exv10w1






EXHIBIT 10.1




LOAN AGREEMENT

BY AND AMONG

LABARGE, INC.,

LABARGE ELECTRONICS, INC.,

LABARGE ACQUISITION COMPANY, INC.,

U.S. BANK NATIONAL ASSOCIATION,

WELLS FARGO BANK, NATIONAL ASSOCIATION

AND

U.S. BANK NATIONAL ASSOCIATION, AS AGENT




DECEMBER 22, 2008




 









 








TABLE OF CONTENTS




	 	 	 	 	 
	SECTION 1.  DEFINITIONS
	 	 	1	 
	1.01 Definitions
	 	 	1	 
	1.02 Continuance of an Event of Default
	 	 	23	 
	1.03 Accounting Terms and Determinations
	 	 	23	 
	SECTION 2.  LOANS AND LETTERS OF CREDIT
	 	 	23	 
	2.01 Revolving Credit Commitments
	 	 	23	 
	2.02 Swing Line Loans
	 	 	25	 
	2.03 LaBarge Electronics Term Loan
	 	 	27	 
	2.04 LaBarge Acquisition Term Loan
	 	 	28	 
	2.05 Letter of Credit Commitment
	 	 	28	 
	2.06 Method of Borrowing
	 	 	31	 
	2.07 Notes
	 	 	33	 
	2.08 Duration of Interest Periods and Selection of Interest Rates
	 	 	35	 
	2.09 Interest Rates and Interest Payments
	 	 	36	 
	2.10 Computation of Interest
	 	 	38	 
	2.11 Fees
	 	 	38	 
	2.12 Method of Making Interest and Other Payments
	 	 	39	 
	2.13 Voluntary Prepayments
	 	 	39	 
	2.14 Mandatory Prepayments
	 	 	40	 
	2.15 General Provisions as to Payments
	 	 	41	 
	2.16 Funding Losses
	 	 	41	 
	2.17 Basis for Determining Interest Rate Inadequate or Unfair
	 	 	41	 
	2.18 Illegality
	 	 	42	 
	2.19 Increased Cost
	 	 	42	 
	2.20 Base Rate Loans Substituted for Affected LIBOR Loans
	 	 	43	 
	2.21 Capital Adequacy
	 	 	43	 
	2.22 Survival of Indemnities
	 	 	44	 
	2.23 Discretion of Lenders as to Manner of Funding
	 	 	44	 
	2.24 Sharing of Payments
	 	 	44	 
	2.25 Application of Payments
	 	 	44	 
	2.26 Taxes
	 	 	45	 
	SECTION 3.  PRECONDITIONS
	 	 	46	 
	3.01 Preconditions to Effectiveness of this Agreement
	 	 	46	 
	3.02 All Loans
	 	 	49	 
	3.04 All Letters of Credit
	 	 	50	 
	SECTION 4.  REPRESENTATIONS AND WARRANTIES
	 	 	51	 
	4.01 Existence and Power
	 	 	51	 
	4.02 Authorization
	 	 	51	 
	4.03 Binding Effect
	 	 	51	 
	4.04 Financial Statements
	 	 	52	 
	4.05 Litigation
	 	 	52	 
	4.06 Pension and Welfare Plans
	 	 	52	 
	4.07 Tax Returns and Payment
	 	 	53	 
	4.08 Subsidiaries
	 	 	53	 
	4.09 Compliance With Other Instruments; None Burdensome
	 	 	53	 
	4.10 Other Debt
	 	 	54	 
	4.11 Labor Matters
	 	 	54	 
	4.12 Title to Property
	 	 	54	 
	4.13 Regulation U
	 	 	54	 
	4.14 Multi-Employer Pension Plan Amendments Act of 1980
	 	 	54	 






 









 






	 	 	 	 	 
	4.15 Investment Company Act of 1940
	 	 	55	 
	4.16 Patents, Trademarks, Copyrights, Licenses, Etc
	 	 	55	 
	4.17 Environmental and Safety and Health Matters
	 	 	55	 
	4.18 Investments
	 	 	55	 
	4.19 No Default
	 	 	55	 
	4.20 Government Contracts
	 	 	56	 
	4.21 Purchase and Other Commitments and Outstanding Bids
	 	 	56	 
	4.22 Disclosure
	 	 	56	 
	SECTION 5.  COVENANTS
	 	 	56	 
	5.01 Affirmative Covenants of the Company
	 	 	56	 
	(a) Information
	 	 	56	 
	(b) Payment of Indebtedness
	 	 	58	 
	(c) Books and Records, Consultations and Inspections
	 	 	58	 
	(d) Payment of Taxes
	 	 	58	 
	(e) Payment of Claims
	 	 	59	 
	(f) Existence
	 	 	59	 
	(g) Maintenance of Property
	 	 	59	 
	(h) Compliance with Laws, Regulations, Etc
	 	 	59	 
	(i) Environmental Matters
	 	 	59	 
	(j) ERISA Compliance
	 	 	60	 
	(k) Notices
	 	 	60	 
	(l) Insurance
	 	 	61	 
	(m) Further Assurances
	 	 	61	 
	(n) Accountant
	 	 	62	 
	(o) Financial Covenants
	 	 	62	 
	(p) Subsidiaries
	 	 	62	 
	(q) Interest Rate Protection
	 	 	62	 
	5.02 Negative Covenants of Borrower
	 	 	62	 
	(a) Limitation on Indebtedness
	 	 	63	 
	(b) Limitation on Liens
	 	 	63	 
	(c) Consolidation, Merger, Sale of Property, Etc.
	 	 	63	 
	(d) Sale and Leaseback Transactions
	 	 	64	 
	(e) Sale or Discount of Accounts
	 	 	64	 
	(f) Transactions with Affiliates
	 	 	65	 
	(g) Changes in Nature of Business
	 	 	65	 
	(h) Fiscal Year
	 	 	65	 
	(i) Stock Redemptions and Distributions
	 	 	65	 
	(j) Pension Plans
	 	 	65	 
	(k) Restricted Investments, Acquisitions
	 	 	65	 
	(l) Subsidiaries
	 	 	65	 
	(m) Limitations on Restrictive Agreements
	 	 	65	 
	5.03 Use of Proceeds
	 	 	66	 
	SECTION 6.  EVENTS OF DEFAULT
	 	 	66	 
	SECTION 7. AGENT
	 	 	71	 
	7.01 Appointment
	 	 	71	 
	7.02 Powers
	 	 	71	 
	7.03 General Immunity
	 	 	72	 
	7.04 No Responsibility for Loans, Recitals, Etc.
	 	 	72	 
	7.05 Right to Indemnity
	 	 	72	 
	7.06 Action Upon Instructions of Required Lenders
	 	 	72	 
	7.07 Employment of Agents and Counsel
	 	 	73	 
	7.08 Reliance on Documents; Counsel
	 	 	73	 
	7.09 May Treat Payee as Owner
	 	 	73	 






-ii-









 






	 	 	 	 	 
	7.10 Agent’s Reimbursement
	 	 	73	 
	7.11 Rights as a Lender
	 	 	73	 
	7.12 Independent Credit Decision
	 	 	73	 
	7.13 Resignation of Administrative Agent
	 	 	74	 
	7.14 Delivery of Documents
	 	 	74	 
	7.15 Application of Section 7 to U.S. Bank
	 	 	74	 
	7.16 Legal Representation of the Agent
	 	 	74	 
	7.17 Duration of Agency
	 	 	75	 
	SECTION 8.  GENERAL
	 	 	75	 
	8.01 No Waiver
	 	 	75	 
	8.02 Right of Setoff
	 	 	75	 
	8.03 Cost and Expenses
	 	 	75	 
	8.04 Environmental Indemnity
	 	 	76	 
	8.05 General Indemnity
	 	 	76	 
	8.06 Authority to Act
	 	 	77	 
	8.07 Notices
	 	 	77	 
	8.08 Consent To Jurisdiction; Waiver of Jury Trial
	 	 	77	 
	8.09 Governing Law
	 	 	77	 
	8.10 Amendments and Waivers
	 	 	77	 
	8.11 References; Headings for Convenience
	 	 	78	 
	8.12 Successors and Assigns
	 	 	78	 
	8.13 No Oral Agreements; Entire Agreement
	 	 	79	 
	8.14 Severability
	 	 	79	 
	8.15 Counterparts
	 	 	79	 
	8.16 Resurrection of the Borrower’s Obligations
	 	 	79	 
	8.17 Independence of Covenants
	 	 	80	 
	8.18 Collateral
	 	 	80	 
	8.19 Confidentiality
	 	 	80	 
	8.20 USA Patriot Act
	 	 	80	 
	8.21 Swap Contracts and Treasury Management Agreements
	 	 	80	 
	8.22 Release of Liens
	 	 	81	 
	8.23 Waiver of Consequential Damages, etc.
	 	 	81	 
	8.24 Release of Certain Documents
	 	 	81	 
	8.25 Reallocation of Loans
	 	 	81	 
	8.26 Amendment and Restatement
	 	 	81	 







-iii-









 








LOAN AGREEMENT




     THIS LOAN AGREEMENT (this “Agreement”) is made and entered into as of the 22nd day of
December, 2008, by and among LABARGE, INC., a Delaware corporation (the “Company”), LABARGE
ELECTRONICS, INC., a Missouri corporation (“LaBarge Electronics”), LABARGE ACQUISITION COMPANY,
INC., a Missouri corporation (“LaBarge Acquisition”) (the Company, LaBarge Electronics and LaBarge
Acquisition are sometimes hereinafter individually referred to as a “Borrower” and collectively
referred to as the “Borrowers”), the Lenders from time to time party hereto and U.S. BANK NATIONAL
ASSOCIATION, as the Agent.



WITNESSETH:




     WHEREAS, the Borrowers (other than LaBarge Acquisition), the Lenders and the Agent are parties
to that certain Loan Agreement dated as of February 17, 2004, as amended by that certain First
Amendment to Loan Agreement dated as of April 16, 2004, that certain Second Amendment to Loan
Agreement dated as of August 18, 2005, that certain Third Amendment to Loan Agreement dated as of
February 10, 2006, that certain Fourth Amendment to Loan Agreement dated as of December 1, 2006,
and that certain Fifth Amendment to Loan Agreement dated as of October 3, 2008 (as so amended, the
“Existing Loan Agreement”);



     WHEREAS, the Borrowers, the Lenders and the Agent desire to amend and restate the Existing
Loan Agreement in the manner hereinafter set forth;



     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrowers, the
Lenders and the Agent hereby amend and restate the Existing Loan Agreement so that so amended and
restated it reads in its entirety as follows:



     WHEREAS, (a) the Company has requested that the Lenders increase the maximum amount of, extend
the maturity date of and amend certain of the terms of their existing revolving credit facility to
the Company, (b) LaBarge Electronics has requested that the Lenders increase the principal amount
of, extend the maturity date of and amend certain of the terms of their existing $9,500,000.00 term
loan to LaBarge Electronics and (c) LaBarge Acquisition has applied to the Lenders for a term loan
in the aggregate principal amount of $35,000,000.00; and



     WHEREAS, the Lenders are willing to amend said revolving credit facility to the Company, to
amend said term loan to LaBarge Electronics and to make said term loan to LaBarge Acquisition upon,
and subject to, the terms, provisions and conditions hereinafter set forth;



     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company, LaBarge
Electronics, LaBarge Acquisition, the Lenders and the Agent hereby mutually covenant and agree as
follows:



SECTION 1.  DEFINITIONS.




     1.01 Definitions. In addition to the terms defined elsewhere in this Agreement or in
any Exhibit or Schedule hereto, when used in this Agreement, the following terms shall have the
following meanings (such meanings shall be equally applicable to the singular and plural forms of
the terms used, as the context requires):



 









 





     Account Debtor shall mean any Person who is and/or may become obligated to the
Company, LaBarge Electronics, LaBarge Acquisition and/or LaBarge/STC under or on account of any of
the Accounts.



     Accounts shall mean all trade accounts receivable of each of the Company, LaBarge
Electronics, LaBarge Acquisition and LaBarge/STC arising out of the bona fide sale of goods and/or
performance of services in the ordinary course of such Person’s business which have been invoiced
by such Person.



     Acquisition shall mean any transaction or series of related transactions, consummated
on or after the date of this Agreement, by which the Company or any Subsidiary directly or
indirectly (a) acquires all or substantially all of the assets comprising one or more business
units of any other Person, whether through purchase of assets, merger or otherwise or (b) acquires
(in one transaction or as the most recent transaction in a series of transactions) at least (i) a
majority (in number of votes) of the stock and/or other securities of a corporation having ordinary
voting power for the election of directors (other than stock and/or other securities having such
power only by reason of the happening of a contingency), (ii) a majority (by percentage of voting
power) of the outstanding partnership interests of a partnership, (iii) a majority (by percentage
of voting power) of the outstanding membership interests of a limited liability company or (iv) a
majority of the ownership interests in any organization or entity other than a corporation,
partnership or limited liability company.



     Adjusted Base Rate shall mean the Base Rate plus the Applicable Base Rate
Margin. The Adjusted Base Rate shall be adjusted automatically on and as of the effective date of
any change in the Base Rate and/or the Applicable Base Rate Margin.



     Affiliate shall mean any Person (a) which directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with the Company or any
Subsidiary, (b) which directly or indirectly through one or more intermediaries beneficially owns
or holds or has the power to direct the voting power of Five Percent (5%) or more of any class of
capital stock, membership interests or other equity interests of the Company or any Subsidiary,
(c) which has Five Percent (5%) or more of any class of its capital stock, membership interests or
other equity interests beneficially owned or held, directly or indirectly, by the Company or any
Subsidiary or (d) who is a director, officer or manager of the Company or any Subsidiary. For
purposes of this definition, “control” shall mean the power to direct the management and policies
of a Person, directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.



     Agent shall mean U.S. Bank National Association in its capacity as agent for the
Lenders under this Agreement and certain of the other Transaction Documents and its successors in
such capacity.



     Applicable Commitment Fee Rate, Applicable LIBOR Margin and Applicable
Base Rate Margin shall mean the per annum rate shown in the applicable column below based on
the applicable Consolidated Debt to Consolidated EBITDA Ratio:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	If the Consolidated	 	Applicable	 	 	 	 
	Debt to Consolidated	 	Commitment Fee	 	Applicable LIBOR	 	Applicable Base
	EBITDA Ratio is, then	 	Rate is	 	Margin is	 	Rate Margin is
	3 2.0 to 1.0
	 	 	0.500	%	 	 	2.75	%	 	 	1.25	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	3 1.5 to 1.0 but
< 2.0 to 1.0
	 	 	0.375	%	 	 	2.25	%	 	 	0.75	%
	 
	< 1.5 to 1.0
	 	 	0.250	%	 	 	2.00	%	 	 	0.50	%





- 2 -









 





The determination of the Applicable Commitment Fee Rate, the Applicable LIBOR Margin and the
Applicable Base Rate Margin as of any date shall be based on the Consolidated Debt to Consolidated
EBITDA Ratio as of the end of the most recently ended fiscal quarter of the Company for which
financial statements of the Company and its Subsidiaries have been delivered to the Agent and the
Lenders pursuant to Section 5.01(a), and shall be effective for purposes of determining the
Applicable Commitment Fee Rate, the Applicable LIBOR Margin and the Applicable Base Rate Margin
from and after the first day of the first month immediately following the date on which delivery of
such financial statements is required until the first day of the first month immediately following
the next such date on which delivery of such financial statements of the Company and its
Subsidiaries is so required. Notwithstanding the foregoing, (a) if the applicable financial
statements for any fiscal quarter of the Company are not delivered to the Agent and the Lenders
when due in accordance with Section 5.01(a), then (i) Applicable Commitment Fee Rate shall mean
0.500% per annum, (ii) Applicable LIBOR Margin shall mean 2.75% per annum and (iii) Applicable Base
Rate Margin shall mean 1.25% per annum during the period commencing on the date such financial
statements were due and ending on the first (1st) day of the first month immediately following the
date on which such financial statements are delivered to the Agent and the Lenders and (b) during
the period commencing on the date of this Agreement and ending August 31, 2009, (i) Applicable
Commitment Fee Rate shall mean 0.375% per annum, (ii) Applicable LIBOR Margin shall mean 2.25% per
annum and (iii) Applicable Base Rate Margin shall mean 0.75% per annum.




     Assignee shall have the meaning ascribed thereto in Section 8.12(c).



     Assignment and Assumption Agreement shall have the meaning ascribed thereto in Section
8.12(c).



     Attorneys’ Fees shall mean (a) the reasonable fees and costs, charges and expenses
related thereto (determined on the basis of such counsel’s generally applicable rates, which may be
higher than the rates such counsel charges the Agent for certain matters) of the attorneys (and all
paralegals, accountants and other staff employed by such attorneys) employed by the Agent from time
to time in connection with (i) the negotiation, preparation, execution, administration and/or
enforcement of this Agreement and/or any of the other Transaction Documents, (ii) the preparation,
negotiation or execution of any amendment, modification, extension, renewal and/or restatement of
this Agreement or any of the other Transaction Documents and/or (iii) the preparation, negotiation
or execution of any waiver or consent with respect to this Agreement or any of the other
Transaction Documents and (b) the reasonable fees and costs, charges and expenses related thereto
(determined on the basis of such counsel’s generally applicable rates, which may be higher than the
rates such counsel charges the Agent or the applicable Lender, as the case may be, for certain
matters) of the attorneys (and all paralegals, accountants and other staff employed by such
attorneys) employed by the Agent and/or any Lender (i) in connection with the enforcement of this
Agreement and/or any of the other Transaction Documents, (ii) in connection with any Default or
Event of Default under this Agreement, (iii) to represent the Agent and/or any Lender in any
litigation, contest, dispute, suit or proceeding, or to commence, defend or intervene in any
litigation, contest, dispute, suit or proceeding, or to file any petition, complaint, answer,
motion or other pleading or to take any other action in or with respect to any litigation, contest,
dispute, suit or proceeding (whether instituted by the Agent, any Lender, any Borrower or any other
Person and whether in bankruptcy or otherwise) in any way or respect relating to this Agreement or
any of the other Transaction Documents, any Borrower, any other Obligor or any Collateral (but
excluding any such fees, costs, charges and/or expenses incurred with respect to a dispute between
the Agent and any Lender or with respect to disputes between one or more of the Lenders), (iv) to
protect, collect, lease, sell, take possession of or liquidate any Collateral, (v) to attempt to
enforce any security interest in or other Lien upon any Collateral or to give any advice with
respect to



- 3 -









 




such enforcement and/or (vi) to enforce any of the rights and/or remedies of the Agent and/or any
Lender to collect any of the Borrower’s Obligations owed by any one or more of the Borrowers and/or
any Guarantee of any of the Borrower’s Obligations owed by any one or more of the Borrowers.




     Authorized Person shall have the meaning ascribed thereto in Section 2.06(f).



     Base Rate shall mean, as of any Business Day, a rate of interest per annum equal to
the highest of (b) the Prime Rate as of such Business Day, (b) the sum of the Fed Funds Rate as of
such Business Day plus One-Half of One Percent (1/2%) per annum or (c) the sum of the Daily
LIBOR Rate as of such Business Day plus Two Percent (2%) per annum. The Base Rate shall be reset
daily on each Business Day.



     Base Rate Loan shall mean any Loan or any portion of any Loan bearing interest based
on the Adjusted Base Rate.



     Borrower’s Obligations shall mean, with respect to each Borrower, any and all present
and future indebtedness (principal, interest, fees, collection costs and expenses, and other
amounts), liabilities and obligations (including, without limitation, guaranty obligations, letter
of credit reimbursement obligations, indemnity obligations, obligations under a Swap Contract
between such Borrower and a Lender and obligations under a Treasury Management Agreement between
such Borrower and a Lender) of such Borrower to the Agent and/or any Lender evidenced by or arising
under or in respect of this Agreement, any Note and/or any other Transaction Document, in each case
whether now existing or hereafter arising, absolute or contingent, joint and/or several, secured or
unsecured, direct or indirect, expressed or implied in law, contractual or tortious, liquidated or
unliquidated, at law or in equity, or otherwise, and whether created directly or acquired by the
Agent and/or any Lender by assignment or otherwise, and any and all costs of collection and/or
Attorneys’ Fees from time to time incurred in connection with any of the foregoing.



     Borrowing Base shall mean, as of the date of any determination thereof, the sum of (a)
Eighty-Five Percent (85%) of the face amount of the Eligible Accounts of each of the Company,
LaBarge Electronics, LaBarge Acquisition and LaBarge/STC as of such date (less maximum discounts,
credits and allowances which may be taken by or granted to Account Debtors in connection therewith
and/or adjustments for reserves and allowances deemed appropriate by the Agent in its good faith
discretion) plus (b) Thirty-Five Percent (35%) of the Eligible Inventory of each of the
Company, LaBarge Electronics, LaBarge Acquisition and LaBarge/STC as of such date, valued at the
lower of cost or market in accordance with GAAP; provided, however, that in no event may the
portion of the Borrowing Base comprised of Eligible Inventory exceed Fifty Percent (50%) of the
total Borrowing Base before giving effect to this proviso (for example, if (before giving effect to
this proviso) the portion of the Borrowing Base comprised of Eligible Accounts was $10,000,000.00
and the portion of the Borrowing Base comprised of Eligible Inventory was $15,000,000.00, the total
Borrowing Base (after giving effect to this proviso) would be $22,500,000.00 ($10,000,000.00 +
$12,500,000.00)). Notwithstanding any provision contained in this definition of “Borrowing Base” to
the contrary, the Lenders may at any time and from time to time, in their sole and absolute
discretion, loan to the Company more than the above stated percentage of Eligible Accounts and/or
more than the above stated percentage of the value of Eligible Inventory, without notice to the
Company; provided, however, that no such over-advance shall establish a custom or course of dealing
or entitle the Company to any subsequent over-advance under the same or different circumstances.



     Borrowing Base Certificate shall have the meaning ascribed thereto in Section 2.01(b).



     Business Day shall mean any day except a Saturday, Sunday or legal holiday observed by
the Agent and/or any Lender.



- 4 -









 





     Capital Expenditure shall mean any expenditure to purchase or otherwise acquire a
fixed asset (other than a Capitalized Lease Obligation) which, in accordance with GAAP, is required
to be capitalized on the balance sheet of the Person making the same.



     Capitalized Lease shall mean any lease of Property, whether real and/or personal, by a
Person as lessee which in accordance with GAAP is required to be capitalized on the balance sheet
of such Person.



     Capitalized Lease Obligations of any Person shall mean, as of the date of any
determination thereof, the amount at which the aggregate rental obligations due and to become due
under all Capitalized Leases under which such Person is a lessee would be reflected as a liability
on a balance sheet of such Person in accordance with GAAP.



     CERCLA shall mean the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
§§9601 et seq., and as the same may from time to time be further amended.



     Change of Control Event shall mean the beneficial ownership or acquisition by any
Person or group of Persons who are Affiliates (in any transaction or series of related
transactions) of (a) more than Fifty Percent (50%) of the Voting Stock of the Company, (b) the
power to elect, appoint or cause the election or appointment of at least a majority of the members
of the Board of Directors of the Company or (c) all or substantially all of the assets and
Properties of the Company.



     Citibank Supplier Agreement shall mean that certain Supplier Agreement dated June 9,
2005, and executed by the Company and Citibank, N.A., under which Citibank, N.A. agreed to purchase
certain Accounts of the Company of which Sikorsky Aircraft Corporation and/or any of its
subsidiaries is the Account Debtor.



     Code shall mean the Internal Revenue Code of 1986, as amended, and any successor
statute of similar import, together with the regulations thereunder, in each case as in effect from
time to time. References to sections of the Code shall be construed to also refer to any successor
sections.



     Collateral shall mean any Property of the Company, LaBarge Electronics, LaBarge
Acquisition and/or any other Obligor which now or at any time hereafter secures the payment or
performance of any of the Borrower’s Obligations owed by any one or more of the Borrowers and/or
any Guarantee thereof.



     Company Patent, Trademark and License Security Agreement shall mean that certain
Patent, Trademark and License Security Agreement dated as of February 17, 2004, and executed by the
Company in favor of the Agent, as the same may from time to time be amended, modified, extended,
renewed or restated.



     Company Security Agreement shall mean that certain Security Agreement dated as of
February 17, 2004, and executed by the Company in favor of the Agent, as the same may from time to
time be amended, modified, extended, renewed or restated.



     Company Stock Pledge Agreement shall mean that certain Stock Pledge Agreement dated as
of the date of this Agreement and executed by the Company in favor of the Agent, as the same may
from time to time be amended, modified, extended, renewed or restated.



     Consolidated Debt shall mean, as of the date of any determination thereof, all Debt of
the Company and its Subsidiaries as of such date, determined on a consolidated basis and in
accordance with GAAP.



- 5 -









 





     Consolidated Debt to Consolidated EBITDA Ratio shall mean, as of the last day of any
fiscal quarter of the Company, the ratio of (a) Consolidated Debt as of such day to (b)
Consolidated EBITDA for the four (4) consecutive fiscal quarter period of the Company ending on
such day.



     Consolidated EBITDA shall mean, for the period in question, the sum of (a)
Consolidated Net Income during such period plus (b) to the extent deducted in determining
such Consolidated Net Income, the sum of (i) Consolidated Interest Expense during such period,
plus (ii) all provisions for any Federal, state, local and/or foreign income taxes made by
the Company and its Subsidiaries during such period (whether paid, accrued or deferred),
plus (iii) all depreciation and amortization expenses of the Company and its Subsidiaries
during such period, plus (iv) any extraordinary losses during such period (including,
without limitation, and whether or not such losses constitutes extraordinary losses, losses in an
aggregate amount not to exceed $7,600,000.00 incurred during the fiscal year of the Company ending
June 28, 2009, with respect to the write-down of certain Accounts owed to the Company by, and
certain inventory manufactured or acquired by the Company specifically for, Eclipse Aviation
Corporation), plus (v) any losses from the sale or other disposition of Property other than
in the ordinary course of business during such period plus (vi) any non-cash charge
required to be made by the Company during such period for impairment of goodwill under U.S.
Financial Accounting Standard Number 142 entitled “Goodwill and Other Intangible Assets”
minus (c) to the extent added in determining such Consolidated Net Income, the sum of (i)
any extraordinary gains during such period plus (ii) any gains from the sale or other
disposition of Property other than in the ordinary course of business during such period, all
determined on a consolidated basis and in accordance with GAAP.



     Consolidated Fixed Charge Coverage Ratio shall mean, for the period in question, the
ratio of (a) Consolidated Operating Cash Flow during such period to (b) Consolidated Fixed Charges
during such period, all determined on a consolidated basis and in accordance with GAAP.



     Consolidated Fixed Charges shall mean, for the period in question, the sum of (a) the
aggregate amount of all principal payments required to be made by Borrower and its Subsidiaries on
all Debt during such period (including the principal portion of payments in respect of Capitalized
Leases but excluding principal payments on the Revolving Credit Loans and the Swing Line Loans and
mandatory prepayments on the LaBarge Electronics Term Loan and/or the LaBarge Acquisition Term Loan
under Section 2.14 of this Agreement), plus (b) Consolidated Interest Expense during such
period plus (c) Consolidated Operating Lease Expense during such period plus (d)
the aggregate amount of “Earnout Amount” (as defined therein) payments made by LaBarge Acquisition
under Section 7 of the Pensar Acquisition Agreement during such period, all determined on a
consolidated basis and in accordance with GAAP.



     Consolidated Interest Expense shall mean, for the period in question, without
duplication, all gross interest expense of the Company and its Subsidiaries (including, without
limitation, all commissions, discounts and/or related amortization and other fees and charges owed
by the Company and its Subsidiaries with respect to letters of credit, the net costs associated
with interest swap obligations of the Company and its Subsidiaries, capitalized interest expense,
the interest portion of Capitalized Lease Obligations and the interest portion of any deferred
payment obligation) during such period, all determined on a consolidated basis and in accordance
with GAAP.



     Consolidated Net Income shall mean the after-tax net income (or loss) of the Company
and its Subsidiaries for the period in question, determined on a consolidated basis and in
accordance with GAAP.



     Consolidated Net Worth shall mean, as of the date of any determination thereof, the
amount of the capital stock accounts (net of treasury stock, at cost) of the Company and its
Subsidiaries as of such date



- 6 -









 




plus (or minus in the case of a deficit) the surplus and retained earnings of the
Company and its Subsidiaries as of such date, all determined on a consolidated basis and in
accordance with GAAP.




     Consolidated Operating Cash Flow shall mean, for the period in question, the sum of
(a) Consolidated EBITDA during such period, plus (b) Consolidated Operating Lease Expense
during such period, minus (c) all Federal, state, local and/or foreign income taxes paid by
the Company and its Subsidiaries during such period, minus (d) all Capital Expenditures
(other than (i) any Capital Expenditures made by the Company as part of the Pensar Acquisition and
(ii) any Capital Expenditures in the aggregate amount of up to $3,000,000.00 made by the Company in
connection with its purchase of the land and building located in Tulsa, Oklahoma which is currently
leased by the Company) made by the Company and/or any Subsidiary during such period (net of any
Debt incurred by the Company and/or any Subsidiary (other than the Revolving Credit Loans and the
Swing Line Loans) to finance such Capital Expenditures) minus (e) all Distributions paid by
the Company on or with respect to its capital stock during such period (including, without
limitation, all payments by the Company for or with respect to the redemption and/or repurchase of
any capital stock of the Company), all determined on a consolidated basis and in accordance with
GAAP.



     Consolidated Operating Lease Expense shall mean, for the period in question, the
aggregate amount of all Operating Lease Expenses of the Company and its Subsidiaries during such
period, all determined on a consolidated basis and in accordance with GAAP.



     Daily LIBOR Rate shall mean, as of any Business Day, the quotient of (a) a rate per
annum equal to the British Bankers’ Association interest settlement rates for U.S. Dollar deposits
for an interest period of one (1) month as of 11:00 a.m. (London time) on such Business Day (or, if
such Business Day is not a Eurodollar Business Day, as of 11:00 a.m. (London time) on the
immediately preceding Eurodollar Business Day) as published on Reuters Screen LIBOR01 Page, or if
Reuters Screen LIBOR01 Page is not available, as published by Bloomberg Financial Services, Dow
Jones Market Services, Telerate or any similar service selected by the Agent divided by (b)
one minus the applicable LIBOR Reserve Percentage. The Daily LIBOR Rate shall be reset daily on
each Business Day.



     Debt of any Person shall mean, as of the date of determination thereof, the sum of (a)
all Indebtedness of such Person for borrowed money or which has been incurred in connection with
the purchase or other acquisition of Property (other than unsecured trade accounts payable incurred
in the ordinary course of business) plus (b) all Capitalized Lease Obligations of such
Person plus (c) the aggregate undrawn face amount of all letters of credit and/or surety
bonds issued for the account and/or upon the application of such Person together with all
unreimbursed drawings with respect thereto plus (d) all Guarantees by such Person of Debt
of others.



     Default shall mean any event or condition the occurrence of which would, with the
lapse of time or the giving of notice or both, become an Event of Default.



     Defaulting Lender shall mean any Lender that (a) has failed to fund any portion of any
of the Loans, participations in any Swing Line Loans and/or participations in any Letters of Credit
required to be funded by it under this Agreement within one (1) Business Day of the date required
to be funded by it under this Agreement, (b) has otherwise failed to pay over to the Agent or any
other Lender any other amount required to be paid by it under this Agreement within one (1)
Business Day of the date when due, unless the subject of a good faith dispute or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.



     Distribution in respect of any corporation, limited liability company, partnership or
other entity shall mean (a) dividends or other distributions (other than stock dividends and stock
splits) on or in respect of any of the capital stock, membership interests, partnership interests
or other equity interests of such



- 7 -









 




corporation, limited liability company, partnership or other entity and (b) the redemption,
repurchase or other acquisition of any capital stock, membership interests, partnership interests
or other equity interests of such corporation, limited liability company, partnership or other
entity or of any warrants, rights or other options to purchase any such capital stock, membership
interests, partnership interests or other equity interests.




     Eligible Accounts shall mean all Accounts of each of the Company, LaBarge Electronics,
LaBarge Acquisition and LaBarge/STC other than: (a) Accounts which remain unpaid for more than
ninety (90) days after their invoice dates and Accounts which are not due and payable within ninety
(90) days after their invoice dates; (b) Accounts owing by a single Account Debtor, including a
currently scheduled Account, if Twenty-Five Percent (25%) or more of the balance owing by said
Account Debtor upon said Accounts is ineligible pursuant to clause (a) above; (c) Accounts with
respect to which the Account Debtor is a shareholder, member or partner of the Company, LaBarge
Electronics, LaBarge Acquisition and/or LaBarge/STC or an Affiliate; (d) Accounts with respect to
which payment by the Account Debtor is or may be conditional and Accounts commonly known as bill
and hold Accounts or Accounts of a similar or like arrangement; (e) Accounts with respect to which
the Account Debtor is not a resident or citizen of or otherwise located in the continental United
States of America, unless such Accounts are backed in full by an irrevocable letter of credit in
form and substance satisfactory to the Agent issued by a domestic commercial bank acceptable to the
Agent; (f) Accounts with respect to which the Account Debtor is the United States of America, any
state of the United States or any other governmental body or any department, agency or
instrumentality of any of the foregoing, unless such Accounts are duly assigned to the Agent in
accordance with all applicable governmental and regulatory rules and regulations (including,
without limitation, the Federal Assignment of Claims Act of 1940, as amended, if applicable) so
that the Agent is recognized by the Account Debtor to have all of the rights of an assignee of such
Accounts; (g) Accounts with respect to which the Company, LaBarge Electronics, LaBarge Acquisition
or LaBarge/STC, as the case may be, is or may become liable to the Account Debtor for goods sold or
services rendered by such Account Debtor to the Company, LaBarge Electronics, LaBarge Acquisition
or LaBarge/STC, as the case may be, but only to the extent of the then aggregate liability of the
Company, LaBarge Electronics, LaBarge Acquisition or LaBarge/STC, as the case may be, to such
Account Debtor (i.e. the excess of the aggregate face amount of Accounts of such Account Debtor
over the aggregate liability of the Company, LaBarge Electronics, LaBarge Acquisition or
LaBarge/STC, as the case may be, to such Account Debtor shall constitute an Eligible Account unless
otherwise excepted under this definition of Eligible Accounts); (h) Accounts with respect to
which the goods giving rise thereto have not been shipped and delivered to and accepted as
satisfactory by the Account Debtor thereof or with respect to which the services performed giving
rise thereto have not been completed and accepted as satisfactory by the Account Debtor thereof;
(i) Accounts which are not invoiced (and dated as of such date) and sent to the Account Debtor
thereof concurrently with or not later than five (5) days after the shipment and delivery to said
Account Debtor of the goods giving rise thereto or the performance of the services giving rise
thereto; (j) Accounts with respect to which possession and/or control of the goods sold giving rise
thereto is held, maintained or retained by the Company, LaBarge Electronics, LaBarge Acquisition or
LaBarge/STC, as the case may be (or by any agent or custodian of the Company, LaBarge Electronics,
LaBarge Acquisition or LaBarge/STC, as the case may be) for the account of or subject to further
and/or future direction from the Account Debtor thereof; (k) Accounts arising from a consignment
sale, a “sale on approval” or a “sale or return”; (l) Accounts as to which the Agent, at any time
or times hereafter, determines, in good faith, that the prospects of payment or performance by the
Account Debtor is or will be impaired in any material respect; (m) Accounts of an Account Debtor to
the extent, but only to the extent, that the same exceed a credit limit determined by the Agent in
its good faith discretion, at any time or times hereafter; (n) Accounts which are subject to any
dispute, offset, counterclaim, discount (except for prompt payment discounts that do not exceed Two
Percent (2%) of the invoice amount) or other claim or defense on the part of the Account Debtor or
to any claim on the part of the Account Debtor contesting or denying liability under such Account;
(o) Accounts with respect to which the Account Debtor is located in the State of New Jersey, the
State of Minnesota or the State of West Virginia; provided,



- 8 -









 




however, that such restriction shall not apply if the Company, LaBarge Electronics, LaBarge
Acquisition or LaBarge/STC, as the case may be, (i) has filed and has effective (A) in respect of
Account Debtors located in the State of New Jersey, a Notice of Business Activities Report with the
State of New Jersey Division of Taxation for the then current year, (B) in respect of Account
Debtors located in the State of Minnesota, a Minnesota Business Activity Report with the Minnesota
Department of Revenue for the then current year or (C) in respect of Account Debtors located in the
State of West Virginia, a West Virginia Business Activity Report with the West Virginia Department
of Tax and Revenue for the then current year, as applicable, or (ii) is otherwise exempt from such
reporting requirements under the laws of such State(s); and (p) Accounts which are not subject to a
first priority perfected security interest and lien in favor of the Agent for the benefit of the
Agent and the Lenders.




