
	 	 



 




    	88



    	 



    













CORPORATE
ACKNOWLEDGMENT




STATE
OF FLORIDA


COUNT
OF DUVAL




On
this 9th day of December, 2014, before me, the undersigned Notary Public, personally appeared David R. Griffin and William E. Nielsen,
of International Baler Corporation, and known to me to be authorized agents of the corporation that executed the foregoing instrument
and acknowledged the foregoing instrument to be of free and voluntary act and deed of the corporation, by authority of its Bylaws or
by resolution of its board of directors, for the uses and purposes therein mentioned, and on oath stated that they are authorized to
execute the foregoing instrument and in fact executed the foregoing instrument on behalf of the corporation


	 	 
	By:
  /s/ Kelly Anne Brow	Residing
  at 4626 Merrimac Avenue,
	Kelly
  Anne Brow	Jacksonville,
  FL 32210
	Notary
  Public in and for the State of Florida	My commission
  expires Mar 26, 2017








    	89



    	 



    










REVOLVING
NOTE AND CREDIT AGREEMENT MODIFICATION AGREEMENT




This
Revolving Note and Credit Agreement Modification Agreement (the "Agreement") is made and entered into effective as of February
26, 2015 (the " Agreement Date"), by and between INTERNATIONAL BALER CORPORATlON , a Delaware corporation (the "Borrower"),
and FIRST MERCHANTS BANK, NATIONAL ASSOCIATION, a national banking association (the "Lender").




WITNESSETH:




WHEREAS,
Borrower and Lender previously entered into a Credit Agreement dated January 7, 2013 (as same may have been amended or modified from
time to time , the "Credit Agreement"); and




WHEREAS,
Borrower heretofore executed a Revolving Note in the principal amount of $1,650,000.00 dated January 7, 2013 in favor of Lender (as same
may have been amended or modified from time to time, the " Promissory Note"); and




WHEREAS,
the Promissory Note has at all times been, and is now, continuously and without interruption outstanding in favor of Lender; and




WHEREAS,
Borrower has requested that the Credit Agreement and the Promissory Note be modified to the limited extent as here inafter set forth;
and




WHEREAS,
Lender has agreed to such modification .




NOW
THEREFO RE, by mutual agreement of the parties and in mutual consideration of the agreements contained herein and for other good and
valuable considerations, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that the Credit Agreement,
the Promissory Note and the Loan Documents are modified as hereinafter indicated .




1.
ACCURACY OF RECITALS; DEFINITIONS.






Borrower
acknowledges the accuracy of the Recitals, stated above. Additionally, capitalized Terms appearing in this Agreement but not otherwise
defined herein shall have the meanings ascribed to such Terms as in the Promissory Note and the Credit Agreement.




2.
MODIFICATION OF PROMISSORY NOTE.






The
maturity date of the Promissory Note is changed from December 3 I , 20I 4 to May 15, 20 I 7. On the revised maturi ty date, Borrower
shall pay to Lender the unpaid principal, accrued and unpaid int erest , and all other amounts payable by Borrower under the Promissory
Note and Loan Documents.




3.
MODIFICATION OF CREDIT AGREEMENT.






3.1
The defined Term "Revolving Loan Termination Date" as set forth in Section I of the Credit Agreement is amended and replaced
with the following:


 






Revolving
Loan Termination Date means the earlier to occur of(a) May 15 , 20 17, or (b) such other date on which the Revo lving Commitment
terminates pursuant to Section 6 or Section 13.




    	90



    	 



    

3.2
Section 4.1(a) of the Credit Agreement is amended and replaced with the following:







(a) 
at all times while the Revolving Loan is outstanding, the Revolving Loan shall accrue interest at a rate per annum equal to the sum of
the Prime Rate less Ninety Five (95) Basis Points (0.95%); and




4.
RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL.






The
Loan Documents are ratified and affirmed by Borrower and shall remain in full force and effect as modified herein . Any property or rights
to or interest in property granted as security in the Loan Documents shall remain as security for the loan and the obligations of Borrower
in the Loan Documents.




5.
BORROWER REPRESENTATIONS AND WARRANTIES.






		5.1	No
                                            default or event of default under any of the Loan Documents as modified he reby, nor any
                                            event, that, with the giving of notice or the passage of time or both, would be a default
                                            or an event of default under the Loan Documents as modified herein has occurred and is continuing.





		5.2	There
                                            has been no material adverse change in the financial conditions of Borrower or any other
                                            person whose financial statement has been delivered to Lender in connection with the Promissory
                                            Note from the most recent financial statement received by Lender.





		5.3	Each
                                            and all representations and warranties of Borrower in the Loan Documents are accurate on
                                            the date hereof.





		5.4	Borrower
                                            has no claims, counterclaims, defenses , or set-offs with respect to the Loan or the Loan
                                            Documents as modified herein .





		5.5	The
                                            Credit Agreement, Promissory Note and Loan Documents as modified herein are the legal , valid,
                                            and binding obligation of Borrower, enforceable against Borrower in accordance with their
                                            terms.





