# EDGAR Filing Document

**Accession Number:** 0000788920
**File Stem:** 0001079973-26-000201
**Filing Date:** 2026-2
**Character Count:** 532616
**Document Hash:** 27ac4d20692ab92d68ec114221483d95
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001079973-26-000201.hdr.sgml**: 20260212

**ACCESSION NUMBER**: 0001079973-26-000201

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 27

**CONFORMED PERIOD OF REPORT**: 20260209

**ITEM INFORMATION**: Entry into a Material Definitive Agreement

**ITEM INFORMATION**: Completion of Acquisition or Disposition of Assets

**ITEM INFORMATION**: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20260212

**DATE AS OF CHANGE**: 20260212

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PRO DEX INC
- **CENTRAL INDEX KEY:** 0000788920
- **STANDARD INDUSTRIAL CLASSIFICATION:** SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 841261240
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-14942
- **FILM NUMBER:** 26626033

**BUSINESS ADDRESS:**
- **STREET 1:** 2361 MCGAW AVENUE
- **CITY:** IRVINE
- **STATE:** CA
- **ZIP:** 92614
- **BUSINESS PHONE:** 949-769-3231

**MAIL ADDRESS:**
- **STREET 1:** 2361 MCGAW AVENUE
- **CITY:** IRVINE
- **STATE:** CA
- **ZIP:** 92614

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRO-DEX, INC.
- **DATE OF NAME CHANGE:** 20151110

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CONTEXT CAPITAL FUNDS
- **DATE OF NAME CHANGE:** 20151104

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRO DEX INC
- **DATE OF NAME CHANGE:** 19920703

?xml version='1.0' encoding='ASCII'? Current Report

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): **February 9, 2026**

**PRO-DEX, INC.**

*(Exact name of registrant as specified in charter)*

---

| | | |
|:---|:---|:---|
| **Colorado** | **0-14942** | **84-1261240** |
| *(State or other jurisdiction of incorporation)* | *(Commission File Number)* | *(IRS Employer Identification Number)* |

---

**2361 McGaw Avenue**

**Irvine, California 92614**

*(Address of principal executive offices, zip code)*

**(949) 769-3200**

*(Registrant's telephone number including area code)*

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Exchange Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, no par value | PDEX | NASDAQ Capital Market |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Item 1.01. Entry into a Material Definitive Agreement.**

*<u>Acquisition of Advance Precision Machining</u>*

On February 9, 2026, Pro-Dex, Inc. ("Pro-Dex" or the "Company") completed its acquisition of all the issued and outstanding membership interests (the "Acquisition") of Advanced Precision Machining LLC, a California limited liability company ("APM"), resulting in APM becoming a wholly owned subsidiary of the Company. APM is engaged in the manufacture of various machined components serving customers in a variety of industries, including medical device and aerospace, and manufactures several of the Company's machined sub-assemblies. The Acquisition was made pursuant to a Membership Interest Purchase Agreement, dated February 9, 2026 (the "Purchase Agreement"), by and among the Company as purchaser, Advanced-Precision Machining Holding Company, Inc., a California corporation, as seller ("Seller"), and Sean McCaig and Yasumi McCaig, each an individual, as the owners of Seller ("Owners" and, together with Seller, the "Seller Parties").

The aggregate purchase price for the Acquisition was approximately $8,650,000, of which approximately $6,650,000 was paid by the Company in cash at closing and $2,000,000 of which is to be paid by the Company under the terms of a 63-month subordinated promissory note issued to Seller at closing (the "Seller Promissory Note"), which bears simple interest at 8% per annum and requires twenty-one equal quarterly payments of principal and accrued interest in the amount on $117,569.54 each. The Company's obligations under the Seller Promissory Note are subordinate to the Company's borrowings from UMB Bank N.A., described below. In connection with the Acquisition, the Company also agreed to engage Sean McCaig as a consultant to provide the Company with various consulting services through the end of calendar 2026.

The Purchase Agreement contains representations, warranties, covenants, and indemnification obligations of the Company and the Seller Parties customary for an acquisition transaction of this type. Pursuant to the terms of the Purchase Agreement, the Company will obtain a representations and warranties insurance policy with a coverage amount of $2,000,000, which serves, to the extent covered by the policy, as a source of recovery for indemnification claims the Company may have against the Seller Parties for breaches of representations or warranties under the Purchase Agreement. The Seller Promissory Note also contains covenants and obligations of the Company customary for a subordinated promissory note of this type.

The foregoing description of the Purchase Agreement and the Seller Promissory Note and the transactions contemplated thereby is not complete and is qualified in its entirety by reference to the full text of the Purchase Agreement and the Seller Promissory Note, copies of which are filed as Exhibit 2.1 and Exhibit 10.1, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

The representations and warranties contained in the Purchase Agreement were made only for purposes of the transactions represented thereby as of the specific dates therein, are solely for the benefit of the Company and Seller Parties, may be subject to limitations agreed upon by the Company and Seller Parties, including, among others, being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Purchase Agreement and should not rely on the representations or warranties therein, or any descriptions thereof, as characterizations of the actual state of facts or condition of the Company or any third party. Moreover, information concerning the subject matter of representations and warranties contained in the Purchase Agreement may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures. Rather, investors and the public should look to the disclosures contained in the Company's reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for information concerning the Company.

*<u>UMB Second Amended and Restated Credit & Security Agreement & Term Note D</u>*

In connection with the Acquisition, on February 9, 2026 (the "Credit Amendment Date"), the Company entered into a Second Amended and Restated Credit and Security Agreement (the "Amended Credit Agreement") with UMB Bank, N.A. ("UMB"), which among other things provided for financing to fund the cash portion of the purchase price for the Acquisition by issuing Term Note D in the principal amount of $6,650,000. Term Note D is in addition to the following loans that were previously issued to the Company under the UMB credit agreement and that remain issued under the Amended Credit Agreement: Term Note A in the original principal amount of $7,525,000, Term Note B in the original principal amount of $1,000,000, Term Note C in the original principal amount of $5,000,000, and a Revolving Note in the amount of $11,000,000.

The Amended Credit Agreement also extended the maturity date of the Revolving Note from December 29, 2026 to December 29, 2027 pursuant to a Third Amended and Restated Revolving Credit Note entered into by the Company and UMB on the Credit Amendment Date. No amounts are drawn under the Revolving Note as of the date of this Current Report on Form 8-K.

Other than the issuance of Term Note D and extension of the maturity date of the Revolving Note, the Amended Credit Agreement did not materially amend or modify the terms of the Company's loans with UMB as they existed prior to the Credit Amendment Date.

Both Term Note A and Term Note B mature on November 1, 2027, and bear interest at a fixed rate of 3.84% per annum. Term Note C matures on August 1, 2029, and bears interest at the greater of (a) 5% or (b) the SOFR one-month rate plus 2.5% (the "Adjusted SOFR Rate"). Term Note D matures on February 1, 2031, and bears interest at the greater of (a) 4.5% or (b) the Adjusted SOFR Rate. The Revolving Note bears interest at the greater of (a) 4% or (b) the Adjusted SOFR Rate.

Any payment on Term Note A, Term Note B, Term Note C, Term Note D or the Revolving Note (collectively, the "Notes") not made within seven days after the due date is subject to a late payment fee equal to 5% of the overdue amount. Upon the occurrence and during the continuance of an event of default, the interest rate of all the Notes is increased by 3% and UMB may, at its option, declare the loans under the Notes immediately due and payable in full. The origination fees associated with Term Note D in the amount of $16,625 and the maturity extension fees associated with the Revolving Note in the amount of $15,000 were paid by the Company to UMB on the Credit Amendment Date.

The Amended Credit Agreement and the Notes contain representations and warranties, affirmative, negative and financial covenants, and events of default that are customary for loans of this type.

The foregoing description of the Amended Credit Agreement and the Notes and the transactions contemplated thereby is not complete and is qualified in its entirety by reference to the full text of the Amended Credit Agreement and the Notes. Copies of the Amended Credit Agreement, Term Note D, and the Third Amended and Restated Revolving Credit Note are filed as Exhibit 10.2, Exhibit 10.3, and Exhibit 10.4, respectively, to this Current Report on Form 8-K and are incorporated by reference herein. Copies of the current Term Note A, Term Note B, and Term Note C are exhibits to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 4, 2026 and are incorporated by reference herein.

The representations and warranties contained in the Amended Credit Agreement and the Notes were made only for purposes of the transactions represented thereby as of the specific dates therein, are solely for the benefit of the Company and UMB, may be subject to limitations agreed upon by the Company and UMB, including, among others, being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Amended Credit Agreement or the Notes and should not rely on the representations or warranties therein, or any descriptions thereof, as characterizations of the actual state of facts or condition of the Company or any third party. Moreover, information concerning the subject matter of representations and warranties contained in the Amended Credit Agreement and the Notes may change after the date of those documents, which subsequent information may or may not be fully reflected in the Company's public disclosures. Rather, investors and the public should look to the disclosures contained in the Company's reports under the Exchange Act for information concerning the Company.

**Item 2.01. Completion of Acquisition or Disposition of Assets.**

The disclosures contained in Item 1.01 above under the heading "*Acquisition of Advanced Precision Machining "* are incorporated into this Item 2.01 by this reference.

**Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.**

The disclosures contained in Item 1.01 above under the heading "*UMB Second Amended and Restated Credit & Security Agreement & Term Note D"* are incorporated into this Item 2.03 by this reference.

**Item 7.01. Regulation FD Disclosure.**

**Press Release** 

A copy of the press release announcing the Acquisition referenced in Item 1.01 above under the heading "*Acquisition of Advanced Precision Machining*" is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished pursuant to this Item 7.01 and the press release furnished as Exhibit 99.1 hereto shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

**Item 9.01. Financial Statements and Exhibits.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 2.1\*±<br>| [Membership Interest Purchase Agreement dated February 9, 2026 by and among Pro-Dex, Inc., Advanced-Precision Machining Holding Company, Inc., and Sean McCaig and Yasumi McCaig](pdex_ex2x1.htm)<br>|
| 10.1 | [Subordinated Promissory Note dated February 9, 2026 between Pro-Dex, Inc. and Advanced-Precision Machining Holding Company, Inc.](pdex_ex10x1.htm) |
| 10.2\* | [Second Amended and Restated Credit and Security Agreement dated February 9, 2026 by and among UMB Bank, N.A. and Pro-Dex, Inc.](pdex_ex10x2.htm) |
| 10.3 | [Term Note D dated February 9, 2026 made by Pro-Dex, Inc. in favor of UMB Bank, N.A.](pdex_ex10x3.htm) |
| 10.4 | [Third Amended and Restated Revolving Credit Note dated February 9, 2026 made by Pro-Dex, Inc. in favor of UMB Bank, N.A.](pdex_ex10x4.htm) |
| 99.1 | [Press Release dated February 12, 2026](ex99x1.htm) |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |

---

\* Pursuant to Item 601(a)(5) of Regulation S-K promulgated by the Securities and Exchange Commission, certain schedules and attachments to this exhibit have been omitted because they do not contain information material to an investment or voting decision and that information is not otherwise disclosed in the exhibit.

± Certain portions of this exhibit have been redacted pursuant to Item 601(a)(6) or Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
| Date: February 12, 2026 | Pr**o-Dex, Inc.** | Pr**o-Dex, Inc.** |
|  | By: | /s/ Alisha K. Charlton |
|  |  | Alisha K. Charlton |
|  |  | Chief Financial Officer |

---

## Exhibit 2.1

**EXHIBIT 2.1**

**Certain information has been omitted from this exhibit pursuant to Item 601(a)(6) or Item 601(b)(10)(iv) of Regulation S-K. [XXX] indicates that information has been redacted.**

Execution Version

MEMBERSHIP INTEREST PURCHASE AGREEMENT

by and among

Pro-Dex, Inc., as Purchaser

Advanced-Precision Machining Holding Company, Inc., as Seller

Sean McCaig and Yasumi McCaig, as the Owners

and

Sean McCaig, as the Seller Representative

Dated as of February 9, 2026

![](image_003.jpg)

![](image_004.jpg)

![](image_005.jpg)

**MEMBERSHIP INTEREST PURCHASE AGREEMENT**

This MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement"), dated February 9, 2026, is by and among Pro-Dex, Inc., a Colorado corporation (the "<u>Purchaser</u>"), Advanced-Precision Machining Holding Company, Inc., a California corporation (the "<u>Seller</u>"), Sean McCaig, an individual ("<u>S. McCaig</u>"), Yasumi McCaig, an individual ("<u>Y. McCaig</u>" and together with S. McCaig, each an "<u>Owner</u>" and, collectively, the "<u>Owners</u>", and the Owners together with the Seller, each a "<u>Seller Party</u>" and, collectively, the "<u>Seller Parties</u>"), and Sean McCaig as the representative of the Seller and Owners pursuant to <u>Section 7.6</u> (the "<u>Seller Representative</u>"). Capitalized terms used in this Agreement have the meanings set forth or cross-referenced in <u>Section 10.1</u>.

**RECITALS**

WHEREAS, the Seller owns legally, beneficially and of record all of the issued and outstanding limited liability company membership interests (the "<u>Company Interests</u>") in Advanced Precision Machining, LLC, a California limited liability company formerly known as Advanced Precision Machining, Inc., a California corporation (the "<u>Company</u>");

WHEREAS, prior to the date of this Agreement, the Owners, the Seller and the Company consummated the Restructuring, as described more fully in this Agreement;

WHEREAS, on February 3, 2026, the Seller and the Company consummated the Conversion and, as a result thereof, the Company's name changed from Advanced Precision Machining, Inc. to Advanced Precision Machining, LLC;

WHEREAS, the Seller desires to sell to the Purchaser, and the Purchaser desires to purchase from the Seller, all of the Company Interests upon the terms and subject to the conditions set forth in this Agreement (the "<u>Acquisition</u>");

WHEREAS, the Owners, as the shareholders of the Seller, will indirectly be the recipients of substantially all of the amounts payable by the Purchaser to the Seller in order to acquire the Company and the goodwill of the Company's business, and will derive substantial benefits from the consummation of the transactions contemplated by this Agreement, and as a result, each Owner has agreed to be a party to this Agreement and the other Ancillary Agreements to which such Owner is a party;

WHEREAS, the Seller Parties, on the one hand, and the Purchaser, on the other hand, desire to make certain representations, warranties, covenants and other agreements in connection with the Acquisition; and

WHEREAS, contemporaneously with the execution and delivery of this Agreement by the parties, the Purchaser is obtaining and binding a buyer-side representations and warranties insurance policy in the form mutually approved by the Seller Parties and the Purchaser, a copy of which is attached hereto as <u>Exhibit C</u> (the "<u>R&W Policy</u>").

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements hereinafter contained, and intending to be legally bound hereby, the parties hereby agree as follows:

**ARTICLE I**

**<u>THE PURCHASE AND SALE</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Purchase and Sale of the Company Interests</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, the Seller shall, and hereby does, sell, convey, assign and transfer to the Purchaser, and the Purchaser shall, and hereby does, purchase from the Seller, all of the Company Interests, free and clear of any and all Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company Interests will be purchased by the Purchaser for an aggregate amount of Eight Million Six Hundred Fifty Thousand Dollars ($8,650,000), subject to any adjustment pursuant to <u>Section 1.3</u> below, less (x) $39,680 (as the Seller R&W Insurance Amount), and (y) $62,500 (as the Breakup Fee Amount, which is hereby credited towards the Purchase Price pursuant to Section 6 of the Letter of Intent) (as so adjusted, the "<u>Purchase Price</u>"). The Purchase Price shall be paid as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)at the Closing, Purchaser shall issue a promissory note, substantially in the form attached hereto as <u>Exhibit A</u>, in favor of Seller, in the amount of $2,000,000 (the "<u>Note</u>"), which is subordinated to Purchaser's indebtedness to UMB Bank, N.A. d/b/a Minesota Bank & Trust, a division of UMB Bank, N.A., successor-in-interest to Minnesota Bank & Trust, a division of HTLF Bank (the "<u>Senior Lender</u>"), pursuant to that certain Subordination Agreement, dated as of the date hereof, by and between Seller and the Senior Lender (the "<u>Subordination Agreement</u>"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the remaining balance of the Purchase Price (equal to $6,547,820) shall be paid at Closing to the Seller in accordance with the wire instructions provided by the Seller Representative to the Purchaser prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <u>Closing</u>. The closing of the Acquisition (the "<u>Closing</u>") shall take place concurrently with the execution and delivery of this Agreement by e-mail exchange of .pdf documents on the date of this Agreement (the "<u>Closing Date</u>"). The Closing shall be deemed effective for all purposes as of 12:01 a.m. California time on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 <u>Purchase Price Adjustment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Post-Closing Adjustment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Within sixty (60) days after the Closing Date, Purchaser shall prepare and deliver to the Seller Representative a statement setting forth the Purchaser's calculation of the Closing Inventory Value and Delinquent AP (the "<u>Closing Adjustment Statement</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii) The post-Closing adjustment to the Purchase Price shall be an amount equal to the (1) absolute value of the Closing Inventory Deficiency, if any, plus (2) absolute value of Delinquent AP, if any (collectively, the "<u>Post-Closing Adjustment</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Examination and Review</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i) <u>Examination</u>. After receipt of the Closing Adjustment Statement, the Seller Representative shall have fifteen (15) days (the "<u>Review Period</u>") to review the Closing Adjustment Statement. During the Review Period, the Seller Representative shall have reasonable access to the books and records of the Company to the extent that they relate to the Closing Adjustment Statement and to such historical financial information (to the extent in Purchaser's possession) relating to the Closing Adjustment Statement as the Seller Representative may reasonably request for the purpose of reviewing the Closing Adjustment Statement and to prepare a Statement of Objections (as defined below), provided that such access shall be in a manner that does not interfere with the normal business operations of Purchaser or the Company and that any books, records or other information provided to the Seller Representative shall be subject to <u>Section 5.1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii) <u>Objection</u>. On or prior to the last day of the Review Period, the Seller Representative may object to the Closing Adjustment Statement by delivering to Purchaser a written statement setting forth the Seller Representative's objections in reasonable detail, indicating each disputed item or amount and the basis for such disagreement therewith (the "<u>Statement of Objections</u>"). If the Seller Representative fails to deliver the Statement of Objections before the expiration of the Review Period, the Closing Adjustment Statement and the Post-Closing Adjustment reflected in the Closing Adjustment Statement shall be deemed to have been accepted by Seller. If the Seller Representative delivers the Statement of Objections before the expiration of the Review Period, Purchaser and the Seller Representative shall negotiate in good faith to resolve such objections within thirty (30) days after the delivery of the Statement of Objections (the "<u>Resolution Period</u>"), and, if the same are so resolved within the Resolution Period, the Post-Closing Adjustment and the Closing Adjustment Statement with such changes as are agreed in writing by Purchaser and Seller Representative shall be final and binding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii) <u>Resolution of Disputes</u>. If the Seller Representative and Purchaser fail to reach an agreement with respect to all of the matters set forth in the Statement of Objections before expiration of the Resolution Period, then any amounts remaining in dispute ("<u>Disputed Amounts</u>") shall be submitted for resolution to an independent accounting firm mutually agreed to by the Seller Representative and the Purchaser (the "<u>Independent Accountant</u>") who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only and make any adjustments to the Post-Closing Adjustment and the Closing Adjustment Statement. The parties hereto agree that all adjustments shall be made without regard to materiality. The Independent Accountant shall only decide the specific items under dispute by the parties and their decision for each Disputed Amount must be within the range of values assigned to such Disputed Amount in the Closing Adjustment Statement and the Statement of Objections, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Fees of the Independent Accountant</u>. The fees and expenses of the Independent Accountant shall be paid by the Seller, on the one hand, and by Purchaser, on the other hand, as follows: (A) the Seller shall be responsible for the percentage of such fees and expenses determined by dividing (1) the aggregate amount of the absolute values of the differences between the amount of each Disputed Amount asserted by the Seller Representative and the amount of that Disputed Amount that is determined by the Independent Accountant by (2) the total aggregate amount of the absolute values of the differences between the amount of each Disputed Amount asserted by the Purchaser and the amount of that Disputed Amount asserted by the Seller Representative and (B) the Purchaser shall be responsible for remainder of such fees and expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (v) <u>Determination by Independent Accountant</u>. The Independent Accountant shall make a determination as soon as practicable within thirty (30) days (or such other time as the Seller Representative and Purchaser shall agree in writing) after its engagement, and its resolution of the Disputed Amounts and its adjustments to the Closing Adjustment Statement and the Post-Closing Adjustment shall, absent manifest error, be conclusive and binding upon the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Payments of Post-Closing Adjustment</u>. Within five (5) Business Days of acceptance of the Closing Adjustment Statement, or if the Seller Representative timely delivers a Statement of Objection, then within five (5) Business Days of the resolution described in <u>Section 1.3(b)(ii)</u> or <u>1.3(b)(v)</u> above, if there is a Post-Closing Adjustment, the Purchaser shall set off and deduct an amount equal to the Post-Closing Adjustment from the outstanding principal balance of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Adjustments for Tax Purposes</u>. Any Post-Closing Adjustment shall be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless otherwise required by Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4<u>Withholding Taxes</u>. Notwithstanding anything in this Agreement to the contrary, the Purchaser shall be entitled to deduct and withhold from any amounts otherwise payable under this Agreement such amounts as are required to be withheld or deducted under the Code or any other provision of applicable Law with respect to the making of such payment. To the extent that amounts are so deducted and withheld and paid over to the applicable Governmental Authority, such deducted and withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid. To the extent that any payment pursuant to this Agreement is not reduced by such deductions or withholdings, such recipient shall indemnify the Purchaser and its Affiliates for any amounts imposed by any Governmental Authority, together with any costs and expenses related thereto (including reasonable attorneys' fees and costs of investigation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 <u>Treatment; Allocation of Purchase Price</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The parties agree that for U.S. federal income and applicable state and local Tax purposes, the Restructuring shall be treated as a tax-free reorganization, pursuant to Section 368(a)(1)(F) of the Code and the documents effectuating such transaction shall be treated as a plan of reorganization, as contemplated by Treasury Regulations Section 1.368-1(c). The Seller shall provide copies of any Tax forms and elections filed in connection with the Restructuring to the Purchaser for its review and approval. Pursuant to Revenue Ruling 2008-18, 2008-1 C.B. 674, the Company will retain its employer identification number and the Seller applied for and obtained its own separate employer identification number. The parties agree that the purchase and sale of the Company Interests shall be treated for U.S. federal income Tax purposes as an acquisition by the Purchaser of all of the assets of the Company, and as a sale of all of the limited liability company interests in the Company by the Seller in accordance with Revenue Ruling 99-6, 1999-1 C.B. 432 (Situation 2) and that the purchase and sale of the Company Interests will be treated as an "applicable asset acquisition" within the meaning of Section 1060 of the Code with respect to the Purchaser. The parties shall report the transactions contemplated by this Agreement consistently with this <u>Section 1.5</u> on any applicable U.S. federal income or other applicable Tax Return, and shall not take any action inconsistent with the treatment set forth in this <u>Section 1.5</u> unless required by applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Purchase Price (and other relevant items that are deemed sales consideration for federal income Tax purposes) will be allocated among the assets of the Company for Tax reporting purposes in a manner consistent with Section 1060 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Purchaser shall deliver to the Seller Representative a draft allocation schedule within sixty (60) days of the Seller Representative's acceptance (or deemed acceptance pursuant to Section 1.3(b)(ii)) of the Closing Adjustment Statement described in <u>Section 1.3(b)</u>, or if the Seller Representative timely delivers a Statement of Objection, then within sixty (60) days of the resolution described in <u>Section 1.3(b)(ii)</u> or <u>1.3(b)(v)</u>, as applicable. The Seller will deliver its comments to the Purchaser within thirty (30) days thereafter. The Purchaser will incorporate such comments into the allocation schedule as mutually agreed or as otherwise determined by the Independent Accountant for resolution in accordance with the principles set forth in <u>Section 1.3(b)</u>. Any adjustments to the Purchase Price pursuant to this Agreement shall result in an adjustment to the allocation schedule to reflect the proportionate change amongst those classes of assets (or assets that correspond to the liabilities), including goodwill, that caused the adjustment to the Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No party shall take or omit to take any action with respect to their respective Taxes and Tax Returns, including, in connection with any audit, that is inconsistent with the allocation of consideration contemplated by this <u>Section 1.5</u>, except to the extent required pursuant to a "determination" within the meaning of Section 1313(a) of the Code (or any analogous provision of state, local or foreign Law). Without limiting the generality of the foregoing, no party shall file, or permit any Person to file, any IRS Form 8594 (including Part III thereof, if applicable) that has not been mutually agreed upon by the Seller and Purchaser pursuant to this <u>Section 1.5</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)If any Governmental Authority disputes the Tax treatment pursuant to Section 1060 of the Code or any Form 8594 (including Part III thereof, if applicable), <u>Section 8.2</u> shall be applicable with respect to such dispute.

**ARTICLE II**<br><u>REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY</u>** 

Except as set forth in the disclosure letter delivered by the Seller Parties to the Purchaser on the Closing Date (the "<u>Disclosure Letter</u>"), the Seller Parties jointly and severally represent and warrant to the Purchaser as of the Closing Date as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1<u>Organization and Qualification</u>. The Company is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of California and has all requisite limited liability company power and authority necessary to own, lease or operate the property and assets owned, operated or leased by it and to carry on its business as presently conducted, and is duly qualified to do business as a foreign limited liability company and is in good standing in each jurisdiction wherein the nature of its business or the ownership of its assets makes such qualification necessary, except where the failure to so qualify would not have a Material Adverse Effect on the Company. <u>Section 2.1</u> of the Disclosure Letter lists every state or foreign jurisdiction in which the Company has employees, facilities or is qualified to do business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2<u>Authorization</u>. The Company has the limited liability company power and authority to execute and deliver the Ancillary Agreements to be executed by the Company in connection herewith and to perform its obligations thereunder, all of which have been duly authorized by all requisite limited liability company action (including any required member approvals) and no other action on the part of the Company, its managers or any Seller Party is necessary to authorize the execution, delivery and performance of the Ancillary Agreements by the Company and the consummation by the Company of the transactions contemplated thereby. The Ancillary Agreements to which the Company is a party have been duly authorized, executed and delivered by the Company and constitute legal, valid and binding agreements of the Company, enforceable against the Company in accordance with their terms, subject to the effect of any applicable bankruptcy, insolvency (including Laws relating to fraudulent transfers), reorganization, moratorium or similar Laws affecting creditors' rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Capitalization; No Subsidiaries</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Company's membership and any other equity interests consist solely of the Company Interests. All Company Interests are held by the Seller. There are no members of the Company other than the Seller. The Company does not have (i) any membership interests reserved for issuance, (ii) more than one class of membership interest or (iii) any outstanding or authorized option or warrant relating to its equity interests or any outstanding securities or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire from it or have any rights with respect to, any membership or other equity interests (or securities convertible into or exchangeable for any of its membership or other equity interests), including any outstanding or authorized

interest appreciation, phantom equity, profit participation or interests, or other similar rights with respect to the Company. There are no (A) outstanding obligations of the Company or any Seller Party to purchase, repurchase, redeem or otherwise acquire any membership or other equity interests of the Company, (B) voting trusts, seller or member agreements, proxies or other Contracts of any character with respect to the voting or transfer of the Company's membership interests, (C) agreements to which the Company is a party relating to the registration, sale or transfer (including agreements relating to rights of first refusal, co-sale rights or drag-along rights) of any Company Interests, or(D) outstanding obligations of the Company or any Seller Party to make any payment, including the payment of dividends or distributions, based on the value of any equity interest in the Company. All of the Company Interests have been duly authorized and validly issued, are fully paid and non-assessable, and were not issued in violation of any preemptive rights or other similar rights and are free from any Liens. The Company has no obligations to provide financing or extend credit to or make any investment in any Person. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not trigger, invoke or otherwise give rise to any rights by any Seller Party or any other Person to purchase, subscribe for or otherwise acquire any Company Interests (or any securities convertible thereto or exchangeable therefor).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Company has never adopted, sponsored or maintained any equity option plan or any other plan or agreement providing for equity or equity-related compensation to any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Company does not have and has never had any subsidiaries or Affiliated companies. The Company does not control and has never controlled, and does not own and has never owned, directly or indirectly, any shares, membership interests or other equity interests of any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Company is in full compliance with its Articles of Organization, Operating Agreement and other organizational documents (collectively, the "<u>Organizational Documents</u>"), full, complete and accurate copies of which have been uploaded by the Company to the Data Room at least five (5) Business Days prior to the Closing Date. There have been no amendments, modifications, waivers or side letters to the Organizational Documents since their respective dates of original filing or execution, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Upon the consummation of the Acquisition, the Purchaser will be the sole record and beneficial holder of all issued and outstanding Company Interests and of all rights to acquire or receive any Company Interests, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company is not currently nor has it ever been required to file any form, report, schedule, statement or other document with the United States Securities and Exchange Commission, including any periodic reports or registration statements relating to any class of debt or equity securities of the Company pursuant to the Exchange Act, the Securities Act or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>Non-contravention</u>. Neither the execution and delivery by the Company of any Ancillary Agreement to which the Company is a party, nor the consummation of the transactions contemplated by this Agreement or any Ancillary Agreement, will conflict with, result in any breach of, result in a violation of or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation, modification or acceleration of any right or obligation or result in the creation of any Lien upon, or the loss of any benefit under (any such event, a "<u>Conflict</u>") (i) any provision of the Organizational Documents; (ii) any Contract; or (iii) any Governmental Order or Law applicable to the Company or any of its rights, properties or assets. Section 2.4 of the Disclosure Letter sets forth all necessary consents, waivers and approvals of parties to any Contracts with the Company as are required thereunder in connection with the Acquisition, or for any such Contracts to remain in full force and effect without limitation, modification or alteration after the Closing so as to preserve all rights of, and benefits to, the Company under such Contracts from and after the Closing. Following the Closing, the Company will continue to be permitted to exercise all of its rights under the Contracts without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments that the Company would otherwise be required to pay pursuant to the terms of such Contracts had the transactions contemplated by this Agreement not been consummated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 <u>Governmental Consents</u>. No notice to, filing with, or authorization, registration, consent or approval of any Governmental Authority is necessary for the execution, delivery or performance of this Agreement or any Ancillary Agreement to which the Company is a party or the consummation of the transactions contemplated hereby or thereby by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 <u>Financial Statements; Undisclosed Liabilities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Section 2.6(a) of the Disclosure Letter sets forth the Company Financial Statements. The Company Financial Statements (i) are consistent with the books and records of the Company, (ii) accurately and fairly present the financial condition, results of operations and cash flows of the Company as of the dates and for the periods indicated therein, and (iii) have been prepared in accordance with GAAP applied on a consistent basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company does not have any Liabilities other than: (i) Liabilities that are adequately reflected or reserved against in the Company's unaudited balance sheet as of November 30, 2025 (the "<u>Balance Sheet</u>" and such date the "<u>Balance Sheet Date</u>");(ii) Liabilities that have been incurred by the Company since the Balance Sheet Date in the Ordinary Course of Business; and (iii) the Liabilities identified in Section 2.6(b) of the Disclosure Letter. The Company has no Indebtedness or other Liabilities to any of the Seller Parties. The Company has never effected or otherwise been involved in any "off-balance sheet arrangements" (as defined in Item 303(a)(4)(ii) of Regulation S-K under the Exchange Act). The Closing Indebtedness constitutes all the Indebtedness of the Company for borrowed money.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The books, records and accounts of the Company accurately and fairly reflect the transactions in and dispositions of the assets of the Company. The Company has in place adequate systems and processes that are designed to: (i) provide reasonable assurances regarding the reliability of the Company Financial Statements and (ii) in a timely manner accumulate and communicate to the Company's Chief Executive Officer and Chief Financial Officer (or equivalent officer-lever employees) the type of information that would be required to be disclosed in the Company Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company has established and presently maintains a system of internal accounting controls sufficient to provide reasonable assurances (i) that transactions, receipts and expenditures of the Company are executed and made only in accordance with appropriate policies, procedures and authorizations of management of the Company, and (ii) that transactions related to the business of the Company are recorded as necessary: (A) to permit preparation of financial statements in conformity with GAAP and (B) to maintain accountability for the Company's assets and liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 <u>Absence of Changes</u>. Since the Balance Sheet Date, there has not been:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any change in the assets, liabilities, financial condition or operating results of the Company from that reflected in the Company Financial Statements, except changes in the Ordinary Course of Business that are not material in nature or amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any amendment of the Company's Organizational Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) other than as a result of the Restructuring, any issuance of equity interest in the Company or right to acquire any equity interest in the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any incurrence of, or guarantee of, indebtedness for borrowed monies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any damage, destruction or loss, whether or not covered by insurance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any waiver or compromise by the Company of a valuable right or of a debt owed to it;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any satisfaction or discharge of any Lien or payment of any obligation by the Company, except in the Ordinary Course of Business and that are not material in nature or amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) acquisition or disposition of assets outside of the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) acquisition or disposition of any stock, membership interests or any other equity interests of any other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) making of any capital expenditures or commitments, capital additions or capital improvements or entry into any finance leases;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) any material change to, or termination or expiration of, a Material Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) any change in any compensation arrangement or agreement with any employee, officer, director, manager or independent contractor, other than customary salary raises consistent with past practice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) any resignation or termination of employment of any officer or employee of the Company or hiring of any new employee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) adoption, amendment, modification or termination of any Company Employee Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) any loans or guarantees made by the Company to or for the benefit of any Related Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) any declaration, setting aside for payment or other distribution in respect of any of the Company's membership interests, or any direct or indirect redemption, purchase, or other acquisition of any of such equity by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) any sale, assignment or transfer of any Company Intellectual Property or any exclusive license of any Company Intellectual Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) any agreement or arrangement between the Company and any Governmental Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) receipt of any notice that there has been a loss of, or material order cancellation by, any Material Customer of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) any impairment or write-off or write-down (or determination to write-off or write down) with respect to any of the Company's assets or properties, except any such impairment, write-off or write-down that is in the Ordinary Course of Business and is not material in nature or amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the initiation or settlement of any Action;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) any other event or condition of any character that would reasonably be expected to result in a Material Adverse Effect; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) any arrangement or commitment by the Company to do any of the things described in this <u>Section 2.7</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 <u>Company Permits</u>. Section 2.8 of the Disclosure Letter sets forth each Permit that has been issued to the Company or that is required for the operation of the Company's business as currently conducted or as currently contemplated to be conducted (collectively, the "<u>Company Permits</u>"). All of the Company Permits have been issued or granted to the Company, are in full force and effect and constitute all Company Permits required to permit the Company to operate or conduct its businesses or hold any interest in its properties or assets. All of the Company Permits will remain in full force and effect after the Acquisition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 <u>Compliance with Law</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is and has been since the Inception Date, and the business of the Company is and has been since the Inception Date, conducted in compliance with all applicable Laws. No written notice has been received by the Company or by any Seller Party claiming any violation of any Law by the Company or its officers, directors, managers, employees or independent contractors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Section 2.9(b) of the Disclosure Letter sets forth all qualifications, certifications and registrations the Company holds as a disadvantaged business enterprise, minority owned business, women owned business, veteran owned business, or under any similar designation by any Governmental Authority (a "<u>DBE Qualification</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 <u>Litigation</u>. There are no, and have never been any, judgments, decrees, determinations, awards, writs, stipulations, lawsuits, Actions, proceedings, injunctions, settlements or Governmental Orders (including cease and desist letters) in effect, pending or, to the Company's Knowledge, threatened by or against the Company, any Seller Party or any Company Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 <u>Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All Tax Returns required to be filed by, on behalf of or with respect to the Company have been duly and timely filed and are true, complete and correct. All Taxes (whether or not reflected on such Tax Returns) required to be paid by or with respect to, or that could give rise to a Lien on the assets of, the Company have been duly and timely paid. All Taxes required to be withheld by the Company have been duly and timely withheld, and such withheld Taxes have been either duly and timely paid to the proper Governmental Authority or properly set aside in accounts for such purpose. There are no Liens for Taxes on the Company Interests or any of the assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) No written agreement waiving or extending, or having the effect of waiving or extending, the statute of limitations or the period of assessment or collection of any Taxes with respect to the Company, and no written power of attorney with respect to any such Taxes, has been filed or entered into with any Governmental Authority; (ii) the time for filing any Tax Return with respect to Company has not been extended to a date later than the date of this Agreement; (iii) the Company has never been subject to audit, examination, investigation or other proceeding with respect to Taxes; and (iv) no Governmental Authority has asserted in writing any deficiency, claim or issue with respect to Taxes or any adjustment to Taxes against Company with respect to any taxable period for which the period of assessment or collection remains open and no Governmental Authority in a jurisdiction where the Company does not file Tax Returns has ever asserted a claim to the effect that the Company may be subject to taxation by that jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company (i) has not received or applied for a Tax ruling or entered into a closing agreement pursuant to Section 7121 of the Code (or any predecessor provision or any similar provision of state, local or foreign Law), in either case that would be binding upon the Company after the Closing Date, (ii) is not, and has never been, a member of any

affiliated, consolidated, combined or unitary group for purposes of filing Tax Returns on net income and (iii) has no liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6 or any similar provision of state, local or foreign Law. The Company is not a party to any Tax allocation, Tax sharing or similar agreement pursuant to which it will have any obligations after the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) None of Purchaser, any of its Affiliates, or the Company will be required to include any item of income in, or exclude any item of deduction from, taxable income for any Post-Closing Tax Period as a result of any (i) change in the method of accounting for a Pre-Closing Tax Period under Section 481(c) of the Code (or any analogous provision of state, local or foreign Tax Law), (ii) installment sale or other open transaction disposition or intercompany transaction made on or prior to the Closing Date, (iii) prepaid amount received on or prior to the Closing Date, (iv) intercompany transaction or excess loss account described in the Treasury Regulations promulgated under Section 1502 of the Code (or any analogous provision of state, local or foreign Tax Law) or (v) election under Section 108(i) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company has never participated in a "listed transaction" within the meaning of Treasury Regulations Section 1.6011-4(b). The Company has never been either a "distributing corporation" or a "controlled corporation" (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company has complied with all applicable foreign information reporting requirements, and all information Tax Returns required to be filed by, on behalf of or with respect to the Company (including IRS Form 5471, IRS Form 8886 and FinCEN Form 114) have been duly and timely filed and all such Tax Returns are true, complete and correct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Prior to the Contribution, the Company was at all times since the Inception Date properly treated as an "S corporation" within the meaning of Section 1361(a)(1) of the Code (and any corresponding or similar applicable provision of state, local, foreign or other income Tax Law). The Company was at all times since the Contribution, and until the Conversion, properly treated as a "qualified subchapter S subsidiary" of the Seller, as the term is defined in Section 1361(b)(3)(B) of the Code (and any corresponding or similar applicable provision of state, local, foreign or other Law with respect to income Taxes). The Company is, and at all times since the Conversion has been, properly treated as a disregarded entity separate from the Seller within the meaning of Treasury Regulation Section 301.7701-3 (and any corresponding or similar applicable provision of state, local, foreign or other Law with respect to income Taxes). The Seller is, and was at all times since formation properly treated as an "S corporation" within the meaning of Section 1361(a)(1) of the Code (and any corresponding or similar applicable provision of state, local, foreign or other income Tax Law. The Company is not and has not been a member of any affiliated group of corporations which has filed a combined, consolidated, or unitary income Tax Return with any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12 <u>Real Property</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company does not now and has never owned any real property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Section 2.12(b) of the Disclosure Letter sets forth (whether as lessee, sublessee or sublessor) a complete and accurate list of all leases of real property (such real property, the "<u>Leased Property</u>") to which the Company is a party or by which it is bound (each a "<u>Lease</u>" and collectively the "<u>Leases</u>"). Each Lease is valid and binding on the Company and, to the Company's Knowledge, on the other parties thereto, and is in full force and effect. The Company and, to the Company's Knowledge, each of the other parties thereto is not in default under each Lease and no rent is past due. Other than the Leases, none of the Leased Properties is subject to any lease, sublease, license or other agreement granting to any Person any right to the use, occupancy or enjoyment of such Leased Property or any part thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Neither the Company nor any of its Affiliates has received any written notice of any default under any Lease. The Company has a valid leasehold interest in all of the Leased Properties, in each case free and clear of any and all Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) (i) (A) None of the buildings, plants, structures and other improvements operated by or on behalf of the Company and located on or at the Leased Property, or any activities carried on therein, is in violation of, or in conflict with, any applicable zoning regulation or ordinance or other similar Law applicable to or binding on the Company or any of its assets, and (B) there does not exist any pending or threatened condemnation or eminent domain proceedings that affect any Leased Property, (ii) neither the Company nor any of its Affiliates have received any notice stating or alleging that any violation or conflict described in clause (i) has occurred and (iii) the buildings, plants, structures and other improvements operated by or on behalf of the Company are in good working condition. All water, sewer, gas, electric, telephone, drainage, and other utilities required by any Law or necessary for the current operation of the business of the Company in the Leased Property have been installed and connected. Such utilities are and historically have been sufficient to service the Leased Property and the Company has not experienced any material interruption in the delivery of utilities or other public services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13 <u>Title to Assets</u>. The Company has good and valid title to, or in the case of leased rights, assets or properties, good and valid leasehold interests in, all of the rights, assets and properties necessary for the conduct of, or otherwise material to, the business of the Company as currently conducted and as currently contemplated to be conducted, free and clear of all Liens other than Permitted Liens. All fixtures, furniture, equipment, computer hardware, vehicles and other tangible assets owned, leased or used by the Company are in good working condition and repair (subject to normal wear and tear) and are fit and usable in the Ordinary Course of Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14 <u>Intellectual Property Rights</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Section 2.14(a) of the Disclosure Letter sets forth a complete and accurate list of all registered and unregistered Company Intellectual Property, and identifies (i) the owner of such Company Intellectual Property, (ii) whether such Company Intellectual