     Eligible Inventory shall mean all Inventory of each of the Company, LaBarge
Electronics, LaBarge Acquisition and LaBarge/STC which consists of raw materials, work-in-process
or finished goods (specifically excluding any Inventory of the Company, LaBarge Electronics,
LaBarge Acquisition and/or LaBarge/STC which consists of packaging materials and/or shipping
materials) other than: (a) any Inventory which is obsolete; (b) any Inventory which the Agent has
in good faith determined, in accordance with its customary business practices, is unacceptable due
to age, type, category, quality and/or quantity; (c) any Inventory of the Company which is not
located at a location owned by the Company (including, without limitation, any Inventory in the
possession of a warehouseman or processor for the Company) unless the Company has obtained and
delivered to the Agent such landlord waivers, warehousemen waivers, bailee letters, access and
non-offset agreements and/or other agreements, documents or notices as may be required by the Agent
with respect to such Inventory; (d) any Inventory of LaBarge Electronics which is not located at a
location owned by LaBarge Electronics (including, without limitation, any Inventory in the
possession of a warehouseman or processor for LaBarge Electronics) unless LaBarge Electronics has
obtained and delivered to the Agent such landlord waivers, warehousemen waivers, bailee letters,
access and non-offset agreements and/or other agreements, documents or notices as may be required
by the Agent with respect to such Inventory; (e) any Inventory of LaBarge Acquisition which is not
located at a location owned by LaBarge Acquisition (including, without limitation, any Inventory in
the possession of a warehouseman or processor for LaBarge Acquisition) unless LaBarge Acquisition
has obtained and delivered to the Agent such landlord waivers, warehousemen waivers, bailee
letters, access and non-offset agreements and/or other agreements, documents or notices as may be
required by the Agent with respect to such Inventory; (f) any Inventory of LaBarge/STC which is not
located at a location owned by LaBarge/STC (including, without limitation, any Inventory in the
possession of a warehouseman or processor for LaBarge/STC unless LaBarge/STC has obtained and
delivered to the Agent such landlord waivers, warehousemen waivers, bailee letters, access and
non-offset agreements and/or other agreements, documents or notices as may be required by the Agent
with respect to such Inventory; (g) any Inventory which is held by the Company, LaBarge
Electronics, LaBarge Acquisition or LaBarge/STC on a consignment, “sale on approval” or “sale or
return” basis; (h) any Inventory which is held by a third party on a consignment, “sale on
approval” or “sale or return” basis; (i) any Inventory which is not located in the continental
United States of America; (j) any Inventory of the Company which is not located at the chief
executive office of the Company, one of the locations listed on Exhibit A to the Company
Security Agreement or another location with respect to which the Company has complied with all of
the requirements of Section 2(h) of the Company Security Agreement; (k) any Inventory of LaBarge
Electronics which is not located at the chief executive office of LaBarge Electronics, one of the
locations listed on Exhibit A to the LaBarge Electronics Security Agreement or another
location with respect to which LaBarge Electronics has complied with all of the requirements of
Section 2(h) of the LaBarge Electronics Security Agreement; (l) any Inventory of LaBarge
Acquisition which is not located at the chief executive office of LaBarge Acquisition, one of the
locations listed on Exhibit A to the LaBarge Acquisition Security Agreement or another
location with respect to which LaBarge Acquisition has complied with all of the requirements of
Section 2(h) of the LaBarge Acquisition Security Agreement; (m) any Inventory of LaBarge/STC which
is not located at the chief executive office of LaBarge/STC, one of the locations listed on
Exhibit A to the LaBarge/STC Security



- 9 -









 




Agreement or another location with respect to which LaBarge/STC has complied with all of the
requirements of Section 2(h) of the LaBarge/STC Security Agreement; and (n) any Inventory which is
not subject to a first priority perfected security interest and lien in favor of the Agent for the
benefit of the Agent and the Lenders.




     Environmental Claim shall mean any administrative, regulatory or judicial action,
judgment, order, consent decree, suit, demand, demand letter, claim, Lien, notice of noncompliance
or violation, investigation or other proceeding arising (a) pursuant to any Environmental Law or
governmental or regulatory approval issued under any such Environmental Law, (b) from the presence,
use, generation, storage, treatment, Release, threatened Release, disposal, remediation or other
existence of any Hazardous Substance, (c) from any removal, remedial, corrective or other response
action pursuant to an Environmental Law or the order of any governmental or regulatory authority or
agency, (d) from any third party seeking damages, contribution, indemnification, cost recovery,
compensation, injunctive or other relief in connection with a Hazardous Substance or arising from
alleged injury or threat of injury to health, safety, natural resources or the environment or (e)
from any Lien against any Property owned, leased or operated by the Company or any Subsidiary in
favor of any governmental or regulatory authority or agency in connection with a Release,
threatened Release or disposal of a Hazardous Substance.



     Environmental Law shall mean any Federal, state, local, foreign or other statute, law,
rule, regulation, order, consent decree, judgment, permit, license, code, covenant, deed
restriction, common law, treaty, convention, ordinance or other requirement relating to public
health, safety or the environment, including, without limitation, those relating to Releases,
discharges or emissions to air, water, land or groundwater, to the withdrawal or use of
groundwater, to the use and handling of polychlorinated biphenyls or asbestos, to the disposal,
treatment, storage or management of hazardous or solid waste, Hazardous Substances or crude oil, or
any fraction thereof, to exposure to toxic or hazardous materials, to the handling, transportation,
discharge or release of gaseous or liquid Hazardous Substances and any rule, regulation, order,
notice or demand issued pursuant to such law, statute or ordinance, in each case applicable to any
of the Property owned, leased or operated by the Company or any Subsidiary or the operation,
construction or modification of any such Property, including, without limitation, the following:
CERCLA, the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976 and the Hazardous and Solid Waste Amendments of 1984, the Hazardous Materials Transportation
Act, as amended, the Federal Water Pollution Control Act, as amended by the Clean Water Act of
1976, the Safe Drinking Water Control Act, the Clean Air Act of 1966, as amended, the Toxic
Substances Control Act of 1976, the Occupational Safety and Health Act of 1970, as amended, the
Emergency Planning and Community Right-to-Know Act of 1986, the National Environmental Policy Act
of 1975, the Oil Pollution Act of 1990 and any similar or implementing state or local law, and any
state or local statute and any further amendments to these laws providing for financial
responsibility for cleanup or other actions with respect to the Release or threatened Release of
Hazardous Substances or crude oil, or any fraction thereof and all rules, regulations, guidance
documents and publication promulgated thereunder.



     ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended, and
any successor statute of similar import, together with the regulations thereunder, in each case as
in effect from time to time. References to sections of ERISA shall be construed to also refer to
any successor sections.



     ERISA Affiliate shall mean any corporation, limited liability company, trade or
business that is, along with the Company or any Subsidiary, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in Sections 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.



- 10 -









 





     Eurodollar Business Day shall mean any Business Day on which commercial bank(s) are
open for international business (including dealings in dollar deposits) in London.



     Event of Default shall have the meaning ascribed thereto in Section 6.



     Existing Letters of Credit shall have the meaning ascribed thereto in Section 2.05(g).



     Fed Funds Rate shall mean an annual rate equal to U.S. Bank’s quoted rate as of the
opening of business by U.S. Bank on each Business Day for purchasing overnight federal funds in the
national market, which Fed Funds Rate shall fluctuate as and when said quoted rate shall change.



     GAAP shall mean, at any time, generally accepted accounting principles at such time in
the United States.



     Guarantee by any Person shall mean any obligation (other than endorsements of
negotiable instruments for deposit or collection in the ordinary course of business), contingent or
otherwise, of such Person guaranteeing, or in effect guaranteeing, any Indebtedness, liability,
dividend or other obligation of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation
or any Property constituting security therefor, (b) to advance or supply funds (i) for the purchase
or payment of such Indebtedness or obligation, (ii) to maintain working capital or other balance
sheet condition or otherwise to advance or make available funds for the purchase or payment of such
Indebtedness or obligation, (iii) to lease property or to purchase securities or other property or
services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the
ability of the primary obligor to make payment of the Indebtedness or obligation or (iv) otherwise
to assure the owner of the Indebtedness or obligation of the primary obligor against loss in
respect thereof. For the purposes of all computations made under this Agreement, a Guarantee in
respect of any Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the then
outstanding principal amount of such Indebtedness for borrowed money which has been guaranteed or
such lesser amount to which the maximum exposure of the guarantor shall have been specifically
limited, and a Guarantee in respect of any other obligation or liability or any dividend shall be
deemed to be Indebtedness equal to the maximum aggregate amount of such obligation, liability or
dividend or such lesser amount to which the maximum exposure of the guarantor shall have been
specifically limited. Guarantee when used as a verb shall have a correlative meaning.



     Hazardous Substance shall mean any hazardous or toxic material, substance or waste,
pollutant or contaminant which is regulated under any Environmental Law or any other statute, law,
ordinance, rule or regulation of any Federal, state, local, foreign or other body, instrumentality,
agency, authority or official having jurisdiction over any of the Property owned, leased or
operated by the Company or any Subsidiary or its use, including, without limitation, any material,
substance or waste which is: (a) defined as a hazardous substance under Section 311 of the Federal
Water Pollution Control Act (33 U.S.C. §§1317), as amended; (b) regulated as a hazardous waste
under Section 1004 or Section 3001 of the Federal Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act (42 U.S.C. §§6901 et seq.), as amended; (c)
defined as a hazardous substance under Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. §§9601 et seq.), as amended; or (d)
defined or regulated as a hazardous substance or hazardous waste under any rules or regulations
promulgated under any of the foregoing statutes.



     Indebtedness shall mean, with respect to any Person, without duplication, all
indebtedness, liabilities and obligations of such Person which in accordance with GAAP are required
to be classified upon a balance sheet of such Person as liabilities of such Person, and in any
event shall include all (a) obligations of such Person for borrowed money or which have been
incurred in connection with the



- 11 -









 




purchase or other acquisition of Property, (b) obligations secured by any Lien on, or payable out
of the proceeds of or production from, any Property owned by such Person, whether or not such
Person has assumed or become liable for the payment of such obligations, (c) indebtedness,
liabilities and obligations of third parties, including joint ventures and partnerships of which
such Person is a venturer or general partner, recourse to which may be had against such Person, (d)
obligations created or arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person, notwithstanding the fact that the rights and remedies
of the seller, lender or lessor under such agreement in the event of default are limited to
repossession or sale of such Property, (e) Capitalized Lease Obligations of such Person, (f) the
aggregate undrawn face amount of all letters of credit and/or surety bonds issued for the account
of and/or upon the application of such Person together with all unreimbursed drawings with respect
thereto, (g) the Swap Termination Value under any Swap Contract to which such Person is a party to
the extent such Swap Termination Value is owed or would be owed by such Person and (h)
indebtedness, liabilities and obligations of such Person under Guarantees.




     Interest Period shall mean:




	 	(a)	 	with respect to each Revolving Credit LIBOR Loan:






          (i) initially, the period commencing on the date of such Revolving Credit LIBOR
Loan and ending 1, 2, 3 or 6 months thereafter (or such other period agreed upon in
writing by the Company and each Lender), as the Company may elect in the applicable
Notice of Revolving Credit Borrowing; and




          (ii) thereafter, each period commencing on the last day of the immediately
preceding Interest Period applicable to such Revolving Credit LIBOR Loan and ending
1, 2, 3 or 6 months thereafter (or such other period agreed upon in writing by the
Company and each Lender), as the Company may elect pursuant to Section 2.08(a);



          provided that:





          (iii) subject to clauses (iv) and (v) below, any Interest Period which would
otherwise end on a day which is not a Eurodollar Business Day shall be extended to
the next succeeding Eurodollar Business Day unless such Eurodollar Business Day falls
in another calendar month, in which case such Interest Period shall end on the
immediately preceding Eurodollar Business Day;




          (iv) subject to clause (v) below, any Interest Period which begins on the last
Eurodollar Business Day of a calendar month (or 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 Eurodollar Business Day of a calendar month; and




          (v) no Interest Period shall extend beyond the last day of the Revolving Credit
Period; and




	 	(b)	 	with respect to each Term LIBOR Loan which is a portion of the LaBarge Electronics
Term Loan:






          (i) initially, the period commencing on the date selected by LaBarge Electronics
in the applicable LaBarge Electronics Interest Rate Selection Notice and ending 1, 2,
3 or 6 months thereafter (or such other period agreed upon in writing by LaBarge
Electronics and each Lender), as LaBarge Electronics may elect in the applicable
LaBarge Electronics Interest Rate Selection Notice; and



- 12 -









 






          (ii) thereafter, each period commencing on the last day of the immediately
preceding Interest Period applicable to such Term LIBOR Loan and ending 1, 2, 3 or 6
months thereafter (or such other period agreed upon in writing by LaBarge Electronics
and each Lender), as LaBarge Electronics may elect in the applicable LaBarge
Electronics Interest Rate Selection Notice;




provided that:




          (iii) no Interest Period for a Term LIBOR Loan which is a portion of the LaBarge
Electronics Term Loan shall extend beyond a date on which LaBarge Electronics is
required to make a scheduled payment of principal on the LaBarge Electronics Term
Loan unless the sum of (A) the aggregate principal amount of outstanding Term Base
Rate Loans which are portions of the LaBarge Electronics Term Loan plus (B)
the aggregate principal amount of outstanding Term LIBOR Loans which are portions of
the LaBarge Electronics Term Loan with Interest Periods expiring on or before the
date such scheduled principal payment is due equals or exceeds the aggregate
principal amount to be paid on the LaBarge Electronics Term Loan on such principal
payment date;




          (iv) subject to clauses (v) and (vi) below, any Interest Period which would
otherwise end on a day which is not a Eurodollar Business Day shall be extended to
the next succeeding Eurodollar Business Day unless such Eurodollar Business Day falls
in another calendar month, in which case such Interest Period shall end on the
immediately preceding Eurodollar Business Day;




          (v) subject to clause (vi) below, any Interest Period which begins on the last
Eurodollar Business Day of a calendar month (or 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 Eurodollar Business Day of a calendar month; and




          (vi) no Interest Period shall extend beyond the maturity date of the LaBarge
Electronics Term Loan; and




	 	(c)	 	with respect to each Term LIBOR Loan which is a portion of the LaBarge Acquisition
Term Loan:






          (i) initially, the period commencing on the date selected by LaBarge Acquisition
in the applicable LaBarge Acquisition Interest Rate Selection Notice and ending 1, 2,
3 or 6 months thereafter (or such other period agreed upon in writing by LaBarge
Acquisition and each Lender), as LaBarge Acquisition may elect in the applicable
LaBarge Acquisition Interest Rate Selection Notice; and




          (ii) thereafter, each period commencing on the last day of the immediately
preceding Interest Period applicable to such Term LIBOR Loan and ending 1, 2, 3 or 6
months thereafter (or such other period agreed upon in writing by LaBarge Acquisition
and each Lender), as LaBarge Acquisition may elect in the applicable LaBarge
Acquisition Interest Rate Selection Notice;



          provided that:





          (iii) no Interest Period for a Term LIBOR Loan which is a portion of the LaBarge
Acquisition Term Loan shall extend beyond a date on which LaBarge Acquisition



- 13 -









 







is required to make a scheduled payment of principal on the LaBarge Acquisition Term
Loan unless the sum of (A) the aggregate principal amount of outstanding Term Base
Rate Loans which are portions of the LaBarge Acquisition Term Loan plus (B)
the aggregate principal amount of outstanding Term LIBOR Loans which are portions of
the LaBarge Acquisition Term Loan with Interest Periods expiring on or before the
date such scheduled principal payment is due equals or exceeds the aggregate
principal amount to be paid on the LaBarge Acquisition Term Loan on such principal
payment date;




          (iv) subject to clauses (v) and (vi) below, any Interest Period which would
otherwise end on a day which is not a Eurodollar Business Day shall be extended to
the next succeeding Eurodollar Business Day unless such Eurodollar Business Day falls
in another calendar month, in which case such Interest Period shall end on the
immediately preceding Eurodollar Business Day;




          (v) subject to clause (vi) below, any Interest Period which begins on the last
Eurodollar Business Day of a calendar month (or 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 Eurodollar Business Day of a calendar month; and




          (vi) no Interest Period shall extend beyond the maturity date of the LaBarge
Acquisition Term Loan.



     Inventory shall mean all goods owned by the Company, LaBarge Electronics, LaBarge
Acquisition or LaBarge/STC, Inc. and held for sale or lease in the ordinary course of such Person’s
business.



     Investment shall mean any investment (including, without limitation, any loan or
advance) by the Company or any Subsidiary in or to any Person, whether payment therefor is made in
cash or capital stock, membership interests or other equity interests of the Company or any
Subsidiary, and whether such investment is by acquisition of capital stock, membership interests or
other equity interests or Indebtedness, or by loan, advance, transfer of Property, capital
contribution, equity or profit sharing interest, extension of credit on terms other than those
normal in the ordinary course of business or otherwise.



     LaBarge Acquisition Collateral Assignment of Asset Purchase Agreement shall mean that
certain Collateral Assignment of Asset Purchase Agreement dated as of the date of this Agreement
and executed by LaBarge Acquisition in favor of the Agent, as the same may from time to time be
amended, modified, extended, renewed or restated.



     LaBarge Acquisition Interest Rate Selection Notice shall have the meaning ascribed
thereto in Section 2.08(c).



     LaBarge Acquisition Patent, Trademark and License Security Agreement shall mean that
certain Patent, Trademark and License Security Agreement dated as of the date of this Agreement and
executed by LaBarge Acquisition in favor of the Agent, as the same may from time to time be
amended, modified, extended, renewed or restated.



     LaBarge Acquisition Security Agreement shall mean that certain Security Agreement
dated as of the date of this Agreement and executed by LaBarge Acquisition in favor of the Agent,
as the same may from time to time be amended, modified, extended, renewed or restated.



     LaBarge Acquisition Term Loan shall have the meaning ascribed thereto in Section 2.04.



- 14 -









 





     LaBarge Acquisition Term Loan Guaranty shall mean that certain Guaranty dated as of
the date of this Agreement and executed by the Company, LaBarge Electronics and LaBarge/STC in
favor of the Agent and the Lenders with respect to the Borrower’s Obligations owed by LaBarge
Acquisition, as the same may from time to time be amended, modified, extended, renewed or restated.



     LaBarge Acquisition Term Loan Notes shall have the meaning ascribed thereto in Section
2.07(d).



     LaBarge Electronics Interest Rate Selection Notice shall have the meaning ascribed
thereto in Section 2.08(b).



     LaBarge Electronics Patent, Trademark and License Security Agreement shall mean that
certain Patent, Trademark and License Security Agreement dated as of February 17, 2004, and
executed by LaBarge Electronics in favor of the Agent, as the same may from time to time be
amended, modified, extended, renewed or restated.



     LaBarge Electronics Security Agreement shall mean that certain Security Agreement
dated as of February 17, 2004, and executed by LaBarge Electronics in favor of the Agent, as the
same may from time to time be amended, modified, extended, renewed or restated.



     LaBarge Electronics Term Loan shall have the meaning ascribed thereto in Section 2.03.



     LaBarge Electronics Term Loan Guaranty shall mean that certain Guaranty dated as of
the date of this Agreement and executed by the Company, LaBarge Acquisition and LaBarge/STC in
favor of the Agent and the Lenders with respect to the Borrower’s Obligations owed by LaBarge
Electronics, as the same may from time to time be amended, modified, extended, renewed or restated.



     LaBarge Electronics Term Loan Notes shall have the meaning ascribed thereto in Section
2.07(c).



     LaBarge/STC shall mean LaBarge/STC, Inc., a Texas corporation.



     LaBarge/STC Patent, Trademark and License Security Agreement shall mean that certain
Patent, Trademark and License Security Agreement dated as of February 17, 2004, and executed by
LaBarge/STC in favor of the Agent, as the same may from time to time be amended, modified,
extended, renewed or restated.



     LaBarge/STC Security Agreement shall mean that certain Security Agreement dated as of
February 17, 2004, and executed by LaBarge/STC in favor of the Agent, as the same may from time to
time be amended, modified, extended, renewed or restated.



     Lender(s) shall mean U.S. Bank (including U.S. Bank in its capacities as the maker of
the Swing Line Loans and the issuer of the Letters of Credit) and Wells Fargo Bank, National
Association and their respective successors and permitted assigns; provided, however, that for
purposes of this Agreement and each other Transaction Document “Lender” shall also include each
affiliate of a Lender which has entered into a Swap Contract or a Treasury Management Agreement
with the Company and/or any of its Subsidiaries and its successors and assigns and each such
affiliate and its successors and assigns shall be deemed to be a Lender party to this Agreement.



     Letter of Credit and Letters of Credit shall have the respective meanings
ascribed thereto in Section 2.05(a).



     Letter of Credit Application shall mean an application and agreement for irrevocable
standby letter of credit in such form as may then be U.S. Bank’s standard form of application and
agreement for



- 15 -









 




irrevocable standby letter of credit or an application and agreement for irrevocable commercial
letter of credit in such form as may then be U.S. Bank’s standard form of application and agreement
for irrevocable commercial letter of credit, as the case may be, in either case executed by the
Company, as applicant and account party, and delivered to U.S. Bank pursuant to Section 2.05, as
the same may from time to time be amended, modified, extended, renewed or restated.




     Letter of Credit Commitment Fee shall have the meaning ascribed thereto in Section
2.05(d).



     Letter of Credit Issuance Fee shall have the meaning ascribed thereto in Section
2.05(d).



     Letter of Credit Request shall have the meaning ascribed thereto in Section 2.05(a).



     Letter of Credit Reimbursement Agreement shall mean that certain Continuing
Reimbursement Agreement for Letters of Credit dated as of February 17, 2004, and executed by the
Company in favor of U.S. Bank, as the same may from time to time be amended, modified, extended,
renewed or restated.



     LIBOR Base Rate shall mean, with respect to the applicable Interest Period, (a) the
LIBOR Index Rate for such Interest Period, if such rate is available or (b) if the LIBOR Index Rate
is not available, the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum of interest at which deposits in U.S. Dollars are offered to U.S. Bank
in the London interbank market by two (2) Eurodollar dealers of recognized standing, selected by
U.S. Bank in its sole discretion, at or about 11:00 a.m. (London time) on the date two (2)
Eurodollar Business Days before the first day of such Interest Period, for delivery on the first
day of the applicable Interest Period for a number of days comparable to the number of days in such
Interest Period and in an amount approximately equal to the principal amount of the LIBOR Loan to
which such Interest Period is to apply.



     LIBOR Index Rate shall mean, with respect to the applicable Interest Period, a rate
per annum (rounded upwards, if necessary, to the next higher 1/16 of 1%) equal to the British
Bankers’ Association interest settlement rates for U.S. Dollar deposits for such Interest Period as
of 11:00 a.m. (London time) on the day two (2) Eurodollar Business Days before the first day of
such Interest Period as published on Reuters Screen LIBOR01 Page, or if Reuters Screen LIBOR01 Page
is not available, as published by Bloomberg Financial Services, Dow Jones Market Services, Telerate
or any similar service selected by the Agent.



     LIBOR Loan shall mean any Loan or portion of any Loan bearing interest based on the
LIBOR Rate.



     LIBOR Rate shall mean (a) the quotient of the (i) LIBOR Base Rate divided by (ii) one
minus the applicable LIBOR Reserve Percentage plus (b) the Applicable LIBOR Margin. The
LIBOR Rate shall be adjusted automatically on and as of the effective date of any change in the
LIBOR Reserve Percentage and/or the Applicable LIBOR Margin.



     LIBOR Reserve Percentage shall mean for any day that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by The Board of Governors of the Federal
Reserve System (or any successor), for determining the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special or marginal reserves) with respect
to “Eurocurrency liabilities” as defined in Regulation D or with respect to any other category of
liabilities which includes deposits by reference to which the interest rate on LIBOR Loans is
determined, whether or not any Lender has any Eurocurrency liabilities subject to such reserve
requirement at such time. LIBOR Loans shall be deemed to constitute Eurocurrency liabilities and
as such shall be deemed



- 16 -









 




subject to reserve requirements without the benefit of any credits for proration, exceptions or
offsets which may be available from time to time to any Lender. The LIBOR Rate shall be adjusted
automatically on and as of the effective date of any change in the LIBOR Reserve Percentage.




     Lien shall mean any interest in any Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest is based on common
law, statute or contract, including, without limitation, any security interest, mortgage, deed of
trust, pledge, hypothecation, judgment lien or other lien or encumbrance of any kind or nature
whatsoever, any conditional sale or trust receipt, any lease, consignment or bailment for security
purposes and any Capitalized Lease. The term “Lien” shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting Property.



     Loan shall mean each Revolving Credit Loan, each Swing Line Loan, the LaBarge
Electronics Term Loan and the LaBarge Acquisition Term Loan; and Loans shall mean any or
all of the foregoing.”



     Material Adverse Effect shall mean (a) a material adverse effect on the Properties,
assets, liabilities, business, operations, prospects, income or condition (financial or otherwise)
of the Company, LaBarge Electronics, LaBarge Acquisition and/or the Company and its Subsidiaries
taken as a whole, (b) material impairment of the ability of the Company, LaBarge Electronics,
LaBarge Acquisition and/or any other Obligor to perform any of its obligations under this
Agreement, any Note and/or any other Transaction Document or (c) material impairment of the
enforceability of the rights of, or benefits available to, the Agent and/or any Lender under this
Agreement, any Note and/or any other Transaction Document.



     Maximum Swing Line Amount shall mean $5,000,000.00.



     Moody’s shall mean Moody’s Investors Service, Inc.



     Multi-Employer Plan shall mean a “multi-employer plan” as defined in Section
4001(a)(3) of ERISA which is maintained for employees of the Company, any Subsidiary or any ERISA
Affiliate or to which the Company, any Subsidiary or any ERISA Affiliate has contributed in the
past or currently contributes.



     Note shall mean each Revolving Credit Note, the Swing Line Note, each LaBarge
Electronics Term Loan Note and each LaBarge Acquisition Term Loan Note; and Notes shall
mean all of the foregoing.



     Notice of Revolving Credit Borrowing shall have the meaning ascribed thereto in
Section 2.06(a).



     Notice of Swing Line Borrowing shall have the meaning ascribed thereto in Section
2.06(d).



     Obligor shall mean the Company, LaBarge Electronics, LaBarge Acquisition, LaBarge/STC
and each other Person who is or shall at any time hereafter become primarily or secondarily liable
on any of the Borrower’s Obligations owed by any one or more of the Borrowers or who grants the
Agent for the benefit of the Agent and the Lenders a Lien upon any of the Property of such Person
as security for any of the Borrower’s Obligations owed by any one or more of the Borrowers and/or
any Guarantee thereof.



     Occupational Safety and Health Laws shall mean the Occupational Safety and Health Act
of 1970, as amended, and any other Federal, state or local statute, law, ordinance, code, rule,
regulation, order or decree regulating, relating to or imposing liability or standards of conduct
concerning employee health and/or safety, as now or at any time hereafter in effect.



- 17 -









 





     Operating Lease shall mean any lease of Property, whether real and/or personal, by a
Person as lessee which is not a Capitalized Lease.



     Operating Lease Expenses shall mean with respect to any Person, for the period in
question, the aggregate amount of rental and other expenses incurred by such Person in respect of
Operating Leases during such period, all determined in accordance with GAAP.



     Other Taxes shall have the meaning ascribed thereto in Section 2.26.



     Participant shall have the meaning ascribed thereto in Section 8.12(b).



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



     Pensar Acquisition shall mean the acquisition by LaBarge Acquisition of substantially
all of the assets of Pensar Electronic Solutions, LLC pursuant to, and in accordance with, the
terms of the Pensar Acquisition Agreement.



     Pensar Acquisition Agreement shall mean that certain Asset Purchase Agreement dated as
of December 22, 2008, by and among Pensar Electronic Solutions, LLC, as seller, the members of
Pensar Electronic Solutions, LLC and LaBarge Acquisition, as buyer.



     Pension Plan shall mean a “pension plan,” as such term is defined in Section 3(2) of
ERISA, which is established or maintained by the Company, any Subsidiary or any ERISA Affiliate,
other than a Multi-Employer Plan.



     Permitted Liens shall mean any of the following:




     (a) Liens in favor of the Agent for the benefit of the Agent and the Lenders;




     (b) Liens in favor of U.S. Bank under the Letter of Credit Reimbursement Agreement
and/or any Letter of Credit Application;




     (c) Liens on Property of a Subsidiary to secure obligations of such Subsidiary to the
Company;




     (d) Liens for property taxes and assessments or governmental charges or levies and
Liens securing claims or demands of mechanics and materialmen, provided payment thereof is
not at the time required by Section 5.01(d) and/or 5.01(e);




     (e) Liens (other than any Liens imposed by ERISA) incidental to the conduct of business
or the ownership of Properties (including Liens in connection with worker’s compensation,
unemployment insurance and other like laws, warehousemen’s and attorneys’ liens and
statutory landlords’ liens) and Liens to secure the performance of bids, tenders or trade
contracts, or to secure statutory obligations, surety or appeal bonds or other Liens of like
general nature incurred in the ordinary course of business and not in connection with the
borrowing of money or the purchase or other acquisition of Property; provided in each case
the obligation secured is not overdue or, if overdue, is being contested in good faith by
appropriate actions or proceedings being diligently conducted and for which adequate
reserves in accordance with GAAP have been set aside;



- 18 -









 






     (f) survey exceptions, easements, reservations, rights of others for rights-of-way,
utilities and other similar purposes and/or zoning or other restrictions as to the use of
real properties, which are necessary or desirable for the conduct of the activities of the
Company and its Subsidiaries or which customarily exist on properties of Persons engaged in
similar activities and similarly situated and which do not in any event materially impair
the use of such real properties in the operation of the business of the Company and its
Subsidiaries;




     (g) Liens existing as of the date of this Agreement and listed on Schedule 4.12
attached hereto (without giving effect to any changes to Schedule 4.12 made after
the date of this Agreement);




     (h) purchase money Liens granted to a Person financing a Capital Expenditure so long as
(i) the Lien granted is limited to the specific fixed assets acquired and the proceeds
thereof, (ii) the aggregate principal amount of Debt secured by the Lien is not more than
the acquisition cost of the specific fixed assets on which the Lien is granted and (iii) the
transaction does not violate any other provision of this Agreement;




     (i) Capitalized Leases; and




     (j) Liens in favor of Citibank, N.A. on the Accounts of the Company of which Sikorsky
Aircraft Corporation and/or any of its subsidiaries is the Account Debtor, but only to the
extent described in the Citibank Supplier Agreement.



     Person shall mean any individual, sole proprietorship, partnership, joint venture,
limited liability company, trust, unincorporated organization, association, corporation,
institution, entity or government (whether national, Federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division, agency, body or department
thereof).



     Prime Rate shall mean the interest rate announced from time to time by U.S. Bank as
its “prime rate” (which rate shall fluctuate as and when said prime rate shall change). The
Company acknowledges that such “prime rate” is a reference rate and does not necessarily represent
the lowest or best rate offered by U.S. Bank or any other Lender to its customers.



     Property shall mean any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible. Properties shall mean the plural of
Property. For purposes of this Agreement, the Company and each Subsidiary shall be deemed to be
the owner of any Property which it has acquired or holds subject to a conditional sale agreement,
financing lease or other arrangement pursuant to which title to the Property has been retained by
or vested in some other Person for security purposes.



     Pro Rata Share shall mean for the item at issue, with respect to each Lender, a
percentage, the numerator of which is the portion of such item owned or held by such Lender and the
denominator of which is the total amount of such item owned or held by all of the Lenders. For
example, (a) if the amount of the Revolving Credit Commitment of a Lender is $1,000,000.00 and the
total amount of the Revolving Credit Commitments of all of the Lenders is $5,000,000.00, such
Lender’s Pro Rata Share of the Revolving Credit Commitments would be Twenty Percent (20%) and (b)
if the original principal amount of a Loan is $5,000,000.00 and the portion of such Loan made by
one Lender is $500,000.00, such Lender’s Pro Rata Share of such Loan would be Ten Percent (10%). As
of the date of this Agreement, the Pro Rata Shares of the Lenders with respect to the Revolving
Credit Commitments, the Revolving Credit Loans and the Term Loan are as follows: (a) U.S. Bank –
53.3333333333%; and (b) Wells Fargo Bank, National Association – 46.6666666667%.




- 19 -











 





     RCRA shall mean the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§6901
et seq., and any future amendments.



     Regulation D shall mean Regulation D of the Board of Governors of the Federal Reserve
System, as from time to time amended.



     Regulatory Change shall have the meaning ascribed thereto in Section 2.19.



     Release shall mean any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing into the environment, including,
without limitation, the abandonment or discarding of barrels, drums, containers, tanks and/or other
receptacles containing (or containing traces of) any Hazardous Substance.



     Reportable Event shall have the meaning given to such term in ERISA.