		5.6	Borrower
                                            is validly existing under the laws of the state of its formation or organization and has
                                            the requisite power and authority to execute and deliver this Agreement and to perform the
                                            Loan Documents as modified herein. The execution and delivery of this Agreement and the performance
                                            of the Loan Documents as modified herein have been duly authorized by all requisite action
                                            by or on behalf of Bo rrower. This Agreement has been duly executed and delivered on behalf
                                            of Borrower.





 


6.
· BORROWER COVENANTS.


 


Borrower
covenants with Lender:




		6.1	Borrower
                                            shall execute, deliver , and provide to Lender such additional agreements, documents, and
                                            instruments as reasonably required by Lender to effectuate the in tent of this Agreement.





		6.2	Borrower
                                            fully, finally, and forever releases and discharges Lender and its successors, assigns, directors,
                                            officers, employees, agents, and representatives from any and all








    	91



    	 



    












actions,
causes of action, claims, debts, demands, liabilities, obli'gations, and suits, of whatever kind or nature, in law or equity of Borrower,
whether now known or unknown to Borrower, (i) in respect of the Loan, the Loan Documents, or the actions or omissions of Lender in respect
of the Loan or the Loan Documents and (ii) arising from events occurring prior to the date of this Agreement. As used in this Agreement,
" Loan Documents" shall include the Promissory Note and all documents executed by Borrower in connection with the Loan which
is represented by the Promissory Note.




6.3
Borrower pays to Lender a loan fee equal to One Hundred Ninety-Five and No/I 00 Dollars ($195 .00).


 






7.
EXECUTION AND DELIVERY OF AGREEMENT BY LENDER.






Lender
shall not be bound by this Agreement until (i) Lender as executed and delivered this Agreement, and (ii) Borrower has performed all of
the obligations of Borrower under this Agreement to be performed contemporaneously with the execution and delivery of this Agreement.




8.
INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.






The
Loan Documents as modified herein contain the complete understanding and agreement of Borrower and Lender in respect of the Loan and
supersede all prior representations, warranties, agreements, arrangements, understandings, and negotiations. No provision of the Loan
Documents as modified herein may be changed, discharged, supplemented, terminated, or waived except in a writing signed by the parties
thereto.




9.
BINDING EFFECT.






The
Loan Documents as modified herein shall be binding upon and shall inure to the benefit of Borrower and Lender and their successors and
assigns and the executors, legal administrators, personal representatives, heirs , devisees, and beneficiaries of Borrower , provided
, however , Borrower ma y not assign any of its right to delegate any of its obligation under the Loan Documents and any purported assignment
or delegation shall be void.




10.
CHOICE OF LAW.






This
Agreement shall be governed by and construed in accordance with the laws of the State of Indiana without giving effect to conflicts of
law principles.




11.
COUNTERPART EXECUTION.






This
Agreement may be executed in one or more counterparts, each of which shall be deemed an or ig inal and all of which together sha ll constitute
one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Agreement to physically
from one document.




    	92



    	 



    














12.
NOT A NOVATION.









This
Agreement is a modification only and not a novation. Except for the above-referenced modification(s), the Promissory Note, the Agreement,
the Loan Documents and any other agreement or security document, and all the terms and conditions thereof, shall be and remain in full
force and effect with the changes herein deemed to be incorporated therein. This Agreement is to be considered attached to the Promissory
Note and made a part thereof. This Agreement shall not release or affect the liability of any guarantor, surety or endorser of the Promissory
Note or release any owner of collateral securing the Promissory Note. The validity, priority and enforceability of the Promissory Note
shall not be impaired hereby .


	 	INTERNATIONAL
  BALER CORPORATION
	 	 
	 	By:
  /s/ David R. Griffin
	 	David
  R. Griffin, Chief Executive Officer
	 	 
	 	 
	 	By:
  /s/ William E. Nielsen
	 	William
  E. Nielsen, Chief Financial Officer












LENDER'S
ACCEPTANCE




The
foregoing Revolving Note a Credit Agreement Modification Agreement is hereby agreed to and acknowledged this 26 day of February, 2015





	 	FIRST
  MERCHANT BANK, N.A.
	 	 
	 	By:
  /s/ Jamie Matthews
	 	Jamie
  Matthews, Relationship Manager



 






    	93



    	 



    










REVOLVING
NOTE MODIFICATION AGREEMENT




This
Revolving Note Modification Agreement {the "Agreement") is made and entered into effective as of May 15, 2017 (the "Agreement
Date"), by and between INTERNATIONAL BALER CORPORATION, a Delaware corporation (the "Borrower"), and FIRST MERCHANTS
BANK, an Indiana state-chartered banking institution f/k/a FIRST MERCHANTS BANK, NATIONAL ASSOCIATION (the "Lender").




WITNESSETH:




WHEREAS,
Borrower heretofore executed a Revolving Nole in the principal amount of


$1,650,000.00
dated January 7, 2013 in favor of Lender (as same may have been amended or modified from time to time, the "Promissory Note'');
and·




WHEREAS,
the Promissory Note has at all times been, and is now. continuously and without interruption outstanding in favor of Lender; and




WHEREAS,
Borrower has requested that the Promissory Note be modified to the limited extent as hereinafter set forth; and




WHEREAS,
Lender has agreed to such modification.