Property is registered or unregistered, (iii) if registered or subject to an application for registration, the applicable application, serial or registration number and the jurisdiction in which each such item of Company Intellectual Property has been issued, registered or applied for, and (iv) any actions that must be taken within one hundred eighty (180) days after the Closing Date for the purposes of obtaining, maintaining, perfecting, preserving or renewing any Company Intellectual Property, including the payment of any registration, maintenance or renewal fees or the filing of documents, applications or certificates or any responses to office actions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) The Company Intellectual Property constitutes all of the Intellectual Property used in, or necessary for, the continued operation of the Company's business as it is presently conducted or as is proposed to be conducted as of the Closing; (ii) the Company owns all right, title and interest in and to, or has the right to use, pursuant to a valid and enforceable Contract, the Company Intellectual Property free and clear of all Liens (other than Permitted Liens), royalty obligations or any other rights of third parties;(iii) the Company has not received any written claims stating, nor to the Company's Knowledge are any such claims threatened, that the Company's operation of its business has infringed, misappropriated or otherwise violated, or may in the future infringe, misappropriate or otherwise violate, the Intellectual Property rights of any other Person;(iv) the Company's operation of its business has not infringed, misappropriated or otherwise violated, and is not currently infringing, misappropriating or otherwise violating the Intellectual Property of any other Person; (v) no Action (including for interference, derivation, reexamination, *inter partes* review, covered business method review, reissue, opposition, nullity or cancellation) is pending or, to the Company's Knowledge, threatened against the Company that challenges the validity or use of, or the ownership by, the Company of, the Company Intellectual Property; (vi) to the Company's Knowledge, there is no current or past infringement, misappropriation, violation or such other conflict by any other Person of the Company Intellectual Property; (viii) the Company Intellectual Property is valid and subsisting and all registrations, maintenance and renewal fees and filings for the registered Company Intellectual Property have been paid or filed, as applicable; and (ix) there are no materials, information, facts or circumstances, including any materials, information, facts or circumstances that would constitute prior art, that would render any of the Company Intellectual Property invalid or unenforceable or that would materially affect any pending applications for the registration of any Company Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has taken reasonable steps to protect the Company Intellectual Property, the Company's other proprietary information and trade secrets, and the confidential information of third parties provided or made available to the Company, including by requiring (i) all Company Employees, consultants, contractors and third parties to execute non-disclosure agreements and (ii) all Company Employees, consultants, contractors and third parties who have contributed, in whole or in part, to the creation or development of Company Intellectual Property to execute invention assignment agreements. No current or former Company Employee, consultant, contractor or third party has ever excluded any Intellectual Property from any invention assignment agreement executed by such Person in connection with such Person's employment by, engagement with or provision of services to the Company, as applicable, other than Intellectual Property (x) developed prior to such Person's term of employment with, engagement by or provision of services to the Company, as applicable, and (y) that is unrelated to the Company Intellectual Property or any products or services offered or sold by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company Intellectual Property Rights are fully alienable, licensable and transferable by the Company and neither the execution of this Agreement nor the Closing will result in a grant or reversion of rights to any Person of or with respect to any Company Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company is not using and has never used any Publicly Available Software in connection with its business or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) No funding from any Governmental Authority, nor any facilities of a university, college, other educational institution or research center, was used in the development of the Company Intellectual Property or any Company Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15 <u>Material Contracts</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Section 2.15(a) of the Disclosure Letter sets forth a list of all of the following Contracts (collectively, the "<u>Material Contracts</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all Contracts of the Company involving aggregate consideration in excess of $30,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all Contracts that provide for the indemnification by the Company of any Person or the assumption of any Tax, environmental or other Liability of any Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all Contracts relating to Company Intellectual Property (other than Contracts in respect of commercially available "off-the-shelf" software licensed to the Company in the Ordinary Course of Business and with aggregate annual fees of less than $30,000);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all Contracts that relate to the acquisition or disposition of any business (whether by merger, sale of stock or other equity interests, sale of assets or otherwise);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) all agreements and Contracts with current and former employees, independent contractors or consultants (or similar arrangements) to which the Company is a party or has any obligation and which are not cancellable without penalty or notice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) all Contracts relating to indebtedness of the Company for borrowed money;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) all Contracts with any Governmental Authority to which the Company is a party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) all Contracts that limit or purport to limit the ability of the Company to compete in any line of business or with any Person or in any geographic area or during any period of time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) all Contracts to which the Company is a party that provide for any joint venture, partnership or similar arrangement by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) all Contracts obligating the Company to make any individual capital expenditure in excess of $30,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)any Contracts to which the Company is a party that are conditioned upon, or grant the Company more favorable terms as a result of, the Company having a DBE Qualification;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) all Contracts relating to the settlement of any Action;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) all Contracts between or among the Company on the one hand and any Related Party on the other hand;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) all Contracts with a Material Customer or Material Supplier; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) all Contracts involving or related to a Company Employee Plan to which the Company is a party or has any obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company has uploaded to the Data Room at least five (5) Business Days prior to the Closing Date accurate and complete copies of all written Material Contracts, including all amendments thereto. Section 2.15(b) of the Disclosure Letter provides an accurate and complete description of the material terms of each Material Contract that is not in written form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) With respect to the Material Contracts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each of the Material Contracts is in full force and effect and is a valid and binding agreement of the Company and each other party thereto, enforceable against the Company and each such other party in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency (including Laws relating to fraudulent transfers), reorganization, moratorium or similar Laws affecting creditors' rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Company has never breached or defaulted under, or received notice that it has breached or defaulted under, any of the terms or conditions of any Material Contract, nor, to the Knowledge of the Company, has any counterparty to any Material Contract breached or defaulted under a Material Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or would reasonably be expected to:(A) result in a violation or breach of any of the provisions of any Material Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) give any Person the right to declare a default or exercise any remedy under any Material Contract; (C) give any Person the right to accelerate the maturity or performance of any Material Contract; or (D) give any Person the right to cancel, terminate or modify any Material Contract before the expiration of such Material Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Company has never received any notice or other communication regarding any actual or possible violation or breach of, or default under, any Material Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Company has never waived any of its rights under any Material Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) No Person has a contractual right pursuant to the terms of any Material Contract to renegotiate any amount paid or payable to the Company under any Material Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) The Company has performed all obligations required to be performed by it under each Material Contract; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Without limiting the generality of the foregoing, (i) the performance by the Company of its obligations under any Material Contract does not breach the Company's obligations under any other Material Contracts and (ii) the transactions contemplated by this Agreement and the ownership of the Company Interests by the Purchaser will not result in the breach of any Material Contract or the imposition of any obligation on the Company under any Material Contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company is not a party to any Contract or Governmental Order, and there is no such Contract or Governmental Order binding upon the Company, that has or may reasonably be expected to limit the freedom of the Company or any of its Affiliates (including, after the Closing, the Purchaser) to engage in any line of business or to compete with any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16 <u>Related Party Interests and Transactions</u>. (a) No Related Party is a party to any Contract with the Company or has any right, title or interest in any properties or assets of any kind or character (whether real, personal or mixed, tangible or intangible, contingent or otherwise) used or held for use by the Company or otherwise in connection with the Company's business, and (b) no Family Member of any Seller Party (or if a Seller Party is an entity or trust, no Family Member of any equity holder, officer, director or trustee of such Seller Party) is an employee of or consultant to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17 <u>Environmental Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has not received any notice from any Governmental Authority or other third parties regarding any actual or alleged violation of any Environmental Law or any Liabilities or potential Liabilities for personal injury, property damage or investigatory, corrective or remedial obligations arising under Environmental Laws. The Company is in compliance with all Environmental Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No real property currently or previously operated or leased by the Company is listed on, or has been proposed for listing on, the National Priorities List (or CERCLIS) under CERCLA, or any similar state list.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) There has been no Release of Hazardous Materials in contravention of Environmental Laws with respect to the business or assets of the Company or any real property currently or previously operated or leased by the Company, and the Company has not received an Environmental Notice that any real property currently or previously operated or leased by the Company (including soils, groundwater, surface water, buildings and other structures located on any such real property) has been contaminated with any Hazardous Material that would reasonably be expected to result in an Environmental Claim against, or a violation of Environmental Laws or term of any Environmental Permit by, the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company has uploaded to the Data Room at least five (5) Business Days prior to the Closing Date any and all environmental reports, studies, audits, records, sampling data, site assessments and other similar documents with respect to the business or assets of the Company or any real property currently or previously owned, operated or leased by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company has not assumed, undertaken, agreed to indemnify or otherwise become subject to any Liability of any other Person relating to or arising from any Environmental Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18 <u>Brokers</u>. No Person is or will be entitled to a broker's, finder's, investment banker's, financial adviser's or similar fee from the Company or any Seller Party in connection with this Agreement or any Ancillary Agreements or any of the transactions contemplated hereby or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19 <u>Employee Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (i) The Company has not entered into, nor is it otherwise bound by, any collective bargaining agreement with respect to its employees and no Company Employee is covered by such an agreement or is represented by any labor organization; (ii) there is no, and never has been, a labor strike, work stoppage or lockout pending or threatened against or affecting the Company or any Company Employee; (iii) no union organizing campaign is in progress with respect to any Company Employee; (iv) no union or other labor organization has filed a petition with the National Labor Relations Board seeking an election or certification as the exclusive collective bargaining representative of any Company Employees; and (v) there is no material unfair labor practice charge or complaint, or other material labor dispute, grievance or arbitration, pending or, to the Knowledge of the Company, threatened against the Company or with respect to any Company Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company is, and has always been, in compliance with all Laws relating to the hiring and retention of employees and to wages, hours, labor, employment and employment practices, employment termination, plant closing, discrimination, civil rights,

safety and health, workers' compensation, terms and conditions of employment, employee and independent contractor classification, equal employment opportunity and collective bargaining agreements. With respect to each Company Employee, the Company has (i) withheld and reported all amounts required by Law or by Contract to be withheld and reported with respect to wages, salaries and other payments to employees; (ii) is not liable for any arrears of wages, severance pay or any Taxes or any penalty for failure to comply with any of the foregoing; and (iii) is not liable for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations for employees. Each officer, director, manager, employee and independent contractor of the Company has obtained and holds all authorizations required by Law in order for such individual to lawfully provide the services to the Company required of his or her position. The Company has obtained and completed Form I-9 from those employees of the Company for whom such form is required by Law. Each Company Employee is authorized to work in the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) There are no pending or, to the Company's Knowledge, threatened Actions against the Company under any worker's compensation policy or long term disability policy. There is no legal proceeding, claim, investigation, audit, labor dispute or grievance pending or, to the Knowledge of the Company, threatened or reasonably anticipated relating to any employment Contract, compensation, wages and hours, leave of absence, plant closing notification, employment Law, privacy right, labor dispute, safety, retaliation, immigration or discrimination matter involving any Company Employee, including charges of unfair labor practices or harassment complaints. Section 2.19(c) of the Disclosure Letter lists all Liabilities of the Company to any Company Employee that would result from the termination by the Company of such Company Employee's employment or provision of services on the Closing Date. At no time on or prior to the Closing Date has there occurred or existed any event giving rise to any requirement of the Company or any ERISA Affiliate under the Worker Adjustment and Retraining Notification Act or under any similar state or local Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Section 2.19(d) of the Disclosure Letter contains a list of all of the current Company Employees, including next to each Company Employee's name the following information: (i) such Company Employee's position or title, date of hire, base salary or hourly wage rate and other compensation payable to such Company Employee (including housing and automobile allowances, compensation payable pursuant to bonus, deferred compensation or commission arrangements or other compensation); (ii) accrued vacation (including accrued vacation from prior years); (iii) leave status (including type of leave, and expected return date, if known); (iv) visa status, if applicable; (v) the name of any union, collective bargaining agreement or other similar labor agreement covering such employee; (vi) accrued sick days (including accrued sick days from prior years); (vii) any other accrued paid time off (including accrued paid time off from prior years); (viii) the relevant prior notice period required in the event of termination; (ix) any severance or termination payment (in cash or otherwise) to which any employee is entitled under existing contractual obligations; (x) average overtime payments per month during the preceding twelve (12)-month period for nonexempt employees; (xi) any changes in salary, wage rate, bonus structure, benefits, or any other compensation terms since the Balance Sheet Date, and (xii) whether such Company Employee is party to an employment agreement or offer letter with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Section 2.19(e) of the Disclosure Letter contains an accurate and complete list of (i) all Persons that have an independent contractor, consulting or advisory relationship with the Company; (ii) the location at which such independent contractors, consultants and advisors have been or are providing services; (iii) the rate of all regular, bonus or any other compensation payable to all such independent contractors, consultants and advisors; (iv) the start and termination date of any Contract between the Company, on the one hand, and any such independent contractor, consultant or advisor, on the other hand, and (v) the basis upon which each such Person is not classified as an employee. All independent contractors, consultants and advisors to the Company can be terminated immediately without notice and without Liability to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Section 2.19(f) of the Disclosure Letter contains a true and complete list of each Company Employee Plan. With respect to each Company Employee Plan, the Company has uploaded to the Data Room at least five (5) Business Days prior to the Closing Date a current, accurate and complete copy (or, to the extent no such copy exists, an accurate description) thereof including all amendments thereto and, to the extent applicable: (i) any related trust agreement, annuity contract or other funding or financing instrument; (ii) the most recent determination letter, if applicable; (iii) the most recent summary plan description and each summary of material modification thereto and other written communications by the Company, Seller Parties or any ERISA Affiliate concerning the extent of the benefits provided under the Company Employee Plan; (iv) a summary of any proposed amendments or changes anticipated to be made to the Company Employee Plan at any time following the Closing Date, and (v) for the three most recent years, as applicable, (A) the Form 5500 and attached schedules, (B) audited financial statements (C) actuarial valuation reports, and (D) nondiscrimination tests performed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) There are no actions, suits, claims or administrative matters pending or, to the Company's Knowledge, threatened against the Company, Seller Parties or an ERISA Affiliate or any of their Affiliates relating to any Company Employee or any Company Employee Plan. The Company does not intend and has not committed to establish, enter into or amend any Company Employee Plan other than as required to comply with ERISA, the Code or any other applicable Law. Each Company Employee Plan is now, and at all times has been, operated in accordance with its terms and the requirements of all applicable Laws, regulations and rules promulgated thereunder including ERISA and the Code. The Seller Parties, the Company and its ERISA Affiliates have performed all obligations required to be performed by them under, are not in default under or in violation of, and have no Company Knowledge of any default or violation by any party to, any Company Employee Plan. No Company Employee Plan is under audit or investigation by any Governmental Authority or subject to suit and, to the Knowledge of the Company, no audit, investigation, or suit is pending or threatened. Each Company Employee Plan can be amended, terminated or otherwise discontinued at any time without liability to the Company, Purchaser or any of their ERISA Affiliates (other than ordinary administration expenses). No event has occurred and no condition exists that would subject the Company, by reason of its affiliation with any ERISA Affiliate or the Seller Parties, to any tax, fine,

lien, penalty or other liability imposed by ERISA, the Code or other applicable Laws. No non-exempt "prohibited transaction" (as defined in Section 4975 of the Code or Section 406 of ERISA) has occurred that involves the assets of any Company Employee Plan and no non-exempt prohibited transaction has occurred that could subject the Company, any ERISA Affiliate, any of their employees, or any trustee, administrator or other fiduciary of any trust created under any Company Employee Plan to any Tax or sanctions on prohibited transactions imposed by Section 4975 of the Code or Title I of ERISA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Company is not, nor has it ever been, a party to any Contract that is a "nonqualified deferred compensation plan" subject to Section 409A of the Code. The Company is not, nor has it ever been, a party to, or otherwise obligated under, any Contract that provides for the gross-up of Taxes imposed by Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) No Company Employee Plan exists that, as a result of the execution of this Agreement or the Acquisition (either alone or in connection with any subsequent event(s)) could result in (i) severance pay or any increase in severance pay upon any termination of employment on or after the Closing, (ii) acceleration of the time of payment or vesting or result in any payment or funding of compensation or benefits under, increase the amount payable or result in any other material obligation pursuant to, any Company Employee Plan, or (iii) limitation or restrictions on the right of the Company to merge, amend or terminate any Company Employee Plan. The Company is not a party to any Contract, including this Agreement, relating to any Company Employee, which, individually or collectively, could give rise to the payment of any amount that would not be deductible pursuant to Section 280G of the Code. No payment or benefit that has been or will be made with respect to any Company Employee will, or would reasonably be expected to, be characterized as a "parachute payment" within the meaning of Section 280G(b)(2) of the Code as a result of the transactions contemplated by this Agreement, either alone or in conjunction with any other event. There is no Contract to which the Company or any ERISA Affiliate is a party or by which it is bound to compensate any Company Employee for excise Taxes paid pursuant to Section 4999 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) All current or former independent contractors of the Company have been properly classified as independent contractors for Federal and state income tax purposes. No independent contractor is currently eligible to participate in any Company Employee Plan. The Company has never had any temporary or leased employees that were not treated and accounted for in all respects as employees of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Each Company Employee Plan intended to qualify under Section 401(a) of the Code has received a favorable determination, opinion, notification or advisory letter from the Internal Revenue Service with respect to each such Company Employee Plan as to its qualified status under the Code, and no fact or event has occurred since the date of such letter from the Internal Revenue Service to adversely affect the qualified status of any such Plan or the exempt status of any such trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Neither the Company nor any ERISA Affiliate maintains or has maintained or has at any time sponsored or contributed to or has or had any Liability with respect to,

any (i) employee benefit plan subject to Section 412 of the Code or Title IV of ERISA, (ii) "multi-employer plan" (as defined in ERISA Section 3(37) and 4001(a)(3)), (iii) "multiple employer plan" (meaning a plan sponsored by more than one employer within the meaning of ERISA Sections 4063 or 4064 or Section 413(c) of the Code), (iv) "voluntary employees' beneficiary association" (as defined under Section 501(c)(9) of the Code), (v) plan subject to any non-U.S. Law, or (vi) "defined benefit plan" (as defined in Section 3(35) of ERISA). Neither the Company nor any ERISA Affiliate has incurred any current or projected liability in respect of post-employment or post-retirement health, medical or life insurance benefits for current, former or retired employees of the Company. No benefits are provided to any Company Employee under, and neither the Company nor any ERISA Affiliate maintains or has maintained or has any obligation or liability with respect to, any self-insured "group health plan" (as defined under Section 5000(b)(1) of the Code).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) All contributions, premiums or payments required to be made or accrued on or before the Closing Date with respect to any Company Employee Plan have been made or accrued on or before their due dates. To the extent deductible under applicable Tax Law, all such contributions have been fully deducted for income tax purposes and no such deduction has been challenged or disallowed by any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.20 <u>Insurance</u>. Section 2.20 of the Disclosure Letter contains an accurate and complete list of all policies of fire, liability, workers' compensation, property, casualty, and all other forms of insurance owned or held by the Company as of the Closing Date (the "<u>Company Insurance Policies</u>"), including the current premium and coverage amount and an indication as to whether such Company Insurance Policies are "occurrence" or "claims made". The Company has uploaded to the Data Room at least five (5) Business Days prior to the Closing Date true and complete copies of the Company Insurance Policies. All such policies are in full force and effect as of the Closing Date, and will continue in full force and effect at the Closing. No notice of cancellation or termination has been received with respect to any such policy, and there is no existing default or event that, with the giving of notice or lapse of time or both, would constitute a default thereunder. Such policies are in amounts that are customary, adequate and suitable in relation to the Company's business, assets and liabilities, and all premiums to date have been paid in full. The Company is a "named insured" or an "insured" under such insurance policies. Section 2.20 of the Disclosure Letter also contains an accurate and complete summary of any insurance claims made by the Company, whether resolved or pending.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.21 <u>Receivables</u>. All accounts receivable of the Company at Closing (the "<u>Company Accounts Receivable</u>") will represent at Closing valid obligations arising from services actually performed and/or goods actually sold by the Company. The Company Accounts Receivable are collectible within sixty (60) days after the Closing Date at the full amount thereof. There is no contest, claim or right of set-off with any maker of a Company Account Receivable relating to the amount or validity of such Company Account Receivable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.22 <u>Inventory</u>. All inventory of the Company at Closing will consist of a quality and quantity usable and salable in the Ordinary Course of Business,. All such inventory is owned by the Company free and clear of all Liens, and no inventory is held on a consignment basis. The quantities of each item of inventory (whether raw materials, work-in-process or finished goods) of the Company at Closing are not excessive, but are reasonable in the present circumstances of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.23 <u>Customers and Suppliers</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Section 2.23(a) of the Disclosure Letter sets forth (i) each customer who has paid aggregate consideration to the Company for goods or services rendered in an amount greater than or equal to thirty thousand dollars ($30,000) for either of the calendar years ended December 31, 2023 or 2024 or for the eleven months ended November 30, 2025 (collectively, the "<u>Material Customers</u>"); (ii) the amount of consideration paid by each Material Customer during each such year or period; and (iii) any incentive, discount, refund, rebate, credit or other price allowance of any kind given (whether for any post, current or future period) to each Material Customer. The Company has not received any notice, and has no reason to believe, that any of its Material Customers has ceased, or intends to cease, to use the Company's goods or services or to otherwise terminate or materially reduce its relationship with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Section 2.23(b) of the Disclosure Letter sets forth (i) each supplier to whom the Company has paid consideration for goods or services rendered in an amount greater than or equal to thirty thousand dollars ($30,000) for either of the calendar years ended December 31, 2023 or 2024 or the eleven months ended November 30, 2025 (collectively, the "<u>Material Suppliers</u>"); and (ii) the amount of purchases from each Material Supplier during each such year or period. The Company has not received any notice, and has no reason to believe, that any of its Material Suppliers has ceased, or intends to cease, to supply goods or services to the Company or to otherwise terminate or materially reduce its relationship with the Company. No Material Supplier is the sole source of supply to the Company of any goods or services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.24 <u>Product Recalls and Quality Control</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has never received any claim for product liability, and to the Company's Knowledge, no event has occurred that might give rise to the assertion of any such claim. The Company has not voluntarily or involuntarily recalled or withdrawn any Company Product from commerce due to health and/or safety concerns or customer complaints nor does the Company have plans to do so. To the Company's Knowledge, no supplier of the Company has voluntarily or involuntarily recalled or withdrawn from commerce any products (or any components thereof) or services supplied to the Company and no supplier of the Company has plans to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company has never suffered any Liability arising out of any injury to individuals, including death, or property as a result of the ownership, possession, handling, application or use of any of the Company Products. No facts or circumstances exist that could give rise to any future Liability of the Company arising out of any injury to individuals, including death, or property as a result of the ownership, possession, handling, application or use of any Company Products. There are no defects in any Company Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as set forth on Section 2.24(c) of the Disclosure Letter, no Company Product provided or delivered by the Company to customers on or prior to the Closing is subject to any guaranty, warranty or other indemnity by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) There are no pending or outstanding claims made by any customers of the Company under any guaranty, warranty or other indemnity with respect to a Company Product that has not been resolved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) To the Company's Knowledge, no third-party manufacturing site that participates in the manufacture of any Company Products or any components thereof has been subject to a shutdown or import or export prohibition by any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) There have been no recalls (either voluntary or involuntary), field notifications, field corrections, market withdrawals or replacements, warnings, warning letters, investigator notices, safety alerts or other notices of action relating to an alleged lack of safety, efficacy, or regulatory compliance of any Company Product, or seizures ordered or adverse regulatory actions taken (or, to the Knowledge of the Company, threatened) by any Governmental Authority with respect to any Company Product or any facilities where any Company Product is tested, produced, manufactured, processed, packaged or stored that are operated by the Company or, to the Knowledge of the Company, by a third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company has not received any (1) written notices of inspectional observations, establishment inspection reports or warning letters, (2) written notices of any intention to conduct an investigation or review, or (3) other documents issued by the Federal Trade Commission or any other Governmental Authority that allege or assert any lack of compliance with any Law by the Company or Persons who are performing services for the benefit of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Company has not, and to the Knowledge of the Company its directors, officers, managers, employees, consultants, subcontractors and other agents have not, been convicted of any crime or engaged in any conduct that would result in debarment or disqualification of the Company by any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company has not received notice from any of its directors, officers, employees, managers, consultants, subcontractors or other agents, and to the Knowledge of the Company no conditions exist that reasonably could be expected to lead to, any material interruption of supply or manufacturing capacity, shortage of raw materials, components or other manufacturing problems that would have a material effect on the marketing, manufacturing or distribution of the Company Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.25 <u>Books and Records</u>. The Company has uploaded to the Data Room at least five (5) Business Days prior to the Closing Date accurate and complete copies of the minute books of the Company (including, for clarity, for periods prior to the Restructuring), which minute books are complete and correct and have been maintained in accordance with applicable Law and sound business practices. The minute books of the Company contain accurate and complete records of all meetings, and actions taken by written consent of, the members and the managers (or the

shareholders and board of directors prior to the Conversion) of the Company, and no meeting, or action taken by written consent, of any such members or managers (or the shareholders and board of directors prior to the Conversion) has been held for which minutes have not been prepared and are not contained in such minute books. At the Closing, all of the Company's books and records (including the Company's minute books) will be in the possession of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26 <u>Bank Accounts</u>. Section 2.26 of the Disclosure Letter sets forth (a) the name of each bank, trust corporation or other financial institution and stock or other broker (i) with which the Company has an account, credit card, credit line or safe deposit box or vault or (ii) which reflects transactions by any manager, member or employee for the benefit of the business of the Company (including, for the avoidance of doubt, any personal credit cards of any manager, member or employee which reflect transactions for the benefit of the business of the Company), (b) the names of all Persons authorized to draw thereon or to have access to any safe deposit box or vault, (c) a description of the purpose of each such account, safe deposit box or vault, and (d) the names of all Persons authorized by proxies, powers of attorney or other like instruments to act on behalf of the Company in the matters concerning its business or affairs. No such proxies, powers of attorney or other like instruments are irrevocable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.27 <u>Data Privacy</u>. In connection with its collection, storage, transfer (including any transfer across national borders) and/or use of any personally identifiable information from any individuals, including any customers, prospective customers, employees and/or other third parties (collectively "<u>Personal Information</u>"), the Company is and has at all time been in compliance with all applicable Laws in all relevant jurisdictions, the Company's privacy policies and the requirements of any Contract or codes of conduct to which the Company is a party or otherwise bound. The Company has commercially reasonable physical, technical, organizational and administrative security measures and policies in place to protect all Personal Information collected by it or on its behalf from and against unauthorized access, use or disclosure. The Company is and has at all times been in compliance with all Laws relating to data loss, theft and breach of security notification obligations. The Company has (a) complied with all third-party privacy, marketing and security policies, procedures and guidelines and applicable contractual obligations related to privacy, marketing and security related to each service provider or client; and (b) taken commercially reasonable measures to ensure that all third-party service providers and clients have complied with the Company's privacy, marketing and security policies, procedures and guidelines and all privacy and data security Laws. There has been no loss, damage, unauthorized access, modification, or other misuse of any Personal Information or other personal data by the Company or any of its directors, officers, managers, employees, consultants, subcontractors and other agents. The Company has not suffered a security breach that has compromised either the security, confidentiality or integrity of its data or the physical, technical, administrative or organizational safeguards put in place by the Company that relate to the protection of the security, confidentiality or integrity of its data. The Company has not received any Governmental Order or other notification from a Governmental Authority regarding non-compliance or violation of any privacy or data protection Laws. No Person has ever made any claim against the Company for the loss of or unauthorized disclosure or transfer of Personal Information or other personal data, and, to the Company's Knowledge, no basis exists for such a claim. There has been no loss, damage, unauthorized access, unauthorized transmission, modification, or other misuse of any Personal Information or other personal data by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.28 <u>Compliance with the Foreign Corrupt Practices Act and Export Control</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company and its Representatives have not, to obtain or retain business, directly or indirectly offered, paid or promised to pay, or authorized the payment of, any money or other thing of value (including any fee, gift, sample, travel expense or entertainment with a value in excess of one hundred Dollars ($100.00) in the aggregate to any one individual in any year) or any commission payment payable to: (i) any person who is an official, officer, agent, employee or representative of any Governmental Authority or of any existing or prospective customer (whether government owned or nongovernment owned); (ii) any political party or official thereof; (iii) any candidate for political or political party office; or (iv) any other individual or entity while knowing or having reason to believe that all or any portion of such money or thing of value would be offered, given, or promised, directly or indirectly, to any such official, officer, agent, employee, representative, political party, political party official, candidate, individual, or any entity affiliated with such customer, political party or official or political office. Neither the Company nor any of its directors, officers, managers or employees are the subject of any allegation, voluntary disclosure, investigation, prosecution or other enforcement action related to the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any other anti-corruption Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company has at all times been in compliance with all Laws relating to export control and trade embargoes. The Company has not violated the antiboycott prohibitions contained in 50 U.S.C. sect. 2401 et seq. or taken any action that can be penalized under Section 999 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.29 <u>No Power of Attorney</u>. The Company has not granted anyone a power of attorney to act on its behalf which is still in effect

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.30 <u>COVID-19 Matters</u>. Other than the PPP Loan in the original principal amount of $126,539 obtained by the Company on May 1, 2020 and forgiven in full, including accrued interest, on January 25, 2021, the Company has not applied for or incurred any Indebtedness incurred in connection with any Law or program involving any Governmental Authority providing or expanding any loan, guaranty, investment, participation, grant, program or other assistance in response to or to provide relief for the novel coronavirus pandemic known as "COVID-19" (and any mutations, variants, or sub-variants thereof), including without limitation, any PPP Loan, any U.S. Small Business Administration Economic Injury Disaster Loan, any loan under the Main Street Lending Program announced by the U.S. Department of Treasury and Board of Governors of the Federal Reserve, or any other similar federal, state or local Governmental Authority program. As to such forgiven PPP Loan: (i) the Company met the eligibility requirements for receipt of such PPP Loan under the applicable Laws and documentation with respect thereto (including without limitation, with application of all applicable affiliation requirements under applicable Laws); (ii) all representations and warranties made by the Company pursuant to the agreements, instruments and other documents with respect thereto were true and correct in all material respects; (iii) the Company was (both before and after giving effect to the transaction evidenced hereby) in compliance in all material respects with all applicable Laws and documentation relating thereto, and without limiting the generality of the foregoing, used the proceeds of any such PPP Loan exclusively for purposes permitted by applicable Laws and

documentation relating thereto (including as to any PPP Loan exclusively for PPP Specified Forgivable Uses); (iv) the Company has maintained all records required to be submitted in connection with applying for, obtaining, using the proceeds of, or seeking forgiveness of such PPP Loan; and (v) the Company has uploaded to the Data Room at least five (5) Business Days prior to the Closing Date true, correct and complete copies of all agreements, documents, applications (and all attachments, exhibits, addenda the like with respect thereto, including without limitation, information with respect to affiliation), submissions, reports, or other documentation (including without limitation, payroll documentation and affiliation documentation) provided by or on behalf of the Company to any lender, lender agent or Governmental Authority in connection with applying for, obtaining, using the proceeds of, or seeking forgiveness of such PPP Loan. Further, the Company has not applied for or received any employee retention credits under the CARES Act or pursuant to any similar program of any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.31 <u>Full Disclosure</u>. No Seller Party nor the Company has misstated or withheld from the Purchaser any material facts relating to the assets, properties, Liabilities, business operations, financial condition, results of operations or prospects of the Company or its business. Neither this Agreement (including the Exhibits, Disclosure Letter and Schedules hereto), the Ancillary Agreements nor any other agreement, document, certificate or written statement furnished to the Purchaser by or on behalf of any Seller Party or the Company in connection with this Agreement, the Ancillary Agreements or the Acquisition contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading. The Company has uploaded to the Data Room at least five (5) Business Days prior to the Closing Date accurate and complete copies each document disclosed or required to be disclosed on the Disclosure Letter.

**ARTICLE III**

**<u>REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES</u>**

The Seller Parties hereby jointly and severally represent and warrant to the Purchaser as of the Closing Date as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Ownership of Company Interests</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Seller is the sole holder of record, owns legally and beneficially, and has good and valid title to all of the Company Interests, free and clear of all Liens and with no restriction on transfer, voting rights or other incidents of record and beneficial ownership pertaining thereto. The Seller has the sole right to transfer the Company Interests to the Purchaser and, at Closing, the Purchaser shall obtain good and valid title to the Company Interests, free and clear of all Liens. The Company Interests constitute all of the equity interests in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Seller's equity interests consist solely of the equity interests as set forth on Section 3.1(b) of the Disclosure Letter, which includes the identity of each holder of such equity interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No Seller Party is subject to any bankruptcy, reorganization or similar proceeding. Except for this Agreement and the Operating Agreement, there are no

outstanding Contracts between any Seller Party and any other Person (including the Company or another Seller Party) with respect to the acquisition, disposition, transfer, registration or voting of, or any other matters in any way pertaining or relating to, or any other restrictions on, any of the Company Interests, and no Seller Party has any contractual or other right to receive or acquire any additional Company Interests or other equity interest or equity-based interest of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Authorization</u>. Each Seller Party (or if such Seller Party is an entity or trust, the individual(s) executing this Agreement on behalf of such Seller Party) is of sound mind and has the legal capacity to enter into this Agreement and the Ancillary Agreements to which such Seller Party is a party. Each Seller Party has the power and authority to execute and deliver this Agreement and each Ancillary Agreement to be executed by such Seller Party in connection herewith, and to perform its obligations hereunder and thereunder, all of which have been duly authorized by all requisite action, and no other action on the part of such Seller Party or any other Person is necessary to authorize the execution, delivery and performance of this Agreement and each Ancillary Agreement by such Seller Party, and the consummation by such Seller Party of the transactions contemplated hereby and thereby. This Agreement and each Ancillary Agreement to which a Seller Party is a party have been duly authorized, executed and delivered by such Seller Party and constitute legal, valid and binding agreements of such Seller Party, enforceable against such Seller Party in accordance with their terms, subject to the effect of any applicable bankruptcy, insolvency (including Laws relating to fraudulent transfers), reorganization, moratorium or similar Laws affecting creditors' rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Non-contravention</u>. Neither the execution and delivery by any Seller Party of this Agreement and the Ancillary Agreements to which such Seller Party is a party, nor the consummation of the transactions contemplated hereby and thereby, will require any consent of any third party under or Conflict with (a) any Contract to which such Seller Party is subject, (b) any Governmental Order or Law applicable to such Seller Party or (c) if such Seller Party is an entity, the organizational and other governing documents of such Seller Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <u>Absence of Claims</u>. No Seller Party has had, or currently has, any claim against the Company or any other Seller Party nor, to the Knowledge of such Seller Party, does there exist any basis for a future claim against the Company for any reason, whether contingent or unconditional, fixed or variable, under any Contract or on any other legal basis whatsoever.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 <u>Consents</u>. No notice to, filing with, or authorization, registration, consent or approval of any Governmental Authority is necessary for the execution, delivery or performance of this Agreement or any Ancillary Agreement to which any Seller Party is a party, or the consummation of the transactions contemplated hereby or thereby, by such Seller Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 <u>Litigation</u>. There are no, and have never been any, judgments, decrees, determinations, awards, writs, stipulations, lawsuits, Actions, proceedings, injunctions, settlements or other Governmental Orders (including cease and desist letters) in effect, pending or, to the Knowledge of any Seller Party, threatened against such Seller Party or its properties or assets (tangible or intangible), or before any Governmental Authority, in each case that relates in any way to the Company, this Agreement, any Ancillary Agreement, or any of the transactions contemplated hereby or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7 <u>Brokers</u>. No Person is or will be entitled to a broker's, finder's, investment banker's, financial adviser's or similar fee from any Seller Party in connection with this Agreement or any Ancillary Agreements, or any of the transactions contemplated hereby or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8 <u>Tax Consequences</u>. Each Seller Party has reviewed with such Seller Party's own tax and other advisors the federal, state, and local Tax consequences of the sale of Seller's Company Interest to the Purchaser and the transactions contemplated by this Agreement and the Ancillary Agreements. Such Seller Party is relying solely on such advisors and not on any statements or representations of the Company or the Purchaser or any of their respective Representatives with respect to the tax consequences to such Seller Party of Seller's sale of its Company Interest hereunder. Each Seller Party understands that it (and not the Purchaser or the Company) shall be responsible for such Seller Party's own Tax liability that may arise as a result of the transactions contemplated by this Agreement and the Ancillary Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9 <u>Opportunity to Review</u>. Each Seller Party has reviewed this Agreement and the Ancillary Agreements. Each Seller Party has had reasonable time and opportunity to consult with such Seller Party's financial, legal, and other advisors, if desired, before signing this Agreement and the Ancillary Agreements to which such Seller Party as a party. Each Seller Party has taken as much of this time as necessary to consider whether to enter into this Agreement and has chosen to enter into this Agreement freely, knowingly and voluntarily. Each Seller Party has had an opportunity to ask the Seller Representative questions regarding this Agreement and the transactions contemplated by this Agreement, and all such questions have been answered fully and to such Seller Party's satisfaction. Each Seller Party understands that such Seller Party must rely solely on such Seller Party's advisors and not on any statements or representations made by the Purchaser, the Company or any of their Representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10 <u>Company Assets</u>. No Seller Party owns any Intellectual Property, or any other property or asset, that is used in or necessary for the Company's operations, or any Company Product, nor does any Seller Party own (whether solely or jointly), or have any rights to or under, any Company Intellectual Property, or any other property or asset of the Company. No Seller Party owns any equity interest in any of the Company's customers, suppliers or competitors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.11 <u>Company Representations</u>. Each Seller Party understands that such Seller Party is economically responsible for the representations and warranties concerning the Company (including the representations and warranties in <u>Article II</u>) in accordance with the indemnification obligations of the Seller Parties set forth in <u>Article VII</u>.