     Required Lenders shall mean at any time Lenders having more than (a) Fifty-One Percent
(51%) of the total Revolving Credit Commitments (whether used on unused) or, if all of the
Revolving Credit Commitments have been terminated or reduced to $0.00, more than Fifty-One Percent
(51%) of the Total Revolving Credit Outstandings (whether by way of participation or otherwise),
(b) Fifty-One Percent (51%) of the aggregate outstanding principal amount of the LaBarge
Electronics Term Loan and (c) Fifty-One Percent (51%) of the aggregate outstanding principal amount
of the LaBarge Acquisition Term Loan; provided, however, that if there are three (3) or fewer
Lenders, Required Lenders shall mean all of the Lenders. The Revolving Credit Commitment of, and
the Total Revolving Credit Outstandings and portions of the LaBarge Electronics Term Loan and/or
LaBarge Acquisition Term Loan held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.



     Restricted Investment shall mean any Investment, or any expenditure or any incurrence
of any liability to make any expenditure for an Investment, other than:




     (a) loans and/or advances by the Company to any Subsidiary;




     (b) loans and/or advances by any Subsidiary to the Company which are subordinated in
writing to the payment of the Borrower’s Obligations owed by the Company in form and
substance satisfactory to the Required Lenders;




     (c) direct obligations of the United States of America or any instrumentality or agency
thereof, the payment of which is unconditionally guaranteed by the United States of America
or any instrumentality or agency thereof (all of which Investments must mature within twelve
(12) months from the time of acquisition thereof);




     (d) Investments in readily marketable commercial paper which, at the time of
acquisition thereof by the Company or any Subsidiary, is rated A-1 or better by S&P and P-1
or better by Moody’s and which matures within 270 days from the date of acquisition thereof,
provided that the issuer of such commercial paper shall, at the time of acquisition of such
commercial paper, have a senior long-term debt rating of at least A by S&P and Moody’s;




     (e) negotiable certificates of deposit or negotiable bankers acceptances issued by any
Lender or any other bank or trust company organized under the laws of the United States of
America or any state thereof, which bank or trust company (other than the Lenders to which
such restrictions shall not apply) is a member of both the Federal Deposit Insurance
Corporation and



- 20 -









 




the Federal Reserve System and has a Thomson BankWatch Global Issuer Rating of “B” or better
(all of which Investments must mature within twelve (12) months from the time of acquisition
thereof);



     (f) repurchase agreements, which shall be collateralized for at least 102% of face
value, issued by any Lender or any other bank or trust company organized under the laws of
the United States or any state thereof, which bank or trust company (other than the Lenders
to which such restrictions shall not apply) is a member of both the Federal Deposit
Insurance Corporation and the Federal Reserve System and has a Thomson BankWatch Global
Issuer Rating of “B” or better (all of which Investments must mature within twelve (12)
months from the time of acquisition thereof);



     (g) Investments existing as of the date of this Agreement and listed on Schedule
4.18 attached hereto (without giving effect to any changes to Schedule 4.18 made
after the date of this Agreement), and any future retained earnings in respect thereof; and



     (h) in addition to any such loans and advances existing as of the date of this
Agreement and listed on Schedule 4.18 attached hereto (without giving effect to any
changes to Schedule 4.18 made after the date of this Agreement), loans or advances
in the usual and ordinary course of business to officers and/or employees of the Company or
a Subsidiary for business expenses in the aggregate principal amount of up to $200,000.00 at
any one time outstanding.




     Revolving Credit Commitment shall mean, subject to any reduction of the Revolving
Credit Commitments pursuant to Section 2.01(e) and to any assignments of the Revolving Credit
Commitments by the Lenders to the extent permitted by Section 8.12: (a) with respect to U.S. Bank -
$16,000,000.00; and (b) with respect to Wells Fargo Bank, National Association — $14,000,000.00.



     Revolving Credit Guaranty shall mean that certain Guaranty dated as of the date of
this Agreement and executed by LaBarge Electronics, LaBarge Acquisition and LaBarge/STC in favor of
the Agent and the Lenders with respect to the Borrower’s Obligations owed by the Company, as the
same may from time to time be amended, modified, extended, renewed or restated.



     Revolving Credit Base Rate Loan shall mean any Revolving Credit Loan bearing interest
based on the Adjusted Base Rate.



     Revolving Credit LIBOR Loan shall mean any Revolving Credit Loan bearing interest
based on the LIBOR Rate.



     Revolving Credit Loan and Revolving Credit Loans shall have the respective
meanings ascribed thereto in Section 2.01(a).



     Revolving Credit Notes shall have the meaning ascribed thereto in Section 2.07(a).



     Revolving Credit Period shall mean the period commencing February 17, 2004, and ending
December 22, 2011; provided, however, that the Revolving Credit Period shall end on the date the
Revolving Credit Commitments are terminated pursuant to Section 6 or otherwise.



     S&P shall mean Standard and Poor’s Ratings Group.



     Subsidiary shall mean any corporation, limited liability company, partnership or other
entity of which more than Fifty Percent (50%) of the issued and outstanding capital stock,
membership interests,



- 21 -









 




partnership interests or other equity interests entitled to vote for the election of directors,
managing partners or other persons performing similar functions (other than by reason of default in
the payment of dividends or other distributions) is at the time owned directly or indirectly by the
Company and/or any Subsidiary.




     Swap Contract shall mean (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.



     Swap Termination Value shall mean, in respect of any Swap Contract, after taking into
account the effect of any legally enforceable netting agreement relating to such Swap Contract, (a)
for any date on or after the date such Swap Contract has been closed out and a termination value
determined in accordance therewith, such termination value and (b) for any date prior to the date
referenced in clause (a), the amount determined as the mark-to-market value for such Swap Contract,
as determined based upon one or more mid-market or other readily available quotations provided by
any recognized dealer in such Swap Contract (which may include a Lender or any affiliate of a
Lender).



     Swing Line Loan and Swing Line Loans shall have the meanings ascribed thereto
in Section 2.02(a).



     Swing Line Note shall have the meaning ascribed thereto in Section 2.07(b).



     Taxes shall have the meaning ascribed thereto in Section 2.26.



     Term Base Rate Loan shall mean any portion of the LaBarge Electronics Term Loan or the
LaBarge Acquisition Term Loan bearing interest based on the Adjusted Base Rate.



     Term LIBOR Loan shall mean any portion of the LaBarge Electronics Term Loan or the
LaBarge Acquisition Term Loan bearing interest based on the LIBOR Rate.



     Total Revolving Credit Outstandings shall mean, as of any date, the sum of (a) the
aggregate principal amount of all Revolving Credit Loans outstanding as of such date, plus
(b) the aggregate principal amount of all Swing Line Loans outstanding as of such date plus
(c) the aggregate undrawn face amount of all Letters of Credit outstanding as of such date
plus all unreimbursed drawings with respect thereto.



     Transaction Documents shall mean this Agreement, the Notes, the Letter of Credit
Reimbursement Agreement, the Letter of Credit Applications, the Revolving Credit Guaranty, the
LaBarge Electronics Term Loan Guaranty, the LaBarge Acquisition Term Loan Guaranty, the Company
Patent, Trademark and License Security Agreement, the Company Security Agreement, the Company Stock
Pledge Agreement, the LaBarge Acquisition Patent, Trademark and License Security Agreement,



- 22 -









 




the LaBarge Acquisition Security Agreement, the LaBarge Acquisition Collateral Assignment of Asset
Purchase Agreement, the LaBarge Electronics Patent, Trademark and License Security Agreement, the
LaBarge Electronics Security Agreement, the LaBarge/STC Patent, Trademark and License Security
Agreement, the LaBarge/STC Security Agreement, any Swap Contract and/or Treasury Management
Agreement heretofore, now or hereafter executed by a Borrower with or in favor of a Lender and any
and all other agreements, documents and instruments heretofore, now or hereafter delivered to the
Agent and/or any Lender with respect to or in connection with or pursuant to this Agreement, any
Loans made hereunder, any Letters of Credit issued hereunder, any of the Borrower’s Obligations
owed by any one or more of the Borrowers, any Guarantee of any of the Borrower’s Obligations owed
by any one or more of the Borrowers, and executed by or on behalf of the Company, LaBarge
Electronics, LaBarge Acquisition and/or any other Obligor, each as the same may from time to time
be amended, modified, extended, renewed or restated.




     Treasury Management Agreement shall mean any agreement, document or instrument
governing the provision of depository, treasury and/or cash management services, including, without
limitation, deposit accounts, funds transfer, automated clearinghouse, zero balance accounts,
returned check concentration, controlled disbursement, lockbox, account reconciliation and
reporting and trade finance services.



     USA Patriot Act shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as
from time to time amended.



     U.S. Bank shall mean U.S. Bank National Association, a national banking association,
in its individual corporate capacity as a Lender under this Agreement and the other Transaction
Documents and not as Agent under this Agreement and the other Transaction Documents.



     Voting Stock shall mean, with respect to any corporation, any shares of stock of such
corporation whose holders are entitled under ordinary circumstances to vote for the election of
directors of such corporation (irrespective of whether at the time stock of any other class or
classes shall have or might have voting power by reason of the happening of any contingency).



     Welfare Plan shall mean a “welfare plan” as such term is defined in Section 3(1) of
ERISA, which is established or maintained by the Company, any Subsidiary or any ERISA Affiliate,
other than a Multi-Employer Plan.



     1.02 Continuance of an Event of Default. For purposes of this Agreement and the other
Transaction Documents, an Event of Default shall deemed to be continuing until it is waived in
writing by the Lenders as required by Section 8.10 of this Agreement.



     1.03 Accounting Terms and Determinations. Except as otherwise specified in this
Agreement, all accounting terms used in this Agreement shall be interpreted, all accounting
determinations under this Agreement shall be made and all financial statements required to be
delivered under this Agreement shall be prepared in accordance with GAAP as in effect from time to
time, applied on a basis consistent (except for changes approved by the Company’s independent
certified public accountants and by the Required Lenders) with the most recent audited financial
statements of the Company delivered to the Agent and the Lenders.


SECTION 2. LOANS AND LETTERS OF CREDIT.




     2.01 Revolving Credit Commitments.



- 23 -









 





     (a) Subject to the terms and conditions set forth in this Agreement and so long as no Default
or Event of Default has occurred and is continuing, during the Revolving Credit Period, each Lender
severally agrees to make such loans to the Company (individually, a “Revolving Credit Loan” and
collectively, the “Revolving Credit Loans”) as the Company may from time to time request pursuant
to Section 2.06. Each Revolving Credit Loan under this Section 2.01(a) which is a Revolving Credit
Base Rate Loan shall be for an aggregate principal amount of at least $100,000.00 or any larger
multiple of $25,000.00. Each Revolving Credit Loan under this Section 2.01(a) which is a Revolving
Credit LIBOR Loan shall be for an aggregate principal amount of at least $1,000,000.00 or any
larger multiple of $250,000.00. The aggregate principal amount of Revolving Credit Loans which each
Lender shall be required to have outstanding under this Agreement as of any date shall not exceed
the product of (i) such Lender’s Pro Rata Share of the total Revolving Credit Commitments of all of
the Lenders multiplied by (ii) the sum of (A) the lesser of (1) the total Revolving Credit
Commitments of all of the Lenders as of such date or (2) the Borrowing Base as of such date
minus (B) the aggregate principal amount of Swing Line Loans outstanding as of such date
minus (C) the aggregate undrawn face amount of all Letters of Credit outstanding as of such
date plus all unreimbursed drawings with respect thereto; provided, however, that in no
event shall (i) the Total Revolving Credit Outstandings as of any date exceed the lesser of (A) the
total Revolving Credit Commitments of all of the Lenders as of such date or (B) the Borrowing Base
as of such date or (ii) the sum of (A) the aggregate principal amount of all outstanding Revolving
Credit Loans made by any Lender, plus (B) such Lender’s Pro Rata Share of the aggregate
principal amount of Swing Line Loans then outstanding plus (C) such Lender’s Pro Rata Share
of the aggregate undrawn face amount of all outstanding Letters of Credit plus all
unreimbursed drawings with respect thereto exceed the amount of such Lender’s Revolving Credit
Commitment. Each Revolving Credit Loan under this Section 2.01 shall be made from the several
Lenders ratably in proportion to their respective Pro Rata Shares. Within the foregoing limits,
the Company may borrow under this Section 2.01(a), prepay under Section 2.13 and reborrow at any
time during the Revolving Credit Period under this Section 2.01(a). All Revolving Credit Loans not
paid prior to the last day of the Revolving Credit Period, together with all accrued and unpaid
interest thereon and all fees and other amounts owing by the Company to the Agent and/or the
Lenders with respect thereto, shall be due and payable on the last day of the Revolving Credit
Period. The failure of any Lender to make any Revolving Credit Loan required under this Agreement
shall not release any other Lender from its obligation to make Revolving Credit Loans as provided
herein.



     (b) The Company shall deliver to the Agent and each Lender on or before the date of this
Agreement (with respect to the fiscal month of the Company ended November 30, 2008) and on or
before the fifteenth (15th) day of each month thereafter commencing January 15, 2009, a borrowing
base certificate in the form of Exhibit A attached hereto and incorporated herein by
reference (a “Borrowing Base Certificate”) (together with such supporting information as the Agent
or any Lender may reasonably request in connection therewith) setting forth:




     (i) the Borrowing Base and its components as of the end of the immediately preceding
fiscal month of the Company;




     (ii) the aggregate principal amount of all Revolving Credit Loans outstanding as of the
end of the immediately preceding fiscal month of the Company;




     (iii) the aggregate principal amount of all Swing Line Loans outstanding as of the end
of the immediately preceding fiscal month of the Company;




     (iv) the aggregate undrawn face amount of all Letters of Credit outstanding as of the
end of the immediately preceding fiscal month of the Company plus all unreimbursed
drawings with respect thereto; and



- 24 -









 






     (v) the difference, if any, between the Borrowing Base and the Total Revolving Credit
Outstandings as of the end of the immediately preceding fiscal month of the Company.


The Borrowing Base shown in such Borrowing Base Certificate shall be and remain the Borrowing Base
hereunder until the next Borrowing Base Certificate is delivered to the Agent and each Lender, at
which time the Borrowing Base shall be the amount shown in such subsequent Borrowing Base
Certificate. Each Borrowing Base Certificate shall be certified (subject to normal year-end
adjustments) as being true, correct and complete in all material respects by the President or the
Chief Financial Officer of the Company.




     (c) If at any time the Total Revolving Credit Outstandings are greater than the Borrowing Base
as shown on the most recent Borrowing Base Certificate, the Company shall be automatically required
(without demand or notice of any kind by the Agent or any Lender, all of which are hereby expressly
waived by the Company) to immediately repay the Revolving Credit Loans and/or the Swing Line Loans
and/or surrender for cancellation the outstanding Letters of Credit, in either case in an amount
sufficient to reduce the amount of the Total Revolving Credit Outstandings to the amount of the
Borrowing Base.



     (d) If the total Revolving Credit Commitments of all of the Lenders on any date should be less
than the Total Revolving Credit Outstandings on such date, whether as a result of the Company’s
election to decrease the amount of the Revolving Credit Commitments of the Lenders pursuant to
Section 2.01(e) or otherwise, the Company shall be automatically required (without demand or notice
of any kind by the Agent or any Lender, all of which are hereby expressly waived by the Company) to
immediately repay the Revolving Credit Loans and/or the Swing Line Loans and/or surrender for
cancellation the outstanding Letters of Credit, in either case in an amount sufficient to reduce
the amount of the Total Revolving Credit Outstandings to an amount equal to or less than the total
Revolving Credit Commitments of all of the Lenders.



     (e) The Company may, upon three (3) Business Days’ prior written notice to the Agent and each
Lender, terminate entirely at any time, or proportionately reduce from time to time on a pro rata
basis among the Lenders based on their respective Pro Rata Shares by an aggregate amount of
$1,000,000.00 or any larger multiple of $250,000.00 the unused portions of the Revolving Credit
Commitments; provided, however, that (i) at no time shall the Revolving Credit Commitments be
reduced to a figure less than the Total Revolving Credit Outstandings, (ii) at no time shall the
Revolving Credit Commitments be reduced to less than $10,000,000.00 and (iii) any such termination
or reduction shall be permanent and the Company shall have no right to thereafter reinstate or
increase, as the case may be, the Revolving Credit Commitment of any Lender.



     2.02 Swing Line Loan.



     (a) Subject to the terms and conditions set forth in this Agreement and so long as no Default
or Event of Default has occurred and is continuing (provided, however, that U.S. Bank shall have no
liability to any other Lender for making a Swing Line Loan to the Company after the occurrence or
during the continuance of any Default or Event of Default unless U.S. Bank has previously received
notice in writing from the Company or any other Lender of, or has actual knowledge of, the
occurrence of such Default or Event of Default), during the Revolving Credit Period, U.S. Bank may
from time to time in its sole discretion (but in no event shall U.S. Bank be obligated to), make
such loans to the Company (individually, a “Swing Line Loan” and collectively, the “Swing Line
Loans”) as the Company may from time to time request pursuant to Section 2.06. Notwithstanding any
provision contained in this Agreement to the contrary, the making of any Swing Line Loan requested
by the Company shall be at the sole discretion of U.S. Bank and U.S. Bank shall have no commitment
to make Swing Line Loans to the Company. Each Swing Line Loan requested by way of a Notice of
Swing Line Borrowing shall be for an aggregate principal amount of at least $100,000.00 or any larger multiple of $25,000.00. The



- 25 -









 




aggregate principal amount of Swing Line Loans outstanding under this Agreement as of any date
shall not exceed the Maximum Swing Line Amount; provided, however, that in no event shall the Total
Revolving Credit Outstandings as of any date exceed the sum of (i) the lesser of (A) total
Revolving Credit Commitments of all of the Lenders as of such date or (B) the Borrowing Base as of
such date. Within the foregoing limits, the Company may request Swing Line Loans under this Section
2.02, prepay Swing Line Loans under Section 2.13 and request additional Swing Line Loans at any
time during the Revolving Credit Period under this Section 2.02. All Swing Line Loans not paid
prior to the last day of the Revolving Credit Period, together with all accrued and unpaid interest
thereon and all fees and other amounts owing by the Company to U.S. Bank with respect thereto,
shall be due and payable on the last day of the Revolving Credit Period. Immediately upon the
making of a Swing Line Loan, each Lender (other than U.S. Bank) shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from U.S. Bank a risk participation in such
Swing Line Loan in an amount equal to such Lender’s Pro Rata Share (based on such Lender’s Pro Rata
Share of the Revolving Credit Commitments) of such Swing Line Loan.




     (b) U.S. Bank may at any time in its sole and absolute discretion request, on behalf of the
Company (and the Company hereby irrevocably requests and authorizes U.S. Bank to so request on its
behalf), that each Lender make a Revolving Credit Base Rate Loan in an amount equal to such
Lender’s Pro Rata Share of the amount of Swing Line Loans then outstanding. Such request shall (i)
be made in writing (which written request shall be deemed to be a Notice of Revolving Credit
Borrowing for purposes hereof) and in accordance with the requirements of Section 2.06(a), (ii) not
be subject to the minimum and multiples specified in Section 2.01(a) for the principal amount of
the Revolving Credit Base Rate Loans and (iii) be subject to the conditions set forth in Section 3.
U.S. Bank shall furnish the Company with a copy of the applicable Notice of Revolving Credit
Borrowing promptly after delivering such notice to the Agent. Each Lender shall make an amount
equal to its Pro Rata Share of the amount specified in such Notice of Revolving Credit Borrowing
available in immediately available funds to the Agent for the account of U.S. Bank at the Agent’s
address specified in or pursuant to Section 8.07 not later than 12:00 noon (St. Louis, Missouri
time) on the day specified in such Notice of Revolving Credit Borrowing, whereupon, subject to
Section 2.02(c), each Lender that so makes funds available shall be deemed to have made a Revolving
Credit Base Rate Loan to the Company in such amount. The Agent shall remit the funds so received to
U.S. Bank.



     (c) If for any reason any Swing Line Loan cannot be refinanced by such a borrowing of
Revolving Credit Base Rate Loans in accordance with Section 2.02(b) (whether as a result of a
failure to satisfy one or more of the conditions set forth in Section 3 or otherwise), the request
for a Revolving Credit Base Rate Loan submitted by U.S. Bank as set forth herein shall be deemed to
be a request by U.S. Bank that each of the other Lenders fund its risk participation in the
relevant Swing Line Loan(s) and each such Lender’s payment to the Agent for the account of U.S.
Bank pursuant to Section 2.02(b) shall be deemed payment in respect of such participation.



     (d) If any Lender fails to make available to U.S. Bank any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.02 by the time specified in Section
2.02, U.S. Bank shall be entitled to recover from such Lender, on demand, such amount with interest
thereon for the period from the date such payment is required to the date on which such payment is
immediately available to U.S. Bank at a rate per annum equal to the Fed Funds Rate. A certificate
of U.S. Bank submitted to any Lender with respect to any amounts owing under this Section 2.02
shall be conclusive absent demonstrable error.



     (e) Each Lender’s obligation to make Revolving Credit Base Rate Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this Section 2.02 shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right that such Lender may have against U.S. Bank, the Company or any



- 26 -









 




other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or Event of
Default or (iii) any other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender’s obligation to make Revolving Credit Base Rate
Loans pursuant to this Section 2.02 (but not such Lender’s obligation to purchase and fund risk
participations in Swing Line Loans pursuant to this Section 2.02) is subject to the conditions set
forth in Section 3. No such purchase or funding of risk participations shall relieve or otherwise
impair the obligation of the Company to repay Swing Line Loans, together with interest as provided
herein.




     (f) At any time after any Lender has purchased and funded a risk participation in a Swing Line
Loan, if U.S. Bank receives any payment on account of such Swing Line Loan, U.S. Bank will
distribute to such Lender its Pro Rata Share of such payment (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s risk participation
was funded) in the same funds as those received by U.S. Bank.



     (g) If any payment received by U.S. Bank in respect of principal or interest on any Swing Line
Loan is required to be returned by U.S. Bank to the Company or any other Person for any reason,
each Lender shall pay to U.S. Bank its Pro Rata Share thereof on the demand of U.S. Bank, plus
interest thereon from the date of such demand to the date such amount is returned, at a rate per
annum equal to the Fed Funds Rate.



     (h) Until a Lender funds its Revolving Credit Base Rate Loans or risk participation pursuant
to this Section 2.02 to refinance such Lender’s Pro Rata Share of any Swing Line Loan, interest in
respect of such Pro Rata Share shall be solely for the account of U.S. Bank.



     (i) The Company shall make all payments of principal and interest in respect of the Swing Line
Loans directly to U.S. Bank.



     2.03 LaBarge Electronics Term Loan. The Lenders have heretofore made LaBarge
Electronics a term loan, the aggregate outstanding principal amount of which as of the date of this
Agreement (before giving effect to this Agreement) is $9,500,000.00 (the “LaBarge Electronics Term
Loan”). LaBarge Electronics desires to borrow an additional aggregate principal amount of
$500,000.00 from the Lenders on the date of this Agreement, thereby increasing the aggregate
outstanding principal amount of the LaBarge Electronics Term Loan from $9,500,000.00 to
$10,000,000.00. Subject to the terms and conditions set forth in this Agreement, and so long as no
Default or Event of Default has occurred and is continuing, each Lender severally agrees to make an
additional advance on the LaBarge Electronics Term Loan to LaBarge Electronics on the date of this
Agreement in a principal amount equal to such Lender’s Pro Rata Share of $500,000.00. The LaBarge
Electronics Term Loan shall mature on December 22, 2011. Principal on the LaBarge Electronics Term
Loan shall be due and payable in ten (10) consecutive quarterly installments as follows:



	 	 	 	 	 
	Date of Principal Payment	 	Amount of Principal Payment
	September 30, 2009
	 	$444,444.44	 
	December 31, 2009
	 	$444,444.44	 
	March 31, 2010
	 	$444,444.44	 
	June 30, 2010
	 	$444,444.44	 
	September 30, 2010
	 	$555,555.56	 
	December 31, 2010
	 	$555,555.56	 
	March 31, 2011
	 	$555,555.56	 
	June 30, 2011
	 	$555,555.56	 
	September 30, 2011
	 	$600,000.00	 
	December 22, 2011
	 	Entire Outstanding Principal Balance






- 27 -









 





All principal payments and prepayments on the LaBarge Electronics Term Loan shall, unless otherwise
directed by LaBarge Electronics in writing at or prior to the time of such payment or prepayment,
be applied first to that portion of the LaBarge Electronics Term Loan, if any, accruing interest
based on the Adjusted Base Rate and then to those portions of the LaBarge Electronics Term Loan, if
any, accruing interest based on the LIBOR Rate (and among those portions of the LaBarge Electronics
Term Loan, if any, accruing interest based on the LIBOR Rate, being applied to the Interest Periods
in the order of their respective expiration dates (i.e. earliest expiration date first)).




     2.04 LaBarge Acquisition Term Loan. Subject to the terms and conditions set forth in
this Agreement and so long as no Default or Event of Default has occurred and is continuing, each
Lender severally agrees, on the terms and conditions set forth in this Agreement, to make a term
loan to LaBarge Acquisition on or about the date of this Agreement in an original principal amount
equal to such Lender’s Pro Rata Share of $35,000,000.00 (collectively, the “LaBarge Acquisition
Term Loan”). The LaBarge Acquisition Term Loan shall mature on December 22, 2011. Principal on the
LaBarge Acquisition Term Loan shall be due and payable in ten (10) consecutive quarterly
installments as follows:



	 	 	 	 	 
	Date of Principal Payment	 	Amount of Principal Payment
	September 30, 2009
	 	$1,555,555.56	 
	December 31, 2009
	 	$1,555,555.56	 
	March 31, 2010
	 	$1,555,555.56	 
	June 30, 2010
	 	$1,555,555.56	 
	September 30, 2010
	 	$1,944,444.44	 
	December 31, 2010
	 	$1,944,444.44	 
	March 31, 2011
	 	$1,944,444.44	 
	June 30, 2011
	 	$1,944,444.44	 
	September 30, 2011
	 	$2,100,000.00	 
	December 22, 2011
	 	Entire Outstanding Principal Balance





All principal payments and prepayments on the LaBarge Acquisition Term Loan shall, unless otherwise
directed by LaBarge Acquisition in writing at or prior to the time of such payment or prepayment,
be applied first to that portion of the LaBarge Acquisition Term Loan, if any, accruing interest
based on the Adjusted Base Rate and then to those portions of the LaBarge Acquisition Term Loan, if
any, accruing interest based on the LIBOR Rate (and among those portions of the Acquisition Term
Loan, if any, accruing interest based on the LIBOR Rate, being applied to the Interest Periods in
the order of their respective expiration dates (i.e. earliest expiration date first)).




     2.05 Letter of Credit Commitment. (a) Subject to the terms and conditions of this
Agreement and so long as no Default or Event of Default has occurred and is continuing (provided,
however, that U.S. Bank shall have no liability to any other Lender for issuing a Letter of Credit
after the occurrence or during the continuance of any Default or Event of Default unless U.S. Bank
has previously received notice in writing from the Company or any other Lender of, or has actual
knowledge of, the occurrence of such Default or Event of Default), during the Revolving Credit
Period, U.S. Bank hereby agrees to issue irrevocable standby letters of credit and/or irrevocable
commercial letters of credit for the account of the Company (individually, a “Letter of Credit” and
collectively, the “Letters of Credit”) in an amount and for the term specifically requested by the
Company by notice in writing to U.S. Bank in the form of Exhibit F attached hereto and
incorporated herein by reference (a “Letter of Credit Request”); provided, however, that:




     (i) the Company shall have executed and delivered to U.S. Bank a Letter of Credit
Application with respect to such Letter of Credit;



- 28 -









 






     (ii) the date of issuance of such Letter of Credit must be a Business Day which is at
least thirty (30) Business Days before the last day of the Revolving Credit Period;




     (iii) the term of any such Letter of Credit shall not extend beyond the earlier of (A)
the date one (1) year after the date of issuance thereof or (B) three (3) Business Days
before the last day of the Revolving Credit Period;




     (iv) any Letter of Credit may only be utilized to guaranty the payment of obligations
of the Company or a Subsidiary to third parties;




     (v) after giving effect to the issuance of the requested Letter of Credit: (A) the
Total Revolving Credit Outstandings must not exceed the lesser of (1) the total Revolving
Credit Commitments of all of the Lenders at such time or (2) the Borrowing Base at such time
and (B) the sum of the aggregate undrawn face amount of all outstanding Letters of Credit
plus all unreimbursed drawings with respect thereto must not exceed the lesser of
(1) the lesser of (x) the total Revolving Credit Commitments of all of the Lenders at such
time or (y) the Borrowing Base at such time or (2) $10,000,000.00; and




     (vi) the text of any such Letter of Credit is provided to U.S. Bank no less than five
(5) Business Days prior to the requested issuance date, which text must be acceptable to
U.S. Bank in its sole and absolute discretion.



     (b) The payment of drafts under each Letter of Credit shall be made in accordance with the
terms thereof and, in that connection, U.S. Bank shall be entitled to honor any drafts and accept
any documents presented to it by the beneficiary of such Letter of Credit in accordance with the
terms of such Letter of Credit and believed in good faith by U.S. Bank to be genuine. U.S. Bank
agrees to use commercially reasonable efforts to give the Company oral or written notice prior to
making a payment on or with respect to any draw on any Letter of Credit; provided, however, that
the failure to give such notice shall not affect the Company’s obligation to reimburse U.S. Bank
for any such payment. U.S. Bank shall not have any duty to inquire as to the accuracy or
authenticity of any draft or other drawing document that may be presented to it other than the
duties contemplated by the Letter of Credit Reimbursement Agreement and the applicable Letter of
Credit Application. If U.S. Bank shall have received documents that in its good faith judgment
constitute all of the documents that are required to be presented before payment or acceptance of a
draft under a Letter of Credit, it shall be entitled to pay or accept such draft provided such
documents substantially conform on their face to the requirements of such Letter of Credit.



     (c) In the event of any payment by U.S. Bank of a draft presented under a Letter of Credit,
the Company agrees to pay to U.S. Bank in immediately available funds at the time of such drawing
an amount equal to the sum of such drawing plus U.S. Bank’s customary published
negotiation, processing and other fees related thereto. The Company hereby authorizes U.S. Bank to
charge or cause to be charged the Company’s bank accounts at U.S. Bank to the extent there are
balances of immediately available funds therein, in an amount equal to the sum of such drawing
plus U.S. Bank’s customary published negotiation, processing and other fees related thereto
(and U.S. Bank agrees to give the Company prompt written notice of any amount so charged to any
bank account of the Company at U.S. Bank), and the Company agrees to pay the amount of any such
drawing (and/or U.S. Bank’s customary published negotiation, processing and other fees related
thereto) not so charged prior to the close of business of U.S. Bank on the day of such drawing. In
the event any payment under a Letter of Credit is made by U.S. Bank prior to receipt of payment
from the Company, such payment
by U.S. Bank shall constitute a request by the Company for a Revolving Credit Base Rate Loan under
Section 2.01(a) above (and, unless the Required Lenders elect not to make such Loan, the Lenders
will



- 29 -









 




make such Revolving Credit Base Rate Loan to the Company regardless of whether any Default or
Event of Default has occurred and is continuing and regardless of whether such Revolving Credit
Base Rate Loan would otherwise be permitted under the requirements of Sections 2.01(a) of this
Agreement) and the proceeds of such Revolving Credit Base Rate Loan shall be paid directly to U.S.
Bank and applied by U.S. Bank to the payment of any amounts owed by the Company to U.S. Bank under
this Section 2.05. Unreimbursed drawings on Letters of Credit shall bear interest from the date
paid by U.S. Bank until reimbursed in full by the Company at a rate per annum equal to Three
Percent (3%) over and above the Adjusted Base Rate (fluctuating as and when the Adjusted Base Rate
shall change and calculated on an actual day, 360-day year basis).




     (d) The Company hereby further agrees to pay to the order of U.S. Bank:




     (i) with respect to each Letter of Credit, a nonrefundable issuance fee in an amount
equal to One-Eighth of One Percent (1/8%) of the face amount of each such Letter of Credit
(the “Letter of Credit Issuance Fees”), which Letter of Credit Issuance Fees shall be due
and payable annually in advance on the date of the issuance of each such Letter of Credit
and on each anniversary date of each such Letter of Credit;




     (ii) with respect to each Letter of Credit, a nonrefundable commitment fee at a rate
per annum equal to (A) so long as no Event of Default has occurred and is continuing, the
Applicable LIBOR Margin (calculated on an actual day, 360-day year basis) and (B) so long as
any Event of Default has occurred and is continuing, Three Percent (3%) per annum over and
above the Applicable LIBOR Margin (calculated on an actual day, 360-day year basis), on the
undrawn face amount of each such Letter of Credit (“Letter of Credit Commitment Fees”),
which Letter of Credit Commitment Fees shall be due and payable quarterly in arrears on each
March 31, June 30, September 30 and December 31 during the Revolving Credit Period and on
the last day of the Revolving Credit Period; and




     (iii) such other fees (other than additional issuance fees and/or additional commitment
fees) as may be charged by U.S. Bank from time to time in accordance with U.S. Bank’s
published schedule of fees in effect from time to time, which fees shall be due and payable
on demand by U.S. Bank.



     (e) Upon the issuance of a Letter of Credit by U.S. Bank, an undivided participation interest
therein (including, without limitation, an undivided participation interest in the reimbursement
risk relating to such Letter of Credit, in all payments made by U.S. Bank in connection with such
Letter of Credit and in all collateral for such Letter of Credit) shall automatically be granted by
U.S. Bank to and accepted by each other Lender in an amount equal to such other Lender’s Pro Rata
Share (based on such other Lender’s Pro Rata Share of the total Revolving Credit Commitments) of
the face amount of such Letter of Credit. U.S. Bank agrees to give the Agent and each other Lender
prompt written notice of the issuance, amendment and/or termination of any Letter of Credit. If
U.S. Bank shall make payment on any draft presented or accepted under a Letter of Credit, U.S. Bank
shall give notice of such payment to the other Lenders, and each other Lender hereby authorizes and
requests U.S. Bank to advance for their respective accounts, pursuant to the terms hereof, their
respective shares of any such payment based upon their respective Pro Rata Shares of such Letter of
Credit. If such drawing is not paid by the Company in immediately available funds prior to the
close of business of U.S. Bank on the date of such drawing, U.S. Bank shall promptly so notify the
other Lenders and each other Lender agrees to immediately reimburse U.S. Bank in immediately
available funds for its Pro Rata Share of the amount of such drawing, plus interest calculated on
its Pro Rata Share of such amount at a rate per annum equal to the Fed Funds Rate calculated from
the date of such payment by U.S. Bank to but
excluding the date of reimbursement by such other Lender and on an actual-day, 360-day year basis.
Each other Lender will be entitled to its Pro Rata Share of any Letter of Credit Commitment Fees
paid



- 30 -









 




by the Company, but such other Lender shall have no right to share in any Letter of Credit
Issuance Fees or any other fees paid by the Company to U.S. Bank in connection with any of the
Letters of Credit.