·
NOW THEREFORE, by mutual agreement of the parties and in mutual consideration of the agreements contained herein and for other good and
valuable considerations , the receipt a11d sufficiency of which is hereby acknowledged, the parties hereto agree that the Promissory
Note is modified as hereinafter indicated.




1. ACCURACY
OF RECITALS; DEFINITIONS.




Borrower
acknowledges the accuracy of the Recitals, stated above. Additionally, capitalized Terms appearing in this Agreement but not otherwise
defined herein shall have the meanings ascribed to such terms as in the Promissory Note.·




2.
MODIFICATION OF PROMISSORY NOTE.


 






The
maturity date of the Promissory Note is changed from May 15, 2017 to May 15 , 2018. On the revised maturity date, Borrower shall pay
to Lender the unpaid principal , accrued and unpaid interest, and all other amounts payable by Borrower under the Promissory Note and
Loan Documents.




3.
RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL.


 






The
Loan Documents are ratified and atlinned by Borrower and shall remain in full force and effect as modified herein. Any property or rights
to or interest in property granted as security in the Loan Documents shall remain as security for the loan and the obligations of Borrower
in the Loan Documents.




4.
INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.


 






    	94



    	 



    



The
Loan Documents as modified herein contain the complete understanding and agreement of Borrower and Lender in respect of the Loan and
supersede all prior representations, warranties. agreements, arrangements, understandings, and negotiations. No provision of the Loan
Documents as modified herein may be changed, discharged, supplemented, terminated, or waived except in a writing signed by the parties
thereto.




5.
BINDlNG EFFECT.




The
Loan Documents as modified herein shall be binding upon and shall inure to the benefit of Borrower and Lender and their successors and
assigns and the executors, legal administrators, personal representatives, heirs, devisees, and beneficiaries of Borrower, provided,
however, Borrower may not assign any of its right to delegate any of its obligation under the Loan Documents and any purported assignment
or delegation shall be void.




6.
CHOICE OF LAW.






This
Agreement shall be governed by and construed in accordance with the laws of the State of Indiana without giving effect to conflicts oflaw
principles.




7.
COUNTERPART EXECUTION.






This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Agreement to physically
from one document.




8.
NOT A NOVATION.






This
Agreement is a modification only and not a novation. Except for the above-referenced modification(s), the Promissory Note, the Agreement,
the Loan Documents and any other agreement or security document, and all the Terms and conditions thereof, shall be and remain in full
force and effect with the changes herein deemed to be incorporated therein. This Agreement is to be considered attached to the Promissory
Note and made a part thereof. This Agreement shall not release or affect the liability of any guarantor, surety or endorser of the Promissory
Note or release any owner of collateral securing the Promissory Note. The validity, priority and enforceability of the Promissory Note
shall not be imp aired hereby.





	 	INTERNATIONAL
  BALER CORPORATION
	 	 
	 	By:
  /s/ William E. Nielsen
	 	William
  E. Nielsen, Chief Executive Officer



 




    	95



    	 



    



LENDER'S
ACCEPTANCE




The
foregoing Revolving Note Modification Agreement is hereby agreed to and acknowledged effective as of May 15, 2017.





	 	FIRST
  MERCHANTS BANK
	 	 
	 	By:
  /s/ Jamie Matthews
	 	Jamie
  Matthews, Vice President



 




    	96



    	 



    

REVOLVING
NOTE AND CREDIT AGREEMENT MODIFICATION AGREEMENT




This
Revolving Note and Credit Agreement Modification Agreement (the "Agreement") is made and entered into effective as of May 15,
2018 (the "Agreement Date"), by and between INTERNATIONAL BALER CORPORATION, a Delaware corporation (the "Borrower"),
and FIRST MERCHANTS BANK an Indiana state chartered bank f/k/a First Merchants Bank, National Association (the "Lender").




WITNESSETH:




WHEREAS,
Borrower and Lender previously entered into a Credit Agreement dated January 7, 2013 (as same may have been amended or modified from
time to time, the "Credit Agreement"); and




WHEREAS,
Borrower heretofore executed a Revolving Note in the principal amount of


$1,650,000.00
dated January 7, 2013 in favor of Lender (as same may have been amended or modified from time_ to time, the "Promissory Note");
and




WHEREAS,
the Promissory Note has at all times been, and is now, continuously and without interruption outstanding in favor of Lender; and




WHEREAS,
Borrower has requested that the Credit Agreement and the Promissory Note be modified to the limited extent as hereinafter set forth;
and




WHEREAS,
Lender has agreed to such modification.




NOW
THEREFORE, by mutual agreement of the parties and in mutual consideration of the agreements contained herein and for other good and valuable
considerations, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that the Credit Agreement, the
Promissory Note and the Loan Documents are modified as hereinafter indicated.




1.
ACCURACY OF RECITALS; DEFINITIONS.




Borrower
acknowledges the accuracy of the Recitals, stated above. Additionally, capitalized terms appearing in this Agreement but not otherwise
defined herein shall have the meanings ascribed to sucq terms as in the Promissory Note and the Credit Agreement.