**ARTICLE IV**

**<u>REPRESENTATIONS AND WARRANTIES OF THE PURCHASER</u>**

The Purchaser hereby represents and warrants to the Seller Parties as of the Closing Date as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Organization</u>. The Purchaser is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Colorado, and has all requisite corporate power and authority necessary to own, lease or operate its property and assets, and to carry on its business as presently conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Authorization</u>. The Purchaser has the corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements to be executed by the Purchaser in connection herewith, and to perform its obligations hereunder and thereunder, all of which have been duly authorized by all requisite corporate action and no other corporate action on the part of the Purchaser is necessary to authorize the execution, delivery and performance of this Agreement and the Ancillary Agreements by the Purchaser, and the consummation by the Purchaser of the transactions contemplated hereby and thereby. This Agreement and the Ancillary Agreements to which the Purchaser is a party have been duly authorized, executed and delivered by the Purchaser and constitute legal, valid and binding agreements of the Purchaser, enforceable against the Purchaser in accordance with their terms, subject to the effect of any applicable bankruptcy, insolvency (including Laws relating to fraudulent transfers), reorganization, moratorium or similar Laws affecting creditors' rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Non-contravention</u>. Neither the execution and delivery by the Purchaser of this Agreement and any Ancillary Agreement to which the Purchaser is a party, nor the consummation of the transactions contemplated hereby and thereby, will Conflict with (i) the Purchaser's organizational and other governing documents; (ii) any Contract to which Purchaser is a party; or (iii) any Governmental Order or Law applicable to the Purchaser or any of its rights, properties or assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Consents</u>. No notice to, filing with, or authorization, registration, consent or approval of any Governmental Authority is necessary for the execution, delivery or performance of this Agreement or any Ancillary Agreement to which the Purchaser is a party or the consummation of the transactions contemplated hereby or thereby by the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Brokers</u>. No Person is or will be entitled to a broker's, finder's, investment banker's, financial adviser's or similar fee from the Purchaser in connection with this Agreement or any Ancillary Agreements or any of the transactions contemplated hereby or thereby.

**ARTICLE V <br><u>COVENANTS AND AGREEMENTS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Confidentiality</u>**.** From and after the Closing, the Seller Representative and each Seller Party shall hold, shall cause its or their respective Related Parties to hold, and shall use its reasonable best efforts to cause its or their respective Representatives to hold, in confidence any and all information, whether written or oral, concerning the Company, except to the extent that the Seller Parties can show that such information (a) is generally available to and known by the public without breach or violation by any Person of this <u>Section 5.1</u>; or (b) is lawfully acquired by such Seller Party after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation. If the Seller Representative, a Seller Party or any of its or their respective Affiliates or Representatives are compelled to disclose any such information by judicial or administrative process or by other requirements of Law, the Seller Representative or such Seller Party, as applicable, shall promptly notify Purchaser in writing and

shall disclose only that portion of such information which the Seller Representative or such Seller Party, as applicable, is advised by its counsel in writing is legally required to be disclosed, *provided that* the Seller Representative or such Seller Party, as applicable, shall cooperate with the Purchaser to limit, to the extent permitted by Law, the amount of information required to be disclosed and to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Non-competition; Non-solicitation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For a period of five (5) years commencing on the Closing Date (the "<u>Restricted Period</u>"), each Seller Party shall not, and shall cause its respective Affiliates not to, directly or indirectly, (i) engage in or assist others in engaging in the Restricted Business in the Territory; (ii) have an interest in or hold a position with any Person that engages directly or indirectly in the Restricted Business in the Territory, including as a partner, shareholder, member, employee, principal, agent, trustee, advisor or consultant (in each case, whether or not any compensation is paid with respect thereto); or (iii) interfere with the business relationships (whether formed prior to or after the date of this Agreement) between the Company and customers or suppliers of the Company. Notwithstanding the foregoing, a Seller Party may own, directly or indirectly, solely as a passive investment, securities of any Person traded on any national securities exchange if such Seller Party is not a controlling Person of, or a member of a group which controls, such Person and does not, directly or indirectly, own two percent (2%) or more of any class of securities of such Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During the Restricted Period, each Seller Party shall not, and shall cause its respective Affiliates not to, directly or indirectly, hire or solicit for hire any employee or consultant of the Company or encourage any such employee or consultant to leave such employment or consultant relationship or hire any such employee or consultant who has left such employment or consultant relationship.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) During the Restricted Period, each Seller Party shall not, and shall cause its respective Affiliates not to, directly or indirectly, solicit or entice, or attempt to solicit or entice, any clients or customers of the Company or potential clients or customers of the Company for purposes of diverting their business or services from the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) For any Seller Party that is an entity, the provisions of this <u>Section 5.2</u> shall equally apply to any Person that on the Closing Date is a five percent (5%) or greater equity holder of such Seller Party. For any Seller Party that is a trust, the provisions of this <u>Section 5.2</u> shall equally apply to any Person that on the Closing Date is a trustee of, or material beneficiary under, such Seller Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each Seller Party acknowledges that a breach or threatened breach of this <u>Section 5.2</u> would give rise to irreparable harm to the Purchaser, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by a Seller Party, or an Affiliate thereof, of any such obligations, Purchaser shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond or other security).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Each Seller Party acknowledges that the restrictions contained in this <u>Section 5.2</u> are reasonable and necessary to protect the legitimate interests of the Purchaser and constitute a material inducement to the Purchaser to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this <u>Section 5.2</u> should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable Law. The covenants contained in this <u>Section 5.2</u> and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Public Announcements</u>. Each of the Seller Parties will not (nor will they permit, as applicable, any of their respective Representatives or Affiliates to), directly or indirectly, issue any statement or communication to any third party regarding the subject matter of this Agreement, the Acquisition or the transactions contemplated by this Agreement, without the prior written consent of the Purchaser. Purchaser may disclose the existence and terms of this Agreement, the Acquisition and the transactions contemplated by this Agreement (a) pursuant to a customary press release for transactions of this nature and (b) as required by the rules and regulations of U.S. Securities and Exchange Commission or the Nasdaq Stock Market or as otherwise required by applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Fees and Expenses</u>. Except as otherwise provided herein, each party hereto shall pay its own expenses and fees including all legal, accounting, financial and tax advisory, consulting, broker fees, finder fees and all other fees and expenses of third parties incurred in connection with the negotiation and execution of this Agreement and the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>Release of Claims</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Effective as of the Closing, each Seller Party, on behalf of itself, himself, or herself and each of its, his, or her past, present, and future Family Members, shareholders, subsidiaries, parent companies, Affiliates, Representatives, officers, directors, employees, managers, members, partners, trustees, beneficiaries, insurers, carriers, heirs, executors, administrators, predecessors, agents, successors, and assigns (collectively, the "<u>Seller Releasors</u>"), hereby irrevocably waives, releases and discharges, and shall forever be enjoined from prosecuting against, the Purchaser, the Company and each of their respective past, present, and future shareholders, subsidiaries, parent companies, Affiliates, Representatives, officers, directors, employees, managers, members, partners, trustees, beneficiaries, insurers, carriers, heirs, executors, administrators, predecessors, agents,

successors, and assigns (collectively, the "<u>Released Parties</u>") from any and all claims, demands, Actions, suits, losses, Liabilities, judgments, obligations, Contracts, agreements, damages, debts, expenses, and costs, of whatever nature, character, or description (stipulated or otherwise) (including for contribution or indemnity, whether express, implied or equitable), known or unknown, anticipated or unanticipated, and regardless of the nature or character of the matters and circumstances giving rise thereto, which has been, could have been, or could be, now or in the future, asserted in any Action, or in any other court or forum (the "<u>Released Claims</u>"), which any of the Seller Releasors had, now have, or will have, in any capacity, against one or more Released Parties; provided, however, that nothing in this <u>Section 5.05(a)</u> will constitute a release or waiver of any claims or rights a Seller Releasor may have to enforce the terms of this Agreement or any Ancillary Agreement to which such Seller Releasor is a party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Seller Party acknowledges that there is a risk that, subsequent to the Closing, it, he, or she may discover, incur, or suffer claims that were unknown or unanticipated as of the Closing and which, if known by it, him, or her as of the Closing, may have materially affected its, his, or her decision to enter release the Released Claims. Each Seller Party acknowledges and agrees that, by reason of entering into this Agreement, it, he, or she is assuming the risk of all unknown or unanticipated claims released in and by this <u>Section 5.5</u>. WITH RESPECT TO SUCH MATTERS, EACH SELLER PARTY HEREBY EXPRESSLY WAIVES THE BENEFIT OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE OR ANY SIMILAR STATUTE IN ANY OTHER JURISDICTION. SECTION 1542 OF THE CALIFORNIA CIVIL CODE PROVIDES AS FOLLOWS:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) It is the intention of each Seller Party that, subject to the express limitations set forth in the proviso of <u>Section 5.5(a)</u>, the foregoing releases shall be as broad and general as the law permits and that the releases shall be effective as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each Seller Party expressly acknowledges and agrees that this <u>Section 5.5</u> represents a release of potential claims and is not, in any respect, nor for any purpose, to be deemed or construed to be an admission or concession of any Liability or wrongdoing of any kind or nature by any Released Parties or of the existence of any claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each Seller Party hereby covenants and agrees that it, he, or she will not (i) sue, prosecute, or participate in any manner in or assign any Released Claims or (ii) participate, assist, or encourage (explicitly or implicitly or directly or indirectly) any third party to file a lawsuit or make a claim against any Released Party of the kind or nature released by this <u>Section 5.5</u>. Each Seller Party represents and warrants as of the Closing that it, he, or she has not heretofore assigned, transferred, or subrogated, or purported to assign, transfer, or subrogate, to any Person, any of the Released Claims.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <u>Further Actions</u>. If any action is necessary or desirable after the Closing to carry out the purposes of this Agreement, including to vest in the Purchaser the full right and title to all the Company Interests, or to ensure that the Company retains full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company, the Seller Parties shall provide such assistance as is reasonably necessary to take such action, including executing and delivering such additional documents, instruments, conveyances and assurances as may be requested by the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u>Payment of Closing Indebtedness and Transaction Expenses</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within ten (10) Business Days after the Closing Date, the Seller shall, on behalf of the Company, pay or cause to be paid all Closing Indebtedness pursuant to the Payoff Letters to the respective recipients thereof in accordance with the Payoff Letters. Without limiting any of the representations and warranties of the Seller Parties in <u>Article II</u>, the Seller Parties have indicated to the Purchaser that the only Payoff Letter to be paid pursuant to this <u>Section 5.7(a)</u> is the Tesla Payoff Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Within ten (10) Business Days after the Closing Date, the Seller shall, on behalf of the Seller Parties and the Company, pay or cause to be paid the Transaction Expenses outstanding as of the Closing to the respective recipients thereof in accordance with the invoices and wire instructions provided by such recipients.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If the Seller fails to timely pay any of the amounts pursuant to foregoing subparts (a) and (b), the Purchaser may pay such amounts on the Seller's behalf and setoff the amount of any such payments against amounts otherwise payable under the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 <u>Auto Transfers</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Without limiting any of the representations and warranties of the Seller Parties in <u>Article II</u>, the Seller Parties hereby confirm to the Purchaser that, prior to the Closing Date, the Company purchased that certain 2023 Audi A6 (VIN# [XXX]) pursuant to a lease buyout transaction for a buyout purchase price of $55,484.28.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Pursuant to <u>Section 5.7(a)</u>, within ten (10) Business Days after the Closing Date, the Seller will pay in full the payoff amount set forth in the Tesla Payoff Letter for that certain 2018 Telsa (VIN# [XXX]).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) From and after the Closing, the Purchaser and the Company shall reasonably cooperate with the Seller Parties in the Seller Parties' efforts to transfer title to the 2023 Audi A6 (to the extent not previously transferred) and the 2018 Tesla to such transferees as the Seller Parties request to the Company in writing (collectively, the "<u>Auto Title Transfers</u>"); provided, however, that the Seller Parties shall be responsible for any and all costs, expenses, and Taxes (including, without limitation, all Transfer Taxes) incurred by the Company after the Closing in connection with the Auto Title Transfers. If the Seller Parties fail to timely pay any such costs, expenses, and Taxes, the Purchaser may pay such amounts on the Seller Parties' behalf and setoff the amount of any such payments against amounts otherwise payable under the Note.

**ARTICLE VI**

**<u>CLOSING DELIVERABLES</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Seller Party Closing Deliverables</u>. At the Closing, the Seller Parties shall deliver to the Purchaser the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Note</u>. The Note, duly executed by the Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Consulting Agreement</u>. A consulting agreement between the Purchaser and S. McCaig, in form and substance mutually acceptable to the parties thereto (the "<u>Consulting Agreement</u>"), duly executed by S. McCaig.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Restructuring Documents</u>. Proof of consummation of the Restructuring, in form and substance satisfactory to the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Subordination Agreement</u>. The Subordination Agreement, duly executed by the Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Secretary's Certificate</u>. A certificate of the Secretary or an Assistant Secretary (or equivalent officer) of the Company (the "<u>Secretary's Certificate</u>") certifying (i) that attached thereto are true and complete copies of the current Organizational Documents of the Company (including any amendments thereto), and that such Organizational Documents are in full force and effect, (ii) that attached thereto are true and complete copies of all resolutions duly adopted by the sole member of the Company authorizing the execution, delivery and performance of this Agreement, the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all of the resolutions adopted in connection with the transactions contemplated by this Agreement and the Ancillary Agreements and (iii) the names, titles and signatures of the officers of the Company authorized to sign this Agreement, the Ancillary Agreements and the other documents to be delivered hereunder and thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Good Standing Certificate</u>. A good-standing certificate with respect to the Company from the State of California and each other state where the Company is qualified as a foreign limited liability company, in each case dated within five (5) Business Days prior to the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Continuing Employees</u>. Each of the individuals listed on <u>Exhibit B</u> shall have agreed to continue their employment with the Company (or, at the Purchaser's option, with the Purchaser) immediately following the Closing, and shall have agreed to execute such documents in connection therewith as reasonably requested by the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Confidentiality, Proprietary Information and Inventions Assignment Agreements</u>. Purchaser's standard form of confidentiality, proprietary information and inventions assignment agreement, executed by each employee of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Resignations</u>. Written resignations, effective as of the Closing Date, of the officers of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Company Interests</u>. Instruments of transfer of all of the Company Interests, validly executed by the Seller, evidencing the transfer of the Company Interests to the Purchaser and any other instrument necessary to effect the transfer of the Company Interests to the Purchaser in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Notices and Consents</u>. Copies of all notices to, and all consents from, all third parties that are described in Section 2.5 of the Disclosure Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>401(k) Plan</u>. Appropriate documentation, determined satisfactory in the Purchaser's sole discretion, that the Company has terminated its participation under the Company's 401(k) Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>FIRPTA Certificate</u>. A statement from the Seller certifying that the Seller is not a foreign person, substantially in the form of the applicable sample certificate set forth in Treasury Regulations Section 1.1445-2(b)(2)(iv).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>IRS Form W-9</u>. A properly completed and executed IRS Form W-9 from the Seller and each other party to whom a payment will be made pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Bank Accounts</u>. Evidence acceptable to the Purchaser that all authorized Persons on all Company bank accounts and similar accounts have been replaced with Persons selected by the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Additional Documents</u>. The Seller Parties shall have delivered to the Purchaser such other documents and instruments as Purchaser reasonably requests that are necessary or desirable to consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Purchaser's Closing Deliverables</u>. At the Closing, the Purchaser shall deliver to the Seller Parties the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Note</u>. The Note, duly executed by the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Consulting Agreement</u>. The Consulting Agreement, duly executed by the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>R&W Policy</u>. Evidence that the R&W Policy has been bound (subject only to completion of the Closing).

**ARTICLE VII**

**SURVIVAL OF REPRESENTATIONS**

**<u>AND WARRANTIES; INDEMNIFICATION</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Survival of Representations, Warranties and Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of the Purchaser and the Seller Parties contained in this Agreement shall survive until the eighteen (18)-month anniversary of the Closing Date, except that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the representations and warranties set forth in <u>Section 2.1</u> (Organization and Qualification), <u>Section 2.2</u> (Authorization), <u>Section 2.3</u> (Capitalization, No Subsidiaries), <u>Section 2.4</u> (Non-contravention), <u>Section 2.13</u> (Title to Assets), <u>Section 2.14</u> (Intellectual Property), <u>Section 2.17</u> (Environmental Matters), <u>Section 2.18</u> (Brokers), <u>Section 2.19</u> (Employee Matters), <u>Section 3.1</u> (Ownership of Company Interests), <u>Section 3.2</u> (Authorization), <u>Section 3.3</u> (Non-contravention) and <u>Section 3.7</u> (Brokers) (collectively, the "<u>Fundamental Representations</u>") shall survive indefinitely (or, if shorter, the maximum period for which the survival of each such representation and warranty is permitted to be contractually extended under applicable Law and after giving effect to any waiver, mitigation or extension of such periods);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the representations and warranties set forth in <u>Section 2.11</u> (Taxes) (the "<u>Specified Representations</u>") shall survive until the close of business on the 60th day following the expiration of the applicable statute of limitations therefor (after giving effect to any waiver, mitigation or extension thereof); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any claim relating to fraud, willful misconduct, or intentional misrepresentation shall survive until the close of business on the 60th day following the expiration of the applicable statute of limitations therefor (after giving effect to any waiver, mitigation or extension thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The respective covenants and agreements of the Purchaser and the Seller Parties in this Agreement shall survive indefinitely (or, if shorter, the lesser of (x) the maximum period for which the survival for such covenant or agreement is permitted to be contractually extended under applicable Law and after giving effect to any waiver, mitigation or extension of such periods or (y) the period expressly provided in this Agreement for a particular covenant or agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Neither the Seller Parties nor the Purchaser shall have any liability with respect to any representations, warranties, covenants or agreements unless notice of an actual or threatened claim, or notice of discovery of any facts or circumstances that the Seller Representative or the Purchaser, as the case may be, reasonably believes may result in a claim, hereunder is given to the Purchaser or the Seller Representative, as the case may be, prior to the expiration of the survival period, if any, for such representation, warranty, covenant or agreement, in which case such representation, warranty, covenant or agreement shall survive as to such claim until such claim has been finally resolved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) For the avoidance of doubt, the parties acknowledge and agree that the foregoing limitations shall not limit any recovery of the Purchaser under the R&W Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Indemnification</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Joint and Several Indemnification by the Seller Parties</u>. From and after the Closing, each Seller Party agrees to jointly and severally defend, indemnify and hold harmless the Purchaser, the Purchaser's Affiliates (including from and after the Closing the Company) and each of their respective officers, directors, employees, agents, Affiliates and Representatives (collectively, the "<u>Purchaser Indemnified Parties</u>"), from and against any and all Losses based upon, resulting from or arising out of any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any breach of any representation or warranty made by the Seller Parties in <u>Article II</u> or <u>Article III</u> of this Agreement or made by the Seller in the Secretary's Certificate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any breach or non-performance of any covenant or agreement made by any Seller Party in this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any fraud, willful misconduct, or intentional misrepresentation by any Seller Party in connection with this Agreement or the transactions contemplated by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any Indebtedness of the Company that is not included in the calculation of Closing Indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Transaction Expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any matter set forth on Section 2.10 of the Disclosure Letter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) any Liabilities owing to any Person identified on Section 2.18 of the Disclosure Letter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Excluded Taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the Company's application for, receipt or use of, any loan proceeds pursuant to the CARES Act, including any retroactive determination of ineligibility or failure to satisfy any terms or conditions of such CARES Act, and including any Taxes of the Purchaser, the Company, or any other Affiliate of the Purchaser arising from, relating to, or as a result of the receipt or repayment of any Indebtedness pursuant to the CARES Act; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) the Company's pre-Closing failure or alleged failure (regardless of whether the pre-Closing failure or alleged failure continues post-Closing) to comply with any applicable Law regarding wage or hour matters with respect to employees, independent contractors, consultants or any other Person who performed or provided services to the Company, including, any Losses resulting from, arising out of or relating to, the improper classification of any Person as an

exempt employee, independent contractor, temporary employee, leased employee or seasonal employee (as applicable) under any applicable Law or Company Employee Plan or failure to (x) pay wages, overtime, bonuses, commissions, overtime, minimum wage, premiums, piece rate, paid time off, paid sick leave, public health emergency sick leave, on-call payments, business expenses or other compensation, statutory and/or civil penalties or (y) provide meal and rest breaks, pay equity, or legally compliant wage statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Indemnification by the Purchaser</u>. From and after the Closing, the Purchaser agrees to defend, indemnify and hold harmless each of the Seller Parties and their respective heirs, successors and assigns, from and against any and all Losses based upon, resulting from or arising out of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any breach of any representation or warranty made by the Purchaser in <u>Article IV</u> this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any breach or non-performance of any covenant or agreement made by the Purchaser in this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any fraud, willful misconduct, or intentional misrepresentation by the Purchaser in connection with this Agreement or the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Indemnification Limits and Calculations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notwithstanding anything to the contrary contained in this Agreement: (i) the Seller Parties shall not be liable for any claim for indemnification pursuant to <u>Section 7.2(a)(i)</u> unless and until the aggregate amount of indemnifiable Losses which may be recovered from the Seller Parties pursuant to <u>Section 7.2(a)(i)</u> equals or exceeds $50,000 (the "<u>Basket</u>"), in which case the Seller Parties shall be liable for the full amount of such Losses from the first dollar thereof; (ii) the Purchaser shall not be liable for any claim for indemnification pursuant to <u>Section 7.2(b)(i)</u> unless and until the aggregate amount of indemnifiable Losses which may be recovered from the Purchaser pursuant to <u>Section 7.2(b)(i)</u> equals or exceeds the Basket, in which case the Purchaser shall be liable for the full amount of such Losses from the first dollar thereof; (iii) the maximum aggregate amount of indemnifiable Losses which may be recovered from the Seller Parties pursuant to <u>Section 7.2(a)(i)</u> shall not exceed $1,000,000 (the "<u>Cap</u>"); and (iv) the maximum aggregate amount of indemnifiable Losses which may be recovered from the Purchaser pursuant to <u>Section 7.2(b)(i)</u> shall not exceed the Cap; <u>provided</u>, <u>however</u>, that the foregoing clauses of this <u>Section 7.3(a)</u> shall not apply to Losses arising out of or relating to the inaccuracy or breach of any Fundamental Representation or Specified Representation or to any claim relating to fraud, willful misconduct or intentional misrepresentation. For clarity, for purposes of foregoing <u>subparts (i)</u> and <u>(iii)</u> of this <u>Section 7.3(a)</u>, amounts recovered by a Purchaser Indemnified Party under the R&W Policy shall not be applied toward the calculation of the Basket or the Cap.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything in this Agreement to the contrary, an Indemnified Party expressly reserves the right to seek indemnity or other remedy for any Losses arising out of or relating to any breach of any representation, warranty, or covenant contained herein, notwithstanding any investigation by, disclosure to, knowledge or imputed knowledge of the Indemnified Party or any of its Representatives, whether before or after the Closing Date, in respect of any fact or circumstance that reveals the occurrence of any such breach. In furtherance of the foregoing, the parties agree that knowledge or lack of reliance shall not be a defense in law or equity to any claim of breach of representation, warranty or covenant by any party. An Indemnifying Party shall not in any proceeding concerning a breach or alleged breach of any representation, warranty or covenant of this Agreement, or any indemnity thereof, seek information concerning knowledge or reliance of the Indemnified Party or any of its Representatives, through deposition, discovery or otherwise, or seek to introduce evidence or argument in any proceeding regarding the knowledge or lack of reliance of the Indemnified Party or any of its Representatives with respect to any such representations, warranties or covenants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Nothing in this Agreement shall limit the Liability of any Person in the event of fraud, willful misconduct or intentional misrepresentation by such Person involving this Agreement or the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) For all purposes of this <u>Article VII</u>, any inaccuracy in or breach of any representation or warranty, as well as the amount of any Losses with respect thereto, shall be determined without regard to any materiality, Material Adverse Effect, or other similar qualification contained in or otherwise applicable to such representation or warranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding anything to the contrary contained herein, no limitations (including any survival limitations and other limitations set forth in this <u>Article VII</u>), qualifications or procedures in this Agreement shall be deemed to limit or modify the ability of the Purchaser to make claims under or recover under the R&W Policy; it being understood that any matter for which there is coverage available under the R&W Policy shall be subject to the terms, conditions and limitations, if any, set forth in the R&W Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Indemnification Procedures</u>. Any Person entitled to indemnification under this Agreement (an "<u>Indemnified Party</u>") may assert a claim for indemnification from the party or parties to this Agreement that are required to provide indemnification with respect to such claim(s) (an "<u>Indemnifying Party</u>"). If more than one Seller Party is an Indemnifying Party with respect to any claim for indemnification under this <u>Article VII</u>, the Seller Representative shall act on behalf of all such Seller Parties pursuant to the procedures of this <u>Section 7.4</u> in accordance with the rights granted under <u>Section 7.6</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Non-Third-Party Claims</u>. Any claim which does not involve a Third Party Claim may be asserted by giving written notice describing in reasonable detail the matter giving rise to the indemnification obligation under this Agreement (an "<u>Indemnification Notice</u>") to the Indemnifying Party. Upon receipt of an Indemnification Notice, the Indemnifying Party may (a) acknowledge and agree by notice to the Indemnified Party in writing to satisfy such claim within thirty (30) days of receipt of the Indemnification Notice or (b) dispute such claim from the Indemnified Party. In the event that the Indemnifying

Party disputes such claim, the Indemnifying Party shall provide written notice of such dispute to the Indemnified Party within thirty (30) Business Days of receipt of the Indemnification Notice for such claim, setting forth a reasonable basis for such dispute (a "<u>Dispute Notice</u>") and the parties will negotiate in good faith to resolve such dispute for a period of thirty (30) days from delivery of the Dispute Notice. If the parties are unable to resolve such dispute within such thirty (30)-day period, the dispute shall be submitted for resolution pursuant to <u>Section 9.9</u>. In the event that the Indemnifying Party shall fail to provide written notice to the Indemnified Party within thirty (30) days of receipt of an Indemnification Notice from the Indemnified Party that the Indemnifying Party either acknowledges and agrees to pay such claim or disputes such claim, the Indemnifying Party shall be deemed to have acknowledged and agreed to pay such claim in full. Once the Indemnifying Party has acknowledged and agreed to pay any claim pursuant to this <u>Section 7.4(a)</u>, or once any dispute under this <u>Section 7.4(a)</u> has been finally resolved in favor of indemnification by an arbitrator or court or other tribunal of competent jurisdiction, payment of the applicable Losses shall be paid pursuant to <u>Section 7.4(c)</u>. The parties agree that should the Indemnifying Party not make full payment of any such obligations within such ten (10) day period, any amount payable shall accrue interest from and including the date of agreement of the Indemnifying Party or final resolution to the date such payment has been made at a rate per annum equal to ten percent (10%), compounded monthly. Such interest shall be calculated daily on the basis of a 365-day year and the actual number of days elapsed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Third Party Claims</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In the event that any Indemnified Party receives notice of the assertion of any claim or of the commencement of any action or proceeding by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement (a "<u>Third Party Claim</u>") against such Indemnified Party, regarding which an Indemnifying Party is required to provide indemnification under this Agreement, the Indemnified Party shall give written notice together with a statement of available information (other than privileged information) regarding such Third Party Claim (a "<u>Third Party Claim Notice</u>") to the Indemnifying Party within thirty (30) days after learning of such Third Party Claim. The failure to give written notice within such thirty (30)-day period shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Indemnifying Party shall have the right to participate in or, by giving written notice to the Indemnified Party within thirty (30) days after the Indemnifying Party's receipt of the Third Party Claim Notice (after which date the Indemnifying Party may not elect to assume the defense of such Third Party Claim without the written consent of the Indemnified Party), to assume the defense of any Third Party Claim at the Indemnifying Party's sole cost and expense and by the Indemnifying Party's own counsel; *provided, however,* that such Indemnifying Party shall not have the right to assume the defense of any such Third Party Claim (x) unless the Indemnifying Party has agreed and acknowledged in writing (for the benefit of the Indemnified Party) its unqualified obligation to indemnify the Indemnified Party with respect to such Third Party Claim, subject to the limitations set forth in this <u>Article VII</u>, and (y) if the Indemnifying Party is a Seller Party, if such Third Party Claim (1) is asserted directly by or on behalf of a Person that is a supplier or customer of the Company, or (2) seeks an injunction or other equitable relief against the Indemnified Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If the Indemnifying Party assumes the defense of any Third Party Claim within such thirty (30)-day period (or thereafter with the written consent of the Indemnified Party), then, subject to <u>Section 7.4(b)(v)</u>, (x) it shall have the right to take such action as it deems necessary to dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party and (y) the Indemnified Party shall have the right to participate in the defense of any Third Party Claim with counsel selected by it (subject to the Indemnifying Party's right to control the defense thereof) and the fees and disbursements of the Indemnified Party's counsel shall be at the expense of the Indemnified Party, *provided, however,* that if in the reasonable opinion of counsel to the Indemnified Party, (A) there are legal defenses available to an Indemnified Party that are different from or additional to those available to the Indemnifying Party; or (B) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party, then the Indemnifying Party shall be liable for the reasonable fees and expenses of counsel to the Indemnified Party in each jurisdiction for which the Indemnified Party determines counsel is required (such fees and expenses to be reimbursed monthly by payment by the Indemnifying Party to the Indemnified Party; provided, that if the Purchaser is the Indemnified Party, the Purchaser may, but is not required to, elect in its discretion to have reimbursement setoff against the Note, Consulting Agreement or any amounts otherwise payable by any of the Purchaser Indemnified Parties to any Seller Party pursuant to <u>Section 7.4(d)</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) If the Indemnifying Party notifies the Indemnified Party of its intent not to assume the defense of a Third Party Claim, fails to elect in writing to assume the defense of a Third Party Claim with thirty (30) days after the its receipt of the Third Party Claim Notice (or such earlier date, if the failure to assume the defense by such earlier date would materially impair the ability of the Indemnified Party to defend such Third Party Claim), or fails to diligently prosecute the defense of such Third Party Claim, then the Indemnified Party may compromise, settle, dispute, defend, appeal or make counterclaims pertaining to such Third Party Claim with counsel selected by it (all at the cost and expense of the Indemnifying Party), the Indemnifying Party will be bound by the results obtained by the Indemnified Party with respect to such Third Party Claim, and the Indemnifying Party shall be liable for the reasonable fees and expenses of counsel to the Indemnified Party in each jurisdiction for which the Indemnified Party determines counsel is required (such fees and expenses to be reimbursed monthly by payment by the Indemnifying Party to the Indemnified Party; provided, that if the Purchaser is the Indemnified Party, the Purchaser may, but is not required to, elect in its discretion to have reimbursement setoff against the Note, Consulting Agreement or any amounts otherwise payable by any of the Purchaser Indemnified Parties to any Seller Party pursuant to <u>Section 7.4(d)</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) An Indemnifying Party shall not, without the prior written consent of the Indemnified Party (such consent not to be unreasonably delayed, withheld or conditioned), settle, compromise or offer to settle or compromise any Third Party Claim on a basis which would result in the imposition of a consent order, injunction or decree which would restrict the future activity or conduct of the Indemnified Party or any of its Affiliates or if such settlement or compromise (x) does not include an unconditional release of the Indemnified Party for any liability arising out of such claim or demand or any related claim or demand or (y) in the event a Seller Party is the Indemnifying Party, would involve Losses in excess of the balance of the Note less the aggregate amount of Losses relating to unresolved indemnity claims against the Seller Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Seller Representative, the Seller Parties and the Purchaser shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) Notwithstanding anything in this <u>Section 7.4(b)</u> to the contrary, in the event that there is a conflict between the rights of the Seller Parties under this <u>Section 7.4(b)</u> to control the defense of a claim and the rights of insurers under the R&W Policy or any other insurance policy of the Purchaser or the Company or any of their Affiliates to control the defense of such claim, the rights of such insurer(s) will prevail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Claims</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Claims for Losses against any Seller Party pursuant to <u>Section 7.2(a)(i)</u> shall be satisfied (v) first, by setoff against the outstanding balance of the Note up to an amount equal to the Retention Amount, (w) next, to the extent such Losses exceed the balance of the Note but have not fully eroded the Retention Amount, by the Seller Parties until the Retention Amount shall be fully eroded, (x) next, by recovery under the R&W Policy (except for any Losses subject to Exclusions or any other Losses otherwise not covered by the R&W Policy), and (y) thereafter (including any Losses subject to Exclusions or otherwise not covered by the R&W Policy), by the Seller Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Claims for Losses against any Seller Party pursuant to <u>Section 7.2(a)(ii)</u>-<u>(x)</u> shall be satisfied (x) by setoff against the outstanding balance of the Note and (y) thereafter, to the extent such Losses exceed the balance of the Note, by the Seller Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Setoff</u>. Without limiting any other rights or remedies of the Purchaser Indemnified Parties (including under <u>Section 7.4(c)</u> above), the Purchaser Indemnified Parties may, in their sole and absolute discretion, satisfy claims for indemnification for which any Seller Party is obligated under this <u>Article VII</u> by deducting the amount of Losses from any amounts due to S. McCaig under the Consulting Agreement and/or any amounts otherwise payable by any of the Purchaser Indemnified Parties to any Seller Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Tax Treatment of Certain Payments</u>. Except to the extent otherwise required pursuant to a "determination" within the meaning of Section 1313(a) of the Code (or any analogous provision of state, local or foreign tax Law), the parties shall treat any indemnity payment made under this Agreement as an adjustment to the Purchase Price for all federal, state, local and foreign tax purposes, and the parties shall, and shall cause their respective Affiliates to, file their Tax Returns accordingly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Seller Representative</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Appointment of Seller Representative</u>. The Seller Parties hereby unconditionally and irrevocably appoint S. McCaig as the Seller Representative under this Agreement to take any and all actions under this Agreement to be taken or decided by the Seller Representative pursuant to the terms hereof. The Seller Parties hereby agree that (i) the Seller Representative shall not be personally liable as the Seller Representative for any act done or omitted under this Agreement as Seller Representative while acting in good faith and in the exercise of reasonable judgment; and (ii) the Seller Representative shall not be liable to the Seller Parties for any action taken or omitted in good faith in his capacity as Seller Representative, and the taking or omission of any action pursuant to the advice of legal counsel shall be conclusive evidence of good faith. The Seller Parties have the right, upon unanimous approval of the Seller Parties, to change the Seller Representative at any time upon providing at least fifteen (15) days' advance written notice of the same to the Purchaser. The Purchaser and its Affiliates shall have no obligation or Liability to any Seller Party based upon or as a result of any failure, delay or error by the Seller Representative in distributing to any Seller Party any amounts paid to or received by the Seller Representative for the benefit of and further distribution to any Seller Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Notices and Decisions</u>. With respect to any matter delegated to the Seller Representative under this Agreement, (i) notices or communications to or from the Seller Representative shall constitute notice to or from each of the Seller Parties and (ii) a decision, act, consent or instruction of the Seller Representative shall constitute a decision of all the Seller Parties, and shall be final, binding and conclusive upon each Seller Party, and the Purchaser may rely upon any such decision, act, consent or instruction of the Seller Representative as being the final and binding decision, act, consent or instruction of each Seller Party.

**ARTICLE VIII**

**<u>TAX MATTERS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Preparation of Tax Returns</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Pre-Closing Tax Returns</u>. The Seller Representative, on behalf of Seller, shall prepare and, to the extent permitted by applicable Law, file (or shall cause to be prepared and filed), all Tax Returns of or with respect to the Company for all Pre-Closing Tax Periods. All such Tax Returns shall be prepared in accordance with past practice. To

the extent any such Tax Return is required to be filed by the Purchaser or the Company after the Closing, the Seller Representative shall submit such Tax Returns to the Purchaser at least twenty (20) days prior to the due date for filing such Tax Return (including any applicable extensions) for the Purchaser's review and comment and the Seller Representative shall make any comments of the Purchaser in good faith and revise the applicable Tax Return. The Purchaser or the Company, as the case may be, shall file any such Tax Return with the applicable taxing authority; <u>provided</u>, that neither the Purchaser or the Company shall be required to file any Tax Return that is not prepared in accordance with applicable Law or this <u>Section 8.1(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Straddle Period Tax Returns</u>. The Purchaser shall prepare and file, or cause to be prepared and filed, all Tax Returns required to be filed by or with respect to the Company with respect to any Straddle Period of the Company (but not, for the avoidance of doubt, any Tax Return of any Seller Party). Except as otherwise required by applicable Law, all such Tax Returns shall be prepared in accordance with past practice. The Purchaser shall submit such Tax Returns to the Seller Representative at least five (5) days prior to the due date for filing such Tax Return (including any applicable extensions) for review and comment, and the Purchaser shall consider any comments of the Seller Representative in good faith and revise the applicable Tax Return to the extent the Purchaser deems appropriate, in its reasonable discretion. Purchaser shall make itself available to discuss any such Tax Return.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Straddle Period Allocation</u>. In the case of Taxes (other than Transfer Taxes) that are payable with respect to a Straddle Period, the portion of any such Tax that is allocable to the Pre-Closing Straddle Period shall be:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in the case of Taxes that are either (x) based upon or measured by reference to income, gain, or receipts or (y) imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible) (other than conveyances pursuant to this Agreement), the Tax that would be due with respect to the Pre-Closing Straddle Period if such period ended on and included the Closing Date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in the case of Taxes not covered by paragraph (i) above, the product of (x) the amount of such Taxes for the entire Straddle Period, multiplied by (y) a fraction, the numerator of which is the number of days in the Pre-Closing Straddle Period and the denominator of which is the number of days in the entire Straddle Period.