     (f) Notwithstanding any provision contained in this Agreement to the contrary, if any Letters
of Credit remain outstanding on the last day of the Revolving Credit Period, the Company shall, on
or before 2:00 p.m. (St. Louis time) on the last day of the Revolving Credit Period, (i) surrender
the originals of the applicable Letter(s) of Credit to U.S. Bank for cancellation or (ii) provide
U.S. Bank with cash collateral (or other collateral acceptable to the Required Lenders in their
sole and absolute discretion) in an amount at least equal to One Hundred Five Percent (105%) of the
aggregate undrawn face amount of all outstanding Letter(s) of Credit plus all unreimbursed
drawings with respect thereto and execute and deliver to U.S. Bank such agreements as U.S. Bank or
the Required Lenders may require to grant U.S. Bank a first priority perfected security interest in
such cash or other collateral. Any such cash collateral received by U.S. Bank pursuant to this
Section 2.05(f) shall be held by U.S. Bank in one or more separate bank accounts at U.S. Bank
appropriately designated as cash collateral accounts in relation to this Agreement and the Letters
of Credit and retained by U.S. Bank as collateral security for the payment of the Borrower’s
Obligations owed by the Company. Cash amounts delivered to U.S. Bank pursuant to the foregoing
requirements of this Section 2.05(f) shall be invested, at the request and for the account of the
Company in investments of a type and nature and with a term acceptable to the Required Lenders.
Such amounts, including in the case of cash amounts invested in the manner set forth above, shall
not be used by U.S. Bank to pay any amounts drawn or paid under or pursuant to any Letter of
Credit, but may be applied to reimburse U.S. Bank for drawings or payments under or pursuant to
such Letters of Credit which U.S. Bank has paid, or if no such reimbursement is required to the
payment of such of the other Borrower’s Obligations owed by the Company as the Required Lenders
shall determine. Any amounts remaining in any cash collateral account established pursuant to this
Section 2.05(f) after the payment in full of all of the Borrower’s Obligations owed by the Company
and the expiration or cancellation of all of the Letters of Credit shall be returned to the Company
(after deduction of the reasonable expenses of U.S. Bank, if any).



     (g) Notwithstanding any provision contained in this Agreement to the contrary, (i) all
references in this Agreement to Letters of Credit shall include the irrevocable standby and/or
commercial letters of credit listed on Schedule 2.03(g) attached hereto which have
heretofore been issued by U.S. Bank for the account of the Company (the “Existing Letters of
Credit”) and (ii) all references in this Agreement to the Letter of Credit Applications shall
include the applications and agreements for irrevocable standby and commercial letters of credit
heretofore executed by the Company, as account party, with respect to the Existing Letters of
Credit.



     (h) Notwithstanding any provision contained in this Agreement to the contrary, U.S. Bank shall
have no obligation to issue, amend or extend any Letter of Credit if on the date of the issuance,
amendment or extension of such Letter of Credit any Lender (other than U.S. Bank) is at such time a
Defaulting Lender, unless U.S. Bank has entered into arrangements with the Borrower or such
Defaulting Lender on terms satisfactory to U.S. Bank to eliminate U.S. Bank’s risk with respect to
such Defaulting Lender.



     2.06 Method of Borrowing.



     (a) The Company shall give notice (a “Notice of Revolving Credit Borrowing”) to the Agent by
12:00 noon (St. Louis time) on the Business Day of each Revolving Credit Base Rate Loan to be made
to the Company, and by 12:00 noon (St. Louis time) at least two (2) Eurodollar Business Days before
each Revolving Credit LIBOR Loan to be made to the Company, specifying:



- 31 -









 






     (i) the date of such Revolving Credit Loan, which shall be a Business Day during the
Revolving Credit Period in the case of a Revolving Credit Base Rate Loan and a Eurodollar
Business Day during the Revolving Credit Period in the case of a Revolving Credit LIBOR
Loan,




     (ii) the aggregate principal amount of such Revolving Credit Loan,




     (iii) whether such Revolving Credit Loan is to be a Revolving Credit Base Rate Loan or
a Revolving Credit LIBOR Loan, and




     (iv) in the case of a Revolving Credit LIBOR Loan, the duration of the initial Interest
Period applicable thereto, subject to the provisions of the definition of Interest Period.



     (b) Upon receipt of a Notice of Revolving Credit Borrowing given to it, the Agent shall notify
each Lender by 1:00 p.m. (St. Louis time) on the date of receipt of such Notice of Revolving Credit
Borrowing by the Agent (which must be a Business Day) of the contents thereof and of such Lender’s
Pro Rata Share of such Revolving Credit Loan. A Notice of Revolving Credit Borrowing shall not be
revocable by the Company.



     (c) Not later than 2:00 p.m. (St. Louis time) on the date of each Revolving Credit Loan, each
Lender shall make available its Pro Rata Share of such Revolving Credit Loan, in Federal or other
funds immediately available in St. Louis, Missouri, to the Agent at its address specified in or
pursuant to Section 8.07. Unless the Agent determines that any applicable condition specified in
Section 3 has not been satisfied, the Agent will make the funds so received from the Lenders
available to the Company by 3:00 p.m. (St. Louis time) by crediting such funds to a demand deposit
account of the Company at U.S. Bank specified by the Company (or such other account mutually agreed
upon in writing between the Agent and the Company). The Agent shall not be required to make any
amount available to the Borrower under this Agreement except to the extent the Agent shall have
received such amounts from the Lenders as set forth herein, provided, however, that unless the
Agent shall have been notified by a Lender prior to the time a Revolving Credit Loan is to be made
hereunder that such Lender does not intend to make its Pro Rata Share of such Revolving Credit Loan
available to the Agent, the Agent may assume that such Lender has made such Pro Rata Share
available to the Agent prior to such time, and the Agent may in reliance upon such assumption make
available to the Borrower a corresponding amount. If such corresponding amount is not in fact made
available to the Agent by such Lender and the Agent has made such amount available to the Borrower,
then such Lender and the Borrower severally agree to pay to the Agent forthwith on demand such
corresponding amount in immediately available funds with interest thereon, for each day from and
including the date such amount was made available by the Agent to the Borrower to but excluding the
date of payment to the Agent, at (a) in the case of a payment to be made by such Lender, the Fed
Funds Rate plus any administrative processing or similar fees customarily charged by the Agent in
connection with the foregoing and (B) in the case of a payment to be made by the Borrower, the
Adjusted Base Rate. If both the Borrower and the applicable Lender shall pay such interest to the
Agent for the same or an overlapping period, the Agent shall promptly remit to the Borrower the
amount of such interest paid by the Borrower for such period. If the applicable Lender pays its
Pro Rata Share of the applicable Revolving Credit Loan to the Agent, then the amount so paid shall
constitute such Lender’s Pro Rata Share of such Revolving Credit Loan. Any payment by the Borrower
shall be without prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Agent.



     (d) Except as set forth in this Section 2.06(d), the Company shall give notice (a “Notice of
Swing Line Borrowing”) to U.S. Bank by 12:00 noon (St. Louis time) on the Business Day of each
Swing Line Loan, specifying:



- 32 -









 






     (i) the date of such Swing Line Loan, which must be a Business Day during the Revolving
Credit Period; and




     (ii) the principal amount of such Swing Line Loan.


A Notice of Swing Line Borrowing shall not be revocable by the Company.



Pursuant to a certain U.S. Bank Treasury Management Service Agreement by and between the Company
and U.S. Bank and any and all other terms and conditions, agreements, documents and/or instruments
related thereto, as the same may from time to time be amended, modified, restated or replaced, the
Company has requested and authorized U.S. Bank to (A) to apply any collected balances (after
funding advances) in excess of a mutually predetermined amount (the “Target Balance”) remaining at
the end of any day in the Company’s Account No. 4349567042 at U.S. Bank (the “Company’s Operating
Account”) to the repayment of any outstanding Swing Line Loans and (B) subject to all of the other
terms and conditions of this Agreement (including the preconditions to Loans set forth in Section
3.02), make a Swing Line Loan to the Company at the end of any day on which the Company shall have
an overdraft (negative collected balance) or a collected balance otherwise less than the Target
Balance in the Company’s Operating Account (a “Deficiency Amount”) after crediting all deposits
received in immediately available funds and debiting all withdrawals made and checks presented
against the Company’s Operating Account and honored by U.S. Bank as of such date, which Swing Line
Loan shall be in the amount of the Deficiency Amount, without any other request or authorization
therefor from the Company and without notice to the Company. A Notice of Swing Line Borrowing
shall not be required in connection with a Swing Line Loan made to cover any Deficiency Amount in
the Company’s Operating Account as set forth in the immediately preceding sentence. U.S. Bank may,
in its sole discretion, elect to make or not make any such Swing Line Loan to cover any Deficiency
Amount in the Company’s Operating Account.




     (e) Unless U.S. Bank determines that any applicable condition specified in Section 3 has not
been satisfied, with respect to each Swing Line Loan which U.S. Bank, in its sole discretion,
elects to make to the Company, U.S. Bank will make the proceeds of each Swing Line Loan available
to the Company by 3:00 p.m. (St. Louis time) by crediting such funds to the Company’s Operating
Account.



     (f) The Company hereby irrevocably authorizes the Agent and each Lender to rely on telephonic,
facsimile, telegraphic, telex or written instructions of any person identifying himself or herself
as one of the individuals listed on Schedule 2.04 attached hereto (or any other individual
from time to time authorized to act on behalf of the Company pursuant to a resolution adopted by
the Board of Directors of the Company and certified by the Secretary of the Company and delivered
to the Agent and each Lender) (each, an “Authorized Person”) with respect to any request to make a
Revolving Credit Loan or a Swing Line Loan or a repayment hereunder, and on any signature which the
Agent or such Lender, as the case may be, believes in good faith to be genuine, and the Company
shall be bound thereby in the same manner as if such individual were actually authorized or such
signature were genuine. The Company also hereby agrees to defend and indemnify the Agent and each
Lender and hold the Agent and each Lender harmless from and against any and all claims, demands,
damages, liabilities, losses, costs and expenses (including, without limitation, reasonable
attorneys’ fees and expenses) relating to or arising out of or in connection with the acceptance of
any notices or instructions believed by the Agent or such Lender, as the case may be, in good faith
to have been sent or delivered by an Authorized Person, regardless of whether such notice or
instruction was in fact delivered by an Authorized Person.



     2.07 Notes.



     (a) The Revolving Credit Loans of each Lender to the Company shall be evidenced by a Revolving
Credit Note of the Company payable to the order of such Lender in a principal amount equal to



- 33 -









 




the amount of such Lender’s Revolving Credit Commitment, each of which Revolving Credit Notes shall
be in substantially the form of Exhibit B attached hereto and incorporated herein by
reference (with appropriate insertions) (collectively, as the same may from time to time be
amended, modified, extended, renewed, restated or replaced (including, without limitation, any
Revolving Credit Note issued in full or partial replacement of an existing Revolving Credit Note as
a result of an assignment by a Lender), the “Revolving Credit Notes”).




     (b) The Swing Line Loans of U.S. Bank to the Company shall be evidenced by a Swing Line Note
of the Company payable to the order of U.S. Bank in a principal amount equal to the Maximum Swing
Line Amount, which Swing Line Note shall be in substantially the form of Exhibit C attached
hereto and incorporated herein by reference (with appropriate insertions) (as the same may from
time to time be amended, modified extended, renewed or restated, the “Swing Line Note”).



     (c) The portion of the LaBarge Electronics Term Loan made by each Lender shall be evidenced by
a Term Loan Promissory Note of LaBarge Electronics payable to the order of such Lender in an
original principal amount equal to the amount of such Lender’s Pro Rata Share of $10,000,000.00,
each of which Term Loan Promissory Notes shall be in substantially the form of Exhibit D
attached hereto and incorporated herein by reference (with appropriate insertions) (collectively,
as the same may from time to time be amended, modified, extended, renewed, restated or replaced
(including, without limitation, any LaBarge Electronics Term Loan Note issued in full or partial
replacement of an existing LaBarge Electronics Term Loan Note as a result of an assignment by a
Lender), the “LaBarge Electronics Term Loan Notes”).



     (d) The portion of the LaBarge Acquisition Term Loan made by each Lender shall be evidenced by
a Term Loan Promissory Note of LaBarge Acquisition payable to the order of such Lender in an
original principal amount equal to the amount of such Lender’s Pro Rata Share of $35,000,000.00,
each of which Term Loan Promissory Notes shall be in substantially the form of Exhibit E
attached hereto and incorporated herein by reference (with appropriate insertions) (collectively,
as the same may from time to time be amended, modified, extended, renewed, restated or replaced
(including, without limitation, any LaBarge Acquisition Term Loan Note issued in full or partial
replacement of an existing LaBarge Acquisition Term Loan Note as a result of an assignment by a
Lender), the “LaBarge Acquisition Term Loan Notes”).



     (e) Each Lender shall record in its books and records the date, amount, type and Interest
Period (if any) of each Revolving Credit Loan made by it to the Company and the date and amount of
each payment of principal and/or interest made by the Company with respect thereto; provided,
however, that the obligation of the Company to repay each Revolving Credit Loan made to the Company
under this Agreement shall be absolute and unconditional, notwithstanding any failure of such
Lender to make any such recordation or any mistake by such Lender in connection with any such
recordation. The books and records of each Lender showing the account between such Lender and the
Company shall be conclusive evidence of the items set forth therein in the absence of demonstrable
error.



     (f) U.S. Bank shall record in its books and records the date and amount of each Swing Line
Loan made by it and the date and amount of each payment of principal and/or interest made by the
Company with respect thereto; provided, however, that the obligation of the Company to repay each
Swing Line Loan actually made by U.S. Bank to the Company under this Agreement shall be absolute
and unconditional, notwithstanding any failure of U.S. Bank to make any such recordation or any
mistake by U.S. Bank in connection with any such recordation. The books and records of U.S. Bank
showing the account between U.S. Bank and the Company shall be conclusive evidence of the items set
forth therein in the absence of demonstrable error.




- 34 -











 





     (g) Each Lender shall record in its books and records the date, amount, type and Interest
Period (if any) of the portion of the LaBarge Electronics Term Loan made by it and the date and
amount of each payment of principal and/or interest made by LaBarge Electronics with respect
thereto; provided, however, that the obligation of LaBarge Electronics to repay the portion of the
LaBarge Electronics Term Loan made by such Lender under this Agreement shall be absolute and
unconditional, notwithstanding any failure of such Lender to make any such recordation or any
mistake by such Lender in connection with any such recordation. The books and records of each
Lender showing the account between such Lender and LaBarge Electronics shall be conclusive evidence
of the items set forth therein in the absence of demonstrable error.



     (h) Each Lender shall record in its books and records the date, amount, type and Interest
Period (if any) of the portion of the LaBarge Acquisition Term Loan made by it and the date and
amount of each payment of principal and/or interest made by LaBarge Acquisition with respect
thereto; provided, however, that the obligation of LaBarge Acquisition to repay the portion of the
LaBarge Acquisition Term Loan made by such Lender under this Agreement shall be absolute and
unconditional, notwithstanding any failure of such Lender to make any such recordation or any
mistake by such Lender in connection with any such recordation. The books and records of each
Lender showing the account between such Lender and LaBarge Acquisition shall be conclusive evidence
of the items set forth therein in the absence of demonstrable error.



     2.08 Duration of Interest Periods and Selection of Interest Rates.



     (a) The duration of the initial Interest Period for each Revolving Credit LIBOR Loan shall be
as specified in the applicable Notice of Revolving Credit Borrowing. The Company shall elect the
duration of each subsequent Interest Period applicable to such Revolving Credit LIBOR Loan and the
interest rate to be applicable during such subsequent Interest Period (and the Company shall have
the option (i) in the case of any Revolving Credit Base Rate Loan, to elect that such Revolving
Credit Loan become a Revolving Credit LIBOR Loan and the Interest Period to be applicable thereto,
and (ii) in the case of any Revolving Credit LIBOR Loan, to elect that such Revolving Credit Loan
become a Revolving Credit Base Rate Loan), by giving oral or written notice of such election to the
Agent by 12:00 noon (St. Louis time) on the Business Day of, in the case of the election of the
Adjusted Base Rate, and by 12:00 noon (St. Louis time) at least two (2) Eurodollar Business Days
before, in the case of the election of the LIBOR Rate, the end of the immediately preceding
Interest Period applicable thereto, if any; provided, however, that notwithstanding the foregoing,
in addition to and without limiting the rights and remedies of the Agent and the Lenders under
Section 6 hereof, so long as any Default or Event of Default under this Agreement has occurred and
is continuing, the Company shall not be permitted to continue any Revolving Credit LIBOR Loan as a
Revolving Credit LIBOR Loan or to convert any Revolving Credit Base Rate Loan into a Revolving
Credit LIBOR Loan. Upon receipt of any such notice given by Borrower to the Agent under this
Section 2.08(a), the Agent shall notify each Lender by 1:00 p.m. (St. Louis time) on the date of
receipt of such notice (which must be a Business Day) of the contents thereof. If the Agent does
not receive a notice of election for a Revolving Credit Loan pursuant to this Section 2.08(a)
within the applicable time limits specified herein, the Company shall be deemed to have elected to
pay such Revolving Credit Loan in whole pursuant to Section 2.13 on the last day of the current
Interest Period with respect thereto and to reborrow the principal amount of such Revolving Credit
Loan on such date as a Revolving Credit Base Rate Loan.



     (b) The LaBarge Electronics Term Loan shall bear interest on the outstanding principal amount
thereof at a rate per annum equal to the Adjusted Base Rate. LaBarge Electronics may from time to
time fix the interest rate on all or any portion of the LaBarge Electronics Term Loan in an amount
not less than $500,000.00 or any larger multiple of $250,000.00 at the LIBOR Rate for the Interest
Period selected by LaBarge Electronics (subject to the definition of Interest Period); provided,
however, that notwithstanding the foregoing, in addition to and without limiting the rights and
remedies of the Agent and



- 35 -









 







the Lenders under Section 6 hereof, so long as any Default or Event of
Default under this Agreement has occurred and is continuing, LaBarge Electronics shall not be
permitted to fix the interest rate on all or any
portion of the LaBarge Electronics Term Loan at the LIBOR Rate. If LaBarge Electronics elects to
have any portion of the LaBarge Electronics Term Loan bear interest at the LIBOR Rate, LaBarge
Electronics shall give oral or written notice (a “LaBarge Electronics Interest Rate Selection
Notice”) to the Agent by 12:00 noon (St. Louis time) at least two (2) Eurodollar Business Days
before any date (which must be a Eurodollar Business Day) upon which LaBarge Electronics desires to
fix the interest rate on any portion of the LaBarge Electronics Term Loan, which LaBarge
Electronics Interest Rate Selection Notice shall specify the portion of the LaBarge Electronics
Term Loan which is to bear interest at the LIBOR Rate and the initial Interest Period applicable
thereto. LaBarge Electronics may not revoke or rescind any LaBarge Electronics Interest Rate
Selection Notice. Upon receipt of any such LaBarge Electronics Interest Rate Selection Notice
given by LaBarge Electronics to the Agent under this Section 2.08(b), the Agent shall notify each
Lender by 1:00 p.m. (St. Louis time) on the date of receipt of such LaBarge Electronics Interest
Rate Selection Notice (which must be a Business Day) of the contents thereof. Unless LaBarge
Electronics shall have otherwise notified the Agent in accordance with this Section 2.08(b), upon
the expiration of any Interest Period, that portion of the LaBarge Electronics Term Loan bearing
interest at the LIBOR Rate during such Interest Period shall bear interest at the Adjusted Base
Rate from and after the expiration of such Interest Period.



     (c) The LaBarge Acquisition Term Loan shall bear interest on the outstanding principal amount
thereof at a rate per annum equal to the Adjusted Base Rate. LaBarge Acquisition may from time to
time fix the interest rate on all or any portion of the LaBarge Acquisition Term Loan in an amount
not less than $500,000.00 or any larger multiple of $250,000.00 at the LIBOR Rate for the Interest
Period selected by LaBarge Acquisition (subject to the definition of Interest Period); provided,
however, that notwithstanding the foregoing, in addition to and without limiting the rights and
remedies of the Agent and the Lenders under Section 6 hereof, so long as any Default or Event of
Default under this Agreement has occurred and is continuing, LaBarge Acquisition shall not be
permitted to fix the interest rate on all or any portion of the LaBarge Acquisition Term Loan at
the LIBOR Rate. If LaBarge Acquisition elects to have any portion of the LaBarge Acquisition Term
Loan bear interest at the LIBOR Rate, LaBarge Acquisition shall give oral or written notice (a
“LaBarge Acquisition Interest Rate Selection Notice”) to the Agent by 12:00 noon (St. Louis time)
at least two (2) Eurodollar Business Days before any date (which must be a Eurodollar Business Day)
upon which LaBarge Acquisition desires to fix the interest rate on any portion of the LaBarge
Acquisition Term Loan, which LaBarge Acquisition Interest Rate Selection Notice shall specify the
portion of the LaBarge Acquisition Term Loan which is to bear interest at the LIBOR Rate and the
initial Interest Period applicable thereto. LaBarge Acquisition may not revoke or rescind any
LaBarge Acquisition Interest Rate Selection Notice. Upon receipt of any such LaBarge Acquisition
Interest Rate Selection Notice given by LaBarge Acquisition to the Agent under this Section
2.08(c), the Agent shall notify each Lender by 1:00 p.m. (St. Louis time) on the date of receipt of
such LaBarge Acquisition Interest Rate Selection Notice (which must be a Business Day) of the
contents thereof. Unless LaBarge Acquisition shall have otherwise notified the Agent in accordance
with this Section 2.08(c), upon the expiration of any Interest Period, that portion of the LaBarge
Acquisition Term Loan bearing interest at the LIBOR Rate during such Interest Period shall bear
interest at the Adjusted Base Rate from and after the expiration of such Interest Period.



     (d) The Company, LaBarge Electronics and LaBarge Acquisition, collectively, may not have
outstanding and the Lenders shall not be obligated to make more than ten (10) LIBOR Loans at any
one time.



     2.09 Interest Rates and Interest Payments.



     (a) So long as no Event of Default has occurred and is continuing, each Revolving Credit Base
Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the



- 36 -









 







date such Revolving Credit Loan is made until it becomes due, at a rate per annum equal to the
Adjusted Base Rate. So long as any Event of Default has occurred and is continuing, each Revolving
Credit Base Rate Loan shall, unless otherwise agreed in writing by each Lender, bear interest on
the outstanding principal amount thereof, for each day from the date such Revolving Credit Loan is
made until it becomes
due, at a rate per annum equal to Three Percent (3%) over and above the Adjusted Base Rate. Such
interest shall be due and payable monthly in arrears on the last day of each month during the
Revolving Credit Period commencing on the first such date after such Revolving Credit Base Rate
Loan is made, and at the maturity of the Revolving Credit Notes (whether by reason of acceleration
or otherwise). From and after the maturity of the Revolving Credit Notes, whether by reason of
acceleration or otherwise, each Revolving Credit Base Rate Loan shall bear interest, due and
payable on demand, for each day until paid at a rate per annum equal to Three Percent (3%) over and
above the Adjusted Base Rate.



     (b) So long as no Event of Default has occurred and is continuing, each Revolving Credit LIBOR
Loan shall bear interest on the outstanding principal amount thereof for each Interest Period
applicable thereto at a rate per annum equal to the applicable LIBOR Rate. So long as any Event of
Default has occurred and is continuing, each Revolving Credit LIBOR Loan shall, unless otherwise
agreed in writing by each Lender, bear interest on the outstanding principal amount thereof for
each Interest Period applicable thereto at a rate per annum equal to Three Percent (3%) over and
above the applicable LIBOR Rate. Interest shall be due and payable for each Interest Period on the
last day thereof, unless the duration of such Interest Period exceeds three (3) months, in which
case such interest shall be due and payable at the end of the first three (3) months of such
Interest Period and on the last day of such Interest Period, and at the maturity of the Revolving
Credit Notes (whether by reason of acceleration or otherwise). From and after the maturity of the
Revolving Credit Notes, whether by reason of acceleration or otherwise, each Revolving Credit LIBOR
Loan shall bear interest, due and payable on demand, for each day until paid, at a rate per annum
equal to Three Percent (3%) over and above the higher of (i) the LIBOR Rate for the immediately
preceding Interest Period applicable to such Revolving Credit LIBOR Loan or (ii) the Adjusted Base
Rate.



     (c) So long as no Event of Default has occurred and is continuing, the from time to time
outstanding principal balance of each Swing Line Loan shall bear interest prior to the maturity of
the Swing Line Note (whether by reason of acceleration or otherwise) at a rate per annum equal to
the Adjusted Base Rate. So long as any Event of Default has occurred and is continuing, the from
time to time outstanding principal balance of each Swing Line Loan shall, unless otherwise agreed
in writing by each Lender, bear interest prior to the maturity of the Swing Line Note (whether by
reason of acceleration or otherwise) at a rate per annum equal to Three Percent (3%) per annum over
and above the Adjusted Base Rate. Such interest shall be due and payable monthly on the last day of
each month, commencing on the first such date after such Swing Line Loan is made, and at the
maturity of the Swing Line Note (whether by reason of acceleration or otherwise). From and after
the maturity of the Swing Line Note (whether by reason of acceleration or otherwise), the from time
to time outstanding principal balance of each Swing Line Loan shall bear interest at a rate per
annum equal to Three Percent (3%) per annum over and above the Adjusted Base Rate and be due and
payable on demand.



     (d) So long as no Event of Default has occurred and is continuing, each Term Base Rate Loan
shall bear interest on the outstanding principal amount thereof for each day until paid at a rate
per annum equal to the Adjusted Base Rate. So long as any Event of Default has occurred and is
continuing, each Term Base Rate Loan shall, unless otherwise agreed to in writing by each Lender,
bear interest on the outstanding principal amount thereof for each day until paid at a rate per
annum equal to Three Percent (3%) over and above the Adjusted Base Rate. Such interest shall be
due and payable monthly on the last day of each month commencing December 31, 2008, and at the
maturity of the LaBarge Electronics Term Loan Notes (whether by reason of



- 37 -









 







acceleration or otherwise) or the maturity of the LaBarge Acquisition Term Loan Notes (whether by reason of
acceleration or otherwise), as the case may be. From and after the maturity of the LaBarge
Electronics Term Loan Notes (whether by reason of acceleration or otherwise), each Term Base Rate
Loan which is a portion of the LaBarge Electronics Term Loan shall bear interest, due and payable
on demand, for each day until paid at a rate per annum equal to Three Percent (3%) over and above
the Adjusted Base Rate. From and after the maturity of the LaBarge Acquisition Term Loan Notes
(whether by reason of acceleration or otherwise), each Term Base Rate Loan which is a portion of
the LaBarge Acquisition Term Loan shall bear interest, due and payable on demand, for each day
until paid at a rate per annum equal to Three Percent (3%) over and above the Adjusted Base Rate.



     (e) So long as no Event of Default has occurred and is continuing, each Term LIBOR Loan shall
bear interest on the outstanding principal amount thereof for each Interest Period applicable
thereto at a rate per annum equal to the applicable LIBOR Rate. So long as any Event of Default
has occurred and is continuing, each Term LIBOR Loan shall, unless otherwise agreed to in writing
by each Lender, bear interest on the outstanding principal amount thereof for each Interest Period
applicable thereto at a rate per annum equal to Three Percent (3%) over and above the applicable
LIBOR Rate. Interest shall be due and payable for each Interest Period on the last day thereof,
unless the duration of such Interest Period exceeds three (3) months, in which case such interest
shall be payable at the end of the first three (3) months of such Interest Period and on the last
day of such Interest Period, and at the maturity of the LaBarge Electronics Term Loan Notes
(whether by reason of acceleration or otherwise) or the maturity of the LaBarge Acquisition Term
Loan Notes (whether by reason of acceleration or otherwise), as the case may be. From and after the
maturity of the LaBarge Electronics Term Loan Notes, whether by reason of acceleration or
otherwise, each Term LIBOR Loan which is a portion of the LaBarge Electronics Term Loan shall bear
interest, payable on demand, for each day until paid, at a rate per annum equal to Three Percent
(3%) over and above the higher of (i) the LIBOR Rate for the immediately preceding Interest Period
applicable to such Term LIBOR Loan or (ii) the Adjusted Base Rate. From and after the maturity of
the LaBarge Acquisition Term Loan Notes, whether by reason of acceleration or otherwise, each Term
LIBOR Loan which is a portion of the LaBarge Acquisition Term Loan shall bear interest, payable on
demand, for each day until paid, at a rate per annum equal to Three Percent (3%) over and above the
higher of (i) the LIBOR Rate for the immediately preceding Interest Period applicable to such Term
LIBOR Loan or (ii) the Adjusted Base Rate.



     (f) The Agent shall determine each interest rate applicable to the Loans hereunder and its
determination thereof shall be conclusive in the absence of demonstrable error.



     2.10 Computation of Interest. Interest on Base Rate Loans shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed (including the first day
but excluding the last day). Interest on LIBOR Loans shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed, calculated as to each Interest Period from
and including the first day thereof to but excluding the last day thereof.



     2.11 Fees.



     (a) From and including October 1, 2008, to but excluding the last day of the Revolving Credit
Period, the Company shall pay to the Agent for the account of each Lender a nonrefundable
commitment fee on the unused portion of the Revolving Credit Commitment of such Lender (determined
by subtracting such Lender’s Pro Rata Share (which in the case of Swing Line Loans shall, for
purposes of this Section 2.11, be deemed to be 100% for U.S. Bank and 0% for each other Lender
unless, and then only to the extent, the Lenders have funded their participations in the Swing Line
Loans) of the Total Revolving Credit Outstandings from such Lender’s Revolving Credit Commitment)
at a rate per annum equal to the Applicable Commitment Fee Rate. Said commitment fee shall be (i)
calculated on a daily basis, (ii) payable quarterly in arrears on each March 31, June 30, September
30 and December 31 during the Revolving Credit Period and on the last day of the Revolving Credit
Period and (iii) calculated on an actual day, 360-day year basis.



- 38 -









 





     (b) The Company, LaBarge Electronics and LaBarge Acquisition jointly and severally agree to
pay to the Agent for the account of the Lenders certain fees in the amounts set forth in that
certain letter agreement by and among the Company, LaBarge Electronics, LaBarge Acquisition and the
Agent dated December 22, 2008, as the same may from time to time be amended, modified, extended,
renewed or restated.



     (c) The Company, LaBarge Electronics and LaBarge Acquisition jointly and severally agree to
pay U.S. Bank certain fees in the amounts set forth in that certain letter agreement by and among
the
Company, LaBarge Electronics, LaBarge Acquisition and U.S. Bank dated December 15, 2008, as the
same may from time to time be amended, modified, extended, renewed or restated.



     2.12 Method of Making Interest and Other Payments. The Agent may, at its option, deem
interest and other amounts payable by the Company under this Agreement (other than the principal
balance of the Revolving Credit Loans) to be paid by causing the Lenders to make Revolving Credit
Base Rate Loans to the Company in such amount(s). The Agent agrees to give the Company prompt
written notice of any Revolving Credit Base Rate Loans made by the Lenders under this Section 2.12.



     2.13 Voluntary Prepayments.



     (a) The Company may, upon notice to the Agent no later than 12:00 noon (St. Louis time) on
date of the prepayment (which must be a Business Day) specifying that it is prepaying the Revolving
Credit Base Rate Loans, prepay without penalty or premium the Revolving Credit Base Rate Loans in
whole at any time or in part in amounts aggregating $100,000.00 or any larger multiple of
$25,000.00 from time to time, by paying the principal amount to be paid. Each such voluntary
prepayment shall be applied to prepay the Revolving Credit Base Rate Loans of the several Lenders
in proportion to their respective Pro Rata Shares.



     (b) The Company may, upon notice to the Agent no later than 12:00 noon (St. Louis time) on the
date at least three (3) Eurodollar Business Days before the date of the prepayment (which must be a
Eurodollar Business Day) specifying that it is prepaying the Revolving Credit LIBOR Loans, prepay
the Revolving Credit LIBOR Loans to which a given Interest Period applies, in whole, or in part in
amounts aggregating $1,000,000.00 or any larger multiple of $250,000.00, by paying the principal
amount to be paid together with all accrued and unpaid interest thereon to and including the date
of prepayment and any funding losses and other amounts payable under Section 2.16; provided,
however, that in no event may the Company make a partial prepayment of Revolving Credit LIBOR Loans
which results in the total outstanding Revolving Credit LIBOR Loans with respect to which a given
Interest Period applies being greater than $0.00 but less than $1,000,000.00. Each such voluntary
prepayment shall be applied to prepay the Revolving Credit LIBOR Loans of the several Lenders in
proportion to their respective Pro Rata Shares.



     (c) The Company may, upon oral or written notice to U.S. Bank no later than 12:00 noon (St.
Louis time) on date of the prepayment (which must be a Business Day) specifying that it is
prepaying the Swing Line Loans, prepay without penalty or premium the Swing Line Loans in whole at
any time or in part from time to time, by paying the principal amount to be paid. Any such notice
from the Company shall not be revocable.



     (d) LaBarge Electronics may, upon notice to the Agent no later than 12:00 noon (St. Louis
time) on the date at least three (3) Eurodollar Business Days before the date of the prepayment
(which must be a Eurodollar Business Day), prepay all at any time or any portion from time to time
of the unpaid principal balance of the LaBarge Electronics Term Loan prior to maturity provided
that: (i) contemporaneously with each such prepayment LaBarge Electronics shall pay all accrued and unpaid



- 39 -









 







interest on the portion of the LaBarge Electronics Term Loan being prepaid to and including
the date of prepayment; (ii) partial prepayments shall be applied to the installments of principal
of the LaBarge Electronics Term Loan in the inverse order of their stated maturities; (iii) partial
prepayments shall be in an aggregate amount of at least $1,000,000.00 or any larger multiple of
$250,000.00; (iv) in no event may LaBarge Electronics make any prepayment on any portion of the
LaBarge Electronics Term Loan which is accruing interest at the LIBOR Rate which results in the
remaining portion of the LaBarge Electronics Term Loan with respect to which a given Interest
Period applies being greater than $0.00 but less than $1,000,000.00; and (v) if LaBarge Electronics
is making a prepayment on any portion of the LaBarge Electronics Term Loan which is accruing
interest at the LIBOR Rate, LaBarge Electronics shall pay the Agent for the benefit of the Lenders
the funding losses and other amounts, if any, required under Section
2.16. Each such voluntary prepayment shall be applied to pay the portions of the LaBarge
Electronics Term Loan made by the Lenders in proportion to their respective Pro Rata Shares.