2.
MODIFICATION OF PROMISSORY NOTE.






The
maturity date of the Promissory Note is changed from May 15, 2018 to May 15, 2019 . On the revised maturity date, Borrower shall pay
to Lender the unpaid principal, accrued and unpaid interest, and all other amounts payable by Borrower under the Promissory Note and
Loan Documents.




3.
MODIFICATION OF CREDIT AGREEMENT.






The
defined term "Revolving Loan Termination Date" as set forth in Section 1 of the Credit Agreement is amended and replaced with
the following:




Revolving
Loan Termination Date means the earlier to occur of (a) May 15, 2019, or (b) such other date on which the Revolving Commitment terminates
pursuant to Section 6 or Section 13.




    	97



    	 



    

4.
RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL.






The
Loan Documents are ratified and affirmed by Borrower and shall remain in full force and effect as modified herein. Any property or rights
to or interest in property granted as security in the Loan Documents shall remain as security for the loan and the obligations of Borrower
in the Loan Documents.




5.
BORROWER REPRESENTATIONS AND WARRANTIES.






		5.1	No
                                            default or event of default under any of the Loan Documents as modified hereby, nor any event,
                                            that, with the giving of notice or the passage of time or both, would be a default or an
                                            event of default under the Loan Documents as modified herein has occurred and is continuing.





		5.2	There
                                            has been no material adverse change in the financial conditions of Borrower or any other
                                            person whose financial statement has been delivered to Lender in connection with the Promissory
                                            Note from the most recent financial statement received by Lender.





		5.3	Each
                                            and all representations and warranties of Borrower in the Loan Documents are accurate.on
                                            the date hereof.





		5.4	Borrower
                                            has no claims, counterclaims, defenses, or set-offs with respect to the Loan or the Loan
                                            Documents as modified herein.





		5.5	The
                                            Credit Agreement, Promissory Note and Loan Documents as modified herein are the legal, valid,
                                            and binding obligation of Borrower, enforceable against Borrower in accordance with their
                                            terms.





		5.6	Borrower
                                            is validly existing under the laws of the state of its formation or organization and has
                                            the requisite power and authority to execute and deliver this Agreement and to perform the
                                            Loan Documents as modified herein. The execution and delivery of this Agreement and the performance
                                            of the Loan Documents as modified herein have been duly authorized by all requisite action
                                            by or on behalf of Borrower. This Agreement has been duly executed and delivered on behalf
                                            of Borrower.





6.
BORROWER COVENANTS.






Borrower
covenants with Lender:




		6.1	Borrower
                                            shall execute, deliver, and provide to Lender such additional agreements, documents, and
                                            instruments as reasonably required by Lender to effectuate the intent of this Agreement.





		6.2	Borrower
                                            fully, finally, and forever releases and discharges Lender and its successors, assigns, directors,
                                            officers, employees, agents, and representatives from any and all actions, causes of action,
                                            claims, debts, demands, liabilities, obligations, and suits, of whatever kind or nature,
                                            in law or equity of Borrower, whether now known or unknown to Borrower, (i) in respect of
                                            the Loan, the Loan Documents, or the actions or omissions of Lender in respect of the Loan
                                            or the Loan Documents and (ii) arising from events occurring prior to the date of this Agreement.
                                            As used in this Agreement, "Loan





    	98



    	 



    

Documents"
shall include the Promissory Note and all documents executed by Borrower in connection with the Loan which is represented by the Promissory
Note.




6.3
Borrower pays to Lender a loan fee equal to Five Hundred and No/ I 00 Dollars ($500.00).


 






7.
EXECUTION AND DELIVERY OF AGREEMENT BY LENDER.






Lender
shall not be bound by this Agreement until (i) Lender as executed and delivered this Agreement , and (ii) Borrower has performed all
of the obligations of Borrower under this Agreement to be performed contemporaneously with the execution and delivery of this Agreement.




8.
INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.






The
Loan Documents as modified herein contain the complete understanding and agreement of Borrower and Lender in respect of the Loan and
supersede all prior representations, warranties, agreements , arrangements, understandings, and negotiations. No provision of the Loan
Documents as modified herein may be changed, discharged, supplemented, terminated, or waived except in a writing signed by the parties
thereto.




9.
BINDING EFFECT.






The
Loan Documents as modified herein shall be binding upon and shall inure to the benefit of Borrower and Lender and their successors and
assigns and the executors, legal administrators, personal representatives, heirs, devisees, and beneficiaries of Borrower, provided,
however, Borrower may not assign any of its right to delegate any of its obligation under the Loan Documents and any purported assignment
or delegation shall be void.




10.
CHOICE OF LAW.






This
Agreement shall be governed by and constru(,!d in accordance with the laws of the State of Indiana without giving effect to conflicts
of law principles.




11.
COUNTERPART EXECUTION.






This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Agreement to physically
from one document.




    	99



    	 



    

12.
NOT A NOVATION.






This
Agreement is a modification only and not a novation. Except for the above-referenced modification(s), the Promissory Note, the Agreement,
the Loan Documents and any other agreement or security document, and all the terms and conditions thereof, shall be and remain in full
force and effect with the changes herein deemed to be incorporated therein. This Agreement is to be considered attached to the Promissory
Note and made a part thereof. This Agreement shall not release or affect the liability of any guarantor, surety or endorser of the Promissory
Note or release any owner of collateral securing the Promissory Note. The validity, priority and enforceability of the Promissory Note
shall not be impaired hereby.