Taxes with respect to a Straddle Period that are not allocable to the Pre-Closing Straddle Period will be allocable to the Post-Closing Straddle Period. Any credit or refund resulting from an overpayment of Taxes for a Straddle Period shall be prorated based upon the method employed in this <u>Section 8.2(b)</u>, taking into account the type of Tax to which such credit or refund relates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Payments</u>. Payment of any amount due under this <u>Section 8.1</u> shall be made within twenty (20) Business Days following written notice that payment of related Taxes to the appropriate Governmental Authority is due; provided that neither party shall be required to make any payment earlier than five (5) Business Days before the related Taxes are due to the appropriate Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Tax Contests</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If a party receives notice of any proposed claim, assessment, deficiency, review, examination or commencement of any Tax audit or administrative or judicial proceeding or any other claim relating to a pre-Closing Tax Period or a Straddle Period ("<u>Tax Contest</u>") with respect to Taxes of the Company, such party shall promptly provide written notice thereof to the other party or parties hereto; <u>provided, however</u>, that the failure to provide such notice shall not release the other party from any of its obligations under this <u>Article VIII</u>, except to the extent that such other party is materially prejudiced thereby. Such notice shall specify in reasonable detail the basis for and other factual information with respect to such Tax Contest and shall include a copy of the relevant portion of any correspondence or document received from the relevant taxing authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon written notice to the Purchaser, the Seller Representative shall have the right to control, at the Seller's expense, the conduct of any Tax Contest with respect to Taxes of or with respect to the Company for any Pre-Closing Tax Period and for which the Seller is responsible under this Agreement; <u>provided</u>, <u>however</u>, that insofar as such Tax Contest would reasonably be expected to have an adverse effect the Purchaser or any of its Affiliates (including, after the Closing, the Company), the Purchaser shall be entitled to participate in such Tax Contest at its own expense and the Seller Representative shall not compromise, settle or abandon such Tax Contest without prior written consent of the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the case of a Tax Contest for a Straddle Period of the Company, the Controlling Party shall have the right to control, at its own expense, such Contest; <u>provided, however</u>, that (i) the Controlling Party shall provide the Non-controlling Party with a timely and reasonably detailed account of each stage of such Tax Contest, (ii) the Controlling Party shall consult with the Non-controlling Party and offer the Non-controlling Party an opportunity to comment before submitting any written materials prepared or furnished in connection with such Tax Contest, (iii) the Controlling Party shall defend such Tax Contest diligently and in good faith as if it were the only party in interest in connection with such Tax Contest, (iv) the Non-controlling Party shall be entitled to participate in such Tax Contest, at its own expense, if such Tax Contest could have an adverse impact on the Non-controlling Party or any of its Affiliates and (v) the Controlling Party shall not settle, compromise or abandon any such Tax Contest without obtaining the prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, of the Non-controlling Party if such settlement, compromise or abandonment could have an adverse impact on the Non-controlling Party or any of its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Purchaser shall have the right to control, at the Purchaser's expense (and the Seller Representative shall have no right to participate in), any Tax Contest with respect to the Company for any Post-Closing Tax Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <u>Cooperation</u>. The Purchaser and the Seller Representative (on behalf of the Seller) shall (and shall cause their respective Affiliates to) (a) provide the other parties and their Affiliates with such assistance as may be reasonably requested in connection with the preparation of any Tax Return or any audit or other examination by any taxing authority or any judicial or administrative proceeding relating to Taxes for any Pre-Closing Tax Period or any Straddle Period and (b) retain (and provide the other parties and their Affiliates with reasonable access to) all records or information which may be relevant to such Tax Return, audit, examination or proceeding, <u>provided, however</u>, that the foregoing shall be done in a manner so as not to interfere unreasonably with the conduct of the business of the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 <u>Transfer Taxes</u>**.** All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) ("<u>Transfer Taxes</u>") imposed on purchase of the Company Interests pursuant to this Agreement (including any real property transfer tax and any similar Tax) shall be borne by the Seller. All necessary Tax Returns and other documentation with respect to all such Transfer Taxes shall be timely filed by the party primarily responsible for such filing under applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 <u>Coordination; Other Tax Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notwithstanding anything to the contrary contained in this Agreement, (i) the covenants and agreements of the Seller and the Purchaser contained in this <u>Article VIII</u> shall survive and shall remain in full force and effect until ninety (90) days after the expiration of the relevant statutes of limitation, and (ii) indemnification for any and all Tax matters, and the procedures with respect thereto, shall, subject to <u>Section 7.2(a)(viii)</u>, be governed exclusively by this <u>Article VIII</u> and notwithstanding anything to the contrary in <u>Article VII</u>, the provisions of <u>Article VII</u> (except for <u>Section 7.2(a)(viii)</u>) shall not apply shall not apply to any Tax matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any Tax sharing agreement or arrangement between the Seller or any of its Affiliates (other than the Company), on the one hand, and the Company, on the other hand, shall be terminated, and all payments thereunder shall be settled, immediately prior to the Closing.

**ARTICLE IX**

**<u>GENERAL PROVISIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Notices</u>. Any notice, request, instruction or other document to be given hereunder by any party hereto to any other party shall be in writing and shall be delivered personally, by overnight courier service, by email of PDF document (with confirmation of transmission) or sent by certified or registered mail, postage prepaid (and shall be deemed given when: delivered if delivered by hand, one (1) Business Day after deposited with an overnight courier service if delivered by overnight courier, upon electronic confirmation of receipt if faxed or emailed during normal business hours and otherwise upon the opening of business on the next Business Day, and five days after mailing if mailed), as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if to the Purchaser (including the Company after the Closing), to:

Pro-Dex, Inc.<br>2361 McGaw Avenue<br>Irvine, CA 92614<br>Attn: Rick Van Kirk<br>Email: Rick.VanKirk@pro-dex.com

with a copy (which shall not constitute notice) to:

Rutan & Tucker, LLP<br>18575 Jamboree Road, 9<sup>th</sup> Floor<br>Irvine, CA 92612<br>Attn: Garett Sleichter<br>Email: gsleichter@rutan.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if to the Seller Representative, to:

Sean McCaig <br>[XXX] <br>[XXX] <br>Email: [XXX]<br>with a copy (which shall not constitute notice) to:<br>The Gibbs Law Firm <br>1221 Puerta del Sol, Suite 100 <br>San Clemente, CA 92673 <br>Attn: David L. Gibbs <br>Email:david.gibbs@gibbslaw.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Counterparts</u>. This Agreement may be executed in one or more counterparts for the convenience of the parties hereto, each of which shall be deemed an original, and all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or by electronic communications in portable document format (.pdf) shall be effective as delivery of a mutually executed counterpart to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Titles and Headings</u>. The titles, captions and table of contents in this Agreement are for reference purposes only, and shall not in any way define, limit, extend or describe the scope of this Agreement, or otherwise affect the meaning or interpretation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 <u>Amendments; Waivers</u>. This Agreement may be amended by the parties hereto at any time by execution of an instrument in writing signed by the Purchaser and the Seller Representative. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No failure to exercise, or delay in exercising, any right or remedy arising from this Agreement shall operate or be construed as a waiver thereof. No single or partial exercise of any right or remedy hereunder shall preclude any other or further exercise thereof or the exercise of any other right or remedy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 <u>Entire Agreement</u>. This Agreement, the Ancillary Agreements, the Schedules and Exhibits hereto, the Disclosure Letter, and the documents and instruments and other agreements among the parties hereto referenced herein, constitute the entire agreement among the parties with respect to the subject matter hereof, and supersede all prior agreements and understandings, both written and oral, among the parties (including the Letter of Intent) with respect to the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 <u>Assignment; No Third-Party Rights</u>. This Agreement, the Ancillary Agreements, the Schedules and Exhibits hereto, the Disclosure Letter, and the documents and instruments and other agreements among the parties hereto referenced herein, (a) shall be for the sole benefit of the parties to this Agreement and their respective heirs, successors, permitted assigns and legal representatives, and are not intended, nor shall they be construed, to give any Person, other than the parties hereto and their respective heirs, successors, assigns and legal representatives and the rights of any Indemnified Party under <u>Article VII</u>, any legal or equitable right, remedy or claim hereunder, and (b) shall not be assigned by operation of law or otherwise, except that the Purchaser may assign its rights and delegate its obligations under this Agreement to one or more of its Affiliates or to a purchaser or assignee of substantially all or a significant portion of its assets. Nothing herein expressed or implied shall confer upon any of the employees of Purchaser, the Company or any of their respective Affiliates, any rights or remedies, including any right to employment, or continued employment for any specified period, of any nature or kind whatsoever under or by reason of this Agreement. Notwithstanding the foregoing, (x) Released Parties are express third-party beneficiaries of <u>Section 5.5</u>, and (y) the Indemnified Parties are express third-party beneficiaries of <u>Article VII</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 <u>Severability</u>. The invalidity of any section, subsection or other portion of this Agreement shall not affect the validity, force or effect of the remaining portions of this Agreement. If it is ever held that any restriction hereunder is too broad to permit enforcement of such restriction to its fullest extent, such restriction shall be enforced to the maximum extent permitted by Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8 <u>Other Remedies; Specific Performance</u>. Except as otherwise set forth herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. Each of the Seller Parties and the Purchaser acknowledges that the rights of each party to consummate the transactions contemplated by this Agreement are unique, and recognizes and affirms that in the event of a breach of this Agreement by any party, money damages may be inadequate and the non-breaching party may have no adequate remedy at Law. Accordingly, the parties agree that such non-breaching party shall have the right, in addition to any other rights and remedies existing in its favor at Law or in equity, to enforce its rights and the other parties' obligations hereunder, not only by an action or actions for damages, but also by an action or actions for specific performance, injunctive and/or other equitable relief (without posting of bond or other security).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9 <u>Governing Law; Arbitration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be governed by, and construed in accordance with, the internal Laws of the State of California, without reference to the choice of law or conflicts of law principles thereof that would result in the application of the Laws of any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity of this Agreement, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in Orange County, California before one arbitrator. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures as in effect on the Closing Date. Judgment of the arbitrator may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies (including equitable relief) in aid of arbitration from a court of appropriate jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.10 <u>Attorneys' Fees</u>. Without limiting any rights under <u>Article VII</u>, each party agrees to reimburse the other party for reasonable costs, fees and expenses (including, without limitation, reasonable attorneys' and experts' costs, fees and expenses) incurred by the non-breaching party in connection with a successful legal action to enforce the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.11 <u>Interpretation</u>. Unless otherwise indicated to the contrary herein by the context or use thereof: (a) the words "herein," "hereto," "hereof" and words of similar import refer to this Agreement as a whole and not to any particular Section or paragraph hereof; (b) the word "including" means "including, but not limited to"; (c) masculine gender shall also include the feminine and neutral genders, and vice versa; and (d) words importing the singular shall also include the plural and vice versa. Reference to any Law shall mean such Law as amended, modified or supplemented (including by succession of comparable successor statutes), and in effect from time to time, and all rules and regulations promulgated thereunder. Matters disclosed on the Disclosure Letter shall only apply to the specific Section of this Agreement expressly identified in the Disclosure Letter and shall not apply to any other Section that is not expressly identified in the Disclosure Letter. All representations and warranties in <u>Article II</u> concerning any past facts, events, occurrences, or circumstances concerning the Company, its business, its assets, or otherwise shall, unless otherwise expressly stated to the contrary, be deemed to apply to the full extent as if the Company had continued its existence without undertaking the Restructuring. Each of the parties hereto acknowledges that this Agreement has been prepared jointly by the parties hereto and shall not be strictly construed against any other party. As a consequence, the parties do not intend that the presumptions of any Laws or rules relating to the interpretation of contracts against the drafter of any particular clause should be applied to this Agreement and therefore waive their effects.

**ARTICLE X <br><u>DEFINITIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 <u>Certain Definitions</u>**.** As used in this Agreement, the following terms have the respective meanings set forth below.

"<u>Acquisition</u>" has the meaning set forth in the Recitals.

"<u>Action</u>" means any claim, action, suit, proceeding, administrative procedure, arbitral action, inquiry, criminal prosecution or investigation by or before any Governmental Authority.

"<u>Actual Knowledge</u>" means, with respect to the Company, the actual or constructive knowledge of S. McCaig or Y. McCaig, without any duty of inquiry.

"<u>Affiliate</u>" of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

"<u>Agreement</u>" has the meaning set forth in the Preamble.

"<u>Ancillary Agreements</u>" means the instruments of transfer of the Company Interests to the Purchaser, the Note, the Consulting Agreement, and all other agreements and certificates entered into or delivered by the Company or the Seller Parties in connection with the Closing of the Acquisition.

"<u>Articles of Organization</u>" means the articles of organization of the Company filed with the California Secretary of State on February 3, 2026.

"<u>Auto Title Transfers</u>" has the meaning set forth in <u>Section 5.7(c)</u>.

"<u>Balance Sheet</u>" has the meaning set forth in <u>Section 2.6(b)</u>.

"<u>Balance Sheet Date</u>" has the meaning set forth in <u>Section 2.6(b)</u>.

"<u>Basket</u>" has the meaning set forth in <u>Section 7.3(a)</u>.

"<u>Breakup Fee Amount</u>" means $62,500, which equals the amount previously paid by the Purchaser to the Company pursuant to Section 6 of the Letter of Intent.

"<u>Business Day</u>" means any day on which national banking institutions in Los Angeles, California are open to the public for conducting business and are not required or authorized to close.

"<u>Cap</u>" has the meaning set forth in <u>Section 7.3(a)</u>.

"<u>CARES Act</u>" means the Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136), as amended from time to time.

"<u>Closing</u>" has the meaning set forth in <u>Section 1.2</u>.

"<u>Closing Adjustment Statement</u>" has the meaning set forth in <u>Section 1.3(a)(1)</u>.

"<u>Closing Date</u>" has the meaning set forth in <u>Section 1.2</u>.

"<u>Closing Indebtedness</u>" means any and all outstanding Indebtedness of the Company at Closing (including any prepayment fees or premiums due in connection with the payment in full of such Indebtedness on the Closing Date).

"<u>Closing Inventory Deficiency</u>" means the amount, if any, by which Closing Inventory Value is less than One Million One Hundred Thousand Dollars ($1,100,000).

"<u>Closing Inventory Value</u>" means the fair market value of the Company's inventory as of the Closing.

"<u>Code</u>" means the Internal Revenue Code of 1986, as amended.

"<u>Company</u>" has the meaning set forth in the Recitals.

"<u>Company Accounts Receivable</u>" has the meaning set forth in <u>Section 2.21</u>.

"<u>Company Employees</u>" means all current and former employees of the Company.

"<u>Company Employee Plan</u>" means any "employee benefit plan" (as such term is defined in Section 3(3) of ERISA), and all equity, severance, employment, change-in-control, fringe benefit, collective bargaining, bonus, incentive, deferred compensation, employee loan and any other compensatory or employee benefit plan, program, practice, agreement, policy or arrangement, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transaction contemplated by this Agreement or otherwise) (whether written or unwritten, formal or informal) under which (i) any current or former employees, directors, managers, independent contractors or other individual service providers of the Company or an ERISA Affiliate has any present or future right to benefits and which are maintained, sponsored or contributed to or required to be contributed to by Sellers, the Company or any ERISA Affiliate, or (ii) to which the Company or any ERISA Affiliate is a party or has had, has or may have any present or future Liability.

"<u>Company Financial Statements</u>" means (i) the Company's unaudited financial statements (including balance sheet, income statement and statement of cash flow) as of December 31, 2022, December 31, 2023 and December 31, 2024 and for the fiscal years then ended, and (ii) the Company Interim Financial Statements.

"<u>Company Insurance Policies</u>" has the meaning set forth in <u>Section 2.20</u>.

"<u>Company Intellectual Property</u>" means any Intellectual Property that is owned by, controlled by or licensed to the Company.

"<u>Company Interim Financial Statements</u>" means the Company's unaudited financial statements (including balance sheet, income statement and statement of cash flow) as of November 30, 2025 and for the 11-month period then ended.

"<u>Company Interests</u>" has the meaning set forth in the Recitals.

"<u>Company Permits</u>" has the meaning set forth in <u>Section 2.8</u>.

"<u>Company Products</u>" means any and all (a) products (or any component thereof) that are or at any time have been manufactured, developed, under development, distributed, marketed or sold by or on behalf of the Company and (b) services that are or at any time have been rendered by or on behalf of the Company. Without limiting the generality of the foregoing, Company Products includes any and all software that is or at any time has been manufactured, developed, under development, distributed, marketed or sold by or on behalf of the Company.

"<u>Conflict</u>" has the meaning set forth in <u>Section 2.4</u>.

"<u>Consulting Agreement</u>" has the meaning set forth in <u>Section 6.1(b)</u>.

"<u>Contract</u>" means any contract, subcontract, indenture, note, bond, lease, license, commitment, instrument or other agreement, arrangement or understanding of any kind, whether written or oral.

"<u>Contribution</u>" has the meaning set forth in the definition of Restructuring.

"<u>Controlling Party</u>" shall mean whichever of the Seller Representative or the Purchaser is reasonably expected to bear the greater Tax liability in connection with a Straddle Period Tax Contest.

"<u>Conversion</u>" has the meaning set forth in the definition of Restructuring.

"<u>Data Room</u>" means the electronic due diligence data room established with SecureDocs, in contemplation of the Acquisition.

"<u>DBE Qualification</u>" has the meaning set forth in <u>Section 2.9(b)</u>.

"<u>Delinquent AP</u>" means any accounts payable of the Company that are past due as of the Closing.

"<u>Disclosure Letter</u>" has the meaning set forth in the preamble to <u>Article II</u>.

"<u>Disputed Amounts</u>" has the meaning set forth in <u>Section 1.3(b)(iii)</u>.

"<u>Dispute Notice</u>" has the meaning set forth in <u>Section 7.4(a)</u>.

"<u>Dollars</u>" or "<u>$</u>" means United States Dollars.

"<u>Environmental Claim</u>" means any Action by or before any Governmental Authority by any Person alleging Liability of whatever kind or nature (including Liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.

"<u>Environmental Law</u>" means any Law, Governmental Order or Contract with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term "Environmental Law" includes the following (including their implementing regulations and any state and local analogs): CERCLA; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 *et seq.*; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 *et seq.*; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 *et seq.*; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 *et seq.*; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 *et seq.*; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 *et seq.*

"<u>Environmental Notice</u>" means any written directive, notice of violation or infraction, or any other notice related to any Environmental Claim, Environmental Law or Environmental Permit.

"<u>Environmental Permit</u>" means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issued, granted, given, authorized by or made pursuant to Environmental Law.

"<u>ERISA</u>" means the Employee Retirement Income Security Act of 1974, as amended, and the regulations issued thereunder.

"<u>ERISA Affiliate</u>" means a subsidiary of the Company and any other Person under common control with the Company or any subsidiary of the Company within the meaning of Section 414(b), (c), (m) or (o) of the Code and the regulations issued thereunder.

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

"<u>Excluded Taxes</u>" means, without duplication, any liability, obligation or commitment, whether or not accrued, assessed or currently due and payable for (a) any Taxes imposed on, or payable by, the Company for any Pre-Closing Tax Period (including any Pre-Closing Straddle Period), including any withholding Taxes the payment of which has been deferred pursuant to Section 2302 of the CARES Act or any similar or corresponding provision of state or local Law,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if applicable, Taxes for which the Company is liable under Treasury Regulations Section 1.1502-6 (or any analogous provision of state, local or foreign Law) by reason of the Company having been included in any consolidated, affiliated, combined or unitary group at any time before the Closing Date, or as transferee or successor, (c) any Taxes resulting from any breach

of or inaccuracy of any representation or warranty contained in <u>Section 2.11</u> (calculated disregarding any materiality qualification contained in any such representation or warranty), (d) any obligation or other Liability of the Company to indemnify any other Person in respect of or relating to Taxes or to pay an amount pursuant to any Tax sharing or Tax allocation agreement (other than any obligation or other Liability pursuant to any agreement entered into by the Company after the Closing), (e) any Taxes resulting from any extraordinary transaction outside the Ordinary Course of Business undertaken by the Company in anticipation of the sale of the Company Interests pursuant this Agreement, (f) any Taxes of any Seller for any taxable period, (g) any Taxes imposed upon any Purchaser Indemnified Party (including the Company) as a transferee or successor of the Seller or the Company, (h) any Transfer Taxes required to be borne by the Seller pursuant to <u>Section 8.4</u> of this Agreement, (i) any Taxes imposed on the Company or any Seller Party with respect to the transactions pursuant to this Agreement and (j) any Taxes arising as a result of or related to the Restructuring.

"<u>Exclusions</u>" means the items and matters set forth in the R&W Policy under the heading "Schedule of Specific Exclusions and Deemed Disclosures."

"<u>Family Member</u>" means, with respect to any individual, (i) such individual's current or former spouse(s), (ii) any individual who is related (by blood, marriage or adoption) to such individual or such individual's current or former spouse(s) within the second degree, and (iii) any other individual who resides with such individual.

"<u>Fundamental Representations</u>" has the meaning set forth in <u>Section 7.1(a)(i)</u>.

"<u>GAAP</u>" means United States generally accepted accounting principles as in effect on the Closing Date.

"<u>Governmental Authority</u>" means any national, federal, state, provincial, county, municipal or local government, foreign or domestic, or the government of any political subdivision of any of the foregoing, or any entity, authority, agency, ministry or other similar body exercising executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining to government, including any authority or other quasi-governmental entity or self-regulatory organization established to perform any of such functions, and any arbitrator or similar body.

"<u>Governmental Order</u>" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

"<u>Hazardous Materials</u>" means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or man-made, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation and polychlorinated biphenyls.

"<u>Inception Date</u>" means November 26, 1996.

"<u>Indebtedness</u>" means, without duplication, (a) the principal of and premium (if any) in respect of all indebtedness for borrowed money, including accrued interest, (b) the principal of

and premium in respect of obligations evidenced by bonds, debentures, notes or other similar instruments, including accrued interest, (c) the principal component of all obligations to pay the deferred and unpaid purchase price of property and equipment which have been delivered; (d) any Liability for the deferred purchase price of property or services, including any potential future earn-outs or similar payments; (e) any Liability under any sale and leaseback transaction, any synthetic lease or tax ownership operating lease transaction (whether or not recorded on a balance sheet); (f) negative balances in bank accounts; (g) amounts in respect of checks in transit; (h) net cash payment obligations under swaps, options, derivatives and other hedging agreements or arrangements that will be payable upon termination thereof (assuming they were terminated on the date of determination); (i) all Indebtedness of another Person referred to in clauses (a) through (h) above guaranteed directly or indirectly, jointly or severally, in any manner, and (j) any costs, fees or other expenses arising from or in connection with the repayment, liquidation or termination of any Indebtedness referred to in clauses (a) through (i), including any prepayment, breakage, termination, penalty or similar costs, fees or expenses. For clarity, finance leases (formerly known as capital leases) shall not be considered Indebtedness.

"<u>Indemnification Notice</u>" has the meaning set forth in <u>Section 7.4(a)</u>.

"<u>Indemnified Party</u>" has the meaning set forth in <u>Section 7.4</u>.

"<u>Indemnifying Party</u>" has the meaning set forth in <u>Section 7.4</u>.

"<u>Independent Accountant</u>" has the meaning set forth in <u>Section 1.3(b)(iii)</u>.

"<u>Intellectual Property</u>" means any and all intellectual property rights whether registered or unregistered, including the following: (a) all patents, patent applications, patent disclosures, and patentable inventions, (b) all proprietary rights in know-how and technology and applications therefor, (c) all works of authorship, copyrights and applications therefor, (d) all trade names, logos, common-law trademarks and service marks, trademark and service mark registrations and applications therefor, and the goodwill associated with any of the foregoing, (e) all rights in databases and data collections throughout the world, (f) all domain names, and (g) all social media accounts. Without limiting the generality of the foregoing and for the purpose of clarity, "Intellectual Property" includes intellectual property identified in clauses (a) through (g) of the preceding sentence, that may be embodied in: computer software (including source code, object code, data, databases and related documentation); systems, processes, methods, devices, machines, designs or articles of manufacture (whether patentable or unpatentable, and whether or not reduced to practice); improvements; technology; proprietary information; specifications; flowcharts; blueprints; schematics; protocols; programmer notes; customer and supplier lists; pricing and cost information; business and marketing plans; and proposals.

"<u>Knowledge</u>" means, (a) with respect to the Company, the actual or constructive knowledge of S. McCaig or Y. McCaig, after reasonable inquiry, (b) with respect to the Purchaser, the actual or constructive knowledge of any executive officer of the Purchaser, after reasonable inquiry, (c) with respect to any Seller Party that is an individual, the actual or constructive knowledge of such Seller Party, after reasonable inquiry, (d) with respect to any Seller Party that is an entity, the actual or constructive knowledge of the equity holders, officers and directors (or equivalent positions if the Seller Party is not a corporation) of such Seller Party, after reasonable inquiry, and (e) with respect to any Seller Party that is a trust, the actual or constructive knowledge of the trustees of such Seller Party, after reasonable inquiry.

"<u>Law</u>" means any law, statute, regulation, ordinance, rule, code, Governmental Order, governmental requirement, or rule of law (including common law) enacted, promulgated or imposed by any Governmental Authority.

"<u>Lease</u>" has the meaning set forth in <u>Section 2.12(b)</u>.

"<u>Leased Property</u>" has the meaning set forth in <u>Section 2.12(b)</u>.

"<u>Liabilities</u>" means, with respect to any Person, any direct or indirect liabilities, debts, indebtedness, claims, demands, expenses, commitments, deficiencies, guaranties or endorsements of or by such Person of any type, Losses and obligations, whether accrued absolute, contingent, matured, unmatured, liquidated, unliquidated, known or unknown, of every kind and description regardless of whether it would be required to be disclosed on a balance sheet prepared in accordance with GAAP and regardless of whether immediately due and payable.

"<u>Lien</u>" means any pledge, mortgage, deed of trust, hypothecation, claim, security interest, encumbrance, sublease, declaration, condition, covenant, destruction, right-of-way, easement, encroachment, restriction, title defect, option, right of first refusal or first offer or other third party (or governmental) right, encumbrance, lien or charge of any kind or nature.

"<u>Losses</u>" means all losses, damages, Liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, Taxes, costs or expenses of whatever kind, including reasonable attorneys' fees, the cost of enforcing any right to indemnification under this Agreement, the cost of pursuing any insurance providers, as well as incidental, consequential, special or indirect damages (including loss of revenue, diminution in value or any damages based on any type of multiple).

"<u>Material Adverse Effect</u>" means, with respect to any Person, (a) any change, state of facts, condition, development or effect that, alone or in combination with any other change, state of facts, condition, development or effect, has had, or could reasonably be expected to have, a material adverse effect on the business, prospects, results of operations, assets or condition (financial or otherwise) of such Person, or (b) materially impairs the ability of such Person to consummate, or prevents or materially delays, the Acquisition or could reasonably be expected to do so.

"<u>Material Contracts</u>" has the meaning set forth in <u>Section 2.15(a)</u>.

"<u>Material Customers</u>" has the meaning set forth in <u>Section 2.23(a)</u>.

"<u>Material Suppliers</u>" has the meaning set forth in <u>Section 2.23(b)</u>.

"<u>Non-controlling Party</u>" shall mean whichever of the Seller Representative or the Purchaser is not the Controlling Party with respect to such Straddle Period Tax Contest.

"<u>Note</u>" has the meaning set forth in <u>Section 1.1(b)(i)</u>.

"<u>Operating Agreement</u>" means the operating agreement of the Company dated February 3, 2026

"<u>Ordinary Course of Business</u>" means an action taken by or on behalf of the Company that is consistent with the Company's past practices and taken in the ordinary course of the Company's business and operations.

"<u>Organizational Document</u>" has the meaning set forth in <u>Section 2.3(d)</u>.

"<u>Owner</u>" and "<u>Owners</u>" have the meanings set forth in the Preamble.

"<u>Payoff Letters</u>" means letters provided to the Company by the agent, lenders or other holders of Closing Indebtedness in connection with the repayment of the Closing Indebtedness at Closing, in each case setting forth the amounts necessary to pay off all such Closing Indebtedness in full (including, if applicable, any prepayment fees or premiums and any per diem interest amount with respect thereto) and authorizing, upon payment in full of the amounts specified therein, release in full of any and all liens, security interests or other Liens on the Company or its assets (and, if applicable, the Company Interests) securing such Closing Indebtedness.

"<u>Permits</u>" means all permits, licenses, franchises, approvals, authorizations, variances and consents from Governmental Authorities.

"<u>Permitted Liens</u>" means (a) Liens imposed under applicable Law for Taxes that are not yet due and payable, (b) Liens imposed by appliable Law (such as carrier's, warehousemen's and mechanic's Liens) that arise in the Ordinary Course of Business with respect to obligations not yet due and payable, (c) Liens arising from leases of personal property (other than any leases required to be capitalized in accordance with GAAP) that are disclosed on the Disclosure Schedule, and (d) solely with respect to Leased Property, Liens in the nature of easements, rights-of-way, restrictions and other similar charges or encumbrances which do not, individually or in the aggregate, interfere with the use of the Leased Property by the Company.

"<u>Person</u>" means any natural person, general or limited partnership, corporation, limited liability company, limited liability partnership, firm, association or organization, Governmental Authority, or other legal entity or organization.

"<u>Personal Information</u>" has the meaning set forth in <u>Section 2.27</u>.

"<u>Post-Closing Adjustment</u>" has the meaning set forth in <u>Section 1.3(a)(ii)</u>.

"<u>Post-Closing Straddle Period</u>" means the portion of any Straddle Period beginning after the Closing Date.

"<u>Post-Closing Tax Period</u>" means any taxable period beginning after the Closing Date. "<u>Pre-Closing Straddle Period</u>" means the portion of any Straddle Period ending on the Closing Date.

"<u>Pre-Closing Tax Period</u>" means any taxable period ending on or before the Closing Date.

"<u>Publicly Available Software</u>" means any "open source," "freeware," "shareware" or other software code having similar licensing restrictions or distribution models, or any derivative thereof.

"<u>Purchase Price</u>" has the meaning set forth in <u>Section 1.1(b)</u>. "<u>Purchaser</u>" has the meaning set forth in the Preamble.

"<u>Purchaser Indemnified Parties</u>" has the meaning set forth in <u>Section 7.2(a)</u>. "<u>R&W Policy</u>" has the meaning set forth in the Recitals.

"<u>Related Party</u>" means (a) the Seller Parties or any of their respective Affiliates, (b) any current member, shareholder, officer, director or manager of the Company or of the Seller, (c) any Family Member of either (x) any Seller Party or (y) any current member, shareholder, officer, director or manager of the Company or of the Seller, or (d) any Affiliate of any Person covered by foregoing subpart (b) or (c).

"<u>Release</u>" means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).

"<u>Released Claims</u>" has the meaning set forth in <u>Section 5.5(a)</u>. "<u>Released Parties</u>" has the meaning set forth in <u>Section 5.5(a)</u>.

"<u>Representative</u>" means, with respect to any Person, any and all directors, managers, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

"<u>Resolution Period</u>" has the meaning set forth in <u>Section 1.3(b)(ii)</u>.

"<u>Restricted Business</u>" means the business of the Company as conducted, or proposed to be conducted, as of the Closing Date or at any time during the three-year period ending on the Closing Date.

"<u>Restricted Period</u>" has the meaning set forth in <u>Section 5.2(a)</u>.

"<u>Restructuring</u>" means the reorganization of the Company under Section 368(a)(1)(F) of the Code followed by a conversion of the Company into a limited liability company that occurred prior to the execution of this Agreement, which consisted of the following steps and occurring in the order set forth herein: (a) the Owners incorporated the Seller, (b) the Owners contributed 100% of their respective issued and outstanding capital stock of the Company to the Seller in exchange for shares of common stock of the Seller (the "<u>Contribution</u>"), (c) the Seller elected to treat the Company as a "qualified subchapter S subsidiary," as defined in Section 1361(b)(3) of the Code (and applicable state law), checking "Yes" in box 14 therein; and (d) the Seller caused the Company to convert to a California limited liability company that is disregarded as separate from its owner for U.S. federal income tax purposes (within the meaning of Treasury Regulations Section 301.7701-2(a)) (the "<u>Conversion</u>").

"<u>Retention Amount</u>" means $75,000, being the retention amount set forth in the R&W Policy.

"<u>Review Period</u>" has the meaning set forth in <u>Section 1.3(b)(i)</u>.

"<u>S. McCaig</u>" has the meaning set forth in the Preamble.

"<u>Secretary's Certificate</u>" has the meaning set forth in <u>Section 6.1(e)</u>.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

"<u>Seller</u>" has the meaning set forth in the Preamble.

"<u>Seller Party</u>" and "<u>Seller Parties</u>" have the meanings set forth in the Preamble.

"<u>Seller R&W Insurance Amount</u>" equals $39,680, which represents fifty percent (50%) of the total premium and underwriting cost of the R&W Policy.

"<u>Seller Releasors</u>" has the meaning set forth in <u>Section 5.5(a).</u>

"<u>Seller Representative</u>" has the meaning set forth in the Preamble.

"<u>Specified Representations</u>" has the meaning set forth in <u>Section 7.1(a)(ii)</u>.

"<u>Statement of Objections</u>" has the meaning set forth in <u>Section 1.3(b)(ii)</u>.

"<u>Straddle Period</u>" means any taxable period beginning on or before the Closing Date and ending after the Closing Date.

"<u>Subordination Agreement</u>" has the meaning set forth in <u>Section 1.1(b)(i)</u>.

"<u>Tax</u>" means any federal, state, local or foreign income, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, profits, windfall profits, gross receipts, sales, use, value added, transfer, registration, stamp, premium, excise, customs duties, severance, environmental, real property, personal property, ad valorem, occupancy, license, occupation, employment, payroll, social security, disability, unemployment, workers' compensation, withholding, estimated or other similar tax, duty, fee, assessment or other governmental charge or deficiencies thereof (including all interest and penalties thereon and additions thereto).

"<u>Tax Contest</u>" has the meaning set forth in <u>Section 8.2(a)</u>.

"<u>Tax Return</u>" means any federal, state, local or foreign tax return, declaration, statement, report, schedule, election, form or information return relating to Taxes, including any attachment thereto or any amendment thereof.

"<u>Territory</u>" means anywhere in the world.

"<u>Tesla Payoff Letter</u>" means the payoff letter issued by m2 Equipment Finance LLC to the Company concerning Equipment Finance Agreement 117717 providing a payoff amount (which payoff amount shall be valid at least through the date of payment thereof pursuant to <u>Section 5.7(a)</u>) for that certain 2018 Telsa (VIN# [XXX]).

"<u>Third Party Claim</u>" has the meaning set forth in <u>Section 7.4(b)(i)</u>. "<u>Third Party Claim Notice</u>" has the meaning set forth in <u>Section 7.4(b)(i)</u>.

"<u>Transfer Taxes</u>" has the meaning set forth in <u>Section 8.4</u>.

"<u>Transaction Expenses</u>" means the aggregate amount of any and all fees and expenses incurred by or on behalf of, or paid or to be paid directly by, any Seller Party, the Company or any Person that any Seller Party or the Company pays or reimburses or is otherwise legally obligated to pay or reimburse in connection with the process of selling the Company Interests or the negotiation, preparation or execution of this Agreement, the Ancillary Agreements, the other documents to be delivered hereunder and thereunder or the performance or consummation of the Acquisition, including (i) all fees and expenses of counsel, advisors, consultants, investment bankers, accountants, auditors and any other experts in connection with the Acquisition; (ii) any fees and expenses associated with obtaining necessary or appropriate waivers, consents, or approvals of any Governmental Authority or third parties on behalf of the Company or any Seller Party in connection with the Acquisition; (iii) any fees or expenses associated with obtaining the release and termination of any Liens in connection with the Acquisition; (iv) all brokers', finders' or similar fees in connection with the Acquisition; and (v) any change of control payments, bonuses, severance, termination, or retention obligations or similar amounts payable by the Company in connection with or otherwise as a result of the Acquisition, including any Taxes payable in connection therewith.

"<u>Treasury Regulations</u>" means the Treasury Regulations promulgated under the Code.

"<u>Y. McCaig</u>" has the meaning set forth in the Preamble.

*[Remainder of page intentionally left blank]*

IN WITNESS WHEREOF, the Purchaser, the Seller, each of the Owners and the Seller Representative has caused this Agreement to be signed, all as of the Closing Date.

---

| | |
|:---|:---|
| PRO-DEX, INC. | PRO-DEX, INC. |
| By: | /s/ Rick Van Kirk |
|  | Name: Rick Van Kirk<br>Title: President and CEO |

---

---

| | |
|:---|:---|
| ADVANCED-PRECISION MACHINING HOLDING COMPANY, INC. | ADVANCED-PRECISION MACHINING HOLDING COMPANY, INC. |
| By: | /s/ Yasumi A. McCaig |
|  | Name: Yasumi A. McCaig<br>Title: Chief Financial Officer and Secretary |
| By: | /s/ Sean P. McCaig |
|  | Name: Sean P. McCaig<br>Title: Chief Executive Officer |

---

---

| | |
|:---|:---|
| THE SELLER REPRESENTATIVE | THE SELLER REPRESENTATIVE |
| By: | /s/ Sean McCaig |
|  | Name: Sean McCaig |

---

---

| | |
|:---|:---|
| THE OWNERS | THE OWNERS |
| By: | /s/ Sean P. McCaig |
|  | Name: Sean P. McCaig |
| By: | /s/ Yasumi A. McCaig |
|  | Name: Yasumi A. McCaig |

---

## Exhibit 10.1

**EXHIBIT 10.1**

THIS SUBORDINATED PROMISSORY NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATED TO THE SENIOR OBLIGATIONS (AS DEFINED IN THE SUBORDINATION AGREEMENT DEFINED BELOW) IN THE MANNER AND TO THE EXTENT SET FORTH IN A SUBORDINATION AGREEMENT DATED AS OF FEBRUARY 9, 2026 (AS THEN IN EFFECT, THE "<u>SUBORDINATION AGREEMENT"</u>), BETWEEN ADVANCED-PRECISION MACHINING HOLDING COMPANY, INC., A CALIFORNIA CORPORATION, SEAN MCCAIG, AN INDIVIDUAL, YASUMI MCCAIG, AN INDIVIDUAL, AND UMB BANK, N.A., A NATIONAL BANKING ASSOCIATION, PREVIOUSLY DOING BUSINESS AS MINNESOTA BANK & TRUST, A DIVISION OF UMB BANK, N.A., SUCCESSOR BY MERGER TO MINNESOTA BANK & TRUST, AND EACH HOLDER OF THIS SUBORDINATED PROMISSORY NOTE, BY ACCEPTANCE HEREOF, AGREES AND IS HEREBY BOUND BY THE TERMS OF THE SUBORDINATION AGREEMENT.

SUBORDINATED PROMISSORY NOTE

---

| | |
|:---|:---|
| $2,000,000 Issuance | Date: February 9, 2026 |

---

FOR VALUE RECEIVED, the undersigned, Pro-Dex, Inc., a Colorado corporation ("<u>Maker"</u>), hereby promises to pay to the order of Advanced-Precision Machining Holding Company, Inc., a California corporation (together with its successors and assigns, "<u>Holder"</u>), the principal sum of Two Million Dollars ($2,000,000).

All principal from time to time owing under this Note shall bear simple interest at the rate of eight percent (8.0%) per annum.

This Promissory Note (this "<u>Note"</u>) is issued by Maker pursuant to that certain Membership Interest Purchase Agreement, dated as of the Issuance Date, among Maker, Holder, and the other parties thereto (the "Purchase Agreement").

This Note shall be fully amortized with equal quarterly payments over a sixty-three month (63)-month period commencing on the Issuance Date, with the first payment due on the three (3)-month anniversary of the Issuance Date and continuing every three (3) months thereafter through the sixty-three (63)-month anniversary of the Issuance Date (the "Maturity Date").

Unless sooner paid, all remaining amounts outstanding under this Note shall be immediately due and payable in full on the Maturity Date. Payments shall be made in lawful money of the United States of America. Maker shall have the right to prepay this Note in whole or in part, without premium or fee, at any time and from time to time. In the event of any partial prepayment of this Note, thereafter the quarterly payment amount shall be reduced to fully amortize the remaining balance of this Note over the remaining term through the Maturity Date.