     (e) LaBarge Acquisition may, upon notice to the Agent no later than 12:00 noon (St. Louis
time) on the date at least three (3) Eurodollar Business Days before the date of the prepayment
(which must be a Eurodollar Business Day), prepay all at any time or any portion from time to time
of the unpaid principal balance of the LaBarge Acquisition Term Loan prior to maturity provided
that: (i) contemporaneously with each such prepayment LaBarge Acquisition shall pay all accrued and
unpaid interest on the portion of the LaBarge Acquisition Term Loan being prepaid to and including
the date of prepayment; (ii) partial prepayments shall be applied to the installments of principal
of the LaBarge Acquisition Term Loan in the inverse order of their stated maturities; (iii) partial
prepayments shall be in an aggregate amount of at least $1,000,000.00 or any larger multiple of
$250,000.00; (iv) in no event may LaBarge Acquisition make any prepayment on any portion of the
LaBarge Acquisition Term Loan which is accruing interest at the LIBOR Rate which results in the
remaining portion of the LaBarge Acquisition Term Loan with respect to which a given Interest
Period applies being greater than $0.00 but less than $1,000,000.00; and (v) if LaBarge Acquisition
is making a prepayment on any portion of the LaBarge Acquisition Term Loan which is accruing
interest at the LIBOR Rate, LaBarge Acquisition shall pay the Agent for the benefit of the Lenders
the funding losses and other amounts, if any, required under Section 2.16. Each such voluntary
prepayment shall be applied to pay the portions of the LaBarge Acquisition Term Loan made the
Lenders in proportion to their respective Pro Rata Shares.



     (f) Upon receipt of a notice of prepayment pursuant to this Section, the Agent shall promptly
notify each Lender of the contents thereof and of such Lender’s Pro Rata Share of such payment and
such notice shall not thereafter be revocable by the Company, LaBarge Electronics or LaBarge
Acquisition, as the case may be.



     2.14 Mandatory Prepayments. In addition to the regularly scheduled principal payments
due on the LaBarge Electronics Term Loan under Section 2.03 above, the regularly scheduled
principal payments due on the LaBarge Acquisition Term Loan under Section 2.04 above, any voluntary
prepayments made by LaBarge Electronics under Section 2.13 above and any voluntary prepayments made
by LaBarge Acquisition under Section 2.13 above, until the LaBarge Electronics Term Loan and the
LaBarge Acquisition Term Loan have been paid in full, LaBarge Electronics and LaBarge Acquisition
hereby covenant and agree to make mandatory prepayments on the LaBarge Electronics Term Loan and
the LaBarge Acquisition Term Loan in an aggregate amount equal to (i) One Hundred Percent (100%) of
the net cash proceeds received by the Company from the issuance of any capital stock or other
equity securities subsequent to the date of this Agreement (which prepayment shall be due and
payable within ten (10) days after the Company’s receipt of such proceeds) and (ii) One Hundred
Percent (100%) of the net cash proceeds received by the Company or any Subsidiary from the sale or
other disposition of any Property (other than the sale of Inventory in the ordinary course of
business) to the extent such proceeds are not used within ninety (90) days after receipt thereof by
the Company or the applicable Subsidiary, as the case may be, to purchase replacement assets and to
the extent the aggregate amount of such proceeds received by the Company and its Subsidiaries on a
consolidated basis during



- 40 -









 







any fiscal year of the Company and not so used to purchase replacement
assets exceeds the sum of $1,000,000.00 (which prepayment shall be due and payable within ninety
(90) days after receipt of such proceeds by the Company and/or any Subsidiary). All payments due
pursuant to this Section 2.14(a) shall be applied on a pro rata basis between the LaBarge
Electronics Term Loan and the LaBarge Acquisition Term Loan (based on the outstanding principal
balance of each such Loan as of the date of the applicable prepayment) and shall be applied to the
prepayment of the scheduled installments of the LaBarge Electronics Term Loan and the LaBarge
Acquisition Term Loan in the inverse order of their stated maturities (and allocated among the
Lenders based on their respective Pro Rata Shares).



     2.15 General Provisions as to Payments. Each Borrower shall make each payment of
principal of, and interest on, the Loans to such Borrower and of fees and all other amounts payable
by such Borrower under this Agreement, not later
than 2:00 p.m. (St. Louis time) on the date when due and payable, in Federal or other immediately
available funds, to the Agent (or, in the case of Swing Line Loans, to U.S. Bank) at its address
referred to in Section 8.07. All payments received by the Agent or U.S. Bank after 2:00 p.m. (St.
Louis time) shall be deemed to have been received by the Agent or U.S. Bank, as the case may be, on
the next succeeding Business Day. The Agent will distribute to each Lender in immediately available
funds its Pro Rata Share of each such payment received by the Agent for the account of the Lenders
by 3:00 p.m. (St. Louis time) on the day of receipt of such payment by the Agent if such payment is
received by the Agent from the applicable Borrower by 2:00 p.m. (St. Louis time) on such day or by
12:00 noon (St. Louis time) on the next succeeding Business Day if such payment is received by the
Agent from the applicable Borrower after 2:00 p.m. (St. Louis time) on such day. Any such payment
owed by the Agent to any Lender which is not paid within the applicable time period shall bear
interest (payable by the Agent) until paid at the Fed Funds Rate. Whenever any payment of principal
of, or interest on, the Loans or of fees shall be due on a day which is not a Business Day, the
date for payment thereof shall be extended to the next succeeding Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest thereon, at the then
applicable rate, shall be payable for such extended time.



     2.16 Funding Losses. Notwithstanding any provision contained in this Agreement to the
contrary, (a) if any Borrower makes any payment of principal with respect to any LIBOR Loan
(pursuant to Sections 2 or 6 or otherwise) on any day other than the last day of the Interest
Period applicable thereto, or if any Borrower fails to borrow or pay any LIBOR Loan after notice
has been given to by such Borrower to the Agent in accordance with Section 2.06, 2.08, 2.13 or
otherwise, such Borrower shall reimburse each Lender on demand for any resulting losses and
expenses incurred by such Lender, including, without limitation, any losses incurred in obtaining,
liquidating or employing deposits from third parties and any loss of margin for the period after
any such payment, provided that such Lender shall have delivered to such Borrower a certificate
setting forth in reasonable detail the calculation of the amount of such losses and expenses, which
calculation shall be conclusive in the absence of demonstrable error.



     2.17 Basis for Determining Interest Rate Inadequate or Unfair. If with respect to any
Interest Period:




     (a) deposits in dollars (in the applicable amounts) are not being offered to any one or
more Lenders in the relevant market for such Interest Period, or




     (b) any Lender determines that the LIBOR Rate as determined pursuant to the definition
thereof will not adequately and fairly reflect the cost to such Lender of maintaining or
funding the LIBOR Loans for such Interest Period,


such Lender shall forthwith give notice thereof to the Company, LaBarge Electronics and LaBarge
Acquisition which notice shall set forth in detail the basis for such notice, whereupon until such
Lender notifies the Company, LaBarge Electronics and LaBarge Acquisition that the circumstances
giving rise to



- 41 -









 






such suspension no longer exist, (i) the LIBOR Rate shall not be available to the
Company, LaBarge Electronics or LaBarge Acquisition as an interest rate option on any Loans made by
such Lender to the Company, LaBarge Electronics or LaBarge Acquisition, (ii) all of the then
outstanding Revolving Credit LIBOR Loans made by such Lender shall automatically convert to
Revolving Credit Base Rate Loans on the last day of the then current Interest Period applicable to
each such Revolving Credit LIBOR Loan and (iii) all of the then outstanding Term LIBOR Loans made
by such Lender shall automatically convert to Term Base Rate Loans on the last day of the then
current Interest Period applicable to each such Term LIBOR Loan. Interest accrued on each such
LIBOR Loan prior to any such conversion shall be due and payable on the date of such conversion
together with any funding losses and other amounts due under Section 2.16.




     2.18 Illegality. If, after the date of this Agreement, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental or regulatory authority, central bank or
comparable agency charged with the interpretation or administration thereof, or compliance by any
Lender with any request or directive (whether or not having the force of law) of any such
governmental or regulatory authority, central bank or comparable agency shall make it unlawful or
impossible for any Lender to make, maintain or fund its LIBOR Loans to the Company, LaBarge
Electronics and/or LaBarge Acquisition, such Lender shall forthwith give notice thereof to the
Company, LaBarge Electronics and LaBarge Acquisition. Upon receipt of such notice, each of the
Company, LaBarge Electronics and LaBarge Acquisition shall convert all of its then outstanding
LIBOR Loans from such Lender on either (a) the last day of the then current Interest Period
applicable to such LIBOR Loan if such Lender may lawfully continue to maintain and fund such LIBOR
Loan to such day or (b) immediately if such Lender may not lawfully continue to fund and maintain
such LIBOR Loan to such day, to a Base Rate Loan of the same type (i.e., a Revolving Credit Base
Rate Loan or a Term Base Rate Loan) in an equal principal amount. Interest accrued on each such
LIBOR Loan prior to any such conversion shall be due and payable on the date of such conversion
together with any funding losses and other amounts due under Section 2.16.



     2.19 Increased Cost.



     (a) If (i) Regulation D or (ii) after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein, or any change in the interpretation or administration
thereof by any governmental or regulatory authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender with any request or
directive (whether or not having the force of law) of any such governmental or regulatory
authority, central bank or comparable agency (a “Regulatory Change”):




     (A) shall subject any Lender to any tax, duty or other charge with respect to
its LIBOR Loans, its Notes or its obligation to make LIBOR Loans, or shall change
the basis of taxation of payments to any Lender of the principal of or interest on
its LIBOR Loans or any other amounts due under this Agreement in respect of its
LIBOR Loans or its obligation to make LIBOR Loans (except for taxes on or changes in
the rate of tax on the overall net income of such Lender); or




     (B) shall impose, modify or deem applicable any reserve (including, without
limitation, any reserve imposed by the Board of Governors of the Federal Reserve
System), special deposit, capital or similar requirement against assets of, deposits
with or for the account of, or credit extended or committed to be extended by, any
Lender or shall, with respect to any Lender impose, modify or deem applicable any
other condition affecting such Lender’s LIBOR Loans, such Lender’s Notes or such
Lender’s obligation to make LIBOR Loans;



- 42 -









 




and the result of any of the foregoing is to increase the cost to (or in the case of Regulation D,
to impose a cost on or increase the cost to) such Lender of making or maintaining any LIBOR Loan,
or to reduce the amount of any sum received or receivable by such Lender under this Agreement or
under any of its Notes with respect thereto, by an amount deemed by such Lender to be material, and
if such Lender is not otherwise fully compensated for such increase in cost or reduction in amount
received or receivable by virtue of the inclusion of the reference to “LIBOR Reserve Percentage” in
the calculation of the LIBOR Rate, then upon notice by such Lender to the Company, LaBarge
Electronics and LaBarge Acquisition, which notice shall be sent by such Lender promptly after such
Lender becomes aware of such increased cost or reduction and which notice shall set forth such
Lender’s supporting calculations in reasonable detail and the details of the Regulatory Change, the
Company, LaBarge Electronics and LaBarge Acquisition shall pay such Lender, as additional interest,
such additional amount or amounts as will compensate such Lender for such increased cost or
reduction. The determination by any Lender under this Section of the additional amount or amounts
to be paid to it hereunder shall be conclusive in the absence of demonstrable error. In
determining such amount or amounts, the Lenders may use any reasonable averaging and attribution
methods.




     (b) If any Lender demands compensation under Section 2.19(a) above, the Company, LaBarge
Electronics and/or LaBarge Acquisition may at any time, upon at least three (3) Eurodollar Business
Day’s prior notice to such Lender, convert its then outstanding LIBOR Loans to Base Rate Loans of
the same type (i.e., a Revolving Credit Base Rate Loan or a Term Base Rate Loan) in an equal
principal amount. Interest accrued on each such LIBOR Loan prior to any such conversion shall be
due and payable on the date of such conversion together with any funding losses and other amounts
due under Section 2.16 and this Section 2.19.



     2.20 Base Rate Loans Substituted for Affected LIBOR Loans. If notice has been given
by a Lender pursuant to Sections 2.17 or 2.18 or by the Company, LaBarge Electronics and/or LaBarge
Acquisition pursuant to Section 2.19 requiring LIBOR Loans of any Lender to be repaid, then, unless
and until such Lender notifies the Company, LaBarge Electronics and LaBarge Acquisition that the
circumstances giving rise to such repayment no longer apply, all Loans which would otherwise be
made by such Lender to the Company, LaBarge Electronics and/or LaBarge Acquisition as LIBOR Loans
shall be made instead as Base Rate Loans. Such Lender shall promptly notify the Company, LaBarge
Electronics and LaBarge Acquisition if and when the circumstances giving rise to such repayment no
longer apply.



     2.21 Capital Adequacy. If, after the date of this Agreement, any Lender shall have
determined in good faith that the adoption of any applicable law, rule, regulation or guideline
regarding capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental or regulatory authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance by such 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 will have the effect of reducing the rate
of return on such Lender’s capital in respect of its obligations hereunder to a level below that
which such Lender could have achieved but for such adoption, change or compliance (taking into
consideration such Lender’s policies with respect to capital adequacy), then from time to time the
Company, LaBarge Electronics and LaBarge Acquisition shall pay to such Lender upon demand such
additional amount or amounts as will compensate such Lender for such reduction. Each Lender agrees
to give the Company, LaBarge Electronics and LaBarge Acquisition prompt written notice after such
Lender becomes aware that it is entitled to any such additional amount or amounts under this
Section 2.21. All determinations made in good faith by such Lender of the additional amount or
amounts required to compensate such Lender in respect of the foregoing shall be conclusive in the
absence of demonstrable error. In determining such amount or amounts, such Lender may use any
reasonable averaging and attribution methods.



- 43 -









 





     2.22 Survival of Indemnities. All indemnities and all provisions relating to
reimbursement to the Lenders of amounts sufficient to protect the yield to the Lenders with respect
to the Loans, including, without limitation, Sections 2.16, 2.17, 2.18, 2.19 and 2.21 of this
Agreement, shall survive the payment of the Notes and the other Borrower’s Obligations owed by any
one or more of the Borrowers and the termination of this Agreement.



     2.23 Discretion of Lenders as to Manner of Funding. Notwithstanding any provision
contained in this Agreement to the contrary, each Lender shall be entitled to fund and maintain its
funding of all or any part of its LIBOR Loans in any manner it elects, it being understood,
however, that for purposes of this Agreement all determinations hereunder (including, without
limitation, the determination of each Lender’s funding losses and expenses under Section 2.16)
shall be made as if such Lender had actually funded and maintained each LIBOR Loan through the
purchase of deposits having a maturity corresponding to the maturity of the applicable Interest
Period relating to the applicable LIBOR Loan and bearing an interest rate equal to the applicable
LIBOR Base Rate.



     2.24 Sharing of Payments. The Lenders agree among themselves that, in the event that
any Lender shall directly or indirectly obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, banker’s lien or
counterclaim, through the realization, collection, sale or liquidation of any collateral or
otherwise) on account of or in respect of any of the Loans or any of the other Borrower’s
Obligations owed by any one or more of the Borrowers in excess of its Pro Rata Share of all such
payments, such Lenders shall immediately purchase from the other Lenders participations in the
Loans or other Borrower’s Obligations owed to such other Lenders in such amounts, and make such
other adjustments from time to time, as shall be equitable to the end that the Lenders share such
payment ratably in accordance with their respective Pro Rata Shares of the outstanding Loans and
other Borrower’s Obligations owed by any one or more of the Borrowers. The Lenders further agree
among themselves that if any such excess payment to a Lender shall be rescinded or must otherwise
be restored, the other Lenders which shall have shared the benefit of such payment shall, by
repurchase of participation theretofore sold, or otherwise, return its share of that benefit to the
Lender whose payment shall have been rescinded or otherwise restored. Each of the Company, LaBarge
Electronics and LaBarge Acquisition agrees that any Lenders so purchasing a participation in the
Loans or other Borrower’s Obligations owed by such Borrower to the other Lenders may exercise all
rights of set-off, banker’s lien and/or counterclaim as fully as if such Lenders were a holder of
such Loan or other Borrower’s Obligations owed by such Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar law any Lender
receives a secured claim in lieu of a set-off to which this Section 2.24 would apply, such Lenders
shall, to the extent practicable, exercise their rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this Section 2.24 to share in the
benefits of any recovery of such secured claim.



     2.25 Application of Payments. Notwithstanding any provision contained in this
Agreement and/or any other Transaction Document to the contrary:



     (a) so long as neither the Agent nor the Required Lenders have accelerated and demanded
immediate repayment of any or all of the Borrower’s Obligations owed by any one or more of the
Borrowers following an Event of Default under this Agreement, all monies received by the Agent
and/or any Lender as a result of voluntary payment from a Borrower shall be applied to the payment
of the various Borrower’s Obligations owed by such Borrower as directed by such Borrower and the
Agent shall promptly remit to each Lender its ratable share of each such payment; and



     (b) all other monies received by the Agent and/or any Lender, including, without limitation,
all monies received by the Agent and/or any Lender after the Agent or the Required Lenders have
accelerated and demanded immediate repayment of any or all of the Borrower’s Obligations owed by
any one or more of the Borrowers following an Event of Default under this Agreement, whether



- 44 -









 







received as a result of a payment from any Borrower and/or any other Obligor, through the exercise
of a right of setoff or realized from the sale or other disposition of or collections from any of
the Collateral or resulting from any proceedings against any Borrower or any other Obligor or from
any source whatsoever, shall be applied in the following order (or in such other order as each of
the Lenders may agree): (i) first, to the reasonable costs and expenses, including
reasonable attorneys’ fees and expenses, incurred by the Agent and/or any Lender to effect such
recovery, to enforce any right or remedy under this Agreement, any other Transaction Document or
any other agreement with any Borrower or any Person relating to such recovery, to dispose of any of
the Collateral, to preserve or protect any of the Collateral, including, without limitation, making
expenditures for taxes, insurance premiums, prevention of waste and preservation of any of the
Collateral, repairs and maintenance, or to manage and operate any of the Collateral; and (ii)
second, pro rata among the various the Borrower’s Obligations owed by any
one or more of the Borrowers based on the then total outstanding amount of each of said Borrower’s
Obligations on the date of receipt of such monies. For example, if, as of the date of
determination, (i) the aggregate outstanding amount (principal and interest) of the Revolving
Credit Loans was $300.00, (ii) the aggregate outstanding principal amount of the Swing Line Loans
was $50.00, (iii) the aggregate undrawn face amount of the outstanding Letters of Credit together
with all unreimbursed drawings with respect thereto was $50.00, (iv) the aggregate outstanding
principal amount of the LaBarge Electronics Term Loan was $200.00, (v) the aggregate outstanding
principal
amount of the LaBarge Acquisition Term Loan was $300.00, (v) the Swap Termination Value owed by a
Borrower to a Lender with respect to a Swap Contract was $75.00 and (vi) the amount owed by a
Borrower to a Lender under or with respect to a Treasury Management Agreement was $25.00, Thirty
Percent (30%) of the monies would be applied to the Revolving Credit Loans, Five Percent (5%) of
the monies would be applied to the Swing Line Loans, Five Percent (5%) of the monies would be
applied to the Letters of Credit, Twenty Percent (20%) of the monies would be applied to the
LaBarge Electronics Term Loan, Thirty Percent (30%) of the monies would be applied to the LaBarge
Acquisition Term Loan, Seven and One-Half Percent (7-1/2%) of the monies would be applied to the
Swap Termination Value under the Swap Contract and Two and One-Half Percent (2-1/2%) of the monies
would be applied to the amounts under or with respect to a Treasury Management Agreement; and any
amount so allocated to a Letter of Credit shall be held in escrow by the Agent as cash collateral
for the Company’s reimbursement and other obligations with respect to such Letter of Credit until
such Letter of Credit is drawn on, expires or is terminated, and, to the extent such Letter of
Credit is not fully drawn, the excess monies escrowed for such Letter of Credit shall be
reallocated among the other Borrower’s Obligations owed by any one or more of the Borrowers in such
amounts as would have been allocated to such other Borrower’s Obligations (in the manner set forth
above) if the undrawn portion of such Letter of Credit had not been deemed to be issued and
outstanding for purposes of the allocation which gave rise to the escrow deposit); and any amount
so allocated to the various the Borrower’s Obligations shall be allocated among the Lenders based
on their respective ratable shares of such Borrower’s Obligations.



     2.26 Taxes.



     (a) Any and all payments by any Borrower to or for the account of the Agent and/or any Lender
under or in respect of this Agreement, any Note and/or any other Transaction Document shall be made
free and clear of and without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of the Agent and each Lender, taxes imposed on or measured by its
net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which the
Agent or such Lender, as the case may be, is organized or any political subdivision thereof (all
such non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as “Taxes”). If any Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable by such Borrower to the Agent and/or any Lender under
or in respect of this Agreement, any Note and/or any other Transaction Document, (i) the sum
payable shall be increased as necessary so that after



- 45 -









 







making all required deductions (including
deductions applicable to additional sums payable under this Section 2.26(a)) the Agent or such
Lender, as the case may be, receives an amount equal to the sum it would have received had no such
deduction of Taxes been made, (ii) such Borrower shall make such deductions, (iii) such Borrower
shall pay the full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) such Borrower shall furnish to the Agent or such Lender, as
the case may be, at its address referred to in Section 8.07, the original or a certified copy of a
receipt evidencing payment thereof.



     (b) In addition, the Borrowers jointly and severally agree to pay any present or future stamp
or documentary taxes and any other excise or property taxes, or charges or similar levies which
arise from any payment made under or in respect of this Agreement, any Note and/or any other
Transaction Document or from the execution or delivery of, or otherwise with respect to, this
Agreement, any Note and/or any other Transaction Document (hereinafter referred to as “Other
Taxes”).



     (c) The Borrowers jointly and severally agree to indemnify the Agent and each Lender for the
full amount of Taxes or Other Taxes, respectively (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 2.26),
paid by the Agent and/or any Lender and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall be made within fifteen (15)
days from the date the Agent or the applicable Lender, as the case may be, makes demand therefor,
accompanied by
a certificate of the Agent or such Lender, as the case may be, setting forth in reasonable detail
its computation of the amount or amounts to be paid to it hereunder.



     (d) The provisions of this Section 2.26 shall survive any expiration or termination of this
Agreement and the payment of the Notes and the other Borrower’s Obligations owed by any one or more
of the Borrowers.



SECTION 3. PRECONDITIONS.




     3.01 Preconditions to Effectiveness of this Agreement. Notwithstanding any provision
contained in this Agreement to the contrary, this Agreement shall not be effective unless and until
the Agent shall have first received (or the Agent and each Lender shall have waived in writing the
Agent’s receipt of) the following:




     (a) this Agreement, duly executed by the Company, LaBarge Electronics, LaBarge
Acquisition and each Lender;




     (b) the Revolving Credit Notes, each duly executed by the Company;




     (c) the Swing Line Note, duly executed by the Company;




     (d) the LaBarge Electronics Term Loan Notes, each duly executed by LaBarge Electronics;




     (e) the LaBarge Acquisition Term Loan Notes, each duly executed by LaBarge Acquisition;




     (f) the Revolving Credit Guaranty (which must be in form and substance satisfactory to
the Agent and each Lender), duly executed by LaBarge Electronics, LaBarge Acquisition and
LaBarge/STC;



- 46 -









 






     (g) the LaBarge Electronics Term Loan Guaranty (which must be in form and substance
satisfactory to the Agent and each Lender), duly executed by the Company, LaBarge
Acquisition and LaBarge/STC;




     (h) the LaBarge Acquisition Term Loan Guaranty (which must be in form and substance
satisfactory to the Agent and each Lender), duly executed by the Company, LaBarge
Electronics and LaBarge/STC;




     (i) the Company Stock Pledge Agreement (which must be in form and substance
satisfactory to the Agent and each Lender) and such Uniform Commercial Code financing
statements, original stock certificates, stock powers and other documents as the Agent or
any Lender may require in connection therewith, each duly executed by the Company;




     (j) the LaBarge Acquisition Security Agreement (which must be in form and substance
satisfactory to the Agent and each Lender) and such Uniform Commercial Code financing
statements and other documents as the Agent or any Lender may require in connection
therewith, each duly executed by LaBarge Acquisition;




     (k) the LaBarge Acquisition Patent, Trademark and License Security Agreement (which
must be in form and substance satisfactory to the Agent and each Lender) and such Uniform
Commercial Code financing statements and other documents as the Agent or any Lender may
require in connection therewith, each duly executed by LaBarge Acquisition;




     (l) the LaBarge Acquisition Collateral Assignment of Asset Purchase Agreement (which
must be in form and substance satisfactory to the Agent and each Lender) and such Uniform
Commercial Code financing statements and other documents as the Agent or any Lender may
require in connection therewith, each duly executed by LaBarge Acquisition;




     (m) a copy of resolutions of the Board of Directors of the Company, duly adopted, which
authorize the execution, delivery and performance of the Transaction Documents executed by
the Company, certified by the Secretary of the Company;




     (n) a copy of resolutions of the Board of Directors of LaBarge Electronics, duly
adopted, which authorize the execution, delivery and performance of the Transaction
Documents executed by LaBarge Electronics, certified by the Secretary of LaBarge
Electronics;




     (o) a copy of resolutions of the Board of Directors of LaBarge Acquisition, duly
adopted, which authorize the execution, delivery and performance of the Transaction
Documents executed by LaBarge Acquisition, certified by the Secretary of LaBarge
Acquisition;




     (p) a copy of resolutions of the Board of Directors of LaBarge/STC, duly adopted, which
authorize the execution, delivery and performance of the Transaction Documents executed by
LaBarge/STC, certified by the Secretary of LaBarge/STC;




     (q) a copy of the certificate of incorporation of the Company, including any amendments
thereto, certified by the Secretary of State of the State of Delaware;




     (r) a copy of the articles of incorporation of LaBarge Electronics, including any
amendments thereto, certified by the Secretary of State of the State of Missouri;




     (s) a copy of the articles of incorporation of LaBarge Acquisition, including any
amendments thereto, certified by the Secretary of State of the State of Missouri;



- 47 -









 






     (t) a copy of the articles of incorporation of LaBarge/STC, including any amendments
thereto, certified by the Secretary of State of the State of Texas;




     (u) a copy of the by-laws of the Company, including any amendments thereto, certified
by the Secretary of the Company;




     (v) a copy of the by-laws of LaBarge Electronics, including any amendments thereto,
certified by the Secretary of LaBarge Electronics;




     (w) a copy of the by-laws of LaBarge Acquisition, including any amendments thereto,
certified by the Secretary of LaBarge Acquisition;




     (x) a copy of the by-laws of LaBarge/STC, including any amendments thereto, certified
by the Secretary of LaBarge/STC;




     (y) an incumbency certificate, executed by the Secretary of the Company, which shall
identify by name and title and bear the signatures of all of the officers of the Company
executing any of the Transaction Documents;




     (z) an incumbency certificate, executed by the Secretary of LaBarge Electronics, which
shall identify by name and title and bear the signatures of all of the officers of LaBarge
Electronics executing any of the Transaction Documents;




     (aa) an incumbency certificate, executed by the Secretary of LaBarge Acquisition, which
shall identify by name and title and bear the signatures of all of the officers of LaBarge
Acquisition executing any of the Transaction Documents;




     (bb) an incumbency certificate, executed by the Secretary of LaBarge/STC, which shall
identify by name and title and bear the signatures of all of the officers of LaBarge/STC
executing any of the Transaction Documents;




     (cc) certificates of corporate good standing of the Company issued by the Secretaries
of State of the States of Delaware and Missouri;




     (dd) a certificate of corporate good standing of LaBarge Electronics issued by the
Secretary of State of the State of Missouri;




     (ee) certificates of corporate good standing of LaBarge Acquisition issued by the
Secretaries of State of the States of Missouri and Wisconsin;




     (ff) a certificate of corporate good standing of LaBarge/STC issued by the Secretary of
State of the State of Texas;




     (gg) an opinion of counsel of Armstrong Teasdale LLP, outside counsel to the Company,
LaBarge Electronics, LaBarge Acquisition and LaBarge/STC, in form and substance satisfactory
to the Agent and each Lender;




     (hh) the initial Borrowing Base Certificate required by Section 2.01(c);




     (ii) evidence of the proper filing of UCC-1 Financing Statements perfecting first
priority security interests in favor of the Agent in all of the Collateral;



- 48 -









 






     (jj) UCC-3 Termination Statements for all UCC-1 Financing Statements filed of record
against the Company, any Subsidiary and/or Pensar Electronic Solutions, LLC other than UCC-1
Financing Statements relating to Permitted Liens (including, without limitation, all UCC-1
Financing Statements filed in favor of Chase Equipment Leasing, Inc.);




     (kk) evidence satisfactory to the Agent of the insurance required by this Agreement and
the other Transaction Documents together with loss payable endorsements in form and
substance satisfactory to the Agent, duly executed by the insurance company;




     (ll) copies of all financial statements and other Exhibits and Schedules required by
this Agreement and the other Transaction Documents;




     (mm) such mortgagee, bailee, landlord or warehousemen’s waivers as the Agent may deem
necessary regarding locations at which any Collateral is or will be stored or otherwise
located;




     (nn) evidence satisfactory to the Agent and each Lender that contemporaneously with the
funding of the initial Loans under this Agreement LaBarge Acquisition will consummate the
Pensar Acquisition pursuant to, and in accordance with, the terms of, the Pensar Acquisition
Agreement, the terms and provisions (including the purchase price) of which Pensar
Acquisition Agreement must be acceptable to the Agent and each Lender, which evidence shall
include (i) a copy of the fully-executed Pensar Acquisition Agreement together with all
Exhibits and Schedules thereto, (ii) a certificate of Pensar Electronic Solutions, LLC that
all of the conditions to its obligations under the Pensar Acquisition Agreement which are
required to be satisfied as of or prior to closing have been satisfied and (iii) a
certificate of LaBarge Acquisition that all of
the conditions to its obligations under the Pensar Acquisition Agreement which are required
to be satisfied as of or prior to closing have been satisfied;




     (oo) a payoff letter in form and substance satisfactory to the Agent, duly executed by
JPMorgan Chase Bank, N.A.:




     (pp) a letter of direction from the Company, LaBarge Electronics and LaBarge
Acquisition with respect to the disbursement of the proceeds of the initial Loans under this
Agreement; and




     (qq) such other agreements, documents, instruments and certificates as the Agent or any
Lender may reasonably request.



     3.02 All Loans. Notwithstanding any provision contained in this Agreement to the
contrary, no Lender shall have any obligation to make, continue or convert any Loan under this
Agreement unless:




     (a) the Agent shall have received a current Borrowing Base Certificate as required by
Section 2.01(b);




     (b) if such Loan is a Revolving Credit Loan, the Agent shall have received a Notice of
Revolving Credit Borrowing for such Loan as required by Section 2.06;




     (c) if such Loan is a Swing Line Loan, U.S. Bank shall have received a Notice of Swing
Line Borrowing for such Loan to the extent required by Section 2.06;



- 49 -









 






     (d) both immediately before and immediately after giving effect to the making,
continuation or conversion of such Loan, no Default or Event of Default under this Agreement
shall have occurred and be continuing;




     (e) no material adverse change in the Properties, assets, liabilities, business,
operations, prospects, income or condition (financial or otherwise) of the Company, LaBarge
Electronics, LaBarge Acquisition and/or the Company and its Subsidiaries taken as a whole
shall have occurred since September 28, 2008, and be continuing; and




     (f) all of the representations and warranties made by the Company, LaBarge Electronics,
LaBarge Acquisition and/or any other Obligor in this Agreement and/or in any other
Transaction Document shall be true and correct in all material respects on and as of the
date of the making, continuation or conversion of such Loan as if made on and as of the date
of the making, continuation or conversion of such Loan (and for purposes of this Section
3.02(f), the representations and warranties made by the Company, LaBarge Electronics and
LaBarge Acquisition in Section 4.04 shall be deemed to refer to the most recent financial
statements of the Company and its Subsidiaries delivered to the Agent and each Lender
pursuant to Section 5.01(a)).


Each request for the making, continuation or conversion of a Loan by the Company, LaBarge
Electronics and/or LaBarge Acquisition under this Agreement (including, without limitation, the
creation by the Company of a Deficiency Amount in the Company’s Operating Account which will be
funded by a Swing Loan) shall be deemed to be a representation and warranty by the Company, LaBarge
Electronics and LaBarge Acquisition on the date of the making, continuation or conversion of such
Loan as to the facts specified in clauses (d), (e) and (f) of this Section 3.02.




     3.03 All Letters of Credit. Notwithstanding any provision contained in this Agreement
to the contrary, U.S. Bank shall have no obligation to issue, amend or extend any Letter of Credit
under this Agreement unless:




     (a) the Agent and each Lender shall have received a current Borrowing Base Certificate
as required by Section 2.01(b);




     (b) U.S. Bank shall have received a Letter of Credit Request for such Letter of Credit
as required by Section 2.05(a);




     (c) U.S. Bank shall have received a Letter of Credit Application for such Letter of
Credit as required by Section 2.05(a), duly executed by the Company as account party and
applicant;




     (d) the Company shall have complied with all of the procedures and requirements set
forth in Section 2.05;




     (e) both immediately before and immediately after giving effect to the issuance,
amendment or extension of such Letter of Credit, no Default or Event of Default shall have
occurred and be continuing;




     (f) no material adverse change in the Properties, assets, liabilities, business,
operations, income or condition (financial or otherwise) of the Company, LaBarge
Electronics, LaBarge Acquisition and/or the Company and its Subsidiaries taken as a whole
shall have occurred since September 28, 2008, and be continuing;



- 50 -









 






     (g) all of the representations and warranties made by the Company, LaBarge Electronics,
LaBarge Acquisition and/or any other Obligor in this Agreement and/or in any other
Transaction Document shall be true and correct in all material respects on and as of the
date of the issuance, amendment or extension of such Letter of Credit as if made on and as
of the date of the issuance, amendment or extension of such Letter of Credit (and for
purposes of this Section 3.03(g), the representations and warranties made by the Company,
LaBarge Electronics and LaBarge Acquisition in Section 4.04 shall be deemed to refer to the
most recent financial statements of the Company and its Subsidiaries delivered to the Agent
and each Lender pursuant to Section 5.01(a)); and




     (h) U.S. Bank shall have received such other documents, certificates and agreements as
it may reasonably request.



     Each request for the issuance, amendment or extension of a Letter of Credit by the Company
under this Agreement shall be deemed to be a representation and warranty by the Company on the date
of the issuance, amendment or extension of such Letter of Credit as to the facts specified in
clauses (e), (f) and (g) of this Section 3.03.



SECTION 4. REPRESENTATIONS AND WARRANTIES.




     Each of the Company, LaBarge Electronics and LaBarge Acquisition hereby represents and
warrants to the Agent and each Lender that:



     4.01 Existence and Power. The Company and each Subsidiary: (a) is duly incorporated
or organized, validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization; (b) has all requisite corporate, limited liability company or other
powers required to carry on its business as now conducted; (c) has all requisite governmental and
regulatory licenses, authorizations, consents and approvals required to carry on its business as
now conducted, except such licenses, authorizations, consents and approvals the failure to have
could not reasonably be expected to have a Material Adverse Effect; and (d) is qualified to
transact business as a foreign entity in, and is in good standing under the laws of, all states in
which it is required
by applicable law to maintain such qualification and good standing except for those states in which
the failure to qualify or maintain good standing could not reasonably be expected to have a
Material Adverse Effect.