	 	INTERNATIONAL
  BALER CORPORATION
	 	 
	 	By:
  /s/ William E. Nielsen
	 	William
  E. Nielsen, Chief Executive officer
	 	 



 






LENDER'S
ACCEPTANCE




The
foregoing Revolving Note and Credit Agreement Modification Agreement is hereby agreed to and acknowledged effective as of May 15, 2018.





	 	FIRST
  MERCHANTS BANK
	 	 
	 	By:
  /s/ James A. Matthews
	 	James
  A. Matthews, Vice President
	 	 



 




    	100



    	 



    










REVOLVING
NOTE AND CREDIT AGREEMENT MODIFICATION AGREEMENT




This
Revolving Note and Credit Agreement Modification Agreement (the "Agreement") is made and entered into effective as of May 15,
2019 (the "Agreement Date"), by and between


INTERNATIONAL
BALER CORPORATION, a Delaware corporation (the "Borrower"), and FIRST MERCHANTS BANK an Indiana state chartered
bank f/k/a First Merchants Bank, National Association (the "Lender").




WITNESSETH:




WHEREAS,
Borrower and Lender previously entered into a Credit Agreement dated January 7, 2013 (as same may have been amended or modified from
time to time, the "Credit Agreement"); and




WHEREAS,
Borrower heretofore executed a Revolving Note in the principal amount of


$1,650,000.00
dated January 7, 2013 in favor of Lender (as same may have been amended or modified from time to time, the "Promissory Note");
and




WHEREAS,
the Promissory Note has at all times been, and is now, continuously and without interruption outstanding in favor of Lender; and




WHEREAS,
Borrower has requested that the Credit Agreement and the Promissory Note be modified to the limited extent as hereinafter set forth;
and




WHEREAS,
Lender has agreed to such modification.




.
NOW THEREFORE, by mutual agreement of the parties and in mutual consideration of the agreements contained herein and for other good and
valuable considerations , the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that the Credit Agreement,
the Promissory Note and the Loan Documents are modified as hereinafter indicated .




1.
ACCURACY OF RECITALS; DEFINITIONS.


 






Borrower
acknowledges the accuracy of the Recitals, stated above. Additionally, capitalized terms appearing in this Agreement but not otherwise
defined herein shall have the meanings ascribed to such terms as in the Promissory Note and the Credit Agreement.




2.
MODIFICATION OF PROMISSORY NOTE.


 






The
maturity date of the Promissory Note is changed from May 15, 2019 to May 15, 2020. On the revised maturity date, Borrower shall pay to
Lender the unpaid principal, accrued and unpaid interest, and all other amounts payable by Borrower under the Promissory Note and Loan
Documents.






3.
MODIFICATION OF CREDIT AGREEMENT.


 






3.1
The defined term "Revolving Loan Termination Date" as set forth in Section 1 of the Credit Agreement is amended and replaced
with the following:






Revolving
Loan Termination Date means the earlier to occur of (a) May I 5, 2020, or (b)




    	101



    	 



    

such
other date on which the Revolving Commitment tem1inates pursuant to Section 6 or Section 13.


3.2
The following definition is added to Section 1 of the Credit Agreement:


 






Current
Ratio means, at any date, a ratio, the numerator of which is Borrower's total assets and the denominator of which is Borrower's total
current liabilities, each as deTermined in accordance with GAAP as of such date.




3.3
A new Subsection 10.10 .3 is added to the Credit Agreement as follows:


 






I
0.10.3 Current Ratio. Maintain at all times a Current Ratio in excess of 2.0 to· 1.0.




3.4
Section 15.2 of the Credit Agreement is amended to provide that notices to Lender shall be delivered to the following recipient:


 






First
Merchants Bank


1011
North Main Street


Lapel,
Indiana 46051


Fax:
(317)534-3536


E-mail:
jrinker@firstmerchants.com


 




4.
RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL.


 






The
Loan Documents are ratified and affinned by Borrower and shall remain in full force and effect as modified herein. Any property or rights
to or interest in property granted as security in the Loan Documents shall remain as security for the loan and the obligations of Borrower
in the Loan Documents.




5.
BORROWER REPRESENTATIONS AND WARRANTIES.


 






		5.1	Except
                                            as referenced in Section I 3 hereof, no default or event of default under any of the Loan
                                            Documents as modified hereby, nor any event, that, with the giving of notice or the passage
                                            of time or both, would be a default or an event of default under the Loan Documents as modified
                                            herein has occurred and is continuing.





		5.2	There
                                            has been no material adverse change in the financial conditions of Borrower or any other
                                            person whose financial statement has been delivered to Lender in connection with the Promissory
                                            Note from the most recent financial statement received by Lender.





		5.3	Each
                                            and all representations and warranties of Borrower in the Loan Documents are accurate on
                                            the date hereof.





		5.4	Borrower
                                            has no claims, counterclaims, defenses, or set-offs with respect to the Loan or the Loan
                                            Documents as modified herein.