All amounts due or payable at any time under this Note shall be subject to setoff as provided in the Purchase Agreement.

The occurrence or continuance of any of the following shall constitute an "<u>Event of Default"</u> under this Note:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Failure to Pay. Maker shall fail to pay any payment of principal, interest, or other payment when due under this Note, and such failure is not cured within five (5) business days of Holder providing Maker written notice of such failure; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Voluntary Bankruptcy or Insolvency Proceedings. Maker shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of itself or any of its creditors, (iv) become insolvent (as such term may be defined or interpreted under any applicable law), (v) commence a voluntary case or other proceeding seeking liquidation, reorganization, or other relief with respect to itself or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vi) take any action for the purpose of effecting any of the foregoing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator, or custodian of Maker or of all or a substantial part of its property, or an involuntary case or other proceedings seeking liquidation, reorganization, or other relief with respect to Maker or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect, shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within sixty (60) days of commencement.

Upon the occurrence or existence of any Event of Default referred to in subpart (a) above and at any time thereafter during the continuance of such Event of Default, Holder may declare all outstanding obligations of Maker under this Note to be immediately due and payable in full. Upon the occurrence or existence of any Event of Default referred to in subpart (b) or (c) above, immediately and without notice, all outstanding obligations of Maker under this Note shall automatically become immediately due and payable in full. In addition, upon the occurrence or existence of any Event of Default, Holder may exercise any right, power, or remedy granted to it or otherwise permitted to it by law, either by suit in equity or by action at law, or both.

Maker and Holder covenant and agree that the payment of the principal and interest on this Note is hereby expressly subordinated to the payment in full of all indebtedness of Maker, on the date hereof or in the future, under credit facilities (the "<u>Senior Credit Facilities"</u>) provided to Maker by UMB BANK, N.A., a national banking association, previously doing business as Minnesota Bank & TRUST, A DIVISION OF HTLF BANK, as successor by merger with MINNESOTA BANK & <u>Senior Lender"</u>). Maker and Holder shall execute the Subordination Agreement in favor of the Senior Lender in connection with the execution of this Note, in form and substance reasonably acceptable to the Senior Lender. Notwithstanding any provision to the contrary herein, Holder further agrees that, for as long as this Note remains outstanding and Holder remains subject to the Subordination Agreement, Holder shall not, if a default or an event of default exists under the Senior Credit Facilities, take any action or initiate any proceeding, judicial or otherwise, to enforce its rights or remedies with respect to any indebtedness evidenced by this Note, including, without limitation, any action to enforce remedies with respect to any defaults under such indebtedness or to obtain any judgment or pre-judgment remedy against Maker.

Maker expressly waives presentment, protest and demand, notice of protest, demand and dishonor, and nonpayment of this Note, and all other notices of any kind, and expressly agrees that this Note, or any payment hereunder, may be extended from time to time without in any way affecting the liability of Maker and any endorsers hereof. No single or partial exercise by Holder of any power, right, or remedy under this Note shall preclude any other or further exercise thereof or the exercise of any other power, right, or remedy. No delay or omission on the part of Holder in exercising any right, power, or remedy under this Note shall operate as a waiver of such right, power, or remedy or of any other right, power, or remedy available to Holder.

Whenever any payment to be made under this Note shall be due on a Saturday, Sunday, or a public holiday under the laws of the State of California, such payment shall be due on the next succeeding business day.

If any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal balance of this Note.

Neither this Note nor any term or provision hereof may be waived, amended, discharged, modified, changed, or terminated except by an instrument in writing signed by the party against whom enforcement of any such waiver, amendment, discharge, modification, change, or termination is sought.

Neither this Note nor any of the obligations of Maker hereunder may be transferred or assigned, by operation of law or otherwise, in whole or in part, by Maker, without the prior written consent of Holder. Subject to the restrictions on transfer described in the immediately preceding sentence, the rights, interests, and obligations of Maker and Holder shall be binding upon and benefit each party's respective successors, assigns, heirs, administrators, and transferees.

If one or more provisions of this Note are held to be unenforceable, such provision or provisions shall be excluded from this Note and the remainder of this Note shall be interpreted as if such provisions were so excluded and shall be enforceable in accordance with its terms.

Maker promises to pay all costs, fees, and expenses, including, but not limited to, reasonable attorneys' and experts' costs, fees, and expenses, incurred by Holder in the enforcement of this Note.

All payments under this Note shall be applied (i) first, to costs, fees, and expenses pursuant to the immediately preceding paragraph, if any, (ii) second, to accrued and unpaid interest, if any, and (iii) thereafter, to principal.

This Note shall be governed by, and construed in accordance with, the internal laws of the State of California, without reference to the choice of law or conflicts of law principles thereof that would result in the application of the laws of any other jurisdiction.

Any dispute, claim, or controversy arising out of or relating to this Note or the breach, termination, enforcement, interpretation, or validity of this Note, including the determination of the scope or applicability of this provision to arbitrate, shall be determined by arbitration in Orange County, California before one arbitrator. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures as in effect as of the date hereof. Judgment of the arbitrator may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies (including equitable relief) in aid of arbitration from a court of appropriate jurisdiction.

*[signature page follows]*

IN WITNESS WHEREOF, Maker has caused this Note to be duly executed to be effective as of the day and year first set forth above.

---

| | |
|:---|:---|
| MAKER: | MAKER: |
| PRO-DEX, INC. | PRO-DEX, INC. |
| By: | /s/ Rick Van Kirk |
|  | Name: Rick Van Kirk<br>Title: CEO |

---

---

| | |
|:---|:---|
| Accepted and agreed to by HOLDER<br>ADVANCED-PRECISION MACHINING HOLDING COMPANY, INC. | Accepted and agreed to by HOLDER<br>ADVANCED-PRECISION MACHINING HOLDING COMPANY, INC. |
| By: | /s/ Sean P. McCaig |
|  | Name: Sean P. McCaig<br>Secretary |

---

## Exhibit 10.2

**EXHIBIT 10.2**

**SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT**

dated as of February 9, 2026 between

**PRO-DEX, INC.,**

as the Borrower,

and

**UMB BANK, N.A.,**

as the Lender

![](image_006.jpg)

![](image_007.jpg)

![](image_008.jpg)

![](image_009.jpg)

![](image_010.jpg)

**SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT**

This SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT dated as of February 9, 2026 (this "<u>Agreement</u>"), is executed by and between PRO-DEX, INC., a Colorado corporation (the "<u>Borrower</u>"), which has its chief executive office located at 2361 McGaw Avenue, Irvine, California 92614, and UMB BANK, N.A., a national banking association, previously doing business as Minnesota Bank & Trust, a division of UMB Bank, N.A., successor by merger to MINNESOTA BANK & TRUST, A DIVISION OF HTLF BANK, as successor by merger with MINNESOTA BANK & TRUST (the "<u>Lender</u>"), whose address is 9800 Bren Road East 6810001, Minnetonka, Minnesota 55343.

**<u>R E C I T A L S:</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Borrower and the Lender are parties to the Amended and Restated Credit Agreement dated as of November 6, 2020, as amended by Amendment No. 1 to Amended and Restated Credit Agreement dated as of November 5, 2021, Amendment No. 2 to Amended and Restated Credit Agreement dated as of December 29, 2022, Amendment No. 3 to Amended and Restated Credit Agreement dated as of December 29, 2023, Amendment No. 4 to Amended and Restated Credit Agreement and Security Agreement dated as of July 31, 2024, Amendment No. 5 to Amended and Restated Credit Agreement dated as of December 29, 2024, and Amendment No. 6 to Amended and Restated Credit Agreement dated as of April 8, 2025 (collectively, the "<u>Existing Credit Agreement</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Subject to the terms of the Existing Credit Agreement, the Lender extended to the Borrower: (i) a revolving line of credit in the maximum principal amount of $11,000,000 (the "<u>Revolving Loan</u>"); (ii) a term loan in an aggregate principal amount not to exceed $7,525,000 ("<u>Term Loan A</u>"); (iii) a term loan in an aggregate principal amount not to exceed $1,000,000 ("<u>Term Loan B</u>"); and (iv) a term loan in an aggregate principal amount not to exceed $5,000,000 ("<u>Term Loan C</u>"). Term Loan A, Term Loan B, and Term Loan C have been fully advanced, and no additional amounts will be advanced under Term Loan A, Term Loan B, or Term Loan C.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The obligation of the Borrower to repay amounts advanced under the Revolving Loan is evidenced by a Second Amended and Restated Revolving Credit Note dated April 8, 2025 (as then in effect, the "<u>Existing Revolving Note</u>"), by the Borrower and payable to the order of the Lender, in the original principal amount of $11,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The obligation of the Borrower to repay amounts advanced under Term Loan A is evidenced by an Amended and Restated Term Note A dated as of November 6, 2020 (the "<u>Existing Term Note A</u>"), by the Borrower and payable to the order of the Lender in the original principal amount of $7,525,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. The obligation of the Borrower to repay amounts advanced under Term Loan B is evidenced by a Term Note B dated as of November 6, 2020 (as then in effect, the "<u>Existing Term Note B</u>"), by the Borrower and payable to the order of the Lender in the original principal amount of $1,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. The obligation of the Borrower to repay amounts advanced under Term Loan C is evidenced by a Term Note C dated as of July 31, 2024 (as then in effect, the "<u>Existing Term Note C</u>"), by the Borrower and payable to the order of the Lender in the original principal amount of $5,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. The Borrower has requested that the Lender: (i) extend the availability of the Existing Revolving Loan to December 29, 2027; (ii) extend a term loan to the Borrower in the original principal amount of $6,650,000 to finance, in part, the Borrower's acquisition of the membership interests of Advanced Precision Machining, LLC, a California limited liability company formerly known as Advanced Precision Machining, Inc., a California corporation; and (iii) make certain other modifications to the Existing Credit Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. Pursuant to the Borrower's request, the Lender is willing to agree to such requests and extend such financial accommodations to the Borrower under the terms and conditions set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. The Borrower and the Lender have agreed to amend and restate, without limitation, the Existing Credit Agreement, the Existing Revolving Note, Existing Term Note A, Existing Term Note B, and Existing Term Note C in their entirety.

NOW THEREFORE, in consideration of the premises, and the mutual covenants and agreements set forth herein, the Borrower agrees to borrow from the Lender, and the Lender agrees to lend to the Borrower, subject to and upon the following terms and conditions:

**<u>A G R E E M E N T S:</u>**

Section 1. <u>DEFINITIONS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Defined Terms</u>. For the purposes of this Agreement, the following capitalized words and phrases shall have the meanings set forth below.

"<u>Account</u>" or "<u>Accounts</u>" shall have the meaning set forth in the UCC as amended, changed or updated from time to time.

"<u>Account Debtor</u>" shall have the meaning set forth in the UCC as amended, changed or updated from time to time.

"<u>Acquisition</u>" shall mean the transactions contemplated by the Acquisition Agreement to occur on or around the date hereof.

"<u>Acquisition Agreement</u>" shall mean that certain Membership Interest Purchase Agreement dated the date hereof by and among Borrower, as purchaser, Seller, as seller, Owners, as owners, and Seller Representative, as seller representative.

"<u>Acquisition Documents</u>" shall mean the Acquisition Agreement and the other documents, agreements, and instruments executed in connection with the Acquisition.

"<u>Adjusted Net Income</u>" shall mean, for any period, the Net Income for such period, but excluding therefrom: (a) non-operating gains and losses (including extraordinary or unusual gains and losses, gains and losses from discontinuance of operations, gains and losses arising from the sale of assets other than Inventory, and other nonrecurring gains and losses) during such period; and (b) any income attributable to the Borrower's or any of its Subsidiary's Investment in any non-Wholly Owned Subsidiary which is not distributed in cash during such period.

"<u>Affiliate</u>" of any Person shall mean (a) any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person, (b) any officer or director of such Person, and (c) with respect to the Lender, any entity administered or managed by the Lender, or an Affiliate or investment advisor thereof and which is engaged in making, purchasing, holding or otherwise investing in commercial loans. A Person shall be deemed to be "controlled by" any other Person if such Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such Person whether by contract, ownership of voting securities, membership interests or otherwise.

"<u>Applicable Law</u>" shall mean all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or governmental authorities and all orders and decrees of all courts and arbitrators.

"<u>Asset Disposition</u>" shall mean any Disposition (excluding any Disposition expressly permitted by <u>Section 9.17</u>) that yields gross proceeds to the Borrower or any of its Subsidiaries (valued at the principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of $500,000.

"<u>Bank Product Obligations</u>" shall mean all obligations, liabilities, contingent reimbursement obligations, fees, and expenses, including Swap Obligations owing by the Borrower or any Subsidiary to the Lender or any Affiliate of the Lender pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.

"<u>Bank Products</u>" shall mean any and all services or facilities extended to the Borrower or any Subsidiary by the Lender or any Affiliate of the Lender, including (a) credit cards, (b) credit card and other payment processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) deposit accounts or other cash management, including controlled disbursement, accounts or services, or (g) Swap Transactions.

"<u>Bank Products</u>" shall mean any and all services or facilities extended to the Borrower or any Subsidiary by the Lender or any Affiliate of the Lender, including (a) credit cards, (b) credit card and other payment processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions, or (f) deposit accounts or other cash management, including controlled disbursement, accounts, or services.

"<u>Bankruptcy Code</u>" shall mean the United States Bankruptcy Code, as now existing or hereafter amended.

"<u>Borrowing Base Amount</u>" shall mean:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) an amount equal to 80% of the net amount of all Eligible Accounts; <u>plus</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) an amount equal to 50% of the lower of cost or market value of all Eligible Inventory.

"<u>Borrowing Base Certificate</u>" shall mean a certificate to be signed by the Borrower certifying to the accuracy of the Borrowing Base Amount in form and substance satisfactory to the Lender as set forth in <u>Exhibit A</u> hereto.

"<u>Business Day</u>" shall mean any day other than a Saturday, Sunday, or a legal holiday on which banks are authorized or required to be closed for the conduct of commercial banking business in Minneapolis, Minnesota.

"<u>Capital Expenditures</u>" shall mean all expenditures (including Capitalized Lease Obligations) which, in accordance with GAAP, would be required to be capitalized and shown on the consolidated balance sheet of the Borrower, but excluding expenditures made in connection with the replacement, substitution or restoration of assets to the extent financed (i) from insurance proceeds (or other similar recoveries) paid on account of the loss of or damage to the assets being replaced or restored or (ii) with awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced.

"<u>Capital Lease</u>" shall mean, as to any Person, a lease of any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, by such Person, as lessee, that is, or should be, in accordance with Financial Accounting Standards Board Statement No. 13, as amended from time to time, or, if such statement is not then in effect, such statement of GAAP as may be applicable, recorded as a "capital lease" on the financial statements of such Person prepared in accordance with GAAP.

"<u>Capital Securities</u>" shall mean, with respect to any Person, all shares, interests, participations, or other equivalents (however designated, whether voting or non-voting) of such Person's capital, whether now outstanding or issued or acquired after the date hereof, including common shares, preferred shares, membership interests in a limited liability company, limited or general partnership interests in a partnership, or any other equivalent of such ownership interest.

"<u>Capitalized Lease Obligations</u>" shall mean, as to any Person, all rental obligations of such Person, as lessee under a Capital Lease which are or will be required to be capitalized on the books of such Person.

"<u>Cash Equivalents</u>" shall mean, as to any Person, (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition by such Person, (b) time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States or any State thereof, having maturities of not more than one year from the date of acquisition by such Person, (c) repurchase obligations with a term of not more than 90 days for underlying securities of the types described

in clause (a) above entered with any bank meeting the qualifications specified in clause (b) above, (d) commercial paper issued by any issued rated at lease A-1 by S&P or at least P-1 by Moody's (or carrying an equivalent rating by a nationally recognized rating agency if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally), and in each case maturing not more than one year after the date of acquisition by such Person, or (e) investments in money market funds substantially all of whose assets are comprised of securities described in clauses (a) through (d) above.

"<u>Change in Control</u>" shall mean (a) any Person or group of Persons within the meaning of § 13(d)(3) of the Securities Exchange Act of 1934 (other than one or more Continuing Directors or Affiliates of Continuing Directors) becomes the beneficial owner, directly or indirectly of 50% or more of the outstanding Capital Securities of the Borrower, or (b) individuals who constitute the Continuing Directors cease for any reason to constitute at least a majority of the board of directors of the Borrower.

"<u>Collateral</u>" shall have the meaning set forth in <u>Section 6.1</u> hereof.

"<u>Collateral Access Agreement</u>" shall mean an agreement in form and substance reasonably satisfactory to the Lender pursuant to which a mortgagee or lessor of real property on which Collateral is stored or otherwise located, or a warehouseman, processor, or other bailee of or other property owned by the Borrower or any Subsidiary, acknowledges the Liens of the Lender and waives any Liens held by such Person on such property, and, in the case of any such agreement with a mortgagee or lessor, permits the Lender reasonable access to and use of such real property following the occurrence and during the continuance of an Event of Default to assemble, complete and sell any collateral stored or otherwise located thereon.

"<u>Commercial Tort Claim</u>" shall have the meaning as set forth in the UCC as amended, changed or updated from time to time.

"<u>Commodity Exchange Act</u>" shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

"<u>Conforming Changes</u>" shall mean, with respect to either the use or administration of SOFR or the use, administration, adoption or implementation of any replacement rate (i.e. the Prime Rate), any technical, administrative, or operational changes, the definition of "Business Day," the definition of "U.S. Government Securities Business Day," the definition of "Reset Date" or changes to any similar or analogous definition (or the addition of a concept of "interest period"), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, and other technical, administrative or operational matters) that the Lender decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Lender in a manner substantially consistent with market practice (or, if the Lender decides that adoption of any portion of such market practice is not administratively feasible or if the Lender determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Lender decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

"<u>Contingent Liability</u>" and "<u>Contingent Liabilities</u>" shall mean, respectively, each obligation and liability of the Borrower and all such obligations and liabilities of the Borrower incurred pursuant to any agreement, undertaking or arrangement by which the Borrower: (a) guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, dividend, obligation or other liability of any other Person in any manner (other than by endorsement of instruments in the course of collection), including any indebtedness, dividend, or other obligation which may be issued or incurred at some future time; (b) guarantees the payment of dividends or other distributions upon the shares or ownership interest of any other Person; (c) undertakes or agrees (whether contingently or otherwise): (i) to purchase, repurchase, or otherwise acquire any indebtedness, obligation or liability of any other Person or any property or assets constituting security therefor, (ii) to advance or provide funds for the payment or discharge of any indebtedness, obligation or liability of any other Person (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain solvency, assets, level of income, working capital, or other financial condition of any other Person, or (iii) to make payment to any other Person other than for value received; (d) agrees to lease property or to purchase securities, property, or services from such other Person with the purpose or intent of assuring the owner of such indebtedness or obligation of the ability of such other Person to make payment of the indebtedness or obligation; (e) to induce the issuance of, or in connection with the issuance of, any letter of credit for the benefit of such other Person; or (f) undertakes or agrees otherwise to assure a creditor against loss. The amount of any Contingent Liability shall (subject to any limitation set forth herein) be deemed to be the outstanding principal amount (or maximum permitted principal amount, if larger) of the indebtedness, obligation or other liability guaranteed or supported thereby.

"<u>Control</u>" or "<u>Controlling</u>" shall mean the possession of the power to direct, or cause the direction of, the management and policies of the Borrower by contract or voting of securities or ownership interests.

"<u>Debt</u>" shall mean, as to any Person, without duplication, (a) all indebtedness of such Person; (b) all borrowed money of such Person (including principal, interest, fees and charges), whether or not evidenced by bonds, debentures, notes or similar instruments; (c) all obligations to pay the deferred purchase price of property or services; (d) all obligations, contingent or otherwise, with respect to the maximum face amount of all letters of credit (whether or not drawn), bankers' acceptances and similar obligations issued for the account of such Person (including the Letters of Credit), and all unpaid drawings in respect of such letters of credit, bankers' acceptances and similar obligations; (e) all indebtedness secured by any Lien on any property owned by such Person, whether or not such indebtedness has been assumed by such Person (provided, however, if such Person has not assumed or otherwise become liable in respect of such indebtedness, such indebtedness shall be deemed to be in an amount equal to the fair market value of the property subject to such Lien at the time of determination); (f) the aggregate amount of all Capitalized Lease Obligations of such Person; (g) all Contingent Liabilities of such Person, whether or not reflected on its balance sheet; (h) all Bank Product Obligations of such Person; (i) all Debt of any partnership of which such Person is a general partner; and (j) all monetary obligations of such Person under (i) a so-called synthetic, off-balance sheet or tax retention lease, or (ii) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the

indebtedness of such Person (without regard to accounting treatment). Notwithstanding the foregoing, Debt shall not include trade payables and accrued expenses incurred by such Person in accordance with customary practices and in the ordinary course of business of such Person.

"<u>Default Rate</u>" shall mean the applicable per annum rate of interest on each of the Loans plus 2.00%.

"<u>Depreciation</u>" shall mean the total amounts added to depreciation, amortization, obsolescence, valuation, and other proper reserves, as reflected on the Borrower's financial statements and determined in accordance with GAAP.

"<u>Disposition</u>" or "<u>Dispose</u>" shall mean the sale, transfer, assignment, license, lease, or other disposition (whether in one transaction or in a series of transactions, including any sale and leaseback transaction) of any property (including any Capital Securities) by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer, or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

"<u>EBITDA</u>" shall mean, for any Measurement Period, the sum, of: (a) Net Income for such Measurement Period, <u>plus</u> (b) the sum of the following amounts arrived in calculating Net Income (but without duplication for any items): (i) Interest Charges; (ii) Depreciation, amortization, and other non-cash charges; and (iii) federal, state, and local income Taxes.

"<u>Eligible Account</u>" and "<u>Eligible Accounts</u>" shall mean each Account and all such Accounts (exclusive of sales, excise, or other similar taxes) owing to the Borrower, which meets each of the following requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) it is genuine in all respects and has arisen in the ordinary course of the Borrower's business from (i) the performance of services by the Borrower, which services have been fully performed, acknowledged, and accepted by the Account Debtor or (ii) the sale or lease of Goods by the Borrower, including C.O.D. sales, which Goods have been completed in accordance with the Account Debtor's specifications (if any) and delivered to and accepted by the Account Debtor, and the Borrower has possession of, or has delivered to the Lender at the Lender's request, shipping and delivery receipts evidencing such delivery;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) it is subject to a perfected, first priority Lien in favor of the Lender and is not subject to any other assignment, claim, or Lien;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) it is the valid, legally enforceable, and unconditional obligation of the Account Debtor with respect thereto, and is not subject to the fulfillment of any condition whatsoever or any counterclaim, set off claims, credit (except as provided in <u>subsection (h)</u> of this definition), trade or volume discount, allowance, discount, rebate, or adjustment by the Account Debtor with respect thereto, or to any claim by such Account Debtor denying liability thereunder in whole or in part and the Account Debtor has not refused to accept and/or has not returned or offered to return any of the Goods or services which are the subject of such Account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Account Debtor with respect thereto is a resident or citizen of, and is located within, the United States, unless the sale of Goods or services giving rise to such Account is on letter of credit, banker's acceptance, or other credit support terms reasonably satisfactory to the Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) it is not an Account arising from a "sale on approval," "sale or return," "consignment," "guaranteed sale," or "bill and hold," or are subject to any other repurchase or return agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) it is not an Account with respect to which possession and/or control of the Goods sold giving rise thereto is held, maintained, or retained by the Borrower (or by any agent or custodian of the Borrower) for the account of, or subject to, further and/or future direction from the Account Debtor with respect thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) it has not arisen out of contracts with the United States or any department, agency, or instrumentality thereof, unless the Borrower has assigned its right to payment of such Account to the Lender pursuant to the Assignment of Claims Act of 1940, and evidence (satisfactory to the Lender) of such assignment has been delivered to the Lender, or any state, county, city, or other governmental body, or any department, agency, or instrumentality thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) if the Borrower maintains a credit limit for an Account Debtor, the aggregate dollar amount of Accounts due from such Account Debtor, including such Account, does not exceed such credit limit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the Account is evidenced by chattel paper or an instrument, the originals of such chattel paper or instrument shall have been endorsed and/or assigned and delivered to the Lender or, in the case of electronic chattel paper, shall be in the control of the Lender, in each case in a manner satisfactory to the Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) such Account is evidenced by an invoice delivered to the related Account Debtor and is not more than 120 days past the original invoice date thereof, in each case according to the original terms of sale;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) it is not an Account with respect to an Account Debtor that is located in any jurisdiction which has adopted a statute or other requirement with respect to which any Person that obtains business from within such jurisdiction must file a notice of business activities report or make any other required filings in a timely manner in order to enforce its claims in such jurisdiction's courts unless (i) such notice of business activities report has been duly and timely filed or the Borrower is exempt from filing such report and has provided the Lender with satisfactory evidence of such exemption or (ii) the failure to make such filings may be cured retroactively by the Borrower for a nominal fee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) the Account Debtor with respect thereto is not the Borrower or an Affiliate of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) such Account does not arise out of a contract or order which, by its terms, forbids or makes void or unenforceable the assignment thereof by the Borrower to the Lender and is not unassignable to the Lender for any other reason;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) there is no bankruptcy, insolvency, or liquidation proceeding pending by or against the Account Debtor with respect thereto, nor has the Account Debtor suspended business, made a general assignment for the benefit of creditors, or failed to pay its debts generally as they come due, and/or no condition or event has occurred having a Material Adverse Effect on the Account Debtor which would require the Accounts of such Account Debtor to be deemed uncollectible in accordance with GAAP;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) it is not owed by an Account Debtor with respect to which 10% or more of the aggregate amount of outstanding Accounts owed at such time by such Account Debtor is classified as ineligible under clause (j) of this definition; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) it does not violate the negative covenants and does satisfy the affirmative covenants of the Borrower contained in this Agreement, and it is otherwise not unacceptable to the Lender for any other reason.

An Account which is at any time an Eligible Account, but which subsequently fails to meet any of the foregoing requirements, shall forthwith cease to be an Eligible Account. Further, with respect to any Account, if the Lender at any time hereafter determines in its discretion that the prospect of payment or performance by the Account Debtor with respect thereto is materially impaired for any reason whatsoever, such Account shall cease to be an Eligible Account after notice of such determination is given to the Borrower.

"<u>Eligible Inventory</u>" shall mean the U.S. dollar value of the Borrower's Inventory consisting of raw materials and finished goods, which meets each of the following requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) it is subject to a perfected, first priority Lien in favor of the Lender and is not subject to any other assignment, claim, or Lien;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) it is salable and not slow-moving, obsolete, or discontinued, as determined in the sole and absolute discretion of the Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) it is in the possession and control of the Borrower and it is stored and held in facilities owned by the Borrower or, if such facilities are not so owned, the Lender is in possession of a Collateral Access Agreement with respect thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) it is not Inventory produced in violation of the Fair Labor Standards Act and subject to the "hot goods" provisions contained in Title 29 U.S.C. § 215;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) it is not subject to any agreement or license which would restrict the Lender's ability to sell or otherwise Dispose of such Inventory;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) it is located in the United States or in any territory or possession of the United States that has adopted Article 9 of the Uniform Commercial Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) it is not "in transit" to the Borrower or held by the Borrower on consignment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) it is not "work-in-progress" Inventory;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) it is not supply items, packaging, displays, floor models, sales demos, or any other similar materials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) it is not identified to any purchase order or contract to the extent progress or advance payments are received with respect to such Inventory;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) it does not breach any of the representations, warranties, or covenants pertaining to Inventory set forth in the Loan Documents; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) the Lender shall not have determined in its reasonable discretion that it is unacceptable due to age, type, category, quality, quantity, and/or any other reason whatsoever.

Inventory, which is at any time Eligible Inventory, but which subsequently fails to meet any of the foregoing requirements shall forthwith cease to be Eligible Inventory.

"<u>Eligible Investment Securities</u>" shall mean the following categories of Pledged Securities held in the Pledged Account: commercial paper, United States government securities, Municipal Bonds, Listed Corporate Bonds, or any other securities regularly traded on the NASDAQ, the New York Stock Exchange, or the over-the-counter market which the Lender, in its sole discretion, determines to be of sufficient quality to accept as Collateral and in which only the Lender has a Lien.

"<u>Employee Plan</u>" includes any pension, stock bonus, employee stock ownership plan, retirement, profit sharing, deferred compensation, stock option, bonus, or other incentive plan, whether qualified or nonqualified, or any disability, medical, dental, or other health plan, life insurance or other death benefit plan, vacation benefit plan, severance plan, or other employee benefit plan or arrangement, including those pension, profit-sharing, and retirement plans of the Borrower described from time to time in the financial statements of the Borrower and any pension plan, welfare plan, Defined Benefit Pension Plans (as defined in ERISA), or any multi-employer plan, maintained or administered by the Borrower or to which the Borrower is a party or may have any liability or by which the Borrower is bound.

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

"<u>ERISA</u>" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

"<u>Event of Default</u>" shall mean any of the events or conditions which are set forth in <u>Section 11</u> hereof.

"<u>Excess Capital</u>" shall mean, as of any date of determination, calculated on a consolidated basis for the Borrower and its Subsidiaries, the aggregate amount by which their Tangible Assets exceeds the amount of Tangible Assets necessary to show proforma compliance with the financial covenants set forth in <u>Section 10</u> calculated as of such date, where the analysis supporting such proforma compliance is performed based on the consolidated balance sheet for the Borrower and its Subsidiaries most recently delivered to the Lender in accordance with <u>Section 8.8(a)</u> or <u>(b)</u>.

"<u>Excess Capital Certificate</u>" shall mean a certificate in form and substance satisfactory to the Lender and executed by the Borrower's treasurer or chief financial officer, providing a detailed calculation of Excess Capital as of the date of a proposed Other Investment in accordance with <u>Section 9.3(g)</u> or of a Restricted Payment in accordance with <u>Section 9.6</u>.

"<u>Excluded Swap Obligation</u>" shall mean, with respect to any Obligor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Obligor of, or the grant by such Obligor of a security interest to secure, such Swap Obligation (or a Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Obligor's failure for any reason to constitute an "eligible contract participant" as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Obligor or the grant of such security interests becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interests is or becomes illegal.

"<u>Existing Credit Agreement</u>" shall have the meaning set forth in the recitals.

"<u>Existing Revolving Note</u>" shall have the meaning set forth in the recitals.

"<u>Existing Term Note A</u>" shall have the meaning set forth in the recitals.

"<u>Existing Term Note B</u>" shall have the meaning set forth in the recitals.

"<u>Existing Term Note C</u>" shall have the meaning set forth in the recitals.

"<u>FCPA</u>" shall mean the Foreign Corrupt Practices Act of 1977, as amended.

"<u>Fixed Charge Coverage Ratio</u>" means, at any Measurement Date, the ratio, calculated on a consolidated basis for the Borrower and its Subsidiaries, of: (i) the excess of EBITDA for the Measurement Period ending at such date; plus (B) rent expense on operating leases deducted from the Net Income included in the Adjusted Net Income used in calculating such EBITDA; minus (C) the amount of federal, state, and local income Taxes deducted from the Net Income included in Adjusted Net Income used in calculating such EBITDA; minus (D) 50% of the amount of

Depreciation included in the Adjusted Net Income used in calculating such EBITDA; minus (E) Restricted Payments, including Unfunded Stock Repurchases, paid to holders of the Borrower's Capital Securities; to (ii) the Interest Charges that were paid in cash during such Measurement Period; plus (A) the principal payments scheduled to have been paid during such Measurement Period; plus (B) the rent expense on operating leases scheduled to have been paid during such Measurement Period.

"<u>Floor</u>" shall mean (a) with respect to Term Loan C, 5.00%; (b) with respect to Term Loan D, 4.50%; and (c) with respect to the Revolving Loans, 4.00%.

"<u>Funded Debt</u>" shall mean, as to any Person, all Debt of such Person that matures more than one year from the date of its creation (or is renewable or extendible, at the option of such Person, to a date more than one year from such date).

"<u>GAAP</u>" shall mean generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination, provided, however, that interim financial statements or reports shall be deemed in compliance with GAAP despite the absence of footnotes and fiscal year-end adjustments as required by GAAP.

"<u>Guarantor</u>" shall mean, individually and collectively, Advanced Precision Machining, LLC, a California limited liability company formerly known as Advanced Precision Machining, Inc., a California corporation, and any other Subsidiary of the Borrower that becomes a guarantor by executing a Guaranty or a joinder thereto, and their respective successors and assigns.

"<u>Guaranty</u>" shall have the meaning set forth in <u>Section 3.1</u> hereof.

"<u>Hazardous Substances</u>" shall mean (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, dielectric fluid containing levels of polychlorinated biphenyls, radon gas, and mold; (b) any chemicals, materials, pollutant, or substances defined as or included in the definition of "hazardous substances," "hazardous waste," "hazardous materials," "extremely hazardous substances," "restricted hazardous waste," "toxic substances," "toxic pollutants," "contaminants," "pollutants," or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material, or substance, the exposure to, or release of which is prohibited, limited, or regulated by any governmental authority or for which any duty or standard of care is imposed pursuant to, any Environmental Law.

"<u>Indemnified Party</u>" and "<u>Indemnified Parties</u>" shall mean, respectively, the Lender and any parent corporation, Affiliate, or Subsidiary of the Lender, and each of their respective officers, directors, employees, attorneys, and agents, and all of such parties and entities.

"<u>Intangible Assets</u>" means, as of any date of determination, the sum, calculated on a consolidated basis in accordance with GAAP for the Borrower and its Subsidiaries, of: (i) goodwill, organizational expenses, research and development expenses, Intellectual Property,

covenants not to compete, training costs, and other similar intangibles; (ii) deferred charges or unamortized debt discount and expense other than deferred income taxes; (iii) Investments that are not readily marketable; (iv) any write-up in the book value of any assets resulting from a reevaluation thereof subsequent to the date of the Borrower's consolidated annual financial statement described in <u>Section 8.8(a)</u>; (v) accounts receivable, notes receivable, or other receivables or amounts owed by officers, shareholders, or Affiliates; and (vi) any asset acquired subsequent to the date of this Agreement that the Lender, in its reasonable business judgment, determines to be an intangible asset.

"<u>Intellectual Property</u>" shall mean the collective reference to all rights, priorities, and privileges relating to intellectual property, whether arising under United States, multinational, or foreign laws or otherwise, including copyrights, patents, service marks, and trademarks, and all registrations and applications for registration therefor and all licensees thereof, trade names, domain names, technology, know-how, and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

"<u>Interest Charges</u>" shall mean, for any period, the sum of: (a) all interest, charges, and related expenses payable with respect to that fiscal period to a lender in connection with borrowed money or the deferred purchase price of assets that are treated as interest in accordance with GAAP, <u>plus</u> (b) the portion of Capitalized Lease Obligations with respect to that fiscal period that should be treated as interest in accordance with GAAP, <u>plus</u> (c) all charges paid or payable (without duplication) during that period with respect to any Swap Transaction Documents.

"<u>Inventory</u>" shall have the meaning as set forth in the UCC as amended, changed, or updated from time to time.

"<u>Investments</u>" shall have the meaning set forth in <u>Section 9.3</u>.

"<u>Letter of Credit</u>" and "<u>Letters of Credit</u>" shall mean, respectively, a letter of credit and all such letters of credit issued by the Lender, in its sole discretion, upon the execution and delivery by the Borrower and the acceptance by the Lender of a Letter of Credit Agreement.

"<u>Letter of Credit Agreement</u>" shall mean, at any time, with respect to the issuance of Letters of Credit, the Letter of Credit Agreement in the form being used by the Lender at such time.

"<u>Letter of Credit Obligations</u>" shall mean, at any time, an amount equal to the aggregate of the original face amounts of all Letters of Credit minus the sum of (i) the amount of any reductions in the original face amount of any Letter of Credit which did not result from a draw thereunder, (ii) the amount of any payments made by the Lender with respect to any draws made under a Letter of Credit for which the Borrower has reimbursed the Lender, (iii) the amount of any payments made by the Lender with respect to any draws made under a Letter of Credit which have been converted to a Revolving Loan, and (iv) the portion of any issued but expired Letter of Credit which has not been drawn by the beneficiary thereunder. For purposes of determining the outstanding Letter of Credit Obligations at any time, the Lender's acceptance of a draft drawn on the Lender pursuant to a Letter of Credit shall constitute a draw on the applicable Letter of Credit at the time of such acceptance.

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

"<u>Listed Corporate Bonds</u>" shall mean corporate bonds quoted on a recognized U.S. bond exchange and rated by Moody's better than BBB+/Baa1.

"<u>Loan Documents</u>" shall mean each of the agreements, documents, instruments, and certificates set forth in <u>Section 3.1</u> hereof, plus any Swap Transaction Documents, and any and all such other instruments, documents, certificates, and agreements from time to time executed and delivered by the Borrower, the Guarantor, or any of their Subsidiaries for the benefit of the Lender pursuant to any of the foregoing, and all amendments, restatements, supplements, and other modifications thereto.

"<u>Loans</u>" shall mean, collectively, all Revolving Loans, the Term Loans, and all Letter of Credit Obligations, under and pursuant to this Agreement.

"<u>Mako</u>" shall mean Mako Surgical Corp., a Delaware corporation and a division of Stryker Corp., a Delaware corporation.

"<u>Mako Contract</u>" shall mean the Supply Agreement dated January 6, 2012, between Mako and the Borrower, as amended, restated, or otherwise modified from time to time.

"<u>Margin Stock</u>" shall mean margin stock, within the meaning of Regulation U as adopted by the Board of Governors of the Federal Reserve System or any successor thereto.

"<u>Material Adverse Effect</u>" shall mean (a) a material adverse change in, or a material adverse effect upon, the assets, business, properties, prospects, condition (financial or otherwise), or results of operations of the Borrower and its Subsidiaries taken as a whole, (b) a material impairment of the ability of the Borrower or the Guarantor to perform any of the Obligations under any of the Loan Documents, or (c) a material adverse effect on (i) any substantial portion of the Collateral, (ii) the legality, validity, binding effect, or enforceability against the Borrower or the Guarantor of any of the Loan Documents, (iii) the perfection or priority of any Lien granted to the Lender under any Loan Document, or (iv) the rights or remedies of the Lender under any Loan Document.

"<u>Material Contract</u>" shall mean, with respect to any Person, each contract to which such Person is a party involving aggregate consideration payable by or to such Person equal to at least $1,000,000 annually or otherwise material to the business, condition (financial or otherwise), operations, performance, properties, or prospects of such Person. With respect to the Borrower, the Mako Contract constitutes or shall be deemed to constitute a Material Contract.

"<u>Measurement Date</u>" shall mean the last day of each fiscal quarter of the Borrower.

"<u>Measurement Period</u>" shall mean the trailing four consecutive fiscal quarters of the Borrower ending on and including a Measurement Date.

"<u>Moody's</u>" shall mean Moody's Investors Service, Inc., a Delaware corporation, or its successor.

"<u>Municipal Bonds</u>" shall mean bonds issued by municipalities of the United States and rated by Moody's as Baa or better.