     4.02 Authorization. The execution, delivery and performance by the Company of this
Agreement, the Revolving Credit Notes, the Letter of Credit Reimbursement Agreement, the Letter of
Credit Applications and the other Transaction Documents to which it is a party are within the
corporate powers of the Company and have been duly authorized by all necessary corporate action on
the part of the Company. The execution, delivery and performance by LaBarge Electronics of this
Agreement, the LaBarge Electronics Term Loan Notes and the other Transaction Documents to which it
is a party are within the corporate powers of LaBarge Electronics and have been duly authorized by
all necessary corporate action on the part of LaBarge Electronics. The execution, delivery and
performance by LaBarge Acquisition of this Agreement, the LaBarge Acquisition Term Loan Notes and
the other Transaction Documents to which it is a party are within the corporate powers of LaBarge
Acquisition and have been duly authorized by all necessary corporate action on the part of LaBarge
Acquisition.



     4.03 Binding Effect. This Agreement, the Notes, the Letter of Credit Reimbursement
Agreement, the Letter of Credit Applications and the other Transaction Documents to which the
Company, LaBarge Electronics and/or LaBarge Acquisition is a party and which have been executed
contemporaneously with or prior to the execution of this Agreement have been duly executed and
delivered by such of the Company, LaBarge Electronics and LaBarge Acquisition as are parties
thereto and constitute the legal, valid and binding obligations of such of the Company, LaBarge
Electronics and



- 51 -









 







LaBarge Acquisition as are parties thereto enforceable in accordance with their
respective terms, except as such enforceability may be limited by (a) bankruptcy, insolvency or
other similar laws affecting creditors’ rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or at law); and
the Letter of Credit Applications and the other Transaction Documents to which the Company, LaBarge
Electronics and/or LaBarge Acquisition is a party which were not executed contemporaneously with or
prior to the execution of this Agreement, when executed and delivered in accordance with this
Agreement, will constitute the legal, valid and binding obligations of such of the Company, LaBarge
Electronics and LaBarge Acquisition as are parties thereto enforceable in accordance with their
respective terms, except as such enforceability may be limited by (a) bankruptcy, insolvency or
other similar laws affecting creditors’ rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or at law).



     4.04 Financial Statements. The Company has furnished the Agent and each Lender with
the following financial statements, identified by the chief financial officer of the Company: (a) a
consolidated balance sheet and consolidated statements of income, retained earnings and cash flows
of the Company and its Subsidiaries as of and for the fiscal year ended June 29, 2008, all
certified by the Company’s independent certified public accountants, which financial statements
have been prepared in accordance with GAAP consistently applied; and (b) an unaudited consolidated
balance sheet and unaudited consolidated statements of income, retained earnings and cash flows of
the Company and its Subsidiaries as of and for the fiscal quarter ended September 28, 2008, all
certified by the chief financial officer of the Company as being true and correct to the best of
his knowledge and as being prepared in accordance with GAAP consistently applied. The Company
further represents and warrants to the Agent and each Lender that (a) said balance sheets and their
accompanying notes fairly present the condition of the Company and its Subsidiaries as of the dates
thereof and (c) neither the Company nor any of its Subsidiaries had any direct or contingent
liabilities which were not disclosed on said financial statements or the notes thereto (to the
extent such disclosure is required by GAAP). The Company further represents and warrants to the
Agent and each Lender that there has not been any material adverse change in the Properties,
assets, liabilities, business, operations, income or condition (financial or otherwise) of the
Company, LaBarge Electronics, LaBarge Acquisition and/or the Company and its Subsidiaries taken as
a whole since September 28, 2008.



     4.05 Litigation. Except as disclosed on Schedule 4.05 attached hereto, there
is no action or proceeding pending or, to the knowledge of the Company, LaBarge Electronics or
LaBarge Acquisition, threatened against or affecting the Company or any Subsidiary before any
court, arbitrator or any governmental, regulatory or administrative body, instrumentality,
authority, agency or official which, if determined adversely against the Company or any Subsidiary,
could reasonably be expected to have a Material Adverse Effect. Neither the Company nor any
Subsidiary is in default with respect to any order, writ, injunction, decision or decree of any
court, arbitrator or any governmental, regulatory or administrative body, instrumentality,
authority, agency or official, a default under which could reasonably be expected to have a
Material Adverse Effect. There are no outstanding judgments against the Company or any Subsidiary.



     4.06 Pension and Welfare Plans. Except as set forth on Schedule 4.06 attached
hereto, each Pension Plan and Welfare Plan complies in all material respects with ERISA and all
other applicable statutes and governmental and regulatory rules and regulations; no Reportable
Event has occurred and is continuing with respect to any Pension Plan; neither the Company nor any
Subsidiary nor any ERISA Affiliate has withdrawn from any Multi-Employer Plan in a “complete
withdrawal” or a “partial withdrawal” as defined in Sections 4203 or 4205 of ERISA, respectively;
neither the Company nor any Subsidiary nor any ERISA Affiliate has entered into an agreement
pursuant to Section 4204 of ERISA; neither the Company nor any Subsidiary nor any ERISA Affiliate
has in the past contributed to or currently contributes to a Multi-Employer Plan; neither the
Company nor any Subsidiary nor any ERISA Affiliate



- 52 -









 







has any withdrawal liability with respect to a Multi-Employer Plan; no steps have been instituted by the Company or any Subsidiary or any ERISA
Affiliate to terminate any Pension Plan; no condition exists or event or transaction has occurred
in connection with any Pension Plan, Multi-Employer Plan or Welfare Plan which could result in the
incurrence by the Company or any Subsidiary or any ERISA Affiliate of any material liability, fine
or penalty; and neither the Company nor any Subsidiary nor any ERISA Affiliate is a “contributing
sponsor” as defined in Section 4001(a)(13) of ERISA of a “single-employer plan” as defined in
Section 4001(a)(15) of ERISA which has two or more contributing sponsors at least two of whom are
not under common control. Except as disclosed on the consolidated financial statements of the
Company and its Subsidiaries delivered by the Company to the Agent and each Lender, neither the
Company nor any Subsidiary nor any ERISA Affiliate has any liability with respect to any Welfare
Plan.



     4.07 Tax Returns and Payment. The Company and each Subsidiary has filed all Federal,
state, local, foreign and other income and other tax returns which are required to be filed and has
paid all taxes which have become due pursuant to such returns and all other taxes, assessments,
fees and other governmental charges upon the Company or such Subsidiary, as the case may be, and/or
upon their respective Properties, assets, income and franchises which have become due and payable
by the Company or such Subsidiary, as the case may be, except those wherein the amount,
applicability or validity are being contested by the Company or such Subsidiary, as the case may
be, by appropriate proceedings being diligently conducted in good faith and in respect of which
adequate reserves in accordance with GAAP have been established. There is no asserted or assessed
(or to the knowledge of the Company, LaBarge Electronics or LaBarge Acquisition, proposed) tax
deficiency against the Company or any Subsidiary which, if determined adversely against the Company
or any Subsidiary, could reasonably be expected to have a Material Adverse Effect.



     4.08 Subsidiaries. The Company has no Subsidiaries other than as identified on
Schedule 4.08 attached hereto, as the same may from time to time be amended, modified or
supplemented as provided herein. Schedule 4.08 attached hereto correctly sets forth, for
each Subsidiary, the number of shares of each class of capital stock, membership interests or other
equity interests authorized for such Subsidiary, the number of outstanding and the percentage of
the outstanding shares of each such class owned, directly or indirectly, by the Company or one or
more of its Subsidiaries. All of the issued and outstanding capital stock, membership interests or
other equity interests of each Subsidiary is duly authorized, validly issued and fully paid and
nonassessable. Except as disclosed on Schedule 4.08 attached hereto, neither the Company
nor any Subsidiary, individually or collectively, owns or holds, directly or indirectly, any
capital stock of or
membership interest or other equity interest in any corporation, limited liability company,
partnership, joint venture or other entity other than the Company’s Subsidiaries. The Company may
at any time amend, modify or supplement Schedule 4.08 by notifying the Agent and each
Lender in writing of any changes thereto, including any formation, acquisition, merger or
liquidation of any Subsidiary or any change in the capitalization of any Subsidiary, in each case,
in accordance with the terms of this Agreement, and thereby the representations and warranties
contained in this Section 4.08 shall be amended accordingly so long as such amendment, modification
or supplement is made within thirty (30) days after the occurrence of any such changes in the facts
stated therein and that such changes reflect transactions that are permitted under this Agreement.



     4.09 Compliance With Other Instruments; None Burdensome. Neither the Company nor any
Subsidiary is a party to any contract or agreement or subject to any charter or other corporate,
limited liability company or other restriction which could reasonably be expected to have a
Material Adverse Effect and which is not disclosed on the Company’s financial statements heretofore
submitted to the Agent and each Lender; none of the execution and delivery by the Company and/or
any Subsidiary of the Transaction Documents, the consummation of the transactions therein
contemplated or the compliance with the provisions thereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on the Company or any Subsidiary, or any
of the provisions of the certificate or articles of incorporation, by-laws or other organizational
documents of the Company or any Subsidiary or any of the



- 53 -









 







provisions of any indenture, agreement,
document, instrument or undertaking to which the Company or any Subsidiary is a party or subject,
or by which the Company or any Subsidiary or any Property of the Company or any Subsidiary is
bound, or conflict with or constitute a default thereunder or result in the creation or imposition
of any Lien pursuant to the terms of any such indenture, agreement, document, instrument or
undertaking (other than in favor of the Agent pursuant to the Transaction Documents). No order,
consent, approval, license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental, regulatory, administrative or public body or authority, or
any subdivision thereof, or any other Person is required to authorize, or is required in connection
with, the execution, delivery or performance of, or the legality, validity, binding effect or
enforceability of, any of the Transaction Documents.



     4.10 Other Debt. Except as disclosed on Schedule 4.10 attached hereto, as of
the date of this Agreement, neither the Company nor any Subsidiary is a borrower, guarantor or
obligor with respect to, or a lessee under, any Debt (including, without limitation, any Swap
Contracts, Guarantees or Capitalized Leases) other than the Borrower’s Obligations, the Revolving
Credit Guaranty, the LaBarge Electronics Term Loan Guaranty and the LaBarge Acquisition Term Loan
Guaranty.



     4.11 Labor Matters. Neither the Company nor any Subsidiary is a party to any labor
dispute which could reasonably be expected to have a Material Adverse Effect. There are no strikes
or walkouts relating to any labor contract to which the Company or any Subsidiary is subject.
Hours worked and payments made to the employees of the Company and its Subsidiaries have not been
in violation of (a) the Fair Labor Standards Act or (b) any other applicable law dealing with such
matters, the violation of which could reasonably be expected to have a Material Adverse Effect.
All payments due from the Company or any Subsidiary, or for which any claim may be made against any
of them, in respect of wages, employee health and welfare insurance and/or other benefits have been
paid or accrued as a liability on their respective books.



     4.12 Title to Property. The Company and each Subsidiary is the sole and absolute
owner of, or has the legal right to use and occupy, all Property it claims to own or which is
necessary for the Company or such Subsidiary to conduct its business, and all of such Property is
free and clear of all Liens other than Permitted Liens. The Company and each Subsidiary enjoys
peaceful and undisturbed possession in all material respects under all leases under which it is
operating as a lessee.



     4.13 Regulation U. Neither the Company nor LaBarge Electronics nor LaBarge
Acquisition is engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of The Board of Governors of the Federal Reserve System, as amended) and no part of
the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately (a) to purchase or carry margin stock (other than redemptions by the
Company of shares of common stock of the Company to the extent permitted by Section 5.02(i) of this
Agreement) or to extend credit to others for the purpose of purchasing or carrying margin stock, or
to refund or repay indebtedness originally incurred for such purpose or (b) for any purpose which
entails a violation of, or which is inconsistent with, the provisions of any of the Regulations of
The Board of Governors of the Federal Reserve System, including, without limitation, Regulations U,
T or X thereof, as amended. If requested by the Agent or any Lender, the Company, LaBarge
Electronics and LaBarge Acquisition shall furnish to the Agent a statement in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U.



     4.14 Multi-Employer Pension Plan Amendments Act of 1980. The Company and each
Subsidiary is in compliance with the Multi-Employer Pension Plan Amendments Act of 1980, as amended
(“MEPPAA”), and neither the Company nor any Subsidiary has any liability for pension contributions
pursuant to MEPPAA.



- 54 -









 





     4.15 Investment Company Act of 1940. Neither the Company nor LaBarge Electronics nor
LaBarge Acquisition is an “investment company” as that term is defined in, or is otherwise subject
to regulation under, the Investment Company Act of 1940, as amended.



     4.16 Patents, Trademarks, Copyrights, Licenses, Etc. Except as disclosed on
Schedule 4.16 attached hereto, neither the Company nor any Subsidiary has any patents,
patent applications, patent rights, trademarks, trademark applications, trademark rights,
copyrights, licenses or other intellectual property which are material to the business of the
Company or any Subsidiary. The Company may at any time amend, modify or supplement Schedule
4.16 by notifying Lender in writing of any changes thereto, and thereby the representations and
warranties contained in the first sentence of this Section 4.16 shall be amended accordingly so
long as such amendment, modification or supplement is made within thirty (30) days after the
occurrence of any such changes in the facts stated therein and that such changes reflect
transactions that are permitted under this Agreement. The Company and each Subsidiary possesses
all necessary patents, patent rights, trademarks, trademark rights, trade names, trade name rights,
copyrights, licenses and other intellectual property to conduct its business without conflict with
any patent, patent right, trademark, trademark right, trade name, copyright, license or other
intellectual property of any other Person.



     4.17 Environmental and Safety and Health Matters. Except as disclosed on Schedule
4.17 attached hereto: (a) the operations of the Company and each Subsidiary comply with all
applicable Environmental Laws and all applicable Occupational Safety and Health Laws, the violation
of or noncompliance with which could reasonably be expected to have a Material Adverse Effect; (b)
none of the operations of the Company or any Subsidiary are subject to any Environmental Claim or
any judicial, governmental, regulatory or administrative proceeding alleging the violation of any
Occupational Safety and Health Law, which, if determined adversely against the Company or any
Subsidiary, could reasonably be expected to have a Material Adverse Effect; (c) none of the
operations of the Company or any Subsidiary is the subject of any Federal or state investigation
evaluating whether any remedial action is needed to respond to any Release of Hazardous Substances
or any unsafe or unhealthful condition at any premises owned, leased or operated by the Company or
such Subsidiary, which, if determined adversely to the Company or any Subsidiary, could reasonably
be expected to have a Material Adverse Effect; (d) neither the Company nor any Subsidiary has filed
any notice under any Environmental Law or Occupational Safety and Health Law indicating or
reporting (i) any past or present spillage, leakage or Release into the environment of, or
treatment, storage or disposal of, any Hazardous Substance or (ii) any unsafe or unhealthful
condition at any premises owned, leased or operated by the Company or such Subsidiary; and (e)
neither the Company nor any Subsidiary has any material contingent liability in connection with (i)
any spillage, disposal or Release into the environment of, or otherwise with respect to, any
Hazardous Substances or (ii) any unsafe or unhealthful condition at any premises owned, leased or
operated by the Company or such Subsidiary.



     4.18 Investments. Neither the Company nor any Subsidiary has any Restricted
Investments.



     4.19 No Default. No Default or Event of Default under this Agreement has occurred and
is continuing. There is no existing default or event of default under or with respect to any
indenture, contract, agreement, lease or other instrument to which the Company or any Subsidiary is
a party or by which any Property of the Company or any Subsidiary is bound or affected, a default
under which could reasonably be expected to have a Material Adverse Effect. The Company and each
Subsidiary has and is in full compliance with and in good standing with respect to all governmental
and/or regulatory permits, licenses, certificates, consents and franchises necessary to continue to
conduct its business as previously conducted by it and to own or lease and operate its Properties
as now owned or leased by it, the failure to have or noncompliance with which could reasonably be
expected to have a Material Adverse Effect, and, to the best of knowledge of the Company, LaBarge
Electronics and LaBarge Acquisition, none of said permits, certificates, consents or franchises
contain any term, provision, condition or




- 55 -












 




limitation more burdensome than such as are generally
applicable to Persons engaged in the same or similar business as the Company or such Subsidiary, as
the case may be. Neither the Company nor any Subsidiary of the Company is in violation of any
applicable statute, law, rule, regulation or ordinance of the United States of America, of any
state, city, town, municipality, county or of any other jurisdiction, or of any agency thereof, a
violation of which could reasonably be expected to have a Material Adverse Effect.




     4.20 Government Contracts. Neither the Company nor any Subsidiary is a party to or
bound by any supply or purchase agreements with the Federal government or any state or local
government or any agency thereof, the termination or cancellation of which could reasonably be
expected to have a Material Adverse Effect.



     4.21 Purchase and Other Commitments and Outstanding Bids. No material purchase or
other commitment of the Company or any Subsidiary is in excess of the normal, ordinary and usual
requirements of its business, or was made at any price in excess of the then current market price,
or, to the best knowledge of the Company, LaBarge Electronics and LaBarge Acquisition, contains
terms and conditions more onerous than those usual and customary in the applicable industry. There
is no material outstanding bid, sales proposal, contract or unfilled order of the Company or any
Subsidiary which (a) will, or could if accepted, require the Company or any Subsidiary to supply
goods or services at a cost to the Company or any Subsidiary in excess of the revenues to be
received therefor or (b) quotes prices which do not include a markup over reasonably estimated
costs consistent with past markups on similar business based on market conditions current at that
time.



     4.22 Disclosure. Neither this Agreement nor any of the Exhibits or Schedules hereto
nor any certificate or other data furnished to the Agent and/or any Lender by or on behalf of the
Company or any Subsidiary in connection with the transactions contemplated by this Agreement
contains any untrue or incorrect statement of a material fact or omits to state a material fact
necessary to make the statements contained herein or therein not misleading. To the best knowledge
of the Company, LaBarge Electronics and LaBarge Acquisition, there is no fact peculiar to the
Company or any Subsidiary which presently has a Material Adverse Effect or in the future (so far as
the Company, LaBarge Electronics and LaBarge Acquisition can now foresee) could reasonably be
expected to have a Material Adverse Effect, which has not heretofore been disclosed in writing by
the Company to the Agent and each Lender.



SECTION 5. COVENANTS.



     5.01 Affirmative Covenants of the Company. Each of the Company, LaBarge Electronics
and LaBarge Acquisition covenants and agrees that, so long as any Lender has any obligation to make
any Loan under this Agreement, U.S. Bank has any obligation to issue any Letter of Credit under
this Agreement, any Letter of Credit remains outstanding and/or any of the Borrower’s Obligations
owed by any one or more of the Borrowers remain unpaid:



     (a) Information. The Company will deliver to the Agent and each Lender:




     (i) as soon as available and in any event within ninety (90) days after the end of each
fiscal year of the Company, a consolidated balance sheet of the Company and its Subsidiaries
as of the end of such fiscal year and the related consolidated statements of income,
retained earnings and cash flows for such fiscal year, setting forth in each case, in
comparative form, the figures for the previous fiscal year, all such financial statements to
be prepared in accordance with GAAP consistently applied and audited by and accompanied by
the unqualified opinion of KPMG Peat Marwick or other independent certified public
accountants selected by the Company and reasonably acceptable to the Required Lenders
together with (A) a certificate from such accountants to the effect that, in making the
examination necessary for the signing of such annual audit report, such accountants have not
become aware of any Default or Event of Default that has



 - 56 - 









 






occurred and is continuing, or, if
such accountants have become aware of any such event, describing it and the steps, if any,
being taken to cure it and (B) the computations of such accountants evidencing the Company’s
compliance with the financial covenants contained in Section 5.01(o) of this Agreement;




     (ii) as soon as available and in any event within forty-five (45) days after the end of
the first three (3) fiscal quarters of each fiscal year of the Company, a consolidated
balance sheet of the Company and its Subsidiaries as of the end of such fiscal quarter and
the related consolidated statements of income, retained earnings and cash flows for such
fiscal quarter and for the portion of the Company’s fiscal year ended at the end of such
fiscal quarter, setting forth in each case in comparative form, the figures for the
corresponding fiscal quarter and the corresponding portion of the Company’s previous fiscal
year, all in reasonable detail and satisfactory in form to the Required Lenders and
certified (subject to normal year-end adjustments and footnote disclosures) as to fairness
of presentation, GAAP and consistency by the President or the chief financial officer of the
Company;




     (iii) simultaneously with the delivery of each set of financial statements referred to
in Section 5.01(a)(i) and 5.01(a)(ii) above, a certificate of the President or the chief
financial officer of the Company in the form attached hereto as Exhibit G and
incorporated herein by reference, accompanied by supporting financial work sheets where
appropriate, (A) evidencing the Company’s compliance with the financial covenants contained
in Section 5.01(o) of this Agreement, (B) stating whether there exists on the date of such
certificate any Default or Event of Default and, if any Default or Event of Default then
exists, setting forth the details thereof and the action which the Company is taking or
proposes to take with respect thereto and (C) certifying that all of the representations and
warranties made by the Company, LaBarge Electronics, LaBarge Acquisition and/or any other
Obligor in this Agreement and/or in any other Transaction Document are true and correct in
all material respects on and as of the date of such certificate as if made on and as of the
date of such certificate;




     (iv) promptly upon receipt thereof, any reports (including, without limitation, any
management letters) submitted to the Company or any Subsidiary (other than reports
previously delivered pursuant to Sections 5.01(a)(i) above) by independent accountants in
connection with any annual, interim or special audit made by them of the books of the
Company or any Subsidiary;




     (v) within fifteen (15) days after the end of each fiscal month of the Company, (A) an
accounts trial balance of the Company indicating which Accounts are up to 30, 31 to 60, 61
to 90 or more than 90 days past the invoice date and including, if requested by the Agent or
any Lender, a listing of the names and addresses of all applicable Account Debtors, (B) a
summary of accounts payable of the Company showing which accounts payable are current, up to
30, 31 to 60, 61 to 90 or more than 90 days past due and including, if requested by the
Agent or any
Lender, a listing of the names and addresses of applicable creditors and (C) a backlog
report for each of the Company, LaBarge Electronics, LaBarge Acquisition and LaBarge/STC,
all in form and detail reasonably satisfactory to the Required Lenders and certified as
being true, correct and complete by the President or the chief financial officer of the
Company;




     (vi) at such intervals as the Agent or any Lender may request, such company-prepared
information and reports regarding the Inventory of the Company and each Subsidiary as the
Agent or any Lender may from time to time reasonably request, all in form and detail
reasonably satisfactory to the Required Lenders and certified as being true, correct and
complete by the President or the chief financial officer of the Company;



 - 57 - 









 






     (vii) as soon as available and in any event no later than ninety (90) days after the
beginning of each fiscal year of the Company, consolidated balance sheet, income statement
and cash flow projections for the Company and its Subsidiaries for such fiscal year on a
month-by-month basis, all in form and detail reasonably acceptable to the Required Lenders;
and




     (viii) with reasonable promptness, such further information regarding the business,
affairs and financial condition of the Company or any Subsidiary as the Agent or any Lender
may from time to time reasonably request.



     The Agent and each Lender is hereby authorized to deliver a copy of any financial statement or
other information made available by the Company or any Subsidiary to any regulatory authority
having jurisdiction over the Agent or such Lender, as the case may be, pursuant to any request
therefor.



     (b) Payment of Indebtedness. The Company will, and it will cause each Subsidiary to,
(i) pay and discharge any and all Indebtedness payable or Guaranteed by the Company or such
Subsidiary, as the case may be, and any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) in accordance with the agreement,
document or instrument relating to such Indebtedness or Guarantee; provided, however, that neither
the Company nor any Subsidiary shall be required to pay any such Indebtedness which does not
constitute Debt the payment of which is being contested in good faith and by appropriate
proceedings being diligently conducted and for which adequate reserves in accordance with GAAP have
been provided, except that the Company or such Subsidiary, as the case may be, shall pay or cause
to be paid all such Indebtedness forthwith upon the commencement of proceedings to foreclose any
Lien which is attached as security therefor, unless such foreclosure is stayed by the filing of an
appropriate bond in a manner reasonably satisfactory to the Required Lenders and (ii) faithfully
perform, observe and discharge all covenants, conditions and obligations which are imposed upon the
Company or such Subsidiary, as the case may be, by any and all agreements, documents, instruments
and indentures evidencing, securing or otherwise relating to such Indebtedness or Guarantee.



     (c) Books and Records; Consultations and Inspections. The Company will, and it will
cause each Subsidiary to, maintain books and records sufficient to permit the preparation of
financial statements in accordance with GAAP and in which true, correct and complete entries shall
be made of all dealings and transactions in relation to its business and activities. The Company
will, and it will cause each Subsidiary to, permit the Agent and each Lender (and any Person
appointed by the Agent or any Lender to whom the Company does not reasonably object) to discuss the
affairs, finances and accounts of the Company and each Subsidiary with the officers of the Company
and each Subsidiary and their independent public accountants, all at such reasonable times and as
often as the Agent or any Lender may from time to time reasonably request. The Company will also
permit, and will cause each Subsidiary to permit, inspection of its Properties, books and records
by the Agent and each Lender during normal business hours and at other reasonable times. The
Company will reimburse the Agent and each Lender upon demand for all reasonable costs and expenses
incurred by the Agent or such Lender, as the case may be, in connection with any such inspection
conducted by the Agent or such Lender, as the case may be, while any Default
or Event of Default under this Agreement has occurred and is continuing. The Company irrevocably
authorizes the Agent and each Lender to communicate directly with its independent public
accountants and irrevocably authorizes and directs such accountants to disclose to the Agent and
each Lender any and all information with respect to the business and financial condition of the
Company and each Subsidiary as the Agent or any Lender may from time to time reasonably request in
writing.



     (d) Payment of Taxes. The Company will, and it will cause each Subsidiary to, duly
file all Federal, state and local income tax returns and all other tax returns and reports of the
Company or such Subsidiary, as the case may be, which are required to be filed and duly pay and
discharge promptly all taxes, assessments and other governmental charges imposed upon it or any of
its Property; provided,



 - 58 - 









 







however, that neither the Company nor any Subsidiary shall be required to
pay any such tax, assessment or other governmental charge the payment of which is being contested
in good faith and by appropriate proceedings being diligently conducted and for which adequate
reserves in accordance with GAAP have been provided, except that the Company or such Subsidiary, as
the case may be, shall pay or cause to be paid all such taxes, assessments and governmental charges
forthwith upon the commencement of proceedings to foreclose any Lien which is attached as security
therefor, unless such foreclosure is stayed by the filing of an appropriate bond in a manner
reasonably satisfactory to the Required Lenders.



     (e) Payment of Claims. The Company will, and it will cause each Subsidiary to, pay
and discharge all trade accounts payable, all accruals and all claims for work, labor or materials
which if unpaid could become a Lien upon any of its Property in accordance with its usual and
customary business practices as in effect on the date of this Agreement (but in no event later than
thirty (30) days after the due date thereof); provided, however, that neither the Company nor any
Subsidiary shall be required to pay any such trade account payable, accrual or claim the payment of
which is being contested in good faith and by appropriate proceedings being diligently conducted
and for which adequate reserves in accordance with GAAP have been provided, except that the Company
or such Subsidiary, as the case may be, shall pay or cause to be paid all such trade accounts
payable, accruals and claims forthwith upon the commencement of proceedings to foreclose any Lien
which is attached as security therefor, unless such foreclosure is stayed by the filing of an
appropriate bond in a manner reasonably satisfactory to the Required Lenders.



     (f) Existence. The Company will, and it will cause each Subsidiary to, do all things
necessary to (i) preserve and keep in full force and effect at all times its corporate or other
existence and all permits, licenses, franchises and other rights material to its business and (ii)
be duly qualified to do business and be in good standing in all jurisdictions where the nature of
its business or its ownership of Property requires such qualification except for those
jurisdictions in which the failure to qualify or be in good standing could not reasonably be
expected to have a Material Adverse Effect.



     (g) Maintenance of Property. The Company will, and it will cause each Subsidiary to,
at all times, preserve and maintain all of the Property used or useful in the conduct of its
business in good condition, working order and repair, ordinary wear and tear excepted.



     (h) Compliance with Laws, Regulations, Etc. The Company will, and it will cause each
Subsidiary to, comply with any and all laws, ordinances and governmental and regulatory rules and
regulations to which the Company or such Subsidiary, as the case may be, is subject (including,
without limitation, all Environmental Laws and all Occupational Safety and Health Laws) and obtain
any and all licenses, permits, franchises and other governmental and regulatory authorizations
necessary to the ownership of its Properties or to the conduct of its business, which violation or
failure to obtain could reasonably be expected to have a Material Adverse Effect.



     (i) Environmental Matters. The Company will give the Agent and each Lender prompt
written notice of (i) any Environmental Claim or any other action or investigation with respect to
the existence or potential existence of any Hazardous Substances instituted or threatened with
respect to the Company or any Subsidiary or any of the Properties or facilities owned, leased or
operated by the Company or any Subsidiary which, if determined adversely to the Company or any
Subsidiary, could reasonably be expected to have a Material Adverse Effect and (ii) any condition
or occurrence on any of the Properties or facilities owned, leased or operated by the Company or
any Subsidiary which constitutes a violation of any Environmental Laws or which gives rise to a
reporting obligation or requires removal or remediation under any Environmental Laws, in each case
which could reasonably be expected to have a Material Adverse Effect. Within thirty (30) days
after the giving of any such notice, the Company shall deliver to the Agent and each Lender the
Company’s plan with respect to removal or remediation and the Company agrees to take all action
which is reasonably necessary in connection with such action, investigation,



 - 59 - 









 







condition or
occurrence in accordance with such plan with due diligence and to complete such removal or
remediation as promptly as possible and in all events within the time required by any Environmental
Laws or any other applicable law, rule or regulation. The Company shall promptly provide the Agent
and each Lender with copies of all documentation relating thereto, and such other information with
respect to environmental matters as Lender may request from time to time.



     (j) ERISA Compliance. If the Company, any Subsidiary or any ERISA Affiliate shall
have any Pension Plan, the Company, such Subsidiary or such ERISA Affiliate, as the case may be,
shall comply with all requirements of ERISA relating to such Pension Plan. Without limiting the
generality of the foregoing, the Company will not, and it will not cause or permit any Subsidiary
or any ERISA Affiliate to:




     (i) permit any Pension Plan maintained by the Company, any Subsidiary or any ERISA
Affiliate to engage in any nonexempt “prohibited transaction,” as such term is defined in
Section 4975 of the Code;




     (ii) permit any Pension Plan maintained by the Company, any Subsidiary or any ERISA
Affiliate to incur any “accumulated funding deficiency”, as such term is defined in Section
302 of ERISA, 29 U.S.C. § 1082, whether or not waived;




     (iii) terminate any Pension Plan in a manner which could result in the imposition of a
Lien on any Property of the Company, any Subsidiary or any ERISA Affiliate pursuant to
Section 4068 of ERISA, 29 U.S.C. § 1368; or




     (iv) take any action which would constitute a complete or partial withdrawal from a
Multi-Employer Plan within the meaning of Sections 4203 or 4205 of Title IV of ERISA.



     Notwithstanding any provision contained in this Section 5.01(j) to the contrary, an act by the
Company or any Subsidiary shall not be deemed to constitute a violation of this Section 5.01(j)
unless the Required Lenders determine in good faith that said action, individually or cumulatively
with other acts of the Company and its Subsidiaries, has or could reasonably be expected to have a
Material Adverse Effect.



     (k) Notices. The Company will notify the Agent and each Lender in writing of any of
the following within five (5) Business Days after any officer of the Company has actual knowledge
thereof, describing the same and, if applicable, the steps being taken by the Person(s) affected
with respect thereto:




     (i) the occurrence of any Default or Event of Default;




     (ii) the occurrence of any default or event of default by the Company, LaBarge
Electronics, LaBarge Acquisition, any other Obligor or any Subsidiary under any note,
indenture,
loan agreement, mortgage, deed of trust, security agreement, lease or other similar
agreement, document or instrument to which the Company, LaBarge Electronics, LaBarge
Acquisition, any other Obligor or any Subsidiary, as the case may be, is a party or by which
it is bound or to which it is subject;




     (iii) the institution of any litigation, arbitration proceeding or governmental or
regulatory proceeding affecting the Company, LaBarge Electronics, LaBarge Acquisition, any
other Obligor or any Subsidiary, whether or not considered to be covered by insurance, in
which the prayer or claim for relief seeks recovery of an amount in excess of $100,000.00
(or, if no dollar amount is specified in the prayer or claim for relief, in which there is a
reasonable likelihood of recovery of an amount in excess of $100,000.00) or any form of
equitable relief;



 - 60 - 









 






     (iv) the entry of any judgment or decree against the Company, LaBarge Electronics,
LaBarge Acquisition, any other Obligor or any Subsidiary;




     (v) the occurrence of a Reportable Event with respect to any Pension Plan; the filing
of a notice of intent to terminate a Pension Plan by the Company, any ERISA Affiliate or any
Subsidiary; the institution of proceedings to terminate a Pension Plan by the PBGC or any
other Person; the withdrawal in a “complete withdrawal” or a “partial withdrawal” as defined
in Sections 4203 and 4205, respectively, of ERISA by the Company, any ERISA Affiliate or any
Subsidiary from any Multi-Employer Plan; or the incurrence of any material increase in the
contingent liability of the Company or any Subsidiary with respect to any “employee welfare
benefit plan” as defined in Section 3(1) of ERISA which covers retired employees and their
beneficiaries;




     (vi) the occurrence of any material adverse change in the Properties, assets,
liabilities, business, operations, prospects, income or condition (financial or otherwise)
of the Company, LaBarge Electronics, LaBarge Acquisition, any other Obligor or any
Subsidiary;




     (vii) any change in the name of the Company, LaBarge Electronics, LaBarge Acquisition,
any other Obligor or any Subsidiary;




     (viii) any proposed opening, closing or other change of any place of business of the
Company, LaBarge Electronics, LaBarge Acquisition, any other Obligor or any Subsidiary;




     (ix) any material change in the Company’s or any Subsidiary’s line(s) of business;




     (x) the occurrence of any Change of Control Event; and




     (xi) any notices required to be provided pursuant to other provisions of this Agreement
and notice of the occurrence of such other events as the Agent or any Lender may from time
to time reasonably specify.



     (l) Insurance. The Company will, and it will cause each Subsidiary to, insure all of
its Property of the character usually insured by Persons engaged in the same or similar businesses
similarly situated, against loss or damage of the kind customarily insured against by such Persons,
unless higher limits or coverage are reasonably required in writing by the Required Lenders, and
carry adequate liability insurance and other insurance of a kind and in an amount generally carried
by Persons engaged in the same or similar businesses similarly situated, unless higher limits or
coverage are reasonably required in writing by the Required Lenders. All insurance required by
this Section 5.01(l) shall be with insurers rated A-XI or better by A.M. Best Company (or accorded
a similar rating by another nationally or internationally recognized insurance rating agency of
similar standing if A.M. Best Company is not then in the business of rating insurers or rating
foreign insurers) or such other insurers as may from time to time be reasonably acceptable to the
Required Lenders. All such insurance may be subject to reasonable deductible amounts.