		5.5	The
                                            Credit Agreement, Promissory Note and Loan Documents as modified herein are the legal, valid,
                                            and binding obligation of Borrower, enforceable against Borrower in accordance with their
                                            Terms.





    	102



    	 



    

		5.6	Borrower
                                            is validly existing under the laws of the state of its formation or organization and has
                                            the requisite power and authority to execute and deliver this Agreement and to perform the
                                            Loan Documents as modified herein. The execution and delivery of this Abrreement and the
                                            perfonnance of the Loan Documents as modified herein have been duly authorized by all requisite
                                            action by or on behalf of Borrower. This Agreement has been duly executed and delivered on
                                            behalf of Borrower.





 


6.
BORROWER COVENANTS.


 


Borrower
covenants with Lender:




		6.1	Borrower
                                            shall execute, deliver, and provide to Lender such additional agreements, documents, and
                                            instruments as reasonably required by Lender to effectuate the intent of this Agreement.





		6.2	Borrower
                                            fully, finally, and forever releases and discharges Lender and its successors, assigns, directors,
                                            officers, employees, agents, and representatives from any and all actions, causes of action,
                                            claims, debts, demands, liabilities, obligations, and suits, of whatever kind or nature,
                                            in law or equity of Borrower, whether now known or unknown to Borrower, (i) in respect of
                                            the Loan, the Loan Documents, or the actions or omissions of Lender in respect of the Loan
                                            or the Loan Documents and (ii) arising from events occurring prior to the date of this Agreement.
                                            As used in this Agreement, "Loan Documents" shall include the Promissory Note and
                                            all documents executed by Borrower in connection with the Loan which is represented by the
                                            Promissory Note.





		6.3	Borrower
                                            pays to Lender a loan fee equal to Five Hundred and No/100 Dollars ($500.00).





 


7.
EXECUTION AND DELIVERY OF AGREEMENT BY LENDER.






Lender
shall not be bound by this Agreement until (i) Lender as executed and delivered this Agreement, and (ii) Borrower has perfom1ed all of
the obligations of Borrower under this Agreement to be perfonned contemporaneously with the execution and delivery of this Agreement.




8.
INTEGRATJON, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.






The
Loan Documents as modified herein contain the complete understanding and agreement of Borrower and Lender in respect of the Loan and
supersede all prior representations, warranties, agreements, arrangements, understandings, and negotiations. No provision of the Loan
Documents as modified herein may be changed, discharged, supplemented, Terminated, or waived except in a writing signed by the parties
thereto.




9.
BINDING EFFECT.






The
Loan Documents as modi tied herein shall be binding upon and shall inure to the benefit of Borrower and Lender and their successors and
assigns and the executors, legal administrators, personal representatives, heirs, devisees, and beneficiaries of Borrower, provided,
however, Borrower may not




    	103



    	 



    

assign
any of its right to delegate any of its obligation under the Loan Documents and any purported assignment or delegation shall be void.




10.
CHOICE OF LAW.






This
Agreement shall be governed by and construed in accordance with the laws of the State of Indiana without giving effect to conflicts of
law principles.




COUNTERPART
EXECUTION.




This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Agreement to physically
from one document.




12.
NOT A NOVATION.






This
Agreement is a modification only and not a novation. Except for the above-referenced


.
modification(s) , the Promissory Note, the Agreement, the Loan Documents and any other agreement or security document, and all the Terms
and conditions thereof, shall be and remain in full force and effect with the changes herein deemed to be incorporated therein. This
Agreement is to be considered attached to the Promissory Note and made a part thereof. This Agreement shall not release or affect the
liability of any guarantor, surety or endorser of the Promissory Note or release any owner of collateral securing the Promissory Note.
The validity, priority and enforceability of the Promissory Note shall not be impaired hereby.




13.
WAIVER.






By
Lender's execution of this Agreement, Lender hereby waives the Event of Default as contemplated in Subsection I 3.1.10 of the Credit
Agreement as a result of Leland Boren's death and the resulting Change in Control. The waiver of the Event of Default referenced in the
preceding sentence constitutes a singular waiver and shall not be deemed to be or to imply the Lender's waiver of the Borrower' s strict
complia nce with the terms and provisions of the Credit Agreement and Loan Documents, as amended, for all subsequent periods. The waiver
granted herein is in connection with the Borrower' s execution of this Agreement and shall not be deemed to create a course of conduct
or obligation upon the Lender to waive the Borrower's future non-complia nce with any of the tern1s or provisions as set forth in the
Credit Agreement or other Loan Documents. No delay or omission of the Lender to exercise any right or power under the Credit Agreement
shall impair such right or power or be construed as a waiver of any default or as an acquiescence except as expressly set forth herein.
All waiver of Borrower's noncompliance with the Terms and provisions of the Credit Agreement and the other Loan Documents shall not be
valid unless in writing and signed by the Lender, and then only to the extent specifically set forth in such writing.