"<u>Net Cash Proceeds</u>" shall mean:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with respect to any issuance of Capital Securities, the aggregate cash proceeds received by the Borrower pursuant to such issuance, net of the direct costs relating to such issuance (including sales and underwriters' commissions); and

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

"<u>Net Income</u>" shall mean with respect to the Borrower and its Subsidiaries for any period, the consolidated net income (or loss) of the Borrower and its Subsidiaries for such period as determined in accordance with GAAP, <u>excluding</u> therefrom all non-operating income (including extraordinary, nonrecurring, or unusual gains) and all non-operating losses (including extraordinary, nonrecurring, or unusual losses).

"<u>Note</u>" and "<u>Notes</u>" shall mean, respectively, each of and collectively, the Revolving Note, Term Note A, Term Note B, Term Note C, and Term Note D.

"<u>Obligations</u>" shall mean the Loans, as evidenced by any Notes, all interest accrued thereon (including interest which would be payable as post-petition in connection with any bankruptcy or similar proceeding, whether or not permitted as a claim thereunder), any fees due the Lender hereunder, any expenses incurred by the Lender hereunder, and any and all other liabilities and obligations of the Borrower or the Guarantor to the Lender under this Agreement and any other Loan Document, including any reimbursement obligations of the Borrower in respect of Letters of Credit and surety bonds, and all other Bank Product Obligations of the Borrower or the Guarantor owed to the Lender or an Affiliate of the Lender, all in each case howsoever created, arising, or

evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, together with any and all renewals or extensions thereof.

"<u>Obligor</u>" shall mean the Borrower, any Subsidiary of the Borrower, any Guarantor, accommodation endorser, third party pledgor, or any other party liable with respect to the Obligations.

"<u>Organizational Certificates</u>" shall mean, with respect to any Person that is a corporation, limited partnership, or limited liability company, a certificate of the appropriate official(s) of the jurisdiction of organization of such Person and each jurisdiction of foreign qualification in which such Person is required to maintain foreign qualification to lawfully transact business in such jurisdiction, certifying as to (i) the subsistence in good standing of, (ii) the authority to transact business by, and (iii) the payment of taxes by, such Person in such jurisdiction(s).

"<u>Organizational Documents</u>" shall mean (i) with respect to any Person that is a corporation, the articles of incorporation and bylaws of such corporation, (ii) with respect to any Person that is a limited partnership, the articles of formation and partnership agreement of such limited partnership, (iii) with respect to any Person that is a limited liability company, the articles of organization or certificate of formation and operating agreement or limited liability company agreement of such limited liability company, (iv) with respect to any Person that is a trust, the trust agreement governing such trust, and (iv) with respect to any Person that is a general partnership, the partnership agreement of such general partnership.

"<u>Organizational Identification Number</u>" shall mean, with respect to Borrower, the organizational identification number assigned to Borrower by the applicable governmental unit or agency of the jurisdiction of organization of the Borrower.

"<u>Other Investment</u>" or "<u>Other Investments</u>" shall have the meaning set forth in <u>Section 9.3(g)</u>.

"<u>Other Taxes</u>" shall mean any present or future stamp or documentary taxes or any other excise or property taxes, charges, or similar levies which arise from the execution, delivery, enforcement, or registration of, or otherwise with respect to, this Agreement or any of the other Loan Documents.

"<u>Owners</u>" shall mean, collectively, Sean McCaig, an individual, and Yasumi McCaig, an individual.

"<u>PDEX</u>" shall mean PDEX Franklin LLC, a California limited liability company, a Wholly Owned Subsidiary of the Borrower.

"<u>PDEX Building</u>" shall mean the office warehouse purchased by PDEX with the proceeds of the PDEX Loan and leased to the Borrower in accordance with the PDEX Lease.

"<u>PDEX Lease</u>" shall mean a Standard Industrial/Commercial Single Tenant Lease - Net dated November 6, 2020, by and between PDEX, as lessor, and the Borrower, as lessee, pursuant to which the Borrower is leasing the PDEX Building.

"<u>PDEX Loan</u>" shall mean the term loan in the original principal amount of $5,207,472 made by the Lender to PDEX subject to the terms of the PDEX Loan Agreement.

"<u>PDEX Loan Agreement</u>" shall mean a Loan Agreement dated on or around November 6, 2020, between the Lender and PDEX, as then in effect.

"<u>Permitted Liens</u>" shall mean: (a) Liens for Taxes or other governmental charges not at the time delinquent or thereafter payable without penalty or being contested in good faith by appropriate proceedings and, in each case, for which it maintains adequate reserves in accordance with GAAP and in respect of which no Lien has been filed; (b) Liens arising in the ordinary course of business (such as (i) Liens of carriers, warehousemen, mechanics, and materialmen and other similar Liens imposed by law, and (ii) Liens in the form of deposits or pledges incurred in connection with worker's compensation, unemployment compensation, and other types of social security (excluding Liens arising under ERISA) or in connection with surety bonds, bids, performance bonds, and similar obligations) for sums not overdue by more than 60 days or being contested in good faith by appropriate proceedings and not involving any advances or borrowed money or the deferred purchase price of property or services, which do not in the aggregate materially detract from the value of the property or assets of the Borrower or materially impair the use thereof in the operation of the Borrower's business and, in each case, for which it maintains adequate reserves in accordance with GAAP and in respect of which no Lien has been filed; (c) Liens described on <u>Schedule 9.2</u> as of the date hereof and the replacement, extension, or renewal of any such Lien upon or in the same property subject thereto arising out of the extension, renewal, or replacement of the Debt secured thereby (without increase in the amount thereof); (d) attachments, appeal bonds, judgments, and other similar Liens, for sums not exceeding $500,000 arising in connection with court proceedings, <u>provided</u> the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings and to the extent such judgments or awards do not constitute an Event of Default under <u>Section 11.9</u> hereof; (e) easements, rights of way, restrictions, minor defects or irregularities in title, and other similar Liens not interfering in any material respect with the ordinary conduct of the business of the Borrower or any of its Subsidiaries; (f) subject to the limitation set forth in <u>Section 9.1(h)</u>, Liens arising in connection with Capitalized Lease Obligations (and attaching only to the property being leased); (g) subject to the limitation set forth in <u>Section 9.1(i)</u>, Liens that constitute purchase money security interests on any property securing Debt incurred for the purpose of financing all or any part of the cost of acquiring such property, <u>provided</u> that any such Lien attaches to such property within 20 days of the acquisition thereof, attaches solely to the property so acquired and the proceeds thereof, and does not secure Debt greater than 100% of the purchase price of the property so acquired; and (h) Liens granted to the Lender hereunder and under the Loan Documents.

"<u>Person</u>" shall mean any natural person, partnership, limited liability company, corporation, trust, joint venture, joint stock company, association, unincorporated organization, government or agency or political subdivision thereof, or other entity, whether acting in an individual, fiduciary or other capacity.

"<u>Piper Sandler</u>" shall mean Piper Sandler & Co., a Delaware corporation.

"<u>Pledged Account</u>" shall mean that certain Account No. T6A-009949 maintained by Borrower with Piper Sandler and pledged to the Lender as collateral for the Obligations.

"<u>Pledged Securities</u>" shall mean the securities owned by the Borrower and held in the Pledged Account.

"<u>Prime Rate</u>" shall mean the floating per annum rate of interest which at any time, and from time to time, shall be most recently announced by the Lender as its Prime Rate, which is not intended to be the Lender's lowest or most favorable rate of interest at any one time. The effective date of any change in the Prime Rate shall for purposes hereof be the date the Prime Rate is changed by the Lender. The Lender shall not be obligated to give notice of any change in the Prime Rate.

"<u>Regulatory Change</u>" shall mean the introduction of, or any change in any applicable law, treaty, rule, regulation, or guideline or in the interpretation or administration thereof by any governmental authority or any central bank or other fiscal, monetary, or other authority having jurisdiction over the Lender or its lending office.

"<u>Reset Date</u>" shall mean the first day of each month following the date hereof, without adjustment for non-Business Days. If the Reset Date is not a U.S. Government Securities Business Day, the rate will be determined as of the first two U.S. Government Securities Business Days preceding the Reset Date.

"<u>Restricted Payment</u>" shall have the definition given to such term in <u>Section 9.6</u>. "<u>Revolving Interest Rate</u>" shall mean the greater of (i) a floating per annum rate of interest equal to SOFR <u>plus</u> 2.50%, and (ii) the Floor.

"<u>Revolving Loan</u>" and "<u>Revolving Loans</u>" shall mean, respectively, each direct advance and the aggregate of all such direct advances made by the Lender to the Borrower under and pursuant to this Agreement, as set forth in <u>Section 2.1</u> of this Agreement.

"<u>Revolving Loan Availability</u>" shall mean, at any time, an amount equal to the lesser of (a) the Revolving Loan Commitment <u>minus</u> the Letter of Credit Obligations, or (b) the Borrowing Base Amount <u>minus</u> the Letter of Credit Obligations.

"<u>Revolving Loan Commitment</u>" shall mean $11,000,000.

"<u>Revolving Loan Maturity Date</u>" shall mean December 29, 2027, unless extended by the Lender pursuant to any modification, extension, or renewal note executed by the Borrower and accepted by the Lender in its sole and absolute discretion in substitution for the Revolving Note.

"<u>Revolving Note</u>" shall mean a revolving note in the form prepared by and acceptable to the Lender, dated as of the date hereof, in the amount of the Revolving Loan Commitment and maturing on the Revolving Loan Maturity Date, duly executed by the Borrower and payable to the order of the Lender, together with any and all renewal, extension, modification, or replacement notes executed by the Borrower and delivered to the Lender and given in substitution therefor.

"<u>S&P</u>" shall mean S&P Global Ratings, a division of S&P Global Inc., a New York corporation, or its successor.

"<u>SEC</u>" shall mean the Securities and Exchange Commission (or successors thereto or an analogous governmental authority).

"<u>Seller</u>" shall mean Advanced-Precision Machining Holding Company, Inc., a California corporation.

"<u>Senior Cash Flow Leverage Ratio</u>" shall mean, at any Measurement Date, the ratio of (a) the Senior Debt at such date, to (b) EBITDA plus operating lease/rent expense for the Measurement Period ending on such Measurement Date.

"<u>Seller Representative</u>" shall mean Sean McCaig, an individual.

"<u>Senior Debt</u>" shall mean, at any Measurement Date, all Debt of the Borrower and its Subsidiaries other than Subordinated Debt and the PDEX Loan.

"<u>SOFR</u>" shall mean the one-month Term SOFR published by CME Group Benchmarks Administration Limited (or a successor administrator designated by the relevant authority) as reported on the Bloomberg Screen TSFR1M or other similar services selected the Lender for a U.S. Government Securities Business Day.

"<u>Subordinated Debt</u>" shall mean that portion of the Debt of the Borrower which is subordinated to the Obligations in a manner satisfactory to the Lender, including right and time of payment of principal and interest.

"<u>Subsidiary</u>" and "<u>Subsidiaries</u>" shall mean, respectively, with respect to any Person, each and all such corporations, partnerships, limited partnerships, limited liability companies, limited liability partnerships, joint ventures, or other entities of which or in which such Person owns, directly or indirectly, such number of outstanding Capital Securities as have more than 50.00% of the ordinary voting power for the election of directors or other managers of such corporation, partnership, limited liability company, or other entity. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of the Borrower.

"<u>Swap Obligation</u>" shall mean any obligation to pay or perform under any agreement, contract, or transaction that constitutes a swap, including any and all indebtedness, liabilities, fees, costs, assessments, penalties, losses, obligations, cancellations, buy backs, reversals, terminations, or assignments now existing or hereafter arising, due or to become due, absolute, or contingent, of the Borrower to the Lender under any Swap Transaction or Swap Transaction Documents.

"<u>Swap Transactions</u>" shall mean one or more agreements between the Borrower and the Lender with respect to any interest rate swap, cap, collar, floor, forward, future, or derivative transaction or option, or similar agreement involving, or settled by reference to, one or more interest rates, currencies, commodities, equity or debt instruments or securities, or economic, financial, or pricing indices or measures of economic, financial, or pricing risk or value.

"<u>Swap Transaction Documents</u>" shall mean any and all documents related to any Swap Transactions between the Borrower and the Lender, including the following: 2002 version of the "ISDA" (International Swaps and Derivatives Association, Inc.) Master Agreement, the Schedule to the Master Agreement, any Credit Support Annexes, any Swap Trade Confirmations, Risk Disclosure Statements, Eligible Contract Participant Verification Forms, and all such other related documents as the Lender may require, which in each case must be in form and content, and include such terms and conditions, as required by Lender and/or its legal counsel.

"<u>Tangible Assets</u>" shall mean, as of any date of determination, the sum, calculated on a consolidated basis in accordance with GAAP for the Borrower and its Subsidiaries, of (a) total assets <u>minus</u> (b) Intangible Assets.

"<u>Taxes</u>" shall mean any and all present and future taxes, duties, levies, imposts, deductions, assessments, charges, or withholdings, and any and all liabilities (including interest and penalties and other additions to taxes) with respect to the foregoing.

"<u>Term Interest Rate</u>" shall mean: (a) with respect to Term Loan A, 3.84%; (b) with respect to Term Loan B, 3.84%; (c) with respect to Term Loan C, the greater of (i) a floating per annum rate of interest equal to SOFR plus 2.50%, and (ii) the Floor; and (d) with respect to Term Loan D, the greater of (i) a floating per annum rate of interest equal to SOFR <u>plus</u> 2.50%, and (ii) the Floor.

"<u>Term Loan A</u>" shall have the meaning set forth in the recitals.

"<u>Term Loan B</u>" shall have the meaning set forth in the recitals.

"<u>Term Loan C</u>" shall have the meaning set forth in the recitals.

"<u>Term Loan D</u>" shall mean the direct advance made by the Lender to or for the benefit of the Borrower in the form of Term Loan D under and pursuant to this Agreement, as set forth in <u>Section 2.2(j)</u> of this Agreement.

"<u>Term Loan D Commitment</u>" shall mean $6,650,000.

"<u>Term Loan Maturity Date</u>" shall mean: (a) November 1, 2027, for Term Loan A; (b) November 1, 2027, for Term Loan B; (c) August 1, 2029, for Term Loan C; and (d) February 1, 2031, for Term Loan D; unless extended by the Lender pursuant to any modification, extension or renewal.

"<u>Term Loan</u>" or "<u>Term Loans</u>" shall mean, individually or collectively as the context requires, Term Loan A, Term Loan B, Term Loan C, and Term Loan D.

"<u>Term Note A</u>" shall mean a term note in the form prepared by and acceptable to the Lender, dated as of the date hereof, in the amount of $7,525,000, maturing on the Term Loan Maturity Date, duly executed by the Borrower and payable to the order of the Lender, amending and restating Existing Term Note A in its entirety, together with any and all renewal, extension, modification, or replacement notes executed by the Borrower and delivered to the Lender and given in substitution therefor.

"<u>Term Note B</u>" shall mean a term note in the form prepared by and acceptable to the Lender, dated as of the date hereof, in the amount of $1,000,000 and maturing on the Term Loan Maturity Date, duly executed by the Borrower and payable to the order of the Lender, amending and restating Existing Term Note B in its entirety, together with any and all renewal, extension, modification, or replacement notes executed by the Borrower and delivered to the Lender and given in substitution therefor.

"<u>Term Note C</u>" shall mean a term note in the form prepared by and acceptable to the Lender, dated as of the date hereof, in the amount of $5,000,000 and maturing on the Term Loan Maturity Date, duly executed by the Borrower and payable to the order of the Lender, amending and restating Existing Term Note C in its entirety, together with any and all renewal, extension, modification, or replacement notes executed by the Borrower and delivered to the Lender and given in substitution therefor.

"<u>Term Note D</u>" shall mean a term note in the form prepared by and acceptable to the Lender, dated as of the date hereof, in the amount of the Term Loan D Commitment and maturing on the Term Loan Maturity Date, duly executed by the Borrower and payable to the order of the Lender, together with any and all renewal, extension, modification, or replacement notes executed by the Borrower and delivered to the Lender and given in substitution therefor.

"<u>UCC</u>" shall mean the Uniform Commercial Code in effect in the state of Minnesota from time to time.

"<u>Unmatured Event of Default</u>" shall mean any event which, with the giving of notice, the passage of time or both, would constitute an Event of Default.

"<u>U.S Government Securities Business Day</u>" shall mean any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

"<u>Unfunded Stock Repurchases</u>" shall mean the Borrower's repurchase of its outstanding equity securities not financed with the proceeds of any Term Loan.

"<u>Voidable Transfer</u>" shall have the meaning set forth in <u>Section 14.22</u> hereof.

"<u>Wholly Owned Subsidiary</u>" shall mean any Subsidiary of which or in which the Borrower owns, directly or indirectly, 100% of the Capital Securities of such Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <u>Accounting Terms</u>. Any accounting terms used in this Agreement which are not specifically defined herein shall have the meanings customarily given them in accordance with GAAP. Calculations and determinations of financial and accounting terms used and not otherwise specifically defined hereunder and the preparation of financial statements to be furnished to the Lender pursuant hereto shall be made and prepared, both as to classification of items and as to amount, in accordance with sound accounting practices and GAAP as used in the preparation of the financial statements of the Borrower on the date of this Agreement. If any changes in accounting principles or practices from those used in the preparation of the financial statements are hereafter occasioned by the promulgation of rules, regulations, pronouncements and opinions

by or required by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or any successor thereto or agencies with similar functions), which results in a material change in the method of accounting in the financial statements required to be furnished to the Lender hereunder or in the calculation of financial covenants, standards or terms contained in this Agreement, the parties hereto agree to enter into good faith negotiations to amend such provisions so as to equitably reflect such changes to the end that the criteria for evaluating the financial condition and performance of the Borrower will be the same after such changes as they were before such changes; and if the parties fail to agree on the amendment of such provisions, the Borrower will furnish financial statements in accordance with such changes, but shall provide calculations for all financial covenants, perform all financial covenants and otherwise observe all financial standards and terms in accordance with applicable accounting principles and practices in effect immediately prior to such changes. Calculations with respect to financial covenants required to be stated in accordance with applicable accounting principles and practices in effect immediately prior to such changes shall be reviewed and certified by the Borrower's accountants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 <u>Other Terms Defined in UCC</u>. All capitalized words and phrases used herein and not otherwise specifically defined herein shall have the respective meanings assigned to such terms in the UCC (as amended, changed or updated from time to time), to the extent the same are used or defined therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 <u>Other Interpretive Provisions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. Whenever the context so requires, the neuter gender includes the masculine and feminine, the single number includes the plural, and vice versa, and in particular the word "Borrower" shall be so construed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Section and Schedule references are to this Agreement unless otherwise specified. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The term "including" is not limiting and means "including, without limitation."

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement and the other Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, supplements and other modifications thereto, but only to the extent such amendments, restatements, supplements and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation shall be construed as

including all statutory and regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) To the extent any of the provisions of the other Loan Documents are inconsistent with the terms of this Agreement, the provisions of this Agreement shall govern.

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

Section 2. <u>COMMITMENT OF THE LENDER</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Revolving Loans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Revolving Loan Commitment</u>. Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties of the Borrower set forth herein and in the other Loan Documents, the Lender agrees to make such Revolving Loans at such times as the Borrower may from time to time request until, but not including, the Revolving Loan Maturity Date, and in such amounts as the Borrower may from time to time request, provided, however, that the aggregate principal balance of all Revolving Loans outstanding at any time shall not exceed the Revolving Loan Availability. Revolving Loans made by the Lender may be repaid and, subject to the terms and conditions hereof, borrowed again up to, but not including the Revolving Loan Maturity Date unless the Revolving Loans are otherwise accelerated, terminated, or extended as provided in this Agreement. The Revolving Loans shall be used by the Borrower for the purpose of working capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Revolving Loan Interest and Payments</u>. The principal amount of the Revolving Loans outstanding from time to time shall bear interest at the applicable Revolving Interest Rate. Accrued and unpaid interest on the unpaid principal balance of all Revolving Loans outstanding from time to time, shall be due and payable monthly, in arrears, commencing on March 1, 2026, and continuing on the first day of each calendar month thereafter, and on the Revolving Loan Maturity Date. Any amount of principal or interest on the Revolving Loans which is not paid when due, whether at stated maturity, by acceleration, or otherwise, shall bear interest payable on demand at the Default Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Revolving Loan Principal Payments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *Revolving Loan Mandatory Payments*. All Revolving Loans hereunder shall be repaid by the Borrower on the Revolving Loan Maturity Date, unless payable sooner pursuant to the provisions of this Agreement. In the event the aggregate outstanding principal balance of all Revolving Loans and Letter of Credit Obligations hereunder exceeds the Revolving Loan Availability, the Borrower shall, without notice or demand of any kind, immediately make such repayments of the Revolving Loans or take such other actions as are satisfactory to the Lender as shall be necessary to eliminate such excess, all without further

demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *Optional Prepayments*. The Borrower may from time to time prepay the Revolving Loans, in whole or in part, without any prepayment penalty whatsoever, provided that any prepayment of the entire principal balance of the Revolving Loans shall include accrued interest on such Revolving Loans to the date of such prepayment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Term Loans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Term Loan A</u>. Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties of the Borrower set forth herein and in the other Loan Documents, the Lender will continue Term Loan A to the Borrower. Term Loan A has been fully advanced, and no additional amounts will be advanced under Term Loan A. The proceeds of Term Loan A were used to finance the repurchase of the Borrower's Capital Securities in accordance with 10b5-1 plans. Term Loan A may be prepaid in whole or in part at any time without penalty but shall be due in full on the Term Loan Maturity Date, unless the credit extended under Term Loan A is otherwise accelerated, terminated, or extended as provided in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Term Loan A Interest</u>. The principal amount of Term Loan A outstanding from time to time shall bear interest at the applicable Term Interest Rate. Any amount of principal or interest on Term Loan A, which is not paid when due, whether at stated maturity, by acceleration, or otherwise, shall bear interest payable on demand at the Default Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Term Loan A Principal plus Interest Payments</u>. The outstanding principal balance of Term Loan A shall be repaid in equal installments of principal and interest each in the amount necessary to fully amortize the outstanding principal balance of Term Loan A by the Term Loan Maturity Date, together with an additional amount representing accrued and unpaid interest on the principal amount of Term Loan A outstanding as set forth above, beginning on March 1, 2026, and continuing on the first day of each month thereafter, with a final payment of all outstanding principal and accrued interest due on the Term Loan Maturity Date. Principal amounts repaid on Term Note A may not be borrowed again.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Term Loan B</u>. Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties of the Borrower set forth herein and in the other Loan Documents, the Lender will continue Term Loan B to the Borrower. Term Loan B has been fully advanced, and no additional amounts will be advanced under Term Loan B. The proceeds of Term Loan B were used to finance tenants improvements to the PDEX Building and for Capital Expenditures. Term Loan B may be prepaid in whole or in part at any time without penalty but shall be due in full on the Term Loan Maturity Date, unless the credit extended under Term Loan B is otherwise accelerated, terminated, or extended as provided in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Term Loan B Interest</u>. The principal amount of Term Loan B outstanding from time to time shall bear interest at the applicable Term Interest Rate. Any amount of principal or interest on Term Loan B, which is not paid when due, whether at stated maturity, by acceleration, or otherwise, shall bear interest payable on demand at the Default Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Term Loan B Principal plus Interest Payments</u>. The outstanding principal balance of Term Loan B shall be repaid in equal installments of principal and interest each in the amount necessary to fully amortize the outstanding principal balance of Term Loan B by the Term Loan Maturity Date, together with an additional amount representing accrued and unpaid interest on the principal amount of Term Loan B outstanding as set forth above, beginning on March 1, 2026, and continuing on the first day of each month thereafter, with a final payment of all outstanding principal and accrued interest due on the Term Loan Maturity Date. Principal amounts repaid on Term Note B may not be borrowed again.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Term Loan C</u>. Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties of the Borrower set forth herein and in the other Loan Documents, the Lender will continue Term Loan C to the Borrower. Term Loan C has been fully advanced, and no additional amounts will be advanced under Term Loan C. The proceeds of Term Loan C were used to refinance existing Debt and to finance the repurchase of the Borrower's Capital Securities in accordance with 10b5-1 plans. Term Loan C may be prepaid in whole or in part at any time without penalty but shall be due in full on the Term Loan Maturity Date, unless the credit extended under Term Loan C is otherwise accelerated, terminated, or extended as provided in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Term Loan C Interest</u>. The principal amount of Term Loan C outstanding from time to time shall bear interest at the applicable Term Interest Rate. Any amount of principal or interest on Term Loan C, which is not paid when due, whether at stated maturity, by acceleration, or otherwise, shall bear interest payable on demand at the Default Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Term Loan C Principal plus Interest Payments</u>. The outstanding principal balance of Term Loan C shall be repaid in equal installments of principal and interest each in the amount necessary to fully amortize the outstanding principal balance of Term Loan C by the Term Loan Maturity Date, together with an additional amount representing accrued and unpaid interest on the principal amount of Term Loan C outstanding as set forth above, beginning on March 1, 2026, and continuing on the first day of each month thereafter, with a final payment of all outstanding principal and accrued interest due on the Term Loan Maturity Date. Principal amounts repaid on Term Note C may not be borrowed again.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Term Loan D Commitment</u>. Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties of the Borrower set forth herein and in the other Loan Documents, the Lender agrees to make a term loan to the Borrower equal to the Term Loan D Commitment ("<u>Term</u>

<u> </u>

<u>Loan D</u>"). Term Loan D shall be available to the Borrower in single principal advance on such date as the conditions set forth in <u>Section 3</u> shall have been satisfied. Term Loan D shall be used by the Borrower for the Acquisition. Term Loan D may be prepaid in whole or in part at any time without penalty but shall be due in full on the Term Loan Maturity Date, unless the credit extended under Term Loan D is otherwise accelerated, terminated, or extended as provided in this Agreement. Term Loan D shall terminate upon the making of the final Term Loan D advance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Term Loan D Interest</u>. The principal amount of Term Loan D outstanding from time to time shall bear interest at the applicable Term Interest Rate. Any amount of principal or interest on Term Loan D, which is not paid when due, whether at stated maturity, by acceleration, or otherwise, shall bear interest payable on demand at the Default Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Term Loan D Principal plus Interest Payments</u>. The outstanding principal balance of Term Loan D shall be repaid in equal principal installments each in the amount necessary to fully amortize the outstanding principal balance of Term Loan D by the Term Loan Maturity Date, together with an additional amount representing accrued and unpaid interest on the principal amount of Term Loan D outstanding as set forth above, beginning on March 1, 2026, and continuing on the first day of each month thereafter, with a final payment of all outstanding principal and accrued interest due on the Term Loan Maturity Date. Principal amounts repaid on Term Note D may not be borrowed again.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Term Loan Mandatory Prepayment</u>. The Borrower shall make a prepayment of the outstanding principal amount of Term Loan A, Term Loan B, Term Loan C, or Term Loan D, in that order, until paid in full upon the occurrence of any of the following events, at the following times and in the following amounts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Concurrently with the receipt by the Borrower or by any Subsidiary of any Net Cash Proceeds from any Asset Disposition, in an amount equal to 100% of such Net Cash Proceeds.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Term Loan Optional Prepayments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Provided that no Event of Default then exists under this Agreement or the Loans, the Borrower may voluntarily prepay the principal balance of any Term Loan, in whole or in part, at any time on or after the date hereof, subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Not less than three days prior to the date upon which the Borrower desires to make such prepayment, the Borrower shall deliver to

the Lender written notice of its intention to prepay a Term Loan, which notice shall be irrevocable and state the prepayment amount and the prepayment date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) The Borrower shall pay to the Lender all accrued and unpaid interest on such Term Loan through the date of such prepayment on the principal balance being prepaid. Each prepayment of such Term Loan shall be applied to the scheduled installments of such Term Loan in inverse order of maturity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) Notwithstanding the forgoing, if any Term Loan is subject to a Bank Product Agreement (i.e. Swap Transaction Documents), in whole or in part, it is expressly understood by the Borrower that such a prepayment may cause breakage, termination, or like fees to be due under the terms of the Bank Product Agreement, all of which will be due at the time of any prepayment. Accordingly, the Borrower should consult the terms of the Bank Product Agreements and other disclosures provided therewith for determination of fees or penalties which may be associated with such a prepayment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Interest and Fee Computation; Collection of Funds</u>. Except as otherwise set forth herein, all interest and fees shall be calculated on the basis of a year consisting of 360 days and shall be paid for the actual number of days elapsed. Principal payments submitted in funds not immediately available shall continue to bear interest until collected. If any payment to be made by the Borrower hereunder or under any Note shall become due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in computing any interest in respect of such payment. Notwithstanding anything to the contrary contained herein, the final payment due under any of the Loans must be made by wire transfer or other immediately available funds. All payments made by the Borrower hereunder or under any of the Loan Documents shall be made without setoff, counterclaim, or other defense. To the extent permitted by applicable law, all payments hereunder or under any of the Loan Documents (including any payment of principal, interest, or fees) to, or for the benefit, of any Person shall be made by the Borrower free and clear of, and without deduction or withholding for, or account of, any taxes now or hereinafter imposed by any taxing authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>Letters of Credit</u>. Subject to the terms and conditions of this Agreement and upon (i) the execution by the Borrower and the Lender of a Letter of Credit Agreement in form and substance acceptable to the Lender (together with all amendments, modifications and restatements thereof, the "Letter of Credit Agreement"), and (ii) the execution and delivery by the Borrower, and the acceptance by the Lender, in its sole and absolute discretion, of a Letter of Credit Agreement, the Lender agrees to issue for the account of the Borrower such Letters of Credit in the standard form of the Lender and otherwise in form and substance acceptable to the Lender, from time to time during the term of this Agreement. The amount of any payments made by the Lender with respect to draws made by a beneficiary under a Letter of Credit for which the Borrower has failed to reimburse the Lender upon the earlier of (i) the Lender's demand for repayment, or (ii) five days from the date of such payment to such beneficiary by the Lender, shall be deemed to have been converted to a Revolving Loan as of the date such payment was made by

the Lender to such beneficiary. Upon the occurrence of an Event of a Default and at the option of the Lender, all Letter of Credit Obligations shall be converted to Revolving Loans at a rate of interest determined by Lender in its sole discretion, all without demand, presentment, protest, or notice of any kind, all of which are hereby waived by the Borrower. To the extent the provisions of the Letter of Credit Agreement differ from, or are inconsistent with, the terms of this Agreement, the provisions of this Agreement shall govern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 <u>Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All payments made by the Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any governmental authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Lender as a result of a present or former connection between the Lender and the jurisdiction of the governmental authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 <u>Lack of Availability of SOFR; Hold Harmless</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If, on or prior to any Reset Date, Lender determines (which determination shall be conclusive and binding absent manifest error) that SOFR cannot be determined pursuant to the definition thereof, Lender will promptly so notify the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon notice thereof by Lender to Borrower, any obligation of Lender to make Loans advances at an interest rate benchmarked based upon SOFR, and any right of the Borrower to continue to obtain SOFR advances, shall be suspended (to the extent of the affected SOFR advances or affected Reset Dates) until Lender revokes such notice. Upon receipt of such notice, (i) Borrower may revoke any pending request for a borrowing of, conversion to or continuation of SOFR advances (to the extent of the affected Loan advances or affected Reset Date) or, failing that, Borrower will be deemed to have converted any such request into a request for an advance of or conversion to SOFR advances in the amount specified therein and (ii) any outstanding affected SOFR advances will be deemed to have been converted into Prime Rate advances at the next Reset Date. Upon any such conversion, Borrower shall also pay accrued interest on the amount so converted, together with any additional amounts required. If Lender determines (which determination shall be conclusive and binding absent manifest error) that SOFR cannot be determined pursuant to the definition thereof on any given day, the interest rate on Loans, otherwise subject to SOFR, shall be subject to the Prime Rate as determined by Lender until Lender revokes such determination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Lender does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to the Prime Rate, SOFR, or any component definition thereof

or rates referred to in the definition thereof, or any alternative, successor or replacement rate thereto, including whether the composition or characteristics of any such alternative, successor or replacement rate will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, Prime Rate, SOFR, or any other benchmark rate prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Conforming Changes. Lender and its affiliates or other related entities may engage in transactions that affect the calculation of Prime Rate, or SOFR, any alternative, successor or replacement rate or any relevant adjustments thereto, in each case, in a manner adverse to the Borrower. Lender may select information sources or services in its reasonable discretion to ascertain Prime Rate or SOFR, or any other benchmark, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 <u>All Loans to Constitute Single Obligation</u>. The Loans shall constitute one general obligation of the Borrower and shall be secured by Lender's priority security interest in and Lien upon all of the Collateral and by all other security interests, Liens, claims and encumbrances heretofore, now or at any time or times hereafter granted by the Borrower and/or any Subsidiary to the Lender.

Section 3. <u>CONDITIONS OF BORROWING</u>.

Notwithstanding any other provision of this Agreement, the Lender shall not be required to disburse, make, or continue all or any portion of the Loans, if any of the following conditions shall have occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Loan Documents</u>. The Borrower shall have failed to execute and deliver to the Lender any of the following Loan Documents, all of which must be satisfactory to the Lender and the Lender's counsel in form, substance, and execution:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Credit Agreement</u>. A copy of this Agreement duly executed by the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Revolving Note</u>. A Revolving Note duly executed by the Borrower, in the form prepared by and acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Term Note A</u>. Term Note A duly executed by the Borrower, in the form prepared by and acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Term Note B</u>. Term Note B duly executed by the Borrower, in the form prepared by and acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Term Note C</u>. Term Note C duly executed by the Borrower, in the form prepared by and acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Term Note D</u>. Term Note D duly executed by the Borrower, in the form prepared by and acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Guaranty</u>. A Continuing Unconditional Guaranty dated as of the date of this Agreement, executed by the Guarantor to and for the benefit of the Lender, in the form prepared by and acceptable to the Lender (each, a "<u>Guaranty</u>," and if more than one, then collectively, the "<u>Guaranties</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Pledge Agreement</u>. A Pledge Agreement dated as of the date of this Agreement, executed by the Borrower, in the form prepared by and acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Pledged Account Control Agreement</u>. A Notice to Securities Intermediary and Control Agreement dated as of the date of this Agreement, executed by the Borrower and Piper Sandler, in a form prepared by Piper Sandler and reasonably acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Deposit Account Control Agreement</u>. A Deposit Account Control Agreement dated as of the date of this Agreement, executed by the Borrower and Columbia Bank, in a form prepared by Columbia Bank and reasonably acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Membership Interest Pledge Agreement</u>. A Membership Interest Pledge Agreement dated as of the date of this Agreement, executed by the Borrower, and consented to by the Guarantor, in the form prepared by and acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Security Agreement</u>. A Security Agreement dated as of the date of this Agreement, executed by the Guarantor, in the form prepared by and acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Patent, Copyright, License, and Trademark Security Agreement - Borrower</u>. A Patent, Copyright, License, and Trademark Security Agreement dated as of the date of this Agreement, executed by the Borrower, in the form prepared by and acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Patent, Copyright, License, and Trademark Security Agreement - Guarantor</u>. A Patent, Copyright, License, and Trademark Security Agreement dated as of the date of this Agreement, executed by the Guarantor, in the form prepared by and acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Subordination Agreement</u>. A Subordination Agreement dated as of the date of this Agreement, from the Seller and the Owners, in the form prepared by and acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Collateral Access Agreement</u>. A Collateral Access Agreement dated as of the date of this Agreement, from the owner, lessor or mortgagee, as the case may be, of any real estate whereon any Collateral owned by Guarantor is stored or otherwise located, in a form reasonably acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Acquisition Documents</u>. Acquisition Documents dated as of the date of this Agreement, duly executed by the Borrower, Seller, Owners, and Seller Representative, in forms reasonably acceptable to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Borrowing Base Certificate</u>. A Borrowing Base Certificate in the form required by the Lender, certified as accurate by the Borrower and acceptable to the Lender in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Search Results; Lien Terminations</u>. Copies of UCC search reports dated such a date as is reasonably acceptable to the Lender, listing all effective financing statements which name the Borrower, Seller, and Owners, under their present names and any previous names, as debtors, together with (i) copies of such financing statements, (ii) payoff letters evidencing repayment in full of all existing Debt to be repaid with the Loans, the termination of all agreements relating thereto and the release of all Liens granted in connection therewith, with UCC or other appropriate termination statements and documents effective to evidence the foregoing (other than Permitted Liens), and (iii) such other UCC termination statements as the Lender may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Organizational and Authorization Document</u>. Copies of (i) the Organizational Documents of the Borrower; (ii) resolutions for the Borrower approving and authorizing such Person's execution, delivery and performance of the Loan Documents and the Acquisition Documents to which it is party and the transactions contemplated thereby; (iii) signature and incumbency certificates for the Borrower, for any Person executing any of the Loan Documents, each of which the Borrower hereby certifies to be true and complete, and in full force and effect without modification, it being understood that the Lender may conclusively rely on each such document and certificate until formally advised by the Borrower of any changes therein; and (iv) Organizational Certificate of the Borrower and in each other state requested by the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>Organizational and Authorization Document</u>. Copies of (i) the Organizational Documents of the Guarantor; (ii) resolutions for the Guarantor approving and authorizing such Person's execution, delivery and performance of the Loan Documents and the Acquisition Documents to which it is party and the transactions contemplated thereby; (iii) signature and incumbency certificates for the Guarantor, for any Person executing any of the Loan Documents, each of which the Borrower hereby certifies to be true and complete, and in full force and effect without modification, it being understood that the Lender may conclusively rely on each such document and certificate until formally advised by the Guarantor of any changes therein; and (iv) Organizational Certificate of the Guarantor and in each other state requested by the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Organizational and Authorization Document</u>. Copies of (i) the Organizational Documents of the Seller; (ii) resolutions for the Seller approving and authorizing such Person's execution, delivery and performance of the Acquisition Documents to which it is party and the transactions contemplated thereby; (iii) signature and incumbency certificates for the Seller, for any Person executing any of the Acquisition Documents, each of which the Borrower hereby certifies to be true and complete, and in full force and effect without modification, it being understood that the Lender may

conclusively rely on each such document and certificate until formally advised by the Borrower of any changes therein; and (iv) Organizational Certificate of the Seller and in each other state requested by the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>Beneficial Ownership</u>. If Borrower or the Guarantor qualifies as a "legal entity customer" under 31 C.F.R. § 1010.230, as amended from time to time, a Beneficial Ownership Certification in relation to the Borrower and the Guarantor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Insurance</u>. Evidence satisfactory to the Lender of the existence of insurance required to be maintained pursuant to <u>Section 8.6</u>, together with evidence that the Lender has been named as a lender's loss payee and as an additional insured on all related insurance policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) <u>Additional Documents</u>. Such other certificates, financial statements, schedules, resolutions, opinions of counsel, notes and other documents which are provided for hereunder or which the Lender shall require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Acquisition</u>. The Borrower shall have consummated (or contemporaneously with the extension of Term Loan D shall consummate) the Acquisition in accordance with the terms of the Acquisition Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Leverage; Liquidity</u>. After giving pro forma effect to the consummation of the Acquisition and the incurrence of Term Loan D and other Indebtedness to be incurred by the Borrower on the date hereof, (a) the Senior Cash Flow Leverage Ratio as of the date hereof shall not be greater than 2.50 to 1.00, and (c) the Fixed Charge Coverage Ratio as of the date hereof shall not be less than 1.15 to 1.00.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <u>Event of Default</u>. Any Event of Default or Unmatured Event of Default shall have occurred and be continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 <u>Material Adverse Effect</u>. The occurrence of any event having a Material Adverse Effect upon the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 <u>Litigation</u>. Any litigation or governmental proceeding shall have been instituted against the Borrower or any of its officers or shareholders which has a Material Adverse Effect upon the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7 <u>Representations and Warranties</u>. Any representation or warranty of the Borrower contained herein or in any Loan Document shall be untrue or incorrect in any material respect as of the date of any Loan as though made on such date, except to the extent such representation or warranty expressly relates to an earlier date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8 <u>Origination Fees</u>. The Borrower shall have failed to pay to the Lender an origination fee in the amount of $16,625 with respect to Term Loan D and an extension fee of $15,000 with respect to the Revolving Loan.