     (m) Further Assurances. Each of the Company, LaBarge Electronics and LaBarge
Acquisition will, and the Company will cause each Subsidiary to, execute and deliver to the Agent,
at any time and from time to time, any and all further agreements, documents and instruments, and
take any and all further actions which may be required under applicable law, or which the Agent or
any Lender may from time to time reasonably request, in order to effectuate the transactions
contemplated by this Agreement and the other Transaction Documents.



 - 61 - 









 





     (n) Accountant. The Company will give the Agent and each Lender prompt notice of any
change of the Company’s independent certified public accountants and a statement of the reasons for
such change. The Company shall at all times utilize KPMG Peat Marwick or other independent
certified public accountants reasonably acceptable to the Required Lenders.



     (o) Financial Covenants.




     (i) Minimum Consolidated Fixed Charge Coverage Ratio. The Company will have a
Consolidated Fixed Charge Coverage Ratio of at least 1.35 to 1.0 for each four (4)
consecutive fiscal quarter period of the Company commencing with the four (4) consecutive
fiscal quarter period of the Company ending December 28, 2008.




     (ii) Maximum Consolidated Debt to Consolidated EBITDA Ratio. The Company will
have a Consolidated Debt to Consolidated EBITDA Ratio of not more than 2.50 to 1.0 as of the
last day of each fiscal quarter of the Company ending on or after December 28, 2008.




     (iii) Minimum Consolidated Net Worth. The Company will at all times have a
Consolidated Net Worth of not less than the sum of (A) $70,000,000.00 plus (B) Fifty
Percent (50%) of Consolidated Net Income (with no deductions for losses) during each fiscal
quarter of the Company ending on or after December 28, 2008 (such required increases to be
cumulative for each such fiscal quarter) plus (C) One Hundred Percent (100%) of the net
proceeds received by the Company on or after the date of this Agreement from the issuance of
any capital stock or other equity interests of the Company.



     (p) Subsidiaries. If the Company or any Subsidiary creates, forms or acquires any
Subsidiary on or after the date of this Agreement, the Company or such Subsidiary, as the case may
be, will, contemporaneously with the creation, formation or acquisition of such Subsidiary, (i)
grant to the Agent of the ratable benefit of the Lenders a first priority perfected security
interest in and lien on all of the issued and outstanding shares of capital stock, membership
interests or other equity interests of such Subsidiary and (ii) cause such Subsidiary to (A)
guaranty the payment and performance of all of the Borrower’s Obligations owed by any one or more
of the Borrowers and (B) secure said guaranty with a first priority perfected security interest in
and lien on all of the accounts, inventory, documents, instruments, chattel paper, general
intangibles, goods, machinery, equipment, investment property, other tangible and intangible
personal property, real property and books and records of such Subsidiary and the proceeds thereof,
all pursuant to documentation (including, without limitation, an amendment to this Agreement if
requested by the Agent or the Required Lenders) in form and substance reasonably satisfactory to
the Required Lenders.



     (q) Interest Rate Protection. LaBarge Acquisition will, on or before December 31,
2008, purchase interest rate protection in the form of either an interest rate cap, an interest
rate collar or an interest rate swap covering at least $22,500,000.00 of the outstanding principal
amount of the LaBarge Acquisition Term Loan for a period of not less than three (3) years, which
interest rate cap, interest rate collar or interest rate swap must be in form and substance
satisfactory to the Agent and the Required Lenders.



     5.02 Negative Covenants of the Company. Each of the Company, LaBarge Electronics and
LaBarge Acquisition covenants and agrees that, so long as any Lender has any obligation to make any
Loan under this Agreement, U.S. Bank has
any obligation or to issue any Letter of Credit under this Agreement, any Letter of Credit remains
outstanding and/or any of the Borrower’s Obligations owed by any one or more of the Borrower’s
remain unpaid, unless the prior written consent of the Required Lenders is obtained:



 - 62 - 









 





     (a) Limitation on Indebtedness. The Company will not, and it will not cause or permit
any Subsidiary to, incur or be obligated on any Indebtedness, either directly or indirectly, by way
of Guarantee, suretyship or otherwise, other than:




     (i) the Company’s Obligations;




     (ii) unsecured trade accounts payable and other normal accruals incurred in the
ordinary course of business which are not more than thirty (30) days past due (provided,
however, that neither the Company nor any Subsidiary shall be required to pay any such
account payable or other accrual the payment of which is being contested in good faith and
by appropriate proceedings being diligently conducted and for which adequate reserves in
accordance with GAAP have been provided, except that the Company or such Subsidiary, as the
case may be, shall pay or cause to be paid all such accounts payable and accruals forthwith
upon the commencement of proceedings to foreclose any Lien which is attached as security
therefor, unless such foreclosure is stayed by the filing of an appropriate bond in a manner
reasonably satisfactory to the Required Lenders);




     (iii) Indebtedness existing as of the date of this Agreement and listed on Schedule
4.10 attached hereto (without giving effect to any changes to Schedule 4.10 made
after the date of this Agreement);




     (iv) purchase money Indebtedness incurred solely to finance Capital Expenditures;




     (v) Capitalized Lease Obligations; and




     (vi) obligations (contingent or otherwise) of the Company or any Subsidiary existing or
arising under any Swap Contract, provided that (i) such obligations are (or were)
entered into by such Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets or property
held or reasonably anticipated by such Person, or changes in the value of securities issued
by such Person, and not for purposes of speculation or taking a “market view” and (ii) such
Swap Contract does not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party;




     (vii) other Indebtedness not otherwise permitted by this Section 5.02(a) in an amount
not to exceed $1,000,000.00 in the aggregate at any one time outstanding for the Company and
all of its Subsidiaries on a combined basis.



     (b) Limitation on Liens. The Company will not, and will not cause or permit any
Subsidiary to, create, incur or assume, or suffer to be incurred or to exist, any Lien on any of
its Property, whether now owned or hereafter acquired, or upon any income or profits therefrom,
except for Permitted Liens.



     (c) Consolidation, Merger, Sale of Property, Etc.




     (i) The Company will not, and it will not cause or permit any Subsidiary to, directly
or indirectly merge or consolidate with or into any other Person or permit any other Person
to merge into or with or consolidate with it.




     (ii) The Company will not, and will not cause or permit any Subsidiary to, (A) sell,
assign, lease, transfer, abandon or otherwise dispose of any of its Property (including,
without limitation, any shares of capital stock, membership interests or other equity
interests of a Subsidiary owned by the Company or another Subsidiary) or (B) issue, sell or
otherwise dispose



 - 63 - 









 







of any shares of capital stock, membership interests or other equity
interests of any Subsidiary, except for (1) sales of Inventory in the ordinary course of
business (which does not include a transfer of Inventory in partial or total satisfaction of
any Indebtedness), (2) sales of fixed assets (other than real estate) which are obsolete,
worn-out or otherwise not used or useable in the ordinary course of its business, so long as
the net proceeds thereof are used within ninety (90) days after the date of the sale solely
to purchase replacement fixed assets or assets of comparable quality or to pay or prepay (w)
in the case of asset sales by the Company, Debt secured by any Permitted Lien encumbering
the assets being sold or the Borrower’s Obligations owed by the Company, (x) in the case of
asset sales by LaBarge Electronics, Debt secured by any Permitted Lien encumbering the
assets being sold or the Borrower’s Obligations owed by LaBarge Electronics, (y) in the case
of asset sales by LaBarge Acquisition, Debt secured by any Permitted Lien encumbering the
assets being sold or the Borrower’s Obligations owed by LaBarge Acquisition and (z) in the
case of asset sales by any Subsidiary other than LaBarge Electronics or LaBarge Acquisition,
Debt of such Subsidiary, (3) other sales of fixed assets (other than real estate) so long as
the gross sale proceeds from all such asset sales by the Company and all of its Subsidiaries
on a combined basis does not exceed $250,000.00 in the aggregate in any fiscal year of the
Company, (4) sales of Accounts due the Company from Sikorsky Aircraft Corporation and/or any
of its subsidiaries as described in the Citibank Supplier Agreement, provided, that Borrower
provides Agent with prior written notice before any sale of such Accounts is consummated,
and, provided further, that, the gross sales proceeds from all such Account sales shall be
delivered by Citibank directly to Agent for deposit in the deposit account(s) of the Company
designated by the Agent, (5) sales by LaBarge Acquisition to Pensar Electronic Solutions,
LLC pursuant to and in accordance with Section 12.04(b) of the Pensar Acquisition Agreement
of Accounts purchased by LaBarge Acquisition from Pensar Electronic Solutions, LLC pursuant
to the Pensar Acquisition Agreement so long as the aggregate purchase price for such
Accounts is not less than the aggregate face value of such Accounts and such purchase price
is paid in cash contemporaneously with the closing of such sale and (6) sales by LaBarge
Acquisition to Pensar Electronic Solutions, LLC pursuant to and in accordance with Section
12.05(b) of the Pensar Acquisition Agreement of Inventory purchased by LaBarge Acquisition
from Pensar Electronic Solutions, LLC pursuant to the Pensar Acquisition Agreement so long
as the aggregate purchase price for such Inventory is not less than the aggregate cost of
such Inventory as set forth on LaBarge Acquisition’s financial statements prepared in
accordance with GAAP and such purchase price is paid in cash contemporaneously with the
closing of such sale.



     (d) Sale and Leaseback Transactions. The Company will not, and it will not cause or
permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby the Company
or such Subsidiary shall in one or more related transactions sell, transfer or otherwise dispose of
any Property owned by the Company or such Subsidiary to any Person and then rent or lease, as
lessee, such Property or any part thereof for a period or periods which in the aggregate would
exceed twelve (12) months from the date of commencement of the lease term.



     (e) Sale or Discount of Accounts. The Company will not, and it will not cause or
permit any Subsidiary to, sell or discount (other than prompt payment discounts granted in the
ordinary course of business) any of its notes or accounts receivable or chattel paper, other than
(i) sales of Accounts due the Company from Sikorsky Aircraft Corporation and/or any of its
subsidiaries as described in the Citibank Supplier Agreement, provided, that Borrower provides
Agent with prior written notice before any sale of such Accounts is consummated, and, provided
further, that, the gross sales proceeds from all such Account sales shall be delivered by Citibank
directly to Agent for deposit in the deposit account(s) of the Company designated by the Agent and
(ii) sales by LaBarge Acquisition to Pensar Electronic Solutions, LLC pursuant to and in accordance
with Section 12.04(b) of the Pensar Acquisition Agreement of Accounts purchased by LaBarge
Acquisition from
Pensar Electronic Solutions, LLC pursuant to the Pensar Acquisition Agreement so long as the
aggregate purchase price for such Accounts is not less than



 - 64 - 









 







the aggregate face value of such
Accounts and such purchase price is paid in cash contemporaneously with the closing of such sale.



     (f) Transactions with Affiliates. The Company will not, and it will not cause or
permit any Subsidiary to, enter into or be a party to any transaction or arrangement with any
Affiliate (including, without limitation, the purchase from, sale to or exchange of Property with,
or the rendering of any service by or for, any Affiliate), except in the ordinary course of
business and pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business
and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would
be obtained in a comparable arm’s-length transaction with a Person not an Affiliate.



     (g) Changes in Nature of Business. The Company will not, and it will not cause or
permit any Subsidiary to, engage in any business if, as a result, the general nature of the
business which would then be engaged in by the Company and its Subsidiaries, considered as a whole,
would be substantially changed from the general nature of the business engaged in by the Company
and its Subsidiaries as of the date of this Agreement.



     (h) Fiscal Year. The Company will not, and it will not cause or permit any Subsidiary
to, change its fiscal year.



     (i) Stock Redemptions and Distributions. The Company will not, and it will not cause
or permit any Subsidiary to, declare or incur any liability to make any Distribution in respect of
the capital stock or other equity interests of the Company or the capital stock, membership
interests or other equity interests of such Subsidiary, as the case may be, provided, however, that
(i) each wholly-owned Subsidiary shall be permitted to declare and pay cash dividends or cash
distributions on their respective capital stock, membership interests or other equity interests to
the Company and/or another Subsidiary and (ii) so long as no Default or Event of Default has
occurred and is continuing or would be created thereby or result therefrom, the Company shall be
permitted to redeem shares of its common stock so long as the aggregate consideration paid or
committed to be paid by the Company during any fiscal year of the Company for or in connection with
all such redemptions does not exceed the sum of $5,000,000.00. Nothing in this Section 5.02(i)
shall limit or otherwise restrict the Company’s ability to settle outstanding stock option
exercises through the partial cancellation of outstanding stock options.



     (j) Pension Plans. The Company will not, and it will not cause or permit any
Subsidiary to, (i) permit any condition to exist in connection with any Pension Plan which might
constitute grounds for the PBGC to institute proceedings to have such Pension Plan terminated or a
trustee appointed to administer such Pension Plan or (ii) engage in, or permit to exist or occur,
any other condition, event or transaction with respect to any Pension Plan which could result in
the incurrence by the Company, any Subsidiary or any ERISA Affiliate of any material liability,
fine or penalty.



     (k) Restricted Investments; Acquisitions. The Company will not, and it will not cause
or permit any Subsidiary to, directly or indirectly, make any Restricted Investments. The Company
will not, and it will not cause or permit any Subsidiary to, directly or indirectly, make any
Acquisitions.



     (l) Subsidiaries. The Company will not, and it will not cause or permit any
Subsidiary to, create, form or acquire any Subsidiary.



     (m) Limitations on Restrictive Agreements. The Company will not, and it will not cause
or permit any Subsidiary to, enter into, or permit to exist, any agreement with any Person which
prohibits or limits the ability of the Company or such Subsidiary, as the case may be, to (a) pay
dividends or make other distributions or prepay any Indebtedness owed to the Company and/or any
Subsidiary, (b) make loans or advances to
the Company and/or any Subsidiary, (c) transfer any of its Properties to the



 - 65 - 









 







Company and/or any
Subsidiary (other than with respect to Property subject to Liens permitted by clauses (h) or (i) of
the definition of Permitted Liens) or (d) create, incur, assume or suffer to exist any Lien upon
any of its Property or revenues, whether now owned or hereafter acquired (other than with respect
to Property subject to Liens permitted by clauses (h) or (i) of the definition of Permitted Liens);
provided that the foregoing shall not apply to restrictions in effect on the date of this Agreement
contained in agreements governing Debt outstanding on the date of this Agreement and listed on
Schedule 5.02(o) attached hereto and, if such Debt is renewed, extended or refinanced,
restrictions in the agreements governing the renewed, extended or refinanced Debt (and successive
renewals, extensions and refinancings thereof) if such restrictions are no more restrictive in any
material respect than those contained in the agreements governing the Debt being renewed, extended
or refinanced.



     5.03 Use of Proceeds. The Company covenants and agrees that (a) the proceeds of the
Revolving Credit Loans and the Swing Line Loans have been and will be used solely for the working
capital and general corporate purposes of the Company, (b) no part of the proceeds of any Revolving
Credit Loan and/or Swing Line Loan have been or will be used in violation of any applicable law,
rule or regulation, (c) the Company has not and will not directly or indirectly use any of the
proceeds of any Revolving Credit Loan and/or Swing Line Loan for the purpose of buying or carrying
margin stock within the meaning of Regulation U of The Board of Governors of the Federal Reserve
System, as amended, other than for the purpose of financing the Company’s redemption of shares of
common stock of the Company to the extent permitted by Section 5.02(i) of this Agreement and (d)
not more than Twenty-Five Percent (25%) of the value of the consolidated assets of the Company and
its Subsidiaries (other than any treasury stock of the Company) is now, or will at any time be,
represented by margin stock. LaBarge Electronics covenants and agrees that (a) the proceeds of the
LaBarge Electronics Term Loan were used solely for the working capital and general corporate
purposes of LaBarge Electronics, (b) no part of the proceeds of the LaBarge Electronics Term Loan
were used in violation of any applicable law, rule or regulation and (c) LaBarge Electronics did
not directly or indirectly use any of the proceeds of the LaBarge Electronics Term Loan for the
purpose of buying or carrying margin stock within the meaning of Regulation U of The Board of
Governors of the Federal Reserve System, as amended. LaBarge Acquisition covenants and agrees that
(a) the proceeds of the LaBarge Acquisition Term Loan will be used solely to finance the Pensar
Acquisition, (b) no part of the proceeds of the LaBarge Acquisition Term Loan will be used in
violation of any applicable law, rule or regulation and (c) LaBarge Acquisition will not directly
or indirectly use any of the proceeds of the LaBarge Acquisition Term Loan for the purpose of
buying or carrying margin stock within the meaning of Regulation U of The Board of Governors of the
Federal Reserve System, as amended. As used in this Section, the terms “margin stock” and “purpose
of buying or carrying” shall have the respective meanings ascribed to them in Regulation U of The
Board of Governors of the Federal Reserve System, as amended.



SECTION 6. EVENTS OF DEFAULT.




     If any of the following (each of the following herein sometimes called an “Event of Default”)
shall occur and be continuing:



     6.01 The Company shall fail to pay any of the Borrower’s Obligations owed by the Company as
and when the same shall become due and payable, whether by reason of demand, maturity, acceleration
or otherwise;



     6.02 LaBarge Electronics shall fail to pay any of the Borrower’s Obligations owed by LaBarge
Electronics as and when the same shall become due and payable, whether by reason of demand,
maturity, acceleration or otherwise;



 - 66 - 









 





     6.03 LaBarge Acquisition shall fail to pay any of the Borrower’s Obligations owed by LaBarge
Acquisition as and when the same shall become due and payable, whether by reason of demand,
maturity, acceleration or otherwise;



     6.04 Any representation or warranty made by the Company, LaBarge Electronics, LaBarge
Acquisition and/or any other Obligor in this Agreement, in any other Transaction Document or in any
certificate, agreement, instrument or statement furnished or made or delivered pursuant hereto or
thereto or in connection herewith or therewith, shall prove to have been untrue or incorrect in any
material respect when made or effected;



     6.05 The Company and/or LaBarge Electronics shall fail to perform or observe any term,
covenant or provision contained in Section 2.01(b), Section 2.01(c), Section 2.01(d), Section
2.05(f), Section 5.01(a), Section 5.01(c), Section 5.01(f), Section 5.01(k), Section 5.01(l),
Section 5.01(o), Section 5.01(p), Section 5.01(q), Section 5.02 or Section 5.03;



     6.06 The Company, LaBarge Electronics and/or LaBarge Acquisition shall fail to perform or
observe any term, covenant or provision contained in Section 5.01(m) and any such failure shall
remain unremedied for five (5) days;



     6.07 The Company, LaBarge Electronics and/or LaBarge Acquisition shall fail to perform or
observe any other term, covenant or provision contained in this Agreement (other than those
specified in Sections 6.01, 6.02, 6.03, 6.04, 6.05 or 6.06 above) and any such failure shall remain
unremedied for thirty (30) days after the earlier of (a) written notice of default is given to the
Company, LaBarge Electronics and LaBarge Acquisition by the Agent or any Lender or (b) any officer
of the Company, LaBarge Electronics and/or LaBarge Acquisition obtaining actual knowledge of such
default;



     6.08 This Agreement or any other Transaction Document shall at any time for any reason cease
to be in full force and effect or shall be declared to be null and void by a court of competent
jurisdiction, or if the validity or enforceability thereof shall be contested or denied by the
Company, LaBarge Electronics, LaBarge Acquisition and/or any other Obligor, or if the transactions
completed hereunder or thereunder shall be contested by the Company, LaBarge Electronics, LaBarge
Acquisition and/or any other Obligor or if the Company, LaBarge Electronics, LaBarge Acquisition
and/or any other Obligor shall deny that it has any further liability or obligation hereunder or
thereunder;



     6.09 The Company, LaBarge Electronics, LaBarge Acquisition, any other Obligor or any
Subsidiary shall (a) voluntarily commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code or any other Federal, state or foreign bankruptcy, insolvency,
receivership, liquidation or similar law, (b) consent to the institution of, or fail to contravene
in a timely and appropriate manner, any such proceeding or the filing of any such petition, (c)
apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar
official of itself or of a substantial part of its Property, (d) file an answer admitting the
material allegations of a petition filed against itself in any such proceeding, (e) make a general
assignment for the benefit of creditors, (f) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (g) take any corporate or other action for the
purpose of effecting any of the foregoing;



     6.10 An involuntary proceeding shall be commenced or an involuntary petition shall be filed in
a court of competent jurisdiction seeking (a) relief in respect of the Company, LaBarge
Electronics, LaBarge Acquisition, any other Obligor or any Subsidiary, or of a substantial part of
the Property of the Company, LaBarge Electronics, LaBarge Acquisition, any other Obligor or any
Subsidiary, under Title 11 of the United States Code or any other Federal, state or foreign
bankruptcy, insolvency, receivership, liquidation or similar law, (b) the appointment of a
receiver, trustee, custodian, sequestrator or similar official of the Company, LaBarge Electronics,
LaBarge Acquisition, any other Obligor or any Subsidiary or of a



 - 67 - 









 







substantial part of the Property
of the Company, LaBarge Electronics, LaBarge Acquisition, any other Obligor or any Subsidiary or
(c) the winding-up or liquidation of the Company, LaBarge Electronics, LaBarge Acquisition, any
other Obligor or any Subsidiary; and such proceeding or petition shall continue undismissed for
thirty (30) consecutive days or an order or decree approving or ordering any of the foregoing shall
continue unstayed and in effect for thirty (30) consecutive days;



     6.11 The Letter of Credit Reimbursement Agreement shall at any time for any reason cease to be
in full force and effect or shall be declared to be null and void by a court of competent
jurisdiction, or if the validity or enforceability of the Letter of Credit Reimbursement Agreement
shall be contested or denied by the Company, or if the Company shall deny that it has any further
liability or obligation under the Letter of Credit Reimbursement Agreement or if the Company shall
fail to comply with or observe any of the terms, provisions or conditions contained in the Letter
of Credit Reimbursement Agreement;



     6.12 Any Letter of Credit Application shall at any time for any reason cease to be in full
force and effect or shall be declared to be null and void by a court of competent jurisdiction, or
if the validity or enforceability of any Letter of Credit Application shall be contested or denied
by the Company, or if the Company shall deny that it has any further liability or obligation under
any Letter of Credit Application or if the Company shall fail to comply with or observe any of the
terms, provisions or conditions contained in any Letter of Credit Application;



     6.13 The Revolving Credit Guaranty shall at any time for any reason cease to be in full force
and effect or shall be declared to be null and void by a court of competent jurisdiction, or if the
validity or enforceability of the Revolving Credit Guaranty shall be contested or denied by LaBarge
Electronics, LaBarge Acquisition and/or LaBarge/STC, or if LaBarge Electronics, LaBarge Acquisition
and/or LaBarge/STC shall deny that it has any further liability or obligation under the Revolving
Credit Guaranty or if LaBarge Electronics, LaBarge Acquisition and/or LaBarge/STC shall fail to
comply with or observe any of the terms, provisions or conditions contained in the Revolving Credit
Guaranty;



     6.14 The LaBarge Electronics Term Loan Guaranty shall at any time for any reason cease to be
in full force and effect or shall be declared to be null and void by a court of competent
jurisdiction, or if the validity or enforceability of the LaBarge Electronics Term Loan Guaranty
shall be contested or denied by the Company, LaBarge Acquisition and/or LaBarge/STC, or if the
Company, LaBarge Acquisition and/or LaBarge/STC shall deny that it has any further liability or
obligation under the LaBarge Electronics Term Loan Guaranty or if the Company, LaBarge Acquisition
and/or LaBarge/STC shall fail to comply with or observe any of the terms, provisions or conditions
contained in the LaBarge Electronics Term Loan Guaranty;



     6.15 The LaBarge Acquisition Term Loan Guaranty shall at any time for any reason cease to be
in full force and effect or shall be declared to be null and void by a court of competent
jurisdiction, or if the validity or enforceability of the LaBarge Acquisition Term Loan Guaranty
shall be contested or denied by the Company, LaBarge Electronics and/or LaBarge/STC, or if the
Company, LaBarge Electronics and/or LaBarge/STC shall deny that it has any further liability or
obligation under the LaBarge Acquisition Term Loan Guaranty or if the Company, LaBarge Electronics
and/or LaBarge/STC shall fail to comply with or observe any of the terms, provisions or conditions
contained in the LaBarge Acquisition Term Loan Guaranty;



     6.16 The Company Patent, Trademark and License Security Agreement shall at any time for any
reason cease to be in full force and effect or shall be declared to be null and void by a court of
competent jurisdiction, or if the validity or enforceability of the Company Patent, Trademark and
License Security Agreement shall be contested or denied by the Company, or if the Company shall
deny that it has any further liability or obligation under the Company Patent, Trademark and
License Security



 - 68 - 









 







Agreement or if the Company shall fail to comply with or observe any of the terms,
provisions or conditions contained in the Company Patent, Trademark and License Security Agreement;



     6.17 Any “Event of Default” (as defined therein) shall occur under or within the meaning of
the Company Security Agreement;



     6.18 Any “Event of Default” (as defined therein) shall occur under or within the meaning of
the Company Stock Pledge Agreement;



     6.19 The LaBarge Electronics Patent, Trademark and License Security Agreement shall at any
time for any reason cease to be in full force and effect or shall be declared to be null and void
by a court of competent jurisdiction, or if the validity or enforceability of the LaBarge
Electronics Patent, Trademark and License Security Agreement shall be contested or denied by
LaBarge Electronics, or if LaBarge Electronics shall deny that it has any further liability or
obligation under the LaBarge Electronics Patent, Trademark and License Security Agreement or if
LaBarge Electronics shall fail to comply with or observe any of the terms, provisions or conditions
contained in the LaBarge Electronics Patent, Trademark and License Security Agreement;



     6.20 Any “Event of Default” (as defined therein) shall occur under or within the meaning of
the LaBarge Electronics Security Agreement;



     6.21 The LaBarge Acquisition Collateral Assignment of Asset Purchase Agreement shall at any
time for any reason cease to be in full force and effect or shall be declared to be null and void
by a court of competent jurisdiction, or if the validity or enforceability of the LaBarge
Acquisition Collateral Assignment of Asset Purchase Agreement shall be contested or denied by
LaBarge Acquisition, or if LaBarge Acquisition shall deny that it has any further liability or
obligation under the LaBarge Acquisition Collateral Assignment of Asset Purchase Agreement or if
LaBarge Acquisition shall fail to comply with or observe any of the terms, provisions or conditions
contained in the LaBarge Acquisition Collateral Assignment of Asset Purchase Agreement;



     6.22 The LaBarge Acquisition Patent, Trademark and License Security Agreement shall at any
time for any reason cease to be in full force and effect or shall be declared to be null and void
by a court of competent jurisdiction, or if the validity or enforceability of the LaBarge
Acquisition Patent, Trademark and License Security Agreement shall be contested or denied by
LaBarge Acquisition, or if LaBarge Acquisition shall deny that it has any further liability or
obligation under the LaBarge Acquisition Patent, Trademark and License Security Agreement or if
LaBarge Acquisition shall fail to comply with or observe any of the terms, provisions or conditions
contained in the LaBarge Acquisition Patent, Trademark and License Security Agreement;



     6.23 Any “Event of Default” (as defined therein) shall occur under or within the meaning of
the LaBarge Acquisition Security Agreement;



     6.24 The LaBarge/STC Patent, Trademark and License Security Agreement shall at any time for
any reason cease to be in full force and effect or shall be declared to be null and void by a court
of competent jurisdiction, or if the validity or enforceability of the LaBarge/STC Patent,
Trademark and License Security Agreement shall be contested or denied by LaBarge/STC, or if
LaBarge/STC shall deny that it has any further liability or obligation under the LaBarge/STC
Patent, Trademark and License Security Agreement or if LaBarge/STC shall fail to comply with or
observe any of the terms, provisions or conditions contained in the LaBarge/STC Patent, Trademark
and License Security Agreement;



     6.25 Any “Event of Default” (as defined therein) shall occur under or within the meaning of
the LaBarge/STC Security Agreement;



 - 69 - 









 





     6.26 The Company, LaBarge Electronics, LaBarge Acquisition any other Obligor or any Subsidiary
shall be declared by any Lender to be in default on, or pursuant to the terms of, (a) any other
present or future obligation to, or agreement with or in favor of, such Lender, including, without
limitation, any other loan, line of credit, revolving credit, guaranty or letter of credit
reimbursement obligation or (b) any other present or future agreement, document or instrument
purporting to grant such Lender a Lien upon any Property of the Company, LaBarge Electronics,
LaBarge Acquisition, such other Obligor or such Subsidiary, as the case may be, and any such
default shall not be cured or waived in writing within any applicable cure or grace period (if
any);



     6.27 The occurrence of any default or event of default under or within the meaning of any
agreement, document or instrument evidencing, securing, guaranteeing the payment of or otherwise
relating to any Debt of the Company, LaBarge Electronics, LaBarge Acquisition any other Obligor or
any Subsidiary (other than the Borrower’s Obligations owed by any one or more of the Borrowers)
having an aggregate outstanding principal balance in excess of $250,000.00 which is not cured or
waived in writing within any applicable cure or grace period (if any);



     6.28 There occurs under any Swap Contract an Early Termination Date (as defined in such Swap
Contract) resulting from (a) any event of default under such Swap Contract as to which the Company
or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination
Event (as so defined) under such Swap Contract as to which the Company or any Subsidiary is an
Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Company
or such Subsidiary as a result thereof is greater than $250,000.00;



     6.29 A judgment or order is rendered against the Company, LaBarge Electronics, LaBarge
Acquisition, any other Obligor or any Subsidiary and either (a) enforcement proceedings have been
commenced by any creditor upon any such judgment or order or (b) within thirty (30) days after
entry thereof, such judgment or order is not paid or otherwise discharged or execution thereof
stayed pending appeal, or within thirty (30) days after the expiration of any such stay, such
judgment or order is not paid or otherwise discharged; or a judgment or order in an amount in
excess of $250,000.00 is rendered against the Company, LaBarge Electronics, LaBarge Acquisition,
any other Obligor or any Subsidiary, irrespective of whether such judgment or order is paid or
otherwise discharged or stayed pending appeal; or



     6.30 The occurrence of a Reportable Event with respect to any Pension Plan; the filing of a
notice of intent to terminate a Pension Plan by the Company, any ERISA Affiliate or any Subsidiary;
the institution of proceedings to terminate a Pension Plan by the PBGC or any other Person; the
withdrawal in a “complete withdrawal” or a “partial withdrawal” as defined in Sections 4203 and
4205, respectively, of ERISA by the Company, any ERISA Affiliate or any Subsidiary from any
Multi-Employer Plan; or the incurrence of any material increase in the contingent liability of the
Company or any Subsidiary with respect to any “employee welfare benefit plan” as defined in Section
3(1) of ERISA which covers retired employees and their beneficiaries;



     6.31 The institution by the Company, any ERISA Affiliate or any Subsidiary of steps to
terminate any Pension Plan if, in order to effectuate such termination, the Company, such ERISA
Affiliate or such Subsidiary, as the case may be, would be required to make a contribution to such
Pension Plan, or would incur a liability or obligation to such Pension Plan, in excess of
$250,000.00; or the institution by the PBGC of steps to terminate any Pension Plan; or



     6.32 The occurrence of any Change of Control Event;



 - 70 - 









 





     THEN, and in each such event (other than an event described in Sections 6.09 or 6.10), the
Agent shall have the right to, and if requested in writing by the Required Lenders the Agent shall,
terminate the Revolving Credit Commitments of each of the Lenders and declare that the obligations
of the Lenders to make Loans under this Agreement and the obligation of U.S. Bank to issue Letters
of Credit under this Agreement have terminated, whereupon such Revolving Credit Commitments and
such obligations of the Lenders and U.S. Bank shall be immediately and forthwith terminated, and
the Agent shall have the further right to, and if requested in writing by the Required Lenders the
Agent shall further, declare the entire outstanding principal balance of and all accrued and unpaid
interest on the Notes and all of the other Borrower’s Obligations owed by any one or more of the
Borrowers (other than (A) amounts owed by a Borrower under or in respect of any Swap Contract
between such Borrower and a Lender, the payment of which shall be governed by the terms of the
applicable Swap Contract and (B) amounts owed by a Borrower under or in respect of any Treasury
Management Agreement between such Borrower and a Lender, the payment of which shall be governed by
the terms of the applicable Treasury Management Agreement) to be forthwith due and payable,
whereupon all of the unpaid principal balance of and all accrued and unpaid interest on the Notes
and all of such other Borrower’s Obligations shall become and be immediately due and payable,
without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by each of the Borrowers,
and the Agent and the Lenders shall have the right to exercise any and all other rights and
remedies which they may have under any of the other Transaction Documents or under applicable law;
provided, however, that upon the occurrence of any event described in Sections 6.09 or 6.10, the
Revolving Credit Commitments of each of the Lenders, the obligations of the Lenders to make Loans
under this Agreement and the obligation of U.S. Bank to issue Letters of Credit under this
Agreement shall automatically terminate and the entire outstanding principal balance of and all
accrued and unpaid interest on the Notes and all of the other Borrower’s Obligations owed by any
one or more of the Borrowers (other than (A) amounts owed by a Borrower under or in respect of any
Swap Contract between such Borrower and a Lender, the payment of which shall be governed by the
terms of the applicable Swap Contract and (B) amounts owed by a Borrower under or in respect of any
Treasury Management Agreement between such Borrower and a Lender, the payment of which shall be
governed by the terms of the applicable Treasury Management Agreement) shall automatically become
immediately due and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by each of the Borrowers, and the Agent and the Lenders
shall have the right to exercise any and all other rights and remedies which they may have under
any of the other Transaction Documents or under applicable law. If any Event of Default under this
Agreement has occurred and is continuing, in addition to all of the other rights and remedies of
the Agent and the Lenders under this Agreement and the other Transaction Documents and at law or in
equity, the Agent shall have the right, in its sole and absolute discretion, to (a) reduce the
amount of the Revolving Credit Commitments of the Lenders, (b) reduce the Maximum Swing Line
Amount, (c) create reserves and/or allowances against Eligible Accounts and/or Eligible Inventory
and/or (d) reduce the advance rates against Eligible Accounts and/or Eligible Inventory set forth
in the definition of the Borrowing Base.



SECTION 7. AGENT




     7.01 Appointment. U.S. Bank National Association is hereby appointed by the Lenders as
Agent under this Agreement, the Notes and the other Transaction Documents. The Agent agrees to act
as such upon the express conditions contained in this Agreement.