    	104



    	 



    

(SIGNATURE
PAGE TO REVOLVING NOTE AND CREDIT AGREEMENT MODIFICATION)





	 	INTERNATIONAL
  BALER CORPORATION
	 	 
	 	By:
  /s/ Victor W. Biazis
	 	Victor
  W. Biazis, President
	 	 
	 	 
	 	FIRST
  MERCHANTS BANK
	 	 
	 	By:
  /s/ John Rinker
	 	John
  Rinker, Vice President








    	105



    	 



    

Loan
No. 3222136




REVOLVING
NOTE AND CREDIT AGREEMENT MODIFICATION AGREEMENT




This
Revolving Note and Credit Agreement Modification Agreement (the "Agreement") is made and entered into effective as of May 15,
2020 (the "Agreement Date"), by and between INTERNATIONAL BALER CORPORATION, a Delaware corporation (the "Borrower"),
and FIRST MERCHANTS BANK an Indiana state chartered bank f/k/a First Merchants Bank, National Association (the "Lender").




WITNESSETH:




WHEREAS,
Borrower and Lender previously entered into a Credit Agreement dated January 7, 2013 (as same may have been amended or modified from
time to time, the "Credit Agreement"); and




WHEREAS,
Borrower heretofore executed a Revolving Note in the principal amount of


$1,650,000.00
dated January 7, 2013 in favor of Lender (as same may have been amended or modified from time to time, the "Promissory Note");
and




WHEREAS,
the Promissory Note has at all times been, and is now, continuously and without interruption outstanding in favor of Lender; and




WHEREAS,
Borrower has requested that the Credit Agreement and the Promissory Note be modified to the limited extent as hereinafter set forth;
and




WHEREAS,
Lender has agreed to such modification.




NOW
THEREFORE, by mutual agreement of the parties and in mutual consideration of the agreements contained herein and for other good and valuable
considerations, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that the Credit Agreement, the
Promissory Note and the Loan Documents are modified as hereinafter indicated.




1.
ACCURACY OF RECITALS; DEFINITIONS.






Borrower
acknowledges the accuracy of the Recitals, stated above. Additionally, capitalized terms appearing in this Agreement but not otherwise
defined herein shall have the meanings ascribed to such terms as in the Promissory Note and the Credit Agreement.


2.
MODIFICATION OF PROMISSORY NOTE.






		2.1	Effective
                                            as of the date hereof, the principal sum of the Promissory Note shall be reduced to One Million
                                            and No/100 Dollars ($1,000,000.00) or so much of the principal amount of the Revolving Loan
                                            represented by the Promissory Note as may be disbursed by the Lender under the terms of the
                                            Credit Agreement, as amended.





		2.2	The
                                            maturity date of the Promissory Note is changed from May 15, 2020 to May 15, 2021. On the
                                            revised maturity date, Borrower shall pay to Lender the unpaid principal, accrued and unpaid
                                            interest, and all other amounts payable by Borrower under the Promissory Note and Loan Documents.





 


3.
MODIFICATION OF CREDIT AGREEMENT.


 






		3.1	The
                                            defined term "Revolving Loan Termination Date" as set forth in Section 1 of the
                                            Credit Agreement is amended and replaced with the followi_ng:










    	106



    	 



    

Revolving
Loan Termination Date means the earlier to occur of (a) May 15, 2021, or (b) such other date on which the Revolving Commitment terminates
pursuant to Section 6 or Section 13.




		3.2	Subsection
                                            2.1(a) of the Credit Agreement is amended and replaced by the following:





(a)
Revolving Loan Commitment. The Lender agrees to make loans on a revolving basis ("Revolving Loans") from time to time
until the Revolving Loan Termination Date in such amounts as the·Borrower may request; provided that the Revolving Outstandings
will not at any time exceed the lesser of (i) maximum amount of the Revolving Commitment; and (ii) the amount available under the Borrowing
Base. The entire unpaid balance of the Revolving Loans shall be immediately due and payable in full in immediately available funds on
the Revolving Loan Termination Date if not sooner paid in full.




		3.3	Effective
                                            as of the date hereof, Subsection 4.l(a) of the Credit Agreement is amended and replaced
                                            by the following:





(a)
at all times while the Revolving Loan is outstanding, the Revolving Loan shall accrue interest at a variable rate per annum equal to
the greater of (i) two hundred thirty (230) Basis Points (2.30%); and (ii) the sum of the Prime Rate less ninety-five (95) Basis
Points (0.95%)




		3.4	Effective
                                            as of April 30, 2020, all of the provisions regarding the Borrowing Base which were added
                                            pursuant to that certain Amendment No. 2 to Credit Agreement dated effective as of May 15,
                                            2017 providing for the addition of Section 10.1.7 to the Credit Agreement shall be reinstated
                                            as an Affirmative Covenant.





		3.5	Section
                                            10.1.7 of the Credit Agreement is amended to provide that Borrower shall include its accounts
                                            payable aging report with each monthly submission of the Borrowing Base Certificate.





 


4.
RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL.


 






The
Loan Documents are ratified and affirmed by Borrower and shall remain in full force and effect as modified herein. Any property or rights
to or interest in property granted as security in the Loan Documents shall remain as security for the loan and the obligations of Borrower
in the Loan Documents.




5.
BORROWER REPRESENTATIONS AND WARRANTIES . .


 






		5.1	No
                                            default or event of default under any of the Loan Documents as modified hereby, nor any event,
                                            that, with the giving of notice or the passage of time or both, would be a default or an
                                            event of default under the Loan Documents as modified herein has occurred and is continuing.