Section 4. <u>NOTES EVIDENCING LOANS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Revolving Note</u>. The Revolving Loans and the Letter of Credit Obligations shall be evidenced by the Revolving Note. At the time of the initial disbursement of a Revolving Loan and at each time any additional Revolving Loan shall be requested hereunder, or a repayment made in whole or in part thereon, a notation thereof shall be made on the books and records of the Lender. All amounts recorded shall be, absent manifest error, conclusive and binding evidence of (i) the principal amount of the Revolving Loans advanced hereunder and the amount of all Letter of Credit Obligations, (ii) any accrued and unpaid interest owing on the Revolving Loans, and (iii) all amounts repaid on the Revolving Loans or the Letter of Credit Obligations. The failure to record any such amount or any error in recording such amounts shall not, however, limit or otherwise affect the obligations of the Borrower under the Revolving Note to repay the principal amount of the Revolving Loans, together with all interest accruing thereon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Term Notes</u>. Term Loan A shall be evidenced by Term Note A. Term Loan B shall be evidenced by Term Note B. Term Loan C shall be evidenced by Term Note C. Term Loan D shall be evidenced by Term Note D. At the time of the disbursement of any Term Loan, or a repayment made in whole or in part thereon, a notation thereof shall be made on the books and records of the Lender. All amounts recorded shall be, absent demonstrable error, conclusive and binding evidence of (i) the principal amount of such Term Loan, (ii) any accrued and unpaid interest owing on such Term Loan, and (iii) all amounts repaid on such Term Loan. The failure to record any such amount or any error in recording such amounts shall not, however, limit or otherwise affect the obligations of the Borrower under the Term Notes to repay the principal amounts of any Term Loan, together with all interest accruing thereon.

Section 5. <u>MANNER OF BORROWING</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Borrowing Procedures</u>. Each Loan shall be made available to the Borrower upon any written, verbal, electronic, telephonic or telecopy loan request which the Lender in good faith believes to emanate from a properly authorized representative of the Borrower, whether or not that is in fact the case. Each such notice shall be effective upon receipt by the Lender, shall be irrevocable, and shall specify the date, amount and type of borrowing. A request for a direct advance must be received by the Lender no later than 11:00 a.m. Minneapolis, Minnesota time, on the day it is to be funded. The proceeds of each direct advance shall be made available at the office of the Lender by credit to the account of the Borrower or by other means requested by the Borrower and acceptable to the Lender. The Borrower does hereby irrevocably confirm, ratify and approve all such advances by the Lender and does hereby indemnify the Lender against losses and expenses (including court costs, attorneys' and paralegals' fees) and shall hold the Lender harmless with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Letters of Credit</u>. All Letters of Credit shall bear such application, issuance, renewal, negotiation and other fees and charges, and bear such interest as charged by the Lender or otherwise payable pursuant to the Letter of Credit Agreement. In addition to the foregoing, all standby Letters of Credit issued under and pursuant to this Agreement shall bear an annual issuance fee equal to 1.50% of the face amount of such standby Letter of Credit, payable by the Borrower quarterly, in arrears, until (i) such Letter of Credit has expired or has been returned to the Lender, or (ii) the Lender has paid the beneficiary thereunder the full face amount of such Letter of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Automatic Debit</u>. In order to effectuate the timely payment of any of the Obligations when due, the Borrower hereby authorizes and directs the Lender, at the Lender's option, to (a) debit the amount of the Obligations to any ordinary deposit account of the Borrower, or (b) make a Revolving Loan hereunder to pay the amount of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Discretionary Disbursements</u>. The Lender, in its sole and absolute discretion, may immediately upon notice to the Borrower, disburse any or all proceeds of the Loans made or available to the Borrower pursuant to this Agreement to pay any fees (including reasonable attorneys' fees incurred by Lender), costs, expenses or other amounts required to be paid by the Borrower hereunder and not so paid. All monies so disbursed shall be a part of the Obligations, payable by the Borrower on demand from the Lender.

Section 6. <u>SECURITY FOR THE OBLIGATIONS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Security for Obligations</u>. As security for the payment and performance of the Obligations, the Borrower does hereby pledge, assign, transfer and deliver to the Lender and does hereby grant to the Lender a continuing and unconditional first priority security interest in and to any and all property of the Borrower, of any kind or description, tangible or intangible, wheresoever located and whether now existing or hereafter arising or acquired, including the following (all of which property, along with the products and proceeds therefrom, are individually and collectively referred to as the "<u>Collateral</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all property of, or for the account of, the Borrower now or hereafter coming into the possession, control or custody of, or in transit to, the Lender or any agent or bailee for the Lender or any parent, Affiliate or Subsidiary of the Lender or any participant with the Lender in the Loans (whether for safekeeping, deposit, collection, custody, pledge, transmission or otherwise), including all earnings, dividends, interest, or other rights in connection therewith and the products and proceeds therefrom, including the proceeds of insurance thereon; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the additional property of the Borrower, whether now existing or hereafter arising or acquired, and wherever now or hereafter located, together with all additions and accessions thereto, substitutions, betterments and replacements therefor, products and Proceeds therefrom, and all of the Borrower's books and records and recorded data relating thereto (regardless of the medium of recording or storage), together with all of the Borrower's right, title and interest in and to all computer software required to utilize, create, maintain and process any such records or data on electronic media, identified and set forth as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) All Accounts and all Goods whose Disposition by the Borrower has given rise to Accounts and have been returned to, or repossessed or stopped in transit by, the Borrower, or rejected or refused by an Account Debtor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) All Inventory, including raw materials, work-in-process and finished goods;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) All Goods (other than Inventory), including embedded software, Equipment, vehicles, furniture and Fixtures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) All Software and computer programs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) All Securities, Investment Property, Financial Assets, and Deposit Accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) All Chattel Paper, Electronic Chattel Paper, Instruments, Documents, Letter of Credit Rights, all proceeds of letters of credit, Health-Care-Insurance Receivables, Supporting Obligations, notes secured by real estate, Commercial Tort Claims, and General Intangibles, including Payment Intangibles; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) All Proceeds (whether Cash Proceeds or Noncash Proceeds) of the foregoing property, including all insurance policies and proceeds of insurance payable by reason of loss or damage to the foregoing property, including unearned premiums, and of eminent domain or condemnation awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Other Collateral</u>. In addition, the Obligations are also secured by, without limitation: (i) a Patent, Copyright, License, and Trademark Security Agreement dated as of the date hereof, executed by the Borrower in favor of the Lender; (ii) a Patent, Copyright, License, and Trademark Security Agreement dated as of the date hereof, executed by the Guarantor in favor of the Lender; (iii) a Membership Interest Pledge Agreement dated as of the date hereof, executed by the Borrower and consented by the Guarantor, in favor of the Lender; (iv) a Pledge Agreement dated as of the date hereof, executed by the Borrower and the Lender; (v) a Security Agreement dated as of the date hereof, executed by the Guarantor in favor of the Lender; and (vi) a Collateral Assignment of Undertakings dated as of the date hereof, executed by the Borrower in favor of the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Possession of Collateral</u>. Unless an Event of Default exists hereunder, the Borrower shall be entitled to possession or use of the Collateral (other than Instruments or Documents, Tangible Chattel Paper, Investment Property consisting of certificated securities, and other Collateral required to be delivered to the Lender pursuant to this <u>Section 6</u>). The cancellation or surrender of any Note, upon payment or otherwise, shall not affect the right of the Lender to retain the Collateral for any of the other Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Financing Statements</u>. The Borrower shall, at the Lender's request, at any time and from time to time, execute and deliver to the Lender such financing statements, amendments and other documents and do such acts as the Lender deems necessary in order to establish and maintain valid, attached and perfected first priority security interests in the Collateral in favor of the Lender, free and clear of all Liens and claims and rights of third parties whatsoever, except Permitted Liens. The Borrower hereby irrevocably authorizes the Lender at any time, and from time to time, to file in any jurisdiction any initial financing statements and amendments thereto without the signature of the Borrower that (a) indicate the Collateral (i) is comprised of all assets of the Borrower or words of similar effect, regardless of whether any particular asset comprising a part of the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of the jurisdiction wherein such financing statement or amendment is filed, or (ii) as being of an equal or lesser scope or within greater detail as the grant of the security interest set forth herein, and (b) contain any other information required by Section 5 of Article 9 of the Uniform Commercial Code of the

jurisdiction wherein such financing statement or amendment is filed regarding the sufficiency or filing office acceptance of any financing statement or amendment, including (i) whether the Borrower is an organization, the type of organization and any Organizational Identification Number issued to the Borrower, and (ii) in the case of a financing statement filed as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a sufficient description of the real property to which the Collateral relates. The Borrower agrees to furnish any such information to the Lender promptly upon request. The Borrower further ratifies and affirms its authorization for any financing statements and/or amendments thereto, executed and filed by the Lender in any jurisdiction prior to the date of this Agreement. In addition, the Borrower shall make appropriate entries on its books and records disclosing the Lender's security interests in the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u>Additional Collateral</u>. The Borrower shall deliver to the Lender immediately upon its demand, such other collateral as the Lender may from time to time request, should the value of the Collateral, in the Lender's sole and absolute discretion, decline, deteriorate, depreciate or become impaired, and does hereby grant to the Lender a continuing security interest in such other collateral, which, when pledged, assigned and transferred to the Lender shall be and become part of the Collateral. The Lender's security interests in all of the foregoing Collateral shall be valid, complete, and perfected whether or not covered by a specific assignment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 <u>Preservation of the Collateral</u>. The Lender may, but is not required, to take such actions from time to time as the Lender deems appropriate to maintain or protect the Collateral. The Lender shall have exercised reasonable care in the custody and preservation of the Collateral if the Lender takes such action as the Borrower shall reasonably request in writing which is not inconsistent with the Lender's status as a secured party, but the failure of the Lender to comply with any such request shall not be deemed a failure to exercise reasonable care; provided, however, the Lender's responsibility for the safekeeping of the Collateral shall (i) be deemed reasonable if such Collateral is accorded treatment substantially equal to that which the Lender accords its own property, and (ii) not extend to matters beyond the control of the Lender, including acts of God, war, insurrection, riot or governmental actions. In addition, any failure of the Lender to preserve or protect any rights with respect to the Collateral against prior or third parties, or to do any act with respect to preservation of the Collateral, not so requested by the Borrower, shall not be deemed a failure to exercise reasonable care in the custody or preservation of the Collateral. The Borrower shall have the sole responsibility for taking such action as may be necessary, from time to time, to preserve all rights of the Borrower and the Lender in the Collateral against prior or third parties. Without limiting the generality of the foregoing, where Collateral consists in whole or in part of securities, the Borrower represents to, and covenants with, the Lender that the Borrower has made arrangements for keeping informed of changes or potential changes affecting the securities (including rights to convert or subscribe, payment of dividends, reorganization, or other exchanges, tender offers, and voting rights), and the Borrower agrees that the Lender shall have no responsibility or liability for informing the Borrower of any such or other changes or potential changes or for taking any action or omitting to take any action with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7 <u>Other Actions as to any and all Collateral</u>. The Borrower further agrees to take any other action reasonably requested by the Lender to ensure the attachment, perfection and first priority of, and the ability of the Lender to enforce, the Lender's security interest in any and all of the Collateral including (a) causing the Lender's name to be noted as secured party on any certificate of title for a titled good if such notation is a condition to attachment, perfection or

priority of, or ability of the Lender to enforce, the Lender's security interest in such Collateral, (b) complying with any provision of any statute, regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of the Lender to enforce, the Lender's security interest in such Collateral, (c) obtaining governmental and other third party consents and approvals, including any consent of any licensor, lessor or other Person obligated on Collateral, (d) obtaining waivers from mortgagees and landlords in form and substance satisfactory to the Lender, and (e) taking all actions required by the UCC in effect from time to time or by other law, as applicable in any relevant UCC jurisdiction, or by other law as applicable in any foreign jurisdiction. The Borrower further agrees to indemnify and hold the Lender harmless against claims of any Persons not a party to this Agreement concerning disputes arising over the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8 <u>Collateral in the Possession of a Warehouseman or Bailee</u>. If any of the Collateral at any time is in the possession of a warehouseman or bailee, the Borrower shall promptly notify the Lender thereof, and shall promptly obtain a Collateral Access Agreement. The Lender agrees that the Lender shall not give any instructions under any such Collateral Access Agreement unless an Event of Default has occurred and is continuing or would occur, or could reasonably be expected to occur, after taking into account any action by the Borrower with respect to the warehouseman or bailee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.9 <u>Letter-of-Credit Rights</u>. If the Borrower at any time is a beneficiary under a letter of credit now or hereafter issued in favor of the Borrower, the Borrower shall promptly notify the Lender thereof and, at the request and option of the Lender, the Borrower shall, pursuant to an agreement in form and substance satisfactory to the Lender, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Lender of the proceeds of any drawing under the letter of credit, or (ii) arrange for the Lender to become the transferee beneficiary of the letter of credit, with the Lender agreeing, in each case, that the proceeds of any drawing under the letter to credit are to be applied as provided in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.10 <u>Commercial Tort Claims</u>. If the Borrower shall at any time hold or acquire a Commercial Tort Claim, the Borrower shall immediately notify the Lender in writing signed by the Borrower of the details thereof and grant to the Lender in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, in each case in form and substance satisfactory to the Lender, and shall execute any amendments hereto deemed reasonably necessary by the Lender to perfect its security interest in such Commercial Tort Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.11 <u>Electronic Chattel Paper and Transferable Records</u>. If the Borrower at any time holds or acquires an interest in any electronic chattel paper or any "transferable record," as that term is defined in Section 201 of the federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, the Borrower shall promptly notify the Lender thereof and, at the request of the Lender, shall take such action as the Lender may reasonably request to vest in the Lender control under Section 9-105 of the UCC of such electronic chattel paper or control under Section 201 of the federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Lender agrees with the Borrower that the Lender will arrange, pursuant to procedures satisfactory to the Lender and so long as such procedures will not

result in the Lender's loss of control, for the Borrower to make alterations to the electronic chattel paper or transferable record permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of the federal Electronic Signatures in Global and National Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a party in control to make without loss of control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.12 <u>Post-Closing Items</u>. As soon as is reasonably practical, but in any event, no later than 30 days after the date hereof (subject to unilateral extension by the Lender, in its sole discretion), a Collateral Access Agreement, from the owner, lessor or mortgagee, as the case may be, of any real estate whereon any Collateral owned by Borrower is stored or otherwise located, in a form reasonably acceptable to the Lender.

Section 7. <u>REPRESENTATIONS AND WARRANTIES</u>. To induce the Lender to make the Loans, the Borrower makes the following representations and warranties to the Lender, each of which shall survive the execution and delivery of this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Borrower Organization and Name</u>. The Borrower is duly organized, existing and in good standing under the laws of the state reflected in its Organizational Documents, with full and adequate power to carry on and conduct its business as presently conducted. The Borrower is duly licensed or qualified in all foreign jurisdictions wherein the nature of its activities requires such qualification or licensing, except for such jurisdictions where the failure to so qualify would not have a Material Adverse Effect. The exact legal name of the Borrower is as set forth in the first paragraph of this Agreement, and the Borrower currently does not conduct, nor has it during the last five years conducted, business under any other name or trade name.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Authorization</u>. The Borrower has full right, power, and authority to enter into this Agreement, to make the borrowings and execute and deliver the Loan Documents as provided herein and to perform all of its duties and obligations under this Agreement and the other Loan Documents. The execution and delivery of this Agreement and the other Loan Documents will not, nor will the observance or performance of any of the matters and things herein or therein set forth, violate, or contravene any provision of law or of the Organizational Documents or Organizational Certificates of the Borrower. All necessary and appropriate action has been taken on the part of the Borrower to authorize the execution and delivery of this Agreement and the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Validity and Binding Nature</u>. This Agreement and the other Loan Documents are the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors' rights generally and to general principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Consent; Absence of Breach</u>. To the best of Borrower's knowledge, the execution, delivery and performance of this Agreement, the other Loan Documents and any other documents or instruments to be executed and delivered by the Borrower in connection with the Loans, and the borrowings by the Borrower hereunder, do not and will not (a) require any consent, approval, authorization of, or filings with, notice to or other act by or in respect of, any governmental authority or any other Person (other than any consent or approval which has been obtained and is in full force and effect); (b) conflict with (i) any provision of law or any applicable regulation,

order, writ, injunction or decree of any court or governmental authority, (ii) the Organizational Documents of the Borrower, or (iii) any material agreement, indenture, instrument or other document, or any judgment, order or decree, which is binding upon the Borrower or any of their properties or assets; or (c) require, or result in, the creation or imposition of any Lien on any asset of Borrower, other than Liens in favor of the Lender created pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Ownership of Properties; Liens</u>. The Borrower is the sole owner all of its properties and assets, real and personal, tangible and intangible, of any nature whatsoever (including patents, trademarks, trade names, service marks and copyrights), free and clear of all Liens, charges and claims (including infringement claims with respect to patents, trademarks, service marks, copyrights and the like), other than Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Equity Ownership</u>. All issued and outstanding Capital Securities of the Borrower and each of its Subsidiaries are duly authorized and validly issued, fully paid, non-assessable, and free and clear of all Liens other than those in favor of the Lender, if any, and such securities were issued in compliance with all applicable state and federal laws concerning the issuance of securities. As of the date hereof, there are no pre-emptive or other outstanding rights, options, warrants, conversion rights or other similar agreements or understandings for the purchase or acquisition of any Capital Securities of the Borrower and each of its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 <u>Intellectual Property</u>. The Borrower and the Guarantor owns and possesses or has a license or other right to use all its Intellectual Property, as are necessary for the conduct of the businesses of the Borrower or the Guarantor, without any infringement upon rights of others which could reasonably be expected to have a Material Adverse Effect upon the Borrower or the Guarantor, and no material claim has been asserted and is pending by any Person challenging or questioning the use of any Intellectual Property or the validity or effectiveness of any Intellectual Property nor does the Borrower or the Guarantor know of any valid basis for any such claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 <u>Financial Statements</u>. All financial statements submitted to the Lender have been prepared in accordance with sound accounting practices and GAAP on a basis, except as otherwise noted therein, consistent with the previous fiscal year and present fairly the financial condition of the Borrower and the results of the operations for the Borrower as of such date and for the periods indicated. Since the date of the most recent financial statement submitted by the Borrower to the Lender, there has been no change in the financial condition or in the assets or liabilities of the Borrower having a Material Adverse Effect on the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 <u>Litigation and Contingent Liabilities</u>. There is no litigation, arbitration proceeding, demand, charge, claim, petition, or governmental investigation or proceeding pending, or threatened, against the Borrower, which, if adversely determined, which might reasonably be expected to have a Material Adverse Effect upon the Borrower, except as set forth in <u>Schedule 7.9</u>. Other than any liability incident to such litigation or proceedings, the Borrower has no material guarantee obligations, contingent liabilities, liabilities for taxes, or any long-term leases or unusual forward or long-term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, that are not fully-reflected or fully reserved for in the most recent audited financial statements delivered pursuant to <u>Section 8.8(a)</u> or fully-reflected or fully reserved for in the most recent quarterly financial statements delivered pursuant to <u>Section 8.8(b)</u> and not permitted by <u>Section 9.1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 <u>Event of Default</u>. No Event of Default or Unmatured Event of Default exists or would result from the incurrence by the Borrower of any of the Obligations hereunder or under any of the other Loan Document, and the Borrower is not in default (without regard to grace or cure periods) under any other contract or agreement to which it is a party, the effect of which would have a Material Adverse Effect upon the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 <u>Adverse Circumstances</u>. No condition, circumstance, event, agreement, document, instrument, restriction, litigation, or proceeding (or threatened litigation or proceeding or basis therefor) exists which (a) would have a Material Adverse Effect upon the Borrower, or (b) would constitute an Event of Default or an Unmatured Event of Default, except as set forth in <u>Schedule 7.11</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.12 <u>Environmental Laws and Hazardous Substances</u>. The Borrower has not generated, used, stored, treated, transported, manufactured, handled, produced or disposed of any Hazardous Substances, on or off any of the premises of the Borrower (whether or not owned by it) in any manner which at any time violates any Environmental Law or any license, permit, certificate, approval or similar authorization thereunder. The Borrower comply in all material respects with all Environmental Laws and all licenses, permits certificates, approvals and similar authorizations thereunder. There has been no investigation, proceeding, complaint, order, directive, claim, citation or notice by any governmental authority or any other Person, nor is any pending or, to the best of the Borrower's knowledge, threatened, and the Borrower shall immediately notify the Lender upon becoming aware of any such investigation, proceeding, complaint, order, directive, claim, citation or notice, and shall take prompt and appropriate actions to respond thereto, with respect to any non-compliance with, or violation of, the requirements of any Environmental Law by the Borrower or the release, spill or discharge, threatened or actual, of any Hazardous Substances or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Substances or any other environmental, health or safety matter, which affects the Borrower or its business, operations or assets or any properties at which the Borrower has transported, stored or disposed of any Hazardous Substances. The Borrower has no material liability, contingent or otherwise, in connection with a release, spill or discharge, threatened or actual, of any Hazardous Substances or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Substances. The Borrower further agrees to allow the Lender or its agent access to the properties of the Borrower and its Subsidiaries to confirm compliance with all Environmental Laws, and the Borrower shall, following determination by the Lender that there is non-compliance, or any condition which requires any action by or on behalf of the Borrower in order to avoid any non-compliance, with any Environmental Law, at the Borrower's sole expense, cause an independent environmental engineer acceptable to the Lender to conduct such tests of the relevant site as are appropriate, and prepare and deliver a report setting forth the result of such tests, a proposed plan for remediation and an estimate of the costs thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.13 <u>Solvency, etc</u>. As of the date hereof, and immediately prior to and after giving effect to the Acquisition, the issuance of each Letter of Credit, and each Loan hereunder and the use of the proceeds thereof, (a) the fair value of the Borrower's assets is greater than the amount of its liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated as required under the Section 548 of the Bankruptcy Code, (b) the present fair saleable value of the Borrower's assets is not less than the amount that will be

required to pay the probable liability on its debts as they become absolute and matured, (c) the Borrower is able to realize upon its assets and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business, (d) the Borrower does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature, and (e) the Borrower is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which its property would constitute unreasonably small capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.14 <u>ERISA Obligations</u>. All Employee Plans of the Borrower meet the minimum funding standards of Section 302 of ERISA and 412 of the Internal Revenue Code where applicable, and each such Employee Plan that is intended to be qualified within the meaning of Section 401 of the Internal Revenue Code of 1986 is qualified. No withdrawal liability has been incurred under any such Employee Plans and no "Reportable Event" or "Prohibited Transaction" (as such terms are defined in ERISA), has occurred with respect to any such Employee Plans, unless approved by the appropriate governmental agencies. The Borrower has promptly paid and discharged all obligations and liabilities arising under the Employee Retirement Income Security Act of 1974 ("ERISA") of a character which if unpaid or unperformed might result in the imposition of a Lien against any of its properties or assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.15 <u>Labor Relations</u>. Except as could not reasonably be expected to have a Material Adverse Effect, (i) there are no strikes, lockouts or other labor disputes against the Borrower or threatened, (ii) hours worked by and payment made to employees of the Borrower have not been in violation of the Fair Labor Standards Act or any other applicable law, and (ii) no unfair labor practice complaint is pending against the Borrower or threatened before any governmental authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.16 <u>Security Interest</u>. This Agreement creates a valid security interest in favor of the Lender in the Collateral and, when properly perfected by filing in the appropriate jurisdictions, or by possession or Control of such Collateral by the Lender or delivery of such Collateral to the Lender, shall constitute a valid, perfected, first-priority security interest in such Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.17 <u>Lending Relationship</u>. The relationship hereby created between the Borrower and the Lender is and has been conducted on an open and arm's length basis in which no fiduciary relationship exists, and the Borrower has not relied and is not relying on any such fiduciary relationship in executing this Agreement and in consummating the Loans. The Lender represents that it will receive any Note payable to its order as evidence of a bank loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.18 <u>Business Loan</u>. The Loans, including interest rate, fees and charges as contemplated hereby, (i) are business loans, and (ii) do not, and when disbursed shall not, violate the provisions of the Minnesota usury laws, any consumer credit laws or the usury laws of any state which may have jurisdiction over this transaction, the Borrower or any property securing the Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.19 <u>Taxes</u>. The Borrower has timely filed all tax returns and reports required by law to have been filed by it and has paid all taxes, governmental charges and assessments due and payable with respect to such returns, except any such taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with

GAAP shall have been set aside on its books, are insured against or bonded over to the satisfaction of the Lender and the contesting of such payment does not create a Lien on the Collateral which is not a Permitted Lien. There is no controversy or objection pending or threatened in respect of any tax returns of the Borrower. The Borrower has made adequate reserves on its books and records in accordance with GAAP for all taxes that have accrued but which are not yet due and payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.20 <u>Compliance with Regulation U</u>. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no portion of the proceeds of the Loans shall be used by the Borrower, or any Affiliate of the Borrower, either directly or indirectly, for the purpose of purchasing or carrying any Margin Stock or to extend to others for the purpose of purchasing or carrying any Margin Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.21 <u>Governmental Regulation</u>. The Borrower and its Subsidiaries, including the Guarantor, are not, or after giving effect to any loan, will not be, subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the ICC Termination Act of 1995, the Investment Company Act of 1940, or to any federal or state statute or regulation limiting its ability to incur indebtedness for borrowed money.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.22 <u>Bank Accounts</u>. All Deposit Accounts and operating bank accounts of the Borrower and its Subsidiaries are located at the Lender and the Borrower has no other Deposit Accounts except those listed on <u>Schedule 7.22</u> attached hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.23 <u>Place of Business</u>. The principal place of business and books and records of the Borrower is set forth in the preamble to this Agreement, and the location of all Collateral, if other than at such principal place of business, is as set forth on <u>Schedule 7.23</u> attached hereto and made a part hereof, and the Borrower shall promptly notify the Lender of any change in such locations. The Borrower will not remove or permit the Collateral to be removed from such locations without the prior written consent of the Lender, except for Inventory sold in the usual and ordinary course of the Borrower's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.24 <u>Complete Information</u>. This Agreement and all financial statements, schedules, certificates, confirmations, agreements, contracts, and other materials and information heretofore or contemporaneously herewith furnished in writing by the Borrower to the Lender for purposes of, or in connection with, this Agreement and the transactions contemplated hereby is, and all written information hereafter furnished by or on behalf of the Borrower to the Lender pursuant hereto or in connection herewith will be, true and accurate in every material respect on the date as of which such information is dated or certified, and none of such information is or will be incomplete by omitting to state any material fact necessary to make such information not misleading in light of the circumstances under which made (it being recognized by the Lender that any projections and forecasts provided by the Borrower are based on good faith estimates and assumptions believed by the Borrower to be reasonable as of the date of the applicable projections or assumptions and that actual results during the period or periods covered by any such projections and forecasts may differ from projected or forecasted results).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.25 <u>Subordinated Debt</u>. The subordination provisions of the Subordinated Debt are enforceable against the holders of the Subordinated Debt by the Lender. The Obligations

constitute Senior Debt entitled to the benefits of the subordination provisions contained in the Subordinated Debt. The Borrower acknowledges that the Lender is entering into this Agreement and is making the Loans in reliance upon the subordination provisions of the Subordinated Debt and this section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.26 <u>Internal Controls</u>. From and after the closing of an initial public offering of the capital stock of the Borrower:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 under the U.S. Securities Exchange Act or 1934, as amended (the "Exchange Act")), which (i) are designed to ensure that material information relating to the Borrower is made known to the Borrower's principal executive officer and its principal financial offer or persons performing similar functions by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared; (ii) have been evaluated for effectiveness as a date within 90 days prior to the filing of the Borrower's most recent annual or quarterly report filed with the Securities Exchange Commission; and (iii) are effective in all material respects to perform he functions for which they were established;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Based on the evaluation of its disclosure controls and procedures, the Borrower is not aware of (i) any significant deficiency in the design or operation of internal controls which could adversely affect the Borrower's ability to record, process, summarize and report financial data or any material weaknesses in internal controls or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Borrower's internal controls; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.27 <u>Supplier, Customer, Client, and Agent Relations</u>. As of the date hereof, there exists no condition or state of facts or circumstances relating to the Acquisition (including the failure to obtain any required consent to the Acquisition) that would reasonably be expected to prevent the Borrower or the Guarantor from conducting business with any supplier, vendor, customer, client, agent, or other contractual counterparty of the Borrower or the Guarantor in substantially the same manner as previously conducted by the Borrower or the Guarantor immediately prior to the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.28 <u>Material Contracts</u>. Neither the Borrower nor any of its Subsidiaries (a) is in breach or in default in any material respect under any Material Contract to which any is a party, or (b) have received any notice of the intention of any other party to a Material Contract to terminate such Material Contract.

Section 8. <u>AFFIRMATIVE COVENANTS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Compliance with Bank Regulatory Requirements; Increased Costs</u>. If the Lender shall reasonably determine that any Regulatory Change, or compliance by the Lender or any

Person controlling the Lender with any request or directive (whether or not having the force of law) of any governmental authority, central bank or comparable agency has or would have the effect of reducing the rate of return on the Lender's or such controlling Person's capital as a consequence of the Lender's obligations hereunder or under any Letter of Credit to a level below that which the Lender or such controlling Person could have achieved but for such Regulatory Change or compliance (taking into consideration the Lender's or such controlling Person's policies with respect to capital adequacy) by an amount deemed by the Lender or such controlling Person to be material or would otherwise reduce the amount of any sum received or receivable by the Lender under this Agreement or under any Note with respect thereto, then from time to time, upon demand by the Lender (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail), the Borrower shall pay directly to the Lender or such controlling Person such additional amount as will compensate the Lender for such increased cost or such reduction, so long as such amounts have accrued on or after the day which is 180 days prior to the date on which the Lender first made demand therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Borrower Existence</u>. The Borrower shall at all times preserve and maintain (a) its existence and good standing in the jurisdiction of its organization, and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary (other than such jurisdictions in which the failure to be qualified or in good standing could not reasonably be expected to have a Material Adverse Effect), and shall at all times continue as a going concern in the business which the Borrower is presently conducting. If the Borrower does not have an Organizational Identification Number and later obtains one, the Borrower shall promptly notify the Lender of such Organizational Identification Number.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <u>Compliance With Laws</u>. The Borrower shall use the proceeds of the Loans for working capital and other general corporate or business purposes not in contravention of any requirements of law and not in violation of this Agreement, and shall comply, and cause each Subsidiary to comply, in all respects, including the conduct of its business and operations and the use of its properties and assets, with all applicable laws, rules, regulations, decrees, orders, judgments, licenses and permits, except where failure to comply could not reasonably be expected to have a Material Adverse Effect. In addition, and without limiting the foregoing sentence, the Borrower shall (a) ensure, and cause each Subsidiary to ensure, that no person who owns a controlling interest in or otherwise controls the Borrower or any Subsidiary is or shall be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of Foreign Assets Control ("<u>OFAC</u>"), the Department of the Treasury or included in any Executive Orders, (b) not use or permit the use of the proceeds of the Loans to violate any of the foreign asset control regulations of OFAC or any enabling statute or Executive Order relating thereto, (c) comply, and cause each Subsidiary to comply, with all applicable Bank Secrecy Act ("<u>BSA</u>") laws and regulations, as amended, and (d) comply, and cause each Subsidiary to comply with the USA Patriot Act of 2001 and the Corporate Transparency Act of 2024, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 <u>Payment of Taxes and Liabilities</u>. The Borrower shall pay, and cause each Subsidiary to pay, and discharge, prior to delinquency and before penalties accrue thereon, all property and other taxes, and all governmental charges or levies against it or any of the Collateral, as well as claims of any kind which, if unpaid, could become a Lien on any of its property; provided that the foregoing shall not require the Borrower or any Subsidiary to pay any such tax or charge so long as it shall contest the validity thereof in good faith by appropriate proceedings and shall

set aside on its books adequate reserves with respect thereto in accordance with GAAP and, in the case of a claim which could become a Lien on any of the Collateral, such contest proceedings stay the foreclosure of such Lien or the sale of any portion of the Collateral to satisfy such claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 <u>Maintain Property</u>. The Borrower shall at all times maintain, preserve and keep its plant, properties and Equipment, including any Collateral, in good repair, working order and condition, normal wear and tear excepted, and shall from time to time make all needful and proper repairs, renewals, replacements, and additions thereto so that at all times the efficiency thereof shall be fully preserved and maintained. The Borrower shall permit the Lender to examine and inspect such plant, properties and Equipment, including any Collateral, at all reasonable times.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6 <u>Maintain Insurance</u>. The Borrower shall at all times maintain, and cause each Subsidiary to maintain, with insurance companies reasonably acceptable to the Lender, such insurance coverage as may be required by any law or governmental regulation or court decree or order applicable to it and such other insurance, to such extent and against such hazards and liabilities, including employers', public and professional liability risks, as is customarily maintained by companies similarly situated, and shall have insured amounts no less than, and deductibles no higher than, are reasonably acceptable to the Lender. The Borrower shall furnish to the Lender a certificate setting forth in reasonable detail the nature and extent of all insurance maintained by the Borrower, which shall be reasonably acceptable in all respects to the Lender. The Borrower shall cause each issuer of an insurance policy to provide the Lender with an endorsement (i) showing the Lender as "Lender's Loss Payable" with respect to each policy of property insurance and "Certificate Holder" and "Additional Insured" with respect to each policy of casualty insurance and (ii) providing that 30 days' notice will be given to the Lender prior to any cancellation of, material reduction or change in coverage provided by or other material modification to such policy. If insured via separate policy and not endorsement, Borrower shall execute and deliver to the Lender a collateral assignment, in form and substance satisfactory to the Lender, of each business interruption insurance policy maintained by the Borrower.

In the event the Borrower either fails to provide the Lender with evidence of the insurance coverage required by this section or at any time hereafter shall fail to obtain or maintain any of the policies of insurance required above, or to pay any premium in whole or in part relating thereto, then the Lender, without waiving or releasing any obligation or default by the Borrower hereunder, may at any time (but shall be under no obligation to so act), obtain and maintain such policies of insurance and pay such premiums and take any other action with respect thereto, which the Lender deems advisable. This insurance coverage (a) may, but need not, protect the Borrower's interests in such property, including the Collateral, and (b) may not pay any claim made by, or against, the Borrower in connection with such property, including the Collateral. The Borrower may later cancel any such insurance purchased by the Lender, but only after providing the Lender with evidence that the Borrower has obtained the insurance coverage required by this section. If the Lender purchases insurance for the Collateral, the Borrower will be responsible for the costs of that insurance, including interest and any other charges that may be imposed with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to the principal amount of the Loans owing hereunder. The costs of the insurance may be more than the cost of the insurance the Borrower may be able to obtain on its own.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7 <u>ERISA Liabilities; Employee Plans</u>. The Borrower shall (i) keep in full force and effect any and all Employee Plans which are presently in existence or may, from time to time, come into existence under ERISA, and not withdraw from any such Employee Plans, unless such withdrawal can be effected or such Employee Plans can be terminated without liability to the Borrower; (ii) make contributions to all of such Employee Plans in a timely manner and in a sufficient amount to comply with the standards of ERISA; including the minimum funding standards of ERISA; (iii) comply with all material requirements of ERISA which relate to such Employee Plans; (iv) notify the Lender immediately upon receipt by the Borrower of any notice concerning the imposition of any withdrawal liability or of the institution of any proceeding or other action which may result in the termination of any such Employee Plans or the appointment of a trustee to administer such Employee Plans; (v) promptly advise the Lender of the occurrence of any "Reportable Event" or "Prohibited Transaction" (as such terms are defined in ERISA), with respect to any such Employee Plans; and (vi) amend any Employee Plan that is intended to be qualified within the meaning of Section 401 of the Internal Revenue Code of 1986 to the extent necessary to keep the Employee Plan qualified, and to cause the Employee Plan to be administered and operated in a manner that does not cause the Employee Plan to lose its qualified status.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8 <u>Financial Statements</u>. The Borrower shall at all times maintain a standard and modern system of accounting, on the accrual basis of accounting and in all respects in accordance with GAAP, and shall furnish to the Lender or its authorized representatives such information regarding the business affairs, operations, and financial condition of the Borrower, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) promptly when available, and in any event, within 90 days after the close of each of its fiscal years, a copy of the annual audited financial statements of the Borrower and its Subsidiaries, including consolidated balance sheet, statement of income and retained earnings, statement of cash flows for the fiscal year then ended, and such other information (including nonfinancial information) as the Lender may reasonably request, in reasonable detail, prepared and certified without adverse reference to going concern value and without qualification by an independent auditor of recognized standing, selected by the Borrower and reasonably acceptable to the Lender; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) promptly when available, and in any event, within 45 days following the end of each fiscal quarter, a copy of the consolidated and consolidating financial statements of the Borrower and its Subsidiaries regarding such fiscal quarter, including balance sheet, statement of income and retained earnings, statement of cash flows for the fiscal quarter then ended and such other information (including nonfinancial information) as the Lender may reasonably request, in reasonable detail, prepared and certified as true and correct by the Borrower's treasurer or chief financial officer. No change with respect to such accounting principles shall be made by the Borrower without giving prior notification to the Lender. The Borrower represents and warrants to the Lender that the financial statements delivered to the Lender at or prior to the execution and delivery of this Agreement and to be delivered at all times thereafter accurately reflect and will accurately reflect the financial condition of the Borrower. The Lender shall have the right at all times during business hours to inspect the books and records of the Borrower and make extracts therefrom.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9 <u>Supplemental Financial Statements</u>. The Borrower shall immediately upon receipt thereof, provide to the Lender copies of interim and supplemental reports, if any, submitted to the Borrower by independent accountants in connection with any interim audit or review of the books of the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.10 <u>Borrowing Base Certificate</u>. The Borrower shall, within 30 days after the end of each month, deliver to the Lender a Borrowing Base Certificate dated as of the last Business Day of such month, certified as true and correct by an authorized representative of the Borrower and acceptable to the Lender in its sole and absolute discretion, provided, however, at any time an Event of Default exists, the Lender may require the Borrower to deliver Borrowing Base Certificates more frequently.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.11 <u>Aged Accounts Schedule</u>. The Borrower shall, within 30 days after the end of each month, deliver to the Lender an aged schedule of the Accounts of the Borrower, listing the name and amount due from each Account Debtor and showing the aggregate amounts due from (a) 0-30 days, (b) 31-60 days, (c) 61-90 days, and (d) more than 90 days, and certified as accurate by the Borrower's treasurer or chief financial officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.12 <u>Mako Contract</u>. The Borrower shall, not later than January 31st and July 31st of each year, commencing on July 31, 2026, deliver to the Lender a certificate in form and substance satisfactory to the Lender that the Borrower was in full compliance with the Mako Contract for the six-month periods ending on December 31st and June 30th immediately preceding such dates of delivery.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.13 <u>Inventory Reports</u>. The Borrower shall, within 30 days after the end of each month, deliver to the Lender an inventory report, certified as accurate by the Borrower's treasurer or chief financial officer, and within such time as the Lender may specify, such other schedules and reports as the Lender may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.14 <u>Brokerage Statement</u>. The Borrower shall, within 30 days after the end of each month, deliver to the Lender a true, complete, and correct copy of the brokerage statement for the Pledged Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.15 <u>Projected Financial Statements</u>. The Borrower shall, within 30 days after the end of each fiscal year, deliver to the Lender projections for the Borrower's next fiscal year in a form acceptable to the Lender and certified as having been prepared in good faith and representing the most probable course of the Borrower's business for such fiscal year by the Borrower's treasurer or chief financial officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.16 <u>Covenant Compliance Certificate</u>. The Borrower shall, contemporaneously with the furnishing of the financial statements pursuant to <u>Section 8.8(b)</u>, deliver to the Lender a duly completed compliance certificate, dated the date of such financial statements and certified as true and correct by an appropriate officer of the Borrower, containing a computation of each of the financial covenants set forth in <u>Section 10</u> and confirming that the Borrower has not become aware of any Event of Default or Unmatured Event of Default that has occurred and is continuing or, if there is any such Event of Default or Unmatured Event of Default describing it and the steps, if any, being taken to cure it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.17 <u>Field Audits</u>. The Borrower shall permit the Lender to inspect the Collateral including Inventory, other Tangible Assets and/or other business operations of the Borrower and each Subsidiary, to perform appraisals of the Equipment of the Borrower and each Subsidiary, and to inspect, audit, check and make copies of, and extracts from, the books, records, computer data, computer programs, journals, orders, receipts, correspondence and other data relating to Inventory, Accounts and any other Collateral, the results of which must be satisfactory to the Lender in the Lender's sole and absolute discretion. All such inspections or audits by the Lender shall be binding on the Borrower and be at the Borrower's sole expense, provided, however, that so long as no Event of Default or Unmatured Event of Default exists, the Borrower shall not be required to reimburse the Lender for inspections or audits more frequently than once each fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.18 <u>Acquisition Documents</u>. The Borrower shall promptly deliver to the Lender copies of all proposed amendments or modifications to any Acquisition Documents and all material notices (including notices in respect of defaults) and reports delivered by the Borrower or any of its Subsidiaries or any other Person in connection with the Acquisition Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.19 <u>Other Reports</u>. The Borrower shall, within such period of time as the Lender may specify, deliver to the Lender such other schedules and reports as the Lender may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.20 <u>Collateral Records</u>. The Borrower shall keep full and accurate books and records relating to the Collateral and shall mark such books and records to indicate the Lender's Lien in the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.21 <u>Intellectual Property</u>. The Borrower shall maintain, preserve, and renew, and shall cause the Guarantor to maintain, preserve, and renew, all Intellectual Property necessary for the conduct of its business as and where the same is currently located as heretofore or as hereafter conducted by it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.22 <u>Notice of Proceedings</u>. The Borrower, promptly upon becoming aware, shall give written notice to the Lender of any litigation, arbitration, or governmental investigation or proceeding not previously disclosed by the Borrower to the Lender which has been instituted or, to the knowledge of the Borrower, is threatened against the Borrower or any of its Subsidiaries or to which any of their respective properties is subject which might reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.23 <u>Notice of Filings</u>. The Borrower, promptly after the same are sent, deliver to the Lender copies of all proxy statements, financial statements, and reports that the Borrower sends to any holder of the Borrower's Capital Securities and copies of all reports and registration statements that the Borrower files with the SEC or any national securities exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.24 <u>Material Contracts</u>. The Borrower, promptly upon receipt of the same, shall deliver to the Lender (i) copies of all notices, requests, and other documents received by the Borrower or any of its Subsidiaries under or in connection with any Material Contract or instrument, indenture, or loan agreement related to any breach or default by any party thereto or any other event that could materially impact the value of the interests or rights of the Borrower or any of its Subsidiaries thereunder or otherwise have a Material Adverse Effect, and (ii) such information and reports

regarding any Material Contract and such instruments, indentures, or loan agreements as the Lender may reasonably request from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.25 <u>Notice of Event of Default or Material Adverse Effect</u>. The Borrower shall, immediately after the commencement thereof, give notice to the Lender in writing of the occurrence of any Event of Default or any Unmatured Event of Default, or the occurrence of any condition or event having a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.26 <u>Environmental Matters</u>. If any release or threatened release or other disposal of Hazardous Substances shall occur or shall have occurred on any real property or any other assets of the Borrower or any of its Subsidiaries, the Borrower shall, or shall cause the applicable Subsidiary to, cause the prompt containment and removal of such Hazardous Substances and the remediation of such real property or other assets as necessary to comply with all Environmental Laws and to preserve the value of such real property or other assets. Without limiting the generality of the foregoing, the Borrower shall, and shall cause each Subsidiary to, comply with any federal or state judicial or administrative order requiring the performance at any real property of the Borrower or any Subsidiary of activities in response to the release or threatened release of a Hazardous Substance. To the extent that the transportation of Hazardous Substances is permitted by this Agreement, the Borrower shall, and shall cause its Subsidiaries to, dispose of such Hazardous Substances, or of any other wastes, only at licensed disposal facilities operating in compliance with Environmental Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.27 <u>Further Assurances</u>. The Borrower shall take, and cause each Subsidiary to take, such actions as are necessary or as the Lender may reasonably request from time to time to ensure that the Obligations under the Loan Documents are secured by substantially all of the assets of the Borrower and its Subsidiaries, in each case as the Lender may determine, including (a) the execution and delivery of security agreements, pledge agreements, mortgages, deeds of trust, financing statements and other documents, and the filing or recording of any of the foregoing, and (b) the delivery of certificated securities and other collateral with respect to which perfection is obtained by possession.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.28 <u>Errors and Omissions</u>. The Borrower agrees, if requested by Lender, in consideration of Lender agreeing to enter into this Agreement and make Loan advances, to fully cooperate with the correction of any Loan Documents, related documents, or issues related to the perfection of the Lender's security interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.29 <u>Performance of Material Contracts</u>. The Borrower shall, and shall cause each of its Subsidiaries, to: perform and observe all the terms and provisions of each Material Contract to be performed or observed by the Borrower or any of its Subsidiaries thereunder; maintain each Material Contract to which it is a party in full force and effect; enforce each Material Contract to which it is a party in accordance with its terms; and take all actions to such ends as may from time to time be reasonably required. Upon the request of the Lender, the Borrower shall, and shall cause each of its Subsidiaries to, make to each other party to a Material Contract such demands and requests for information and reports as the Borrower or any of its Subsidiaries is entitled to make under such Material Contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.30 <u>Late Payment Fee</u>. If any payment due under this Agreement is late, Lender may assess a late payment fee equal to 5% of the amount of the payment missed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.31 <u>Non-Utilization Fee</u>. The Borrower agrees to pay to the Lender a non-utilization fee equal to 0.15% of the total of (a) the Revolving Loan Commitment, <u>minus</u> (b) the sum of (i) the daily average of the aggregate principal amount of all Revolving Loans outstanding, <u>plus</u> (ii) the daily average of the aggregate amount of the Letter of Credit Obligations, which non-utilization fee shall be (A) calculated on the basis of a year consisting of 360 days, (B) paid for the actual number of days elapsed, and (C) payable quarterly in arrears on the last day of each March, June, September and December, commencing on March 31, 2026, and on the Revolving Loan Maturity Date

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.32 <u>Banking Relationship</u>. The Borrower covenants and agrees, at all times during the term of this Agreement, to utilize the Lender as its primary bank of account and depository for all financial services, including all receipts, disbursements, cash management and related service.

Section 9. <u>NEGATIVE COVENANTS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Debt</u>. The Borrower shall not, and shall not permit any Subsidiary to, either directly or indirectly, create, assume, incur or have outstanding any Debt (including purchase money indebtedness), or become liable, whether as endorser, guarantor, surety, or otherwise, for any debt or obligation of any other Person, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Obligations under this Agreement and the other Loan Documents or other obligations to the Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) obligations of the Borrower or any Subsidiary for Taxes or other governmental charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) obligations of the Borrower or any Subsidiary for accounts payable, other than for money borrowed, incurred in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Debt of the Borrower owed to any of its Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Debt of any Subsidiaries owed to the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Subordinated Debt;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Bank Product Obligations under a Swap Transaction Documents incurred in favor of the Lender or an Affiliate thereof for bona fide hedging purposes and not for speculation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Capitalized Lease Obligations, provided that the aggregate amount of all such Debt outstanding at any time shall not exceed $500,000 in the aggregate (excluding

Capitalized Lease Obligations of the Guarantor assumed by the Borrower in accordance with the Acquisition Documents):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Debt for Capital Expenditures incurred after the date of this Agreement not to exceed $500,000 in the aggregate at any time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Debt described on <u>Schedule 9.1</u> and any extension, renewal, or refinancing thereof so long as the principal amount thereof is not increased;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) other unsecured Debt, in addition to the Debt listed above, in an aggregate amount outstanding at any time not to exceed $500,000 in the aggregate at any time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Encumbrances</u>. The Borrower shall not, and shall not permit any Subsidiary to, either directly or indirectly, create, assume, incur, or suffer or permit to exist any Lien or charge of any kind or character upon any asset of the Borrower or such Subsidiary, whether owned at the date hereof or hereafter acquired, except for Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Investments</u>. The Borrower shall not, and shall not permit any Subsidiary to, either directly or indirectly, make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase, hold, or acquire any Capital Securities, bonds, notes, debentures, or other debt securities of, or any assets constituting a business unit of, or make any other investment in, any Person (all of the foregoing, collectively, "<u>Investments</u>"), except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Investments in Cash Equivalents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) loans and advances to officers, directors, or employees of Borrower or any Subsidiary of the Borrower in the ordinary course of business (including for travel, entertainment, and relocation expenses) in an aggregate amount not to exceed $500,000 at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Investments by any Subsidiary of the Borrower in the Borrower or the Guarantor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) extensions of trade credit in the ordinary course of business (including any instrument evidencing the same and any instrument, security, or other asset acquired through bona fide collection efforts with respect to the same);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Eligible Investment Securities held in the Pledged Account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Investments listed on <u>Schedule 9.3</u> as of the date hereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Only so long as no Event of Default or Unmatured Event of Default exists or would result therefrom, the Borrower may make other Investments not otherwise permitted by this <u>Section 9.3</u> (each, an "<u>Other Investment</u>," and collectively, "<u>Other Investments</u>"), provided, that (A) the Borrower shall provide the Lender with a schedule of each Other Investment with a value (valued at cost) in excess of $500,000 attached to each Borrowing Base Certificate delivered in accordance with <u>Section 8.10</u>; and (b) if at any time the aggregate amount (valued at cost) of Other Investments made by the Borrower

and the Guarantor on a consolidated basis on or after the date hereof exceeds $500,000, the amount of any additional Other Investments permitted in accordance with this <u>Section 9.3(g)</u> shall be limited to the amount of Excess Capital as calculated on a proforma basis as set forth on an Excess Capital Certificate delivered to the Lender prior to the making of any such Other Investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 <u>Transfer; Merger</u>. The Borrower shall not, and shall not permit any Subsidiary to, whether in one transaction or a series of related transactions, be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or any Capital Securities of any class of, or any partnership or joint venture interest in, any other Person, except for (i) any such merger, consolidation, sale, transfer, conveyance, lease, or assignment of or by any Wholly-Owned Subsidiary into the Borrower or into any other domestic Wholly-Owned Subsidiary; and (ii) any such purchase or other acquisition by the Borrower or any domestic Wholly-Owned Subsidiary of the assets or Capital Securities of any Wholly-Owned Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 <u>Sale-Leasebacks; Subsidiaries; New Business</u>. The Borrower shall not, nor shall it permit any Subsidiary to, enter into any sale and leaseback transaction with respect to any of its properties or create any Subsidiary, or manufacture any goods, render any services, or otherwise enter into any business which is not substantially similar to that existing on the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 <u>Restricted Payments</u>. The Borrower shall not, and shall not permit any Subsidiary to, (a) declare or pay any dividend on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement, or other acquisition of, any Capital Securities of the Borrower or any of its Subsidiaries, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or otherwise, to any holders of any of their Capital Securities (collectively, "<u>Restricted Payments</u>"), provided that: (i) the Borrower's use of the proceeds of Term Loan A or Term Loan C to repurchase its outstanding Capital Securities in accordance with a repurchase program approved by the board of directors of the Borrower is not a Restricted Payment; (ii) any Subsidiary of the Borrower may make a Restricted Payment to the Borrower; (iii) the Borrower may make Restricted Payments with respect to its Capital Securities if payable solely in its Capital Securities; and (iv) so long as no Event of Default or Unmatured Event of Default exists or would result therefrom, the Borrower may make Restricted Payments, provided that such Restricted Payments shall be limited to the amount of Excess Capital as calculated on a proforma basis as set forth on an Excess Capital Certificate delivered to the Lender prior to the making of any such Restricted Payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 <u>Transactions with Affiliates</u>. Other than the PDEX Lease, the Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly, enter into or permit to exist any transaction with any of its Affiliates or with any director, officer, or employee of the Borrower or such Subsidiary other than transactions in the ordinary course of, and pursuant to the reasonable requirements of, the business of the Borrower or such Subsidiary and upon fair and reasonable terms which are fully disclosed to the Lender and are no less favorable to the Borrower or such Subsidiary than would be obtained in a comparable arm's length transaction with a Person that is not an Affiliate of the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8 <u>Unconditional Purchase Obligations</u>. The Borrower shall not, and shall not permit any Subsidiary to, enter into or be a party to any contract for the purchase of materials, supplies or

other property or services if such contract requires that payment be made by it regardless of whether delivery is ever made of such materials, supplies or other property or services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9 <u>Cancellation of Debt</u>. The Borrower shall not, and shall not permit any Subsidiary to, cancel any claim or debt owing to it, except for reasonable consideration or in the ordinary course of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.10 <u>Inconsistent Agreements</u>. The Borrower shall not, and shall not permit any Subsidiary to, enter into any agreement containing any provision which would (a) be violated or breached by any borrowing by the Borrower hereunder or by the performance by the Borrower or any Subsidiary of any of its Obligations hereunder or under any other Loan Document, (b) prohibit the Borrower or any Subsidiary from granting to the Lender a Lien on any of its assets, or (c) create or permit to exist or become effective any encumbrance or restriction on the ability of any Subsidiary to (i) make Restricted Payments to the Borrower or any other Subsidiary, or pay any Debt owed to the Borrower or any other Subsidiary, (ii) make loans or advances to the Borrower or any other Subsidiary, or (iii) transfer any of its assets or properties to the Borrower or any other Subsidiary, other than (A) customary restrictions and conditions contained in agreements relating to the sale of all or a substantial part of the assets of any Subsidiary pending such sale, provided that such restrictions and conditions apply only to the Subsidiary to be sold and such sale is permitted hereunder, (B) restrictions or conditions imposed by any agreement relating to purchase money Debt, Capital Leases and other secured Debt permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Debt, and (C) customary provisions in leases and other contracts restricting the assignment thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.11 <u>Use of Proceeds</u>. Neither the Borrower nor any of its Subsidiaries or Affiliates shall use any portion of the proceeds of the Loans, either directly or indirectly, for the purpose of purchasing any securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.12 <u>Sanctions; Anti-Corruption Use of Proceeds</u>. The Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly, use the proceeds of the Loans or use the Letters of Credit, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of the FCPA or any other applicable anti-corruption law, or (b) (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of sanctions, or (ii) in any other manner that would result in a violation of any sanctions by any Person (including any Person participating in the Loans or Letters of Credit, whether as lender, underwriter, advisor, investor, or otherwise).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.13 <u>Bank Accounts</u>. The Borrower shall not, and shall not permit any Subsidiary to, establish any new Deposit Accounts or other bank accounts, other than Deposit Accounts or other bank accounts established at or with the Lender without the prior written consent of the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.14 <u>Business Activities; Change of Legal Status and Organizational Documents</u>. The Borrower shall not, and shall not permit any Subsidiary to, (a) engage in any line of business other than the businesses engaged in on the date hereof and businesses reasonably related thereto, (b) change its name, its Organizational Identification Number, if it has one, its type of organization,

its jurisdiction of organization or other legal structure, or (b) permit its charter, bylaws or other organizational documents to be amended or modified in any way which could reasonably be expected to materially adversely affect the interests of the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.15 <u>Amendments of Organizational Documents or Material Contracts</u>. The Borrower shall not, and shall not permit any of its Subsidiaries, to amend, restate, supplement, or otherwise modify its Organizational Documents or any Material Contract, in each case, in any respect materially adverse to the interests of the Lender, without the prior written consent of the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.16 <u>Fiscal Year</u>. The Borrower shall not change the end of the Borrower's fiscal year to a date other than June 30th.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.17 <u>Dispositions</u>. The Borrower shall not, and shall not permit the Guarantor to, Dispose of any of its or the Guarantor's property, whether now owned or hereafter acquired, or issue or sell any Capital Securities of the Borrower or the Guarantor to any Person, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Disposition of machinery and equipment no longer used or useful in the business of the Borrower or the Guarantor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Disposition of obsolete or worn-out property of the Borrower or the Guarantor in the ordinary course of its business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the sale or lease of inventory for fair market value in the ordinary course of business of the Borrower or the Guarantor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the sale of Pledged Securities for fair market value in the ordinary course of business of the Borrower; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) other Dispositions of property that yield gross proceeds to the Borrower or the Guarantor (valued at the principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) less than or equal to $500,000.

Section 10. <u>FINANCIAL COVENANTS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 <u>Fixed Charge Coverage Ratio</u>. As of each Measurement Date, for the Measurement Period ending on such Measurement Date, the Borrower and its Subsidiaries shall maintain a Fixed Charge Coverage Ratio of not less than 1.15 to 1.00. Beginning on the Measurement Date ending on September 30, 2026, for the Measurement Period ending on such Measurement Date, and as of each Measurement Date thereafter, the Borrower and its Subsidiaries shall maintain a Fixed Charge Coverage Ratio of not less than 1.20 to 1.00.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 <u>Senior Cash Flow Leverage Ratio</u>. As of each Measurement Date, for the Measurement Period ending on such Measurement Date, the Borrower and its Subsidiaries shall maintain a Senior Cash Flow Leverage Ratio of not more than 2.50 to 1.00.

Section 11. <u>EVENTS OF DEFAULT</u>.

The Borrower, without notice or demand of any kind, shall be in default under this Agreement upon the occurrence of any of the following events (each an "Event of Default").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 <u>Nonpayment of Obligations</u>. Any amount due and owing on any Note or any of the Obligations is not paid within five days after the due date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 <u>Misrepresentation</u>. Any oral or written warranty, representation, certificate, or statement of any Obligor in this Agreement, the other Loan Documents, or any other agreement with the Lender shall be false in any material respect when made or deemed made, or if any financial data or any other information now or hereafter furnished to the Lender by or on behalf of any Obligor shall prove to be false, inaccurate, or misleading in any material respect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 <u>Certain Affirmative Covenants; Negative Covenants</u>. The Borrower or the Guarantor fails to perform or observe any covenant, term, condition, or agreement contained in <u>Sections 8.1</u>, <u>8.4</u>, <u>8.5</u>, <u>8.6</u>, <u>8.7</u>, <u>8.8</u>, <u>8.10</u>, <u>8.11</u>, <u>8.12</u>, <u>8.13</u>, <u>8.14</u>, <u>8.17</u>, <u>8.18</u>, <u>8.19</u>, <u>8.22</u>, <u>8.24</u>, <u>8.25</u>, or <u>Section 9</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 <u>Nonperformance</u>. Any failure to perform or default in the performance of any covenant, condition, or agreement contained in this Agreement or any other Loan Documents (other than Events of Default provided in this <u>Section 11</u>) and, if capable of being cured, such failure to perform or default in performance continues for a period of 30 days after the Borrower receives notice or knowledge from any source of such failure to perform or default in performance; provided, however, that if such failure to perform or default in performance cannot reasonably be cured within such 30-day period, and the Borrower commences the cure thereof within such 30-day period and prosecutes diligently, continuously, and in good faith, the 30-day period will be extended by the period of time reasonably required to cure the default, not to exceed an additional 60 days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 <u>Default under Loan Documents</u>. A default under any of the other Loan Documents, all of which covenants, conditions, and agreements contained therein are hereby incorporated in this Agreement by express reference, shall be and constitute an Event of Default under this Agreement and any other of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 <u>Default under Other Debt</u>. Any default by any Obligor in the payment of any Debt in excess of $500,000 for any other obligation beyond any period of grace provided with respect thereto or in the performance of any other term, condition, or covenant contained in any agreement (including any capital or operating lease or any agreement in connection with the deferred purchase price of property) under which any such obligation is created, the effect of which default is to cause or permit the holder of such obligation (or the other party to such other agreement) to cause such obligation to become due prior to its stated maturity or terminate such other agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7 <u>Other Material Obligations</u>. Any default in the payment when due, or in the performance or observance of, any material obligation of, or condition agreed to by, any Obligor with respect to any material purchase or lease of goods or services where such default, singly or in the aggregate with all other such defaults, might reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8 <u>Bankruptcy, Insolvency, etc</u>. Any Obligor becomes insolvent or generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become due; or any Obligor applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other custodian for such Obligor or any property thereof, or makes a general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for any Obligor or for a substantial part of the property of any thereof and is not discharged within 60 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is commenced in respect of any Obligor, and if such case or proceeding is not commenced by such Obligor, it is consented to or acquiesced in by such Obligor, or remains undismissed for 60 days; or any Obligor takes any action to authorize, or in furtherance of, any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.9 <u>Judgments</u>. The entry of any final judgment, decree, levy, attachment, garnishment or other process, or the filing of any Lien against any Obligor, (a) which judgment or other process is in an amount in excess of $500,000 (not fully paid by insurance proceeds or covered by the relevant insurance provider in a written acknowledgment of coverage), or (b) such judgment or other process shall not have been, within 60 days from the entry thereof, (i) bonded over to the satisfaction of the Lender and appealed, (ii) vacated, or (iii) discharged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.10 <u>Change in Control</u>. The occurrence of any Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.11 <u>Collateral Impairment</u>. The entry of any judgment, decree, levy, attachment, garnishment or other process, or the filing of any Lien against, any of the Collateral or any collateral under a separate security agreement securing any of the Obligations and such judgment or other process shall not have been, within 30 days from the entry thereof, (i) bonded over to the satisfaction of the Lender and appealed, (ii) vacated, or (iii) discharged, or the loss, theft, destruction, seizure or forfeiture, or the occurrence of any material deterioration or impairment of any of the Collateral or any of the collateral under any security agreement securing any of the Obligations, or any material decline or depreciation in the value or market price thereof (whether actual or reasonably anticipated), which causes the Collateral, in the sole opinion of the Lender acting in good faith, to become unsatisfactory as to value or character, or which causes the Lender to reasonably believe that it is insecure and that the likelihood for repayment of the Obligations is or will soon be impaired, time being of the essence. The cause of such deterioration, impairment, decline, or depreciation shall include, but is not limited to, the failure by the Borrower to do any act deemed reasonably necessary by the Lender to preserve and maintain the value and collectability of the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.12 <u>Material Adverse Effect</u>. The occurrence of any development, condition or event which has a Material Adverse Effect on the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.13 <u>Guaranty</u>. There is a discontinuance by the Guarantor of the Guaranty or the Guarantor shall contest the validity of such Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.14 <u>Subordinated Debt</u>. The subordination provisions of any Subordinated Debt shall for any reason be revoked or invalid or otherwise cease to be in full force and effect. The Borrower shall contest in any manner, or any other holder thereof shall contest in any judicial proceeding,

the validity or enforceability of the Subordinated Debt or deny that it has any further liability or obligation thereunder, or the Obligations shall for any reason not have the priority contemplated by the subordination provisions of the Subordinated Debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.15 <u>Mako Contract</u>. The Mako Contract shall expire or be terminated for any reason.

Section 12. <u>REMEDIES</u>.

Upon the occurrence of an Event of Default, the Lender shall have all rights, powers and remedies set forth in the Loan Documents, in any written agreement or instrument (other than this Agreement or the Loan Documents) relating to any of the Obligations or any security therefor, as a secured party under the UCC or as otherwise provided at law or in equity. Without limiting the generality of the foregoing, the Lender may, at its option upon the occurrence of an Event of Default, declare its commitments to the Borrower to be terminated and all Obligations to be immediately due and payable, provided, however, that upon the occurrence of an Event of Default under <u>Section 11.8</u>, all commitments of the Lender to the Borrower shall immediately terminate and all Obligations shall be automatically due and payable, all without demand, notice or further action of any kind required on the part of the Lender. The Borrower hereby waives any and all presentment, demand, notice of dishonor, protest, and all other notices and demands in connection with the enforcement of Lender's rights under the Loan Documents, and hereby consents to, and waives notice of release, with or without consideration, of any of the Borrower, the Guarantor, or any Collateral, notwithstanding anything contained herein or in the Loan Documents to the contrary. In addition to the foregoing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 <u>Possession and Assembly of Collateral</u>. The Lender may, without notice, demand or legal process of any kind, take possession of any or all of the Collateral (in addition to Collateral of which the Lender already has possession), wherever it may be found, and for that purpose may pursue the same wherever it may be found, and may at any time enter into any of the Borrower's premises where any of the Collateral may be or is supposed to be, and search for, take possession of, remove, keep and store any of the Collateral until the same shall be sold or otherwise Disposed of and the Lender shall have the right to store and conduct a sale of the same in any of the Borrower's premises without cost to the Lender. At the Lender's request, the Borrower will, at the Borrower's sole expense, assemble the Collateral and make it available to the Lender at a place or places to be designated by the Lender which is reasonably convenient to the Lender and the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 <u>Sale of Collateral</u>. The Lender may sell any or all of the Collateral at public or private sale, upon such terms and conditions as the Lender may deem proper, and the Lender may purchase any or all of the Collateral at any such sale. The Borrower acknowledges that the Lender may be unable to affect a public sale of all or any portion of the Collateral because of certain legal and/or practical restrictions and provisions which may be applicable to the Collateral and, therefore, may be compelled to resort to one or more private sales to a restricted group of offerees and purchasers. The Borrower consents to any such private sale so made even though at places and upon terms less favorable than if the Collateral were sold at public sale. The Lender shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Lender may apply the net proceeds, after deducting all costs, expenses, attorneys' and paralegals' fees incurred or paid at any time in the collection, protection and sale of the Collateral and the Obligations, to the

payment of any Note and/or any of the other Obligations, returning the excess proceeds, if any, to the Borrower. The Borrower shall remain liable for any amount remaining unpaid after such application, with interest at the Default Rate. Any notification of intended Disposition of the Collateral required by law shall be conclusively deemed reasonably and properly given if given by the Lender at least 10 calendar days before the date of such Disposition. The Borrower hereby confirms, approves and ratifies all acts and deeds of the Lender relating to the foregoing, and each part thereof, and expressly waives any and all claims of any nature, kind or description which it has or may hereafter have against the Lender or its representatives, by reason of taking, selling or collecting any portion of the Collateral. The Borrower consents to releases of the Collateral at any time (including prior to default) and to sales of the Collateral in groups, parcels, or portions, or as an entirety, as the Lender shall deem appropriate. The Borrower expressly absolves the Lender from any loss or decline in market value of any Collateral by reason of delay in the enforcement or assertion or nonenforcement of any rights or remedies under this Agreement. The Lender is granted a license or other right to use, without charge, all of the Borrower's labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks and advertising matter, or any property of a similar nature as it pertains to the Collateral or any other property of the Borrower, in storing, removing, transporting, manufacturing, advertising, selling or otherwise using the Collateral, and the Borrower's rights in and under such property will inure to the Lender's benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 <u>Standards for Exercising Remedies</u>. To the extent that applicable law imposes duties on the Lender to exercise remedies in a commercially reasonable manner, the Borrower acknowledges and agrees that it is not commercially unreasonable for the Lender (a) to fail to incur expenses reasonably deemed significant by the Lender to prepare Collateral for Disposition or otherwise to complete raw material or work-in-process into finished goods or other finished products for Disposition, (b) to fail to obtain third party consents for access to Collateral to be Disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or Disposition of Collateral to be collected or Disposed of, (c) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove liens or encumbrances on or any adverse claims against Collateral, (d) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise Dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other Persons, whether or not in the same business as the Borrower, for expressions of interest in acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers to assist in the Disposition of Collateral, whether or not the collateral is of a specialized nature, (h) to Dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (i) to Dispose of assets in wholesale rather than retail markets, (j) to disclaim Disposition warranties, including any warranties of title, (k) to purchase insurance or credit enhancements to insure the Lender against risks of loss, collection or Disposition of Collateral or to provide to the Lender a guaranteed return from the collection or Disposition of Collateral, or (l) to the extent deemed appropriate by the Lender, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Lender in the collection or Disposition of any of the Collateral. The Borrower acknowledges that the purpose of this section is to provide non-exhaustive indications of what actions or omissions by the Lender would not be commercially unreasonable in the

Lender's exercise of remedies against the Collateral and that other actions or omissions by the Lender shall not be deemed commercially unreasonable solely on account of not being indicated in this section. Without limitation upon the foregoing, nothing contained in this section shall be construed to grant any rights to the Borrower or to impose any duties on the Lender that would not have been granted or imposed by this Agreement or by applicable law in the absence of this section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 <u>UCC and Setoff Rights</u>. The Lender may exercise, from time to time, any and all rights and remedies available to it under the UCC or under any other applicable law in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement or in any other agreements between any Obligor and the Lender, and may, without demand or notice of any kind, appropriate and apply toward the payment of such of the Obligations, whether matured or unmatured, including costs of collection and attorneys' and paralegals' fees, and in such order of application as the Lender may, from time to time, elect, any indebtedness of the Lender to any Obligor, however created or arising, including balances, credits, deposits, accounts or moneys of such Obligor in the possession, control or custody of, or in transit to the Lender. The Borrower, on behalf of itself and each Obligor, hereby waives the benefit of any law that would otherwise restrict or limit the Lender in the exercise of its right, which is hereby acknowledged, to appropriate at any time hereafter any such indebtedness owing from the Lender to any Obligor. Further, upon or after the occurrence and during the continuation of any Event of Default, the Lender is authorized at any time and from time to time, without notice to the Borrower (any such notice being waived by the Borrower), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Lender to or for the credit or the account of the Borrower against any and all of the Obligations irrespective of whether or not the Lender has made any demand under this Agreement or the other Loan Documents and although such Obligations may be unmatured. The rights of the Lender under this section are in addition to other rights and remedies (including other rights of setoff) which the Lender may have.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 <u>Additional Remedies</u>. The Lender shall have the right and power to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) instruct the Borrower, at its own expense, to notify any parties obligated on any of the Collateral, including any Account Debtors, to make payment directly to the Lender of any amounts due or to become due thereunder, or the Lender may directly notify such obligors of the security interest of the Lender, and/or of the assignment to the Lender of the Collateral and direct such obligors to make payment to the Lender of any amounts due or to become due with respect thereto, and thereafter, collect any such amounts due on the Collateral directly from such Persons obligated thereon;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) enforce collection of any of the Collateral, including any Accounts, by suit or otherwise, or make any compromise or settlement with respect to any of the Collateral, or surrender, release or exchange all or any part thereof, or compromise, extend or renew for any period (whether or not longer than the original period) any indebtedness thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) take possession or control of any proceeds and products of any of the Collateral, including the proceeds of insurance thereon;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) extend, renew or modify for one or more periods (whether or not longer than the original period) any Note, any other of the Obligations, any obligation of any nature of any other obligor with respect to any Note or any of the Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) grant releases, compromises, or indulgences with respect to any Note, any of the Obligations, any extension or renewal of any of the Obligations, any security therefor, or to any other obligor with respect to any Note or any of the Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) transfer the whole or any part of securities which may constitute Collateral into the name of the Lender or the Lender's nominee without disclosing, if the Lender so desires, that such securities so transferred are subject to the security interest of the Lender, and any corporation, association, or any of the managers or trustees of any trust issuing any of such securities, or any transfer agent, shall not be bound to inquire, in the event that the Lender or such nominee makes any further transfer of such securities, or any portion thereof, as to whether the Lender or such nominee has the right to make such further transfer, and shall not be liable for transferring the same;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) vote the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) make an election with respect to the Collateral under Section 1111 of the Bankruptcy Code or take action under Section 364 or any other section of the Bankruptcy Code; provided, however, that any such action of the Lender as set forth herein shall not, in any manner whatsoever, impair or affect the liability of the Borrower hereunder, nor prejudice, waive, nor be construed to impair, affect, prejudice or waive the Lender's rights and remedies at law, in equity or by statute, nor release, discharge, nor be construed to release or discharge, the Borrower, any guarantor or other Person liable to the Lender for the Obligations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at any time, and from time to time, accept additions to, releases, reductions, exchanges or substitution of the Collateral, without in any way altering, impairing, diminishing or affecting the provisions of this Agreement, the Loan Documents, or any of the other Obligations, or the Lender's rights hereunder, under any Note or under any of the other Obligations.

The Borrower hereby ratifies and confirms whatever the Lender may do with respect to the Collateral and agrees that the Lender shall not be liable for any error of judgment or mistakes of fact or law with respect to actions taken in connection with the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 <u>Appointment of Receiver</u>. After the occurrence of an Event of Default, Borrower hereby agrees and acknowledges that in addition to any other remedy under the Loan Documents, this Agreement, or at law or equity, that the Lender shall be and is entitled to the appointment of a receiver under either state or federal receivership law and the Borrower hereby consents to the appointment of a receiver of the Lender's choice for purposes of effectuating the provisions of this paragraph. Borrower further agrees and consents that, at the Lender's choosing, such receiver will be entitled to take exclusive possession and control, to the exclusion of Borrower and its agents, of all or substantially all of Borrower's property or such limited or specific property of Borrower as the Lender at its discretion may identify or seect. Borrower further agrees that such receiver

shall be vested with such powers as the appointing court determines are necessary and appropriate to possess, maintain, operate, control, and/or liquidate property placed into the control of the receiver and specifically agrees that at the specific request of the Lender, the receiver may be vested with the power to operate the Borrower as a going concern in all respects, and to collect accounts, enforce and settle claims, and to liquidate Borrower's property or the Collateral. Borrower shall and hereby agrees to cooperate in all reasonable receiver requests for assistance and information necessary to effectuate the duties ascribed to the receiver by the court. Borrower hereby grants to the Lender a limited power of attorney authorizing the Lender to represent the Borrower's consent to the appointment of a receiver in any order that the Lender may present to a court. Borrower further agrees and acknowledges that three days' notice of a hearing appointing such receiver shall be considered reasonable notice of such hearing. The provisions of this section shall survive the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 <u>Attorney-in-Fact</u>. The Borrower hereby irrevocably makes, constitutes and appoints the Lender (and any officer of the Lender or any Person designated by the Lender for that purpose) as the Borrower's true and lawful proxy and attorney-in-fact (and agent-in-fact) in the Borrower's name, place and stead, with full power of substitution, to (i) take such actions as are permitted in this Agreement, (ii) execute such financing statements and other documents and to do such other acts as the Lender may require to perfect and preserve the Lender's security interest in, and to enforce such interests in the Collateral, and (iii) carry out any remedy provided for in this Agreement, including endorsing the Borrower's name to checks, drafts, instruments and other items of payment, and proceeds of the Collateral, executing change of address forms with the postmaster of the United States Post Office serving the address of the Borrower, changing the address of the Borrower to that of the Lender, opening all envelopes addressed to the Borrower and applying any payments contained therein to the Obligations. The Borrower hereby acknowledges that the constitution and appointment of such proxy and attorney-in-fact are coupled with an interest and are irrevocable. The Borrower hereby ratifies and confirms all that such attorney-in-fact may do or cause to be done by virtue of any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 <u>No Marshaling</u>. The Lender shall not be required to marshal any present or future collateral security (including this Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order. To the extent that it lawfully may, the Borrower hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Lender's rights under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, the Borrower hereby irrevocably waives the benefits of all such laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 <u>Application of Proceeds</u>. The Lender will, within three Business Days after receipt of cash or solvent credits from collection of items of payment, proceeds of Collateral, or any other source, apply the whole or any part thereof against the Obligations secured hereby. The Lender shall further have the exclusive right to determine how, when and what application of such payments and such credits shall be made on the Obligations, and such determination shall be conclusive upon the Borrower. Any proceeds of any Disposition by the Lender of all or any part of the Collateral may be first applied by the Lender to the payment of expenses incurred by the

Lender in connection with the Collateral, including attorneys' fees and legal expenses as provided for in <u>Section 14.19</u> hereof. Notwithstanding anything to the contrary set forth above, in no event shall any proceeds of any Collateral owned, or any Guaranty provided, by any Obligor under any Loan Document be applied to repay or cash collateralize any Excluded Swap Obligation with respect to such Obligor, but appropriate adjustments shall be made with respect to payments from other Obligors to preserve the allocation to Obligations otherwise set forth above in this section; provided, further, that Lender may elect to apply the proceeds of any such Collateral or Guaranty to repay or cash collateralize any Obligations in accordance with the priority set forth above (other than Excluded Swap Obligation with respect to such Obligor) before applying the proceeds of any other Collateral or Guaranty provided under any Loan Document, if in the reasonable determination of Lender, such order of application will maximize the repayment of all of the Obligations. Lender shall have absolute discretion as to the time of application of any such proceeds, moneys, or balances in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 <u>No Waiver</u>. No Event of Default shall be waived by the Lender except in writing. No failure or delay on the part of the Lender in exercising any right, power or remedy hereunder shall operate as a waiver of the exercise of the same or any other right at any other time; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. There shall be no obligation on the part of the Lender to exercise any remedy available to the Lender in any order. The remedies provided for herein are cumulative and not exclusive of any remedies provided at law or in equity. The Borrower agrees that in the event that the Borrower fails to perform, observe or discharge any of its Obligations or liabilities under this Agreement or any other agreements with the Lender, no remedy of law will provide adequate relief to the Lender, and further agrees that the Lender shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.11 <u>Letters of Credit</u>. With respect to all Letters of Credit for which presentment for honor shall not have occurred at the time of an acceleration pursuant to this <u>Section 12</u>, the Borrower shall at such time deposit in a cash collateral account opened by the Lender an amount 110% of the amount of the Letter of Credit Obligations then outstanding. Amounts held in such cash collateral account shall be applied by the Lender to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay the Obligations, in such order of application as the Lender may, in its sole discretion, from time to time elect. After all such Letters of Credit shall have expired or been fully drawn upon, all commitments to make Loans hereunder have terminated and all other Obligations have been indefeasibly satisfied and paid in full in cash, the balance, if any, in such cash collateral account shall be returned to the Borrower or such other Person as may be lawfully entitled thereto.

Section 13. <u>SWAP TRANSACTION PROVISIONS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 <u>Event of Default</u>. Borrower hereby acknowledges and agrees that an Event of Default hereunder shall constitute a default under any Swap Transaction Documents and upon any such default, Lender shall have the right to terminate any such Swap Transaction Documents and demand payment of all Swap Obligations owed to Lender