     7.02 Powers. The Agent shall have and may exercise such powers hereunder as are
specifically delegated to the Agent by the terms of this Agreement and the other Transaction
Documents, together with such powers as are reasonably incidental thereto. The Agent shall have no
implied duties to the Lenders, nor any obligation to the Lenders to take any action under this
Agreement or any of the other Transaction Documents, except any action specifically provided by
this Agreement or any of the other Transaction Documents to be taken by the Agent. Without
limiting the



 - 71 - 









 







generality of the foregoing, the Agent shall not be required to take any action with
respect to any Default or Event of Default, except as expressly provided in Section 6 or in Section
7.06.



     7.03 General Immunity. Neither the Agent nor any of its directors, officers,
employees, agents or advisors shall be liable to any of the Lenders for any action taken or not
taken by it in connection with this Agreement or any of the other Transaction Documents (a) with
the consent or at the request of the Required Lenders or (b) in the absence of its own gross
negligence or willful misconduct as determined by a court of competent jurisdiction in a final,
nonappealable order.



     7.04 No Responsibility for Loans, Recitals, Etc. Neither the Agent nor any of its
directors, officers, employees, agents or advisors shall (a) be responsible for or have any duty to
ascertain, inquire into or verify any recitals, reports, statements, representations or warranties
contained in this Agreement or any of the other Transaction Documents or furnished pursuant hereto
or thereto, (b) be responsible for any Loans under this Agreement, (c) be bound to ascertain or
inquire as to the performance or observance of any of the terms of this Agreement or any of the
other Transaction Documents, (d) be responsible for the satisfaction of any condition specified in
Section 3, except receipt of items required to be delivered to
the Agent, (e) be responsible for the validity, effectiveness, genuineness or enforceability of
this Agreement or any of the other Transaction Documents or (f) be responsible for the creation,
attachment, perfection or priority of any security interests or liens purported to be granted to
the Agent or any of the Lenders pursuant to this Agreement or any of the other Transaction
Documents.



     7.05 Right to Indemnity. Notwithstanding any other provision contained in this
Agreement to the contrary, to the extent the Borrowers fail to reimburse the Agent pursuant to
Section 8.03, Section 8.04 or Section 8.05, or if any Default or Event of Default shall occur under
this Agreement, the Lenders shall ratably in accordance with their respective Pro Rata Shares of
the aggregate principal amount of outstanding Loans (or, if no Loans are outstanding, ratably in
accordance with their respective Pro Rata Shares of the Revolving Credit Commitments) indemnify the
Agent and hold it harmless from and against any and all liabilities, losses (except losses
occasioned solely by failure of any Borrower to make any payments or to perform any obligations
required by this Agreement (excepting those described in Sections 8.03, 8.04 and 8.05), the Notes
or any of the other Transaction Documents), costs and/or expenses, including, without limitation,
any liabilities, losses, costs and/or expenses arising from the failure of any Lender to perform
its obligations hereunder or in respect of this Agreement, and also including, without limitation,
reasonable attorneys’ fees and expenses, which the Agent may incur, directly or indirectly, in
connection with this Agreement, the Notes or any of the other Transaction Documents, or any action
or transaction related hereto or thereto; provided only that the Agent shall not be entitled to
such indemnification for any losses, liabilities, costs and/or expenses directly and solely
resulting from its own gross negligence or willful misconduct as determined by a court of competent
jurisdiction in a final, nonappealable order. This indemnity shall be a continuing indemnity,
contemplates all liabilities, losses, costs and expenses related to the execution, delivery and
performance of this Agreement, the Notes and the other Transaction Documents, and shall survive the
satisfaction and payment of the Borrower’s Obligations owed by any one or more of the Borrowers and
the termination of this Agreement.



     7.06 Action Upon Instructions of Required Lenders. The Agent agrees, upon the written
request of the Required Lenders, to take any action of the type specified in this Agreement or any
of the other Transaction Documents as being within the Agent’s rights, duties, powers or
discretion. Notwithstanding the foregoing, (a) the Agent shall be fully justified in failing or
refusing to take any action hereunder, unless it shall first be indemnified to its satisfaction by
the Lenders pro rata against any and all liabilities, losses, costs and expenses (including,
without limitation, attorneys’ fees and expenses) which may be incurred by it by reason of taking
or continuing to take any such action, other than any liability which may arise out of Agent’s
gross negligence or willful misconduct as determined



 - 72 - 









 







by a court of competent jurisdiction in a
final, nonappealable order and (b) in no event shall the Agent be required to take any action which
it in good faith believes would violate this Agreement or any other Transaction Document or any
applicable law, rule or regulation. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, hereunder in accordance with written instructions signed by the Required
Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders and on all holders of the Notes. In the absence of a request by the
Required Lenders, the Agent shall have authority, in its good faith discretion, to take or not to
take any action, unless this Agreement or any of the other Transaction Documents specifically
requires the consent of the Required Lenders or of all of the Lenders.



     7.07 Employment of Agents and Counsel. The Agent may execute any of its duties as
Agent hereunder by or through employees, agents and attorneys-in-fact and shall not be answerable
to the Lenders, except as to money or securities received by it or its authorized agents, for the
default or misconduct of any such agents or attorneys-in-fact selected by it in good faith and with
reasonable care. The Agent shall be entitled to advice and opinion of legal counsel concerning all
matters pertaining to the duties of the agency hereby created.



     7.08 Reliance on Documents; Counsel. The Agent shall be entitled to rely upon any
note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document
believed by it to be genuine and correct and to have been signed or sent by the proper person or
persons, and, in respect to legal matters, upon the opinion of legal counsel selected by the Agent.



     7.09 May Treat Payee as Owner. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any request, authority or consent of any
Person who at the time of making such request or giving such authority or consent is the holder of
any such Note shall be conclusive and binding on any subsequent holder, transferee or assignee of
such Note or of any Note issued in exchange therefor.



     7.10 Agent’s Reimbursement. Each Lender agrees to reimburse the Agent pro rata in
accordance with its Pro Rata Share of the aggregate principal amount of outstanding Loans (or, if
no Loans are outstanding, pro rata in accordance with its Pro Rata Share of the Revolving Credit
Commitments) for (a) any out-of-pocket costs and expenses not reimbursed by the Borrowers for which
the Agent is entitled to reimbursement by the Borrowers under this Agreement or any of the other
Transaction Documents and (b) for any other out-of-pocket costs and expenses incurred by the Agent
on behalf of the Lenders in connection with the preparation, execution, delivery, amendment,
modification, extension, renewal and/or enforcement of this Agreement and/or any of the other
Transaction Documents.



     7.11 Rights as a Lender. With respect to its Revolving Credit Commitment, the Loans
made by it and the Notes issued to it, the Agent shall have the same rights and powers hereunder as
any Lender and may exercise the same as though it were not the Agent, and the terms “Lender” and
“Lenders” shall, unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, issue letters of credit for the
account of and generally engage in any kind of banking or trust business with each Borrower and its
Affiliates as if it were not the Agent.



     7.12 Independent Credit Decision. Each Lender acknowledges that it has, independently
and without reliance upon the Agent or any other Lender and based on the financial statements
referred to in Section 4.04 and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the other Transaction
Documents. Each Lender also acknowledges that it will, independently and without reliance upon the
Agent or any other



 - 73 - 









 







Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking action under this
Agreement and the other Transaction Documents.



     7.13 Resignation of Administrative Agent. Subject to the appointment of a successor
Agent, the Agent may resign as Agent for the Lenders under this Agreement and the other Transaction
Documents at any time by thirty (30) days’ notice in writing to the Lenders and the Borrowers.
Such resignation shall take effect upon appointment of such successor Agent. Subject to the
consent of the Borrowers (which consent shall not be unreasonably withheld or delayed and which
consent shall not be required if any Event of Default under this Agreement has occurred and is
continuing), the Required Lenders shall have the right to appoint a successor Agent who shall be
entitled to all of the rights of, and vested with the same powers as, the original Agent under this
Agreement and the other Transaction Documents. In the event a successor Agent shall not have been
appointed within the thirty (30) day period following the giving of notice by the Agent, subject to
the consent of the Borrowers (which consent shall not be unreasonably withheld or delayed and which
consent shall not be required if any Event of Default under this Agreement has occurred and is
continuing), the Agent may appoint its own successor. Resignation by the Agent shall not affect or
impair the rights of the Agent under Sections 7.05 and 7.10 hereof with respect to all matters
preceding such resignation. Any successor Agent must be a national banking association or a
bank chartered in any State of the United States having a combined capital and surplus of at least
$100,000,000.00.



     7.14 Delivery of Documents. The Agent agrees to promptly provide each Lender with
copies of (a) this Agreement and the other Transaction Documents (including any amendments
thereto), (b) any default notices sent by the Agent to any Borrower or any other Obligor with
respect to this Agreement or any of the other Transaction Documents, (c) any waivers or consents
signed by the Agent or otherwise sent by the Agent to any Borrower or any other Obligor with
respect to this Agreement or any of the other Transaction Documents, (d) any notices of default
sent by any Borrower, any other Obligor or any Lender to the Agent with respect to this Agreement
or any of the other Transaction Documents and (e) any requests for any amendments, waivers or
consents sent to the Agent by any Borrower or any other Obligor with respect to this Agreement or
any of the other Transaction Documents. The Agent agrees to provide each Lender, within five (5)
Business Days after written request by such Lender and at such Lender’s expense, a copy of such
other information, reports, certificates and/or other materials prepared by any Borrower or
otherwise required by the Transaction Documents and which are in the possession of the Agent which
are reasonably requested by such Lender in writing.



     7.15 Application of Section 7 to U.S. Bank. The provisions of this Section 7 and the
obligations of the Lenders thereunder shall be deemed equally to apply to, and be for the benefit
of, (a) U.S. Bank in connection with its making and administration of the Swing Line Loans, to the
same extent that such provisions apply to the Agent, the Revolving Credit Loans, the LaBarge
Electronics Term Loan, the LaBarge Acquisition Term Loan and the other Borrower’s Obligations,
mutatis mutandis and (b) U.S. Bank in connection with its issuance and administration of the
Letters of Credit, to the same extent that such provisions apply to the Agent, the Revolving Credit
Loans, the LaBarge Electronics Term Loan, the LaBarge Acquisition Term Loan and the other
Borrower’s Obligations, mutatis mutandis.



     7.16 Legal Representation of the Agent. In connection with (a) the drafting,
negotiation and execution of this Agreement and the other Transaction Documents and (b) any future
legal representation relating to the administration, amendment, modification, extension, renewal,
restatement and/or enforcement of, and/or waiver or consent under, this Agreement or any of the
other Transaction Documents, Thompson Coburn LLP has only represented and shall only represent U.S.
Bank National Association in its capacity as the Agent and a Lender. Each other Lender hereby
acknowledges and



 - 74 - 









 







agrees that Thompson Coburn LLP has not represented and will not represent such
Lender in connection with any such matters.



     7.17 Duration of Agency. The agency established by Section 7.01 hereof shall
continue, and Sections 7.01 through and including this Section 7.17 shall remain in full force and
effect, until all of the Borrower’s Obligations owed by any one or more of the Borrowers shall have
been paid in full and the Lenders’ commitments to make Loans and/or extend credit to or for the
benefit of any Borrower shall have terminated or expired.”



SECTION 8. GENERAL.




     8.01 No Waiver. No failure or delay by any party to this Agreement in exercising any
right, remedy, power or privilege of such party under this Agreement or under any other Transaction
Document shall operate as a waiver thereof; nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The remedies provided herein and in the other Transaction Documents are cumulative and
not exclusive of any remedies provided by law. Nothing contained in this Agreement shall in any
way affect the right of the Agent or any Lender to exercise any statutory or common law right of
banker’s lien or setoff.



     8.02 Right of Setoff. Upon the occurrence and during the continuance of any Event of
Default, each Lender is hereby authorized at any time and from time to time, without prior notice
to any Borrower (any such prior notice being expressly waived by each Borrower) and to the fullest
extent permitted by law, to setoff and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by such Lender and any and all other indebtedness at
any time owing by such Lender to or for the credit or account of any Borrower against any and all
of the Borrower’s Obligations owed by such Borrower irrespective of whether or not such Lender
shall have made any demand under this Agreement or under any of the other Transaction Documents and
although such obligations may be contingent or unmatured. Each Lender agrees to promptly notify
the applicable Borrower after any such setoff and application made by such Lender, provided,
however, that the failure to give such notice shall not affect the validity of such setoff and
application. The rights of the Lenders under this Section 8.02 are in addition to any other rights
and remedies (including, without limitation, other rights of setoff) which the Lenders may have.
Nothing contained in this Agreement or any other Transaction Document shall impair the right of any
Lender to exercise any right of setoff or counterclaim it may have against any Borrower and to
apply the amount subject to such exercise to the payment of indebtedness of such Borrower unrelated
to this Agreement or the other Transaction Documents.



     8.03 Cost and Expenses. The Borrowers jointly and severally agree, whether or not any
Loan is made under this Agreement, to pay the Agent and each Lender upon demand for (a) all
out-of-pocket costs and expenses and all Attorneys’ Fees incurred by the Agent in connection with
(i) the preparation, documentation, negotiation, execution, administration and/or enforcement of
this Agreement and/or any of the other Transaction Documents, (ii) the preparation, documentation,
negotiation and execution of any amendment, modification, extension, renewal or restatement of this
Agreement and/or any of the other Transaction Documents and/or (iii) the preparation of any waiver
or consent under this Agreement or under any of the other Transaction Documents, (b) all recording,
filing and search fees and expenses incurred by the Agent in connection with this Agreement and the
other Transaction Documents, (c) all out-of-pocket costs and expenses and all Attorneys’ Fees
incurred by the Agent or any Lender in connection with any Default or Event of Default under this
Agreement, (d) if an Event of Default occurs, all out-of-pocket costs and expenses and all
Attorneys’ Fees incurred by the Agent or any Lender in connection with such Event of Default and
collection and other enforcement proceedings resulting therefrom and (e) all other Attorneys’ Fees
incurred by the Agent or any Lender relating to or arising out of or in connection with this
Agreement or any of the other Transaction Documents. The Borrowers



 - 75 - 









 







further jointly and severally
agree to pay or reimburse the Agent and each Lender upon demand for any stamp or other similar
taxes which may be payable with respect to the execution, delivery, recording and/or filing of this
Agreement and/or any of the other Transaction Documents. All of the obligations of Borrowers under
this Section 8.03 shall survive the satisfaction and payment of the Borrower’s Obligations owed by
any one or more of the Borrowers and the termination of this Agreement.



     8.04 Environmental Indemnity. The Borrowers hereby jointly and severally agree to
defend and indemnify the Agent and each Lender and hold the Agent and each Lender harmless from and
against any and all losses, liabilities, damages, injuries, claims, costs and expenses of any and
every kind whatsoever (including, without limitation, court costs and reasonable attorneys’ fees
and expenses) which at any time or from time to time may be paid, incurred or suffered by, or
asserted against, the Agent or any Lender for, with respect to or as a direct or indirect result of
the violation by the Company or any Subsidiary of any Environmental Laws; or with respect to, or as
a direct or indirect result of the presence on or under, or the Release from, properties owned,
leased or operated by the Company or any Subsidiary in the conduct of its business into or upon any
land, the atmosphere or any watercourse, body of water or wetland, of any Hazardous Substances or
any other hazardous or toxic waste, substance or constituent or other substance (including, without
limitation, any losses, liabilities, damages, injuries, claims, costs or expenses asserted or
arising under the Environmental Laws), other than for such liabilities due to the gross negligence
or willful misconduct of the Agent or any Lender seeking such indemnification hereunder as
determined by a court of competent jurisdiction in a final, nonappealable order; and the provisions
of
and undertakings and indemnification set out in this Section 8.04 shall survive the satisfaction
and payment of the Borrower’s Obligations owed by any one or more of the Borrowers and the
termination of this Agreement.



     8.05 General Indemnity. In addition to the payment of expenses pursuant to Section
8.03, the Borrowers hereby jointly and severally agree to defend, indemnify, pay and hold the Agent
and each Lender and any holder(s) of the Notes, and the officers, directors, employees, agents and
affiliates of the Agent and each Lender and such holder(s) (collectively, the “Indemnitees”)
harmless from and against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, disbursements, costs and expenses of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements of counsel for
such Indemnitees in connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnitees shall be designated a party thereto), that
may be imposed on, incurred by or asserted against the Indemnitees, in any manner relating to or
arising out of this Agreement, any of the other Transaction Documents, any other agreement,
document or instrument executed and delivered by any Borrower or any other Obligor in connection
herewith or therewith or any commitment letter delivered by the Agent or any Lender to any
Borrower, or the agreement of the Lenders to make the Loans and/or of U.S. Bank to issue Letters of
Credit under this Agreement (collectively, the “indemnified liabilities”); provided that
(a) the Borrowers shall have no obligation to an Indemnitee hereunder with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of that Indemnitee as
determined by a court of competent jurisdiction in a final, nonappealable order and (b) the
Borrowers shall have no obligation to indemnify the Agent or any Lender with respect to disputes
between the Agent and any one or more of the Lenders or with respect to disputes among one or more
of the Lenders. To the extent that the undertaking to indemnify, pay and hold harmless set forth
in the preceding sentence may be unenforceable because it is violative of any law or public policy,
the Borrowers shall contribute the maximum portion that they are permitted to pay and satisfy under
applicable law to the payment and satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them. The provisions of the undertakings and indemnification set out in this
Section 8.05 shall survive satisfaction and payment of the Borrower’s Obligations owed by any one
or more of the Borrowers and the termination of this Agreement.



 - 76 - 









 





     8.06 Authority to Act. The Agent and each Lender shall be entitled to act on any
notices and instructions (telephonic or written) believed by the Agent or such Lender in good faith
to have been sent or delivered by an Authorized Person, regardless of whether such notice or
instruction was in fact delivered by an Authorized Person, and the Borrowers hereby jointly and
severally agree to defend and indemnify the Agent and each Lender and hold the Agent and each
Lender harmless from and against any and all losses and expenses, if any, ensuing from any such
action.



     8.07 Notices. Any notice, request, demand, consent, confirmation or other
communication under this Agreement shall be in writing and delivered in person or sent by
facsimile, recognized overnight courier or registered or certified mail, return receipt requested
and postage prepaid, to the applicable party at its address or facsimile number set forth on the
signature pages hereof (or, in the case of an Assignee, as set forth in the applicable Assignment
and Assumption Agreement), or at such other address or facsimile number as any party hereto may
designate as its address or facsimile number for communications under this Agreement by notice so
given. Such notices shall be deemed effective on the day on which delivered or sent if delivered
in person or sent by facsimile (with answerback confirmation received), on the first (1st) Business
Day after the day on which sent, if sent by recognized overnight courier or on the third (3rd)
Business Day after the day on which mailed, if sent by registered or certified mail.



     8.08 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. EACH BORROWER IRREVOCABLY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF ANY MISSOURI STATE COURT SITTING IN THE CITY OR COUNTY OF ST.
LOUIS, MISSOURI AND/OR ANY UNITED STATES OF AMERICA COURT SITTING
IN THE EASTERN DISTRICT OF MISSOURI, EASTERN DIVISION, AS THE AGENT MAY ELECT, IN ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT. EACH
BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT TO SUCH SUIT, ACTION OR PROCEEDING
MAY BE HELD AND DETERMINED IN ANY OF SUCH COURTS. EACH BORROWER IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH SUCH BORROWER MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, AND EACH BORROWER
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH BORROWER AUTHORIZES THE SERVICE OF PROCESS UPON
SUCH BORROWER BY REGISTERED MAIL SENT TO SUCH BORROWER AT ITS ADDRESS DETERMINED PURSUANT TO
SECTION 8.07. EACH BORROWER, THE AGENT AND EACH LENDER HEREBY IRREVOCABLY WAIVES THE RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY ACTION IN WHICH ANY ONE OR MORE OF THE BORROWERS, ON THE ONE
HAND, AND THE AGENT AND/OR ANY LENDER, ON THE OTHER HAND, ARE PARTIES RELATING TO OR ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS.



     8.09 Governing Law. This Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Missouri (without reference to conflict of law
principles).



     8.10 Amendments and Waivers.Any provision of this Agreement may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by the Borrowers and the
Required Lenders (and, (i) if the rights or duties of the Agent in its capacity as Agent are
affected thereby, by the Agent, (ii) if the rights or duties of U.S. Bank in its capacity as the
maker of the Swing Line Loans are affected thereby, by U.S. Bank and (iii) if the rights or duties
of U.S. Bank in its capacity as the issuer of the Letters of Credit are affected thereby, by U.S.
Bank); provided that no such amendment or waiver shall, unless signed by all of the Lenders, (a)
increase the Revolving Credit Commitment of any Lender or the Maximum Swing Line Amount, (b)
increase the principal amount of the LaBarge Electronics Term



 - 77 - 









 







Loan, (c) increase the principal
amount of the LaBarge Acquisition Term Loan, (d) reduce the principal amount of or rate of interest
on any Loan or any fees under this Agreement (other than any fees relating to the Letters of Credit
other than the Letter of Credit Commitment Fees), (e) postpone the date fixed for any payment of
principal of or interest on any Loan or any fees under this Agreement, (f) change the definition of
“Required Lenders”, (g) voluntarily release any Collateral (except as contemplated by the
applicable Transaction Documents as in effect on the date of this Agreement) with an aggregate fair
market value (as certified by the Borrower) in excess of $1,000,000.00, (h) voluntarily release any
Obligor, (i) amend Section 2.24, (j) amend Section 2.25 or (k) amend this Section 8.10.
Notwithstanding any provision contained in this Agreement to the contrary, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent under this Agreement
or any other Transaction Documents, except that the Revolving Credit Commitment of such Defaulting
Lender may not be increased or extended without the consent of such Defaulting Lender.



     8.11 References; Headings for Convenience. Unless otherwise specified herein, all
references herein to Section numbers refer to Section numbers of this Agreement, all references
herein to Exhibits A, B, C, D, E, F,
G and H refer to annexed Exhibits A, B, C,
D, E, F, G and H which are hereby incorporated herein by
reference and all references herein to Schedules 2.03(g), 2.04,
4.05, 4.06, 4.08, 4.10, 4.12, 4.16, 4.17
4.18 and 5.02(m) refer to annexed Schedules 2.03(g), 2.04,
4.05, 4.06, 4.08, 4.10, 4.12, 4.16, 4.17
4.18 and 5.02(m) which are hereby incorporated herein by reference. The Section
headings are furnished for the convenience of the parties and are not to be considered in the
construction or interpretation of this Agreement.



     8.12 Successors and Assigns.



     (a) Subject to paragraphs (b), (c) and (d) of this Section 8.12, the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Notwithstanding the foregoing, no Borrower may assign or otherwise
transfer any of its rights or delegate any of its obligations or duties under this Agreement
without the prior written consent of the Agent and each Lender.



     (b) Any Lender may at any time grant to one or more banks or other financial institutions
(each a “Participant”) participating interests in its Revolving Credit Commitment or any or all of
its Loans. In the event of any such grant by a Lender of a participating interest to a
Participant, whether or not upon notice to the Borrowers and the Agent, such Lender shall remain
responsible for the performance of all of its obligations hereunder, and the Borrowers and the
Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement pursuant to which any Lender may grant
such a participating interest shall provide that such Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrowers hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of this Agreement;
provided that such participation agreement may provide that the applicable Lender will not
agree to any amendment, modification or waiver of this Agreement described in clauses (a), (b),
(c), (d) or (e) of Section 8.10 without the consent of the Participant.



     (c) Any Lender may at any time assign to one or more banks or other financial institutions
(each an “Assignee”) all, or a proportionate part of all, of its rights and obligations under this
Agreement and its Notes in a minimum amount of at least $5,000,000.00, and such Assignee shall
assume such rights and obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit H attached hereto executed by such Assignee and such
transferor Lender, with (and subject to) the subscribed consent of the Borrowers and the Agent,
which, in each case, shall not be unreasonably withheld or delayed (each, an Assignment and
Assumption Agreement”); provided, however, that (i) if any Assignee is an affiliate of such
transferor Lender or, immediately prior to such assignment, a Lender, no consent shall be required
and (ii) if any Event of Default under this



 - 78 - 









 







Agreement has occurred and is continuing no consent of
the Borrowers to such assignment shall be required. Upon execution and delivery of such instrument
and payment by such Assignee to such transferor Lender of an amount equal to the purchase price
agreed between such transferor Lender and such Assignee, such Assignee shall be a Lender party to
this Agreement and shall have all the rights and obligations of a Lender with a Revolving Credit
Commitment as set forth in such instrument of assumption, and the transferor Lender shall be
released from its obligations hereunder to a corresponding extent, and no further consent or action
by any party shall be required. Upon the consummation of any assignment pursuant to this
subsection (c), the transferor Lender, the Agent and the Borrowers shall make appropriate
arrangements so that, if required, new Note(s) are issued to the Assignor and/or the Assignee, as
applicable. In connection with any such assignment, the transferor Lender shall pay to the Agent
an administrative fee for processing such assignment in the amount of $3,500.00.



     (d) Any Lender may at any time assign all or any portion of its rights under this Agreement
and its Notes to secure its obligations to a Federal Reserve Bank. No such assignment shall
release the transferor Lender from any of its obligations hereunder.



     8.13 NO ORAL AGREEMENTS; ENTIRE AGREEMENT. This notice is provided pursuant to Section
432.047 R.S.Mo. As used herein, “borrower(s)” means the Borrowers, “creditor” means the Lenders and
the Agent and “this writing” means this Agreement and the other Transaction Documents. ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A
DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL
THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU
(BORROWER(S))
AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE
AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT. This Agreement embodies
the entire agreement and understanding between the parties hereto and supersedes all prior
agreements and understandings (oral or written) relating to the subject matter hereof.



     8.14 Severability. In the event any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.



     8.15 Counterparts. This Agreement may be executed in any number of counterparts
(including facsimile or pdf counterparts), each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.



     8.16 Resurrection of the Borrower’s Obligations. To the extent that the Agent or any
Lender receives any payment on account of any of the Borrower’s Obligations owed by any one or more
of the Borrowers, and any such payment(s) or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, subordinated and/or required to be repaid to
a trustee, receiver or any other Person under any bankruptcy act, state or Federal law, common law
or equitable cause, then, to the extent of such payment(s) received, such Borrower’s Obligations or
part thereof intended to be satisfied and any and all Liens upon or pertaining to any Property of
any Borrower and/or any other Obligor and theretofore created and/or existing in favor of the Agent
or any of the Lenders as security for the payment of such Borrower’s Obligations shall be revived
and continue in full force and effect, as if such payment(s) had not been received by the Agent or
such Lender, as the case may be, and applied on account of such Borrower’s Obligations.



 - 79 - 









 





     8.17 Independence of Covenants. All of the covenants contained in this Agreement and
the other Transaction Documents shall be given independent effect so that if a particular action,
event or condition is prohibited by any one of such covenants, the fact that it would be permitted
by an exception to, or otherwise be in compliance within the provisions of, another covenant shall
not avoid the occurrence of a Default or Event of Default if such action is taken, such event
occurs or such condition exists.



     8.18 Collateral. Each Lender represents that it in good faith is not relying upon any
“margin stock” (as defined in Regulation U of the Board of Governors of the Federal Reserve System,
as amended) as collateral in the extension or maintenance of the credit provided for in this
Agreement. Notwithstanding any provision contained in the Company Security Agreement to the
contrary, the Agent and each Lender hereby releases any security interest or other Lien it may have
upon any shares of capital stock of the Company which are owned by the Company (whether held by the
Company as treasury stock or otherwise).



     8.19 Confidentiality. Each Lender agrees to use reasonable precautions to keep
confidential, in accordance with its customary procedures for handling confidential information of
this nature and in accordance with safe and sound banking practices, any non-public information
supplied to such Lender by the Company or any Subsidiary pursuant to this Agreement or any other
Transaction Document; provided, however, that nothing contained in this Section 8.19 shall prohibit
or limit the disclosure by such Lender of any such information (a) to the extent required by any
statute, rule, regulation, subpoena or judicial process, (b) to any governmental or regulatory
agency having jurisdiction over such Lender, (c) to any professional advisors, including counsel
and accountants, for such Lender in connection with the provision of advice or other services to
such Lender with respect to any of the Borrower’s Obligations owed by any one or more of the
Borrowers, this Agreement or any other Transaction Document, (d) to any bank examiners or auditors,
(e) in connection with any litigation to which such Lender is a party, (f) in connection with the
enforcement of such Lender’s rights and remedies under this Agreement, any of the Notes or any of
the other Transaction Documents or (g) to any assignee or participant (or prospective assignee or
participant); and provided further, that in no event shall any Lender be obligated or required to
return any materials furnished to such Lender by the Company or any Subsidiary under this Agreement
or any other Transaction Document. Notwithstanding the foregoing, no Lender shall have any
liability to the Company, any Subsidiary or any shareholder, partner, joint venturer, director,
officer, employee or agent of the Company or any Subsidiary by reason of, or in any way claimed to
be related to, any disclosure by such Lender of any information with respect to the Company or any
Subsidiary except as the same results from the gross negligence or wilful misconduct of such Lender
as determined by a court of competent jurisdiction in a final, nonappealable order.



     8.20 USA Patriot Act. Each Lender that is subject to the USA Patriot Act and the Agent
(for itself and not on behalf of any Lender) hereby notifies each Borrower that pursuant to the
requirements of the USA Patriot Act, it is required to obtain, verify and record information that
identifies such Borrower, which information includes the name and address of such Borrower and
other information that will allow such Lender or the Agent, as applicable, to identify such
Borrower in accordance with the USA Patriot Act. Each Borrower hereby agrees to provide to the
Agent and each Lender any such information requested by any such party.



     8.21 Swap Contracts and Treasury Management Agreements. By virtue of a Lender’s
execution of this Agreement or an Assignment and Assumption Agreement pursuant to Section 8.12(c),
as the case may be, any affiliate of such Lender with whom a Borrower has entered into a Swap
Contract or a Treasury Management Agreement shall be deemed a Lender party to this Agreement for
purposes of any reference in this Agreement or any other Transaction Document to the parties for
whom the Agent is acting, it being understood and agreed that the rights and benefits of such
affiliate



 - 80 - 









 







under this Agreement and the other Transaction Documents consist solely of such
affiliate’s right to share in any payments made by any Borrower and/or any other Obligor under this
Agreement and/or any other Transaction Document and in any collections out of any Collateral, all
as set forth in Section 2.25. In connection with any such distribution of payments and collections,
the Agent shall be entitled to assume no amounts are due to any Lender or any of its affiliates
under or in respect of any Swap Contracts and/or any Treasury Management Agreements unless such
Lender has notified the Agent in writing of the amount of any such liability owed to it or its
affiliate(s) prior to such distribution.



     8.22 Release of Liens. Each Lender hereby agrees that the Agent shall have the right,
without any notice to or consent of any Lender, to release the Agent’s security interest in and/or
other Lien on any of the Collateral which is sold or otherwise disposed of by the Borrower or any
Subsidiary in accordance with Section 5.02(c)(ii) or with the consent of the Required Lenders (or
of all of the Lenders if the aggregate fair market value of such Collateral (as certified by the
Borrower) in excess of $1,000,000.00).



     8.23 Waiver of Consequential Damages, etc. To the fullest extent permitted by
applicable law, no Borrower shall assert, and each Borrower hereby waives, any claim against the
Agent and/or any Lender, on any theory of liability, for any special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as
a result of, this Agreement or any other Transaction Document, the transactions contemplated hereby
or thereby and/or any Loan and/or the use of the proceeds of any Loan.



     8.24 Release of Certain Documents The Agent and each Lender hereby terminate and
release each of the “LaBarge Electronics Collateral Assignment of Asset Sale and Purchase
Agreement” and the “LaBarge Electronics Membership Interest Pledge Agreement” (each as defined in
the Existing Loan Agreement).



     8.25 Reallocation of Loans. The Lenders agree that on the date of this Agreement the
Lenders will make such payments to each other as shall be necessary to cause the respective Pro
Rata Shares of the Lenders in the principal amount of each of the outstanding Loans as of the date
of this Agreement to be as follows: (a) U.S. Bank — 53.3333333333%; and (b) Wells Fargo Bank,
National Association — 46.6666666667%.



     8.26 Amendment and Restatement. This Agreement is an amendment, restatement and
continuation of, and not a novation of, the Existing Loan Agreement. All references in the
Transaction Documents to the Existing Loan Agreement and any other references of similar import
shall henceforth mean this Agreement, as the same may from time to time be amended, modified,
extended, renewed or restated.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK — SIGNATURE PAGES FOLLOW]




 - 81 - 









 








     IN WITNESS WHEREOF, the Company, LaBarge Electronics, LaBarge Acquisition, the Lenders and the
Agent have executed this Loan Agreement as of the 22nd day of December, 2008.



	 	 	 	 	 	 	 
	 	 	LABARGE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/CRAIG E. LaBARGE
 

	 	 
	 	 	Name: Craig E. LaBarge	 	 
	 	 	Title: CEO and President	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	9900A Clayton Road	 	 
	 	 	St. Louis, Missouri 63178	 	 
	 	 	Attention: Chief Financial Officer	 	 
	 	 	Facsimile No.: (314) 812-9438	 	 
	 
	 	 	 	 	 	 
	 	 	LABARGE ELECTRONICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/CRAIG E.LaBARGE
 

	 	 
	 	 	Name: Craig E. LaBarge	 	 
	 	 	Title: President	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	9900A Clayton Road	 	 
	 	 	St. Louis, Missouri 63178	 	 
	 	 	Attention: Chief Financial Officer	 	 
	 	 	Facsimile No.: (314) 812-9438	 	 
	 
	 	 	 	 	 	 
	 	 	LABARGE ACQUISITION COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/CRAIG E. LaBARGE
 

	 	 
	 	 	Name: Craig E. LaBarge	 	 
	 	 	Title: President	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	9900A Clayton Road	 	 
	 	 	St. Louis, Missouri 63178	 	 
	 	 	Attention: Chief Financial Officer	 	 
	 	 	Facsimile No.: (314) 812-9438	 	 






 - 82 - 









 






	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/Daniel L. Tilghman
 

	 	 
	 	 	Name: Daniel L. Tilghman	 	 
	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	721 Locust Street	 	 
	 	 	First Floor, Bank Lobby	 	 
	 	 	St. Louis, Missouri 63101	 	 
	 	 	Attention: Commercial Lending Department	 	 
	 	 	Facsimile No.: (314) 418-8090	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/Kevin L. Handley
 

	 	 
	 	 	Name: Kevin L. Handley	 	 
	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Attention:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Facsimile No.:
(               )

	 	 
	 

	 	 	 	 	 	 	 	 





	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/Daniel L. Tilghman
 

	 	 
	 	 	Name: Daniel L. Tilghman	 	 
	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	721 Locust Street	 	 
	 	 	First Floor, Bank Lobby	 	 
	 	 	St. Louis, Missouri 63101	 	 
	 	 	Attention: Commercial Lending Department	 	 
	 	 	Facsimile No.: (314) 418-8090	 	 







 - 83 -