		5.2	There
                                            has been no material adverse change in the financial conditions of Borrower or any other
                                            person whose financial statement has been delivered to Lender in connection with the Promissory
                                            Note from the most recent financial statement received by Lender.





		5.3	Each
                                            and all representations and warranties of Borrower in the Loan Documents are accurate on
                                            the date hereof.





		5.4	Borrower
                                            has no claims, counterclaims, defenses, or set-offs with respect to the Loan or the Loan
                                            Documents as modified herein.








    	107



    	 



    



5
..5 The Credit Agreement, Promissory Note and Loan Documents as modified herein are the legal, valid, and binding obligation of Borrower,
enforceable against Borrower in accordance with their terms.




5.6
Borrower is validly existing under the laws of the state of its formation or organization and has the requisite power and authority to
execute and deliver this Agreement and to perform the Loan Documents as modified herein. The execution and delivery of this Agreement
and the performance of the Loan Documents as modified herein have been duly authorized by all requisite action by or on behalf of Borrower.
This Agreement has been duly executed and delivered on behalf of Borrower.




6.
BORROWER COVENANTS.


 


Borrower
covenants with Lender:




		6.1	Borrower
                                            shall execute, deliver, and provide to Lender such additional agreements, documents, and
                                            instruments as reasonably required by Lender to effectuate the intent of this Agreement.





		6.2	Borrower
                                            fully, finally, and forever releases and discharges Lender and its successors, assigns, directors,
                                            officers, employees, agents, and representatives from any and all actions, causes of action,
                                            claims, debts, demands, liabilities, obligations, and suits, of whatever kind or nature,
                                            in law or equity of Borrower, whether now known or unknown to Borrower, (i) in respect of
                                            the Loan, the Loan Documents, or the actions or omissions of Lender in respect of the Loan
                                            or the Loan Documents and (ii) arising from events occurring prior to the date of this Agreement.
                                            As used in this Agreement, "Loan Documents" shall include the Promissory Note and
                                            all documents executed by Borrower in connection with the Loan which is represented by the
                                            Promissory Note.





		6.3	Borrower
                                            pays to Lender a loan fee equal to Five Hundred and No/100 Dollars ($500.00).



\






7.
EXECUTION AND DELIVERY OF AGREEMENT BY LENDER.






Lender
shall not be bound by this Agreement until (i) Lender as executed and delivered this Agreement, and (ii) Borrower has performed all of
the obligations of Borrower under this Agreement to be performed contemporaneously with the execution and delivery of this Agreement.




8.
INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.






The
Loan Documents as modified herein contain the complete understanding and agreement of Borrower and Lender in respect of the Loan and
supersede all prior representations, warranties, agreements, arrangements, understandings, and negotiations. No provision of the Loan
Documents as modified herein may be changed, discharged, supplemented, terminated, or waived except in a writing signed by the parties
thereto.




    	108



    	 



    



9.
BINDING EFFECT.






The
Loan Documents as modified herein shall be binding upon and shall inure to the benefit of Borrower and Lender and their successors and
assigns and the executors, legal administrators, personal representatives, heirs, devisees, and beneficiaries of Borrower, provided,
however, Borrower may not assign any of its right to delegate any of its obligation under the Loan Documents and any purported assignment
or delegation shall be void.




10.
CHOICE OF LAW.






This
Agreement shall be governed by and construed in accordance with the laws of the State of Indiana without giving effect to conflicts of
law principles.




11.
COUNTERPART EXECUTION.






This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Agreement to physically
from one document.




12.
NOT A NOVATION.






This
Agreement is a modification only and not a novation. Except for the above-referenced modification(s), the Promissory Note, the Agreement,
the Loan Documents and any other agreement or security document, and all the terms and conditions thereof, shall be and remain in full
force and effect with the changes herein deemed to be incorporated therein. This Agreement is to be considered attached to the Promissory
Note and made a part thereof. This Agreement shall not release or affect the liability of any guarantor, surety or endorser of the Promissory
Note or release any owner of collateral securing the Promissory Note. The validity, priority and enforceability of the Promissory Note
shall not be impaired hereby.


[signature
page follows] 




    	109



    	 



    





 


[SIGNATURE
PAGE TO REVOLVING NOTE AND CREDIT AGREEMENT MODIFICATION]





	 	INTERNATIONAL
  BALER CORPORATION
	 	
	 	By:
  /s/ Victor W. Biazis
	 	Victor
  W. Biazis, President
	 	 
	 	 
	 	FIRST
  MERCHANTS BANK
	 	 
	 	By:
	 	John
  Rinker, Vice President



 




    	110



    	 



    







[SIGNATURE
PAGE TO REVOLVING NOTE AND CREDIT AGREEMENT MODIFICATION)






 


	 	INTERNATIONAL
  BALER CORPORATION
	 	
	 	By:
  
	 	Victor
  W. Biazis, President
	 	 
	 	 
	 	FIRST
  MERCHANTS BANK
	 	 
	 	By:
  /s/John Rinker
	 	John
  Rinker, Vice President







    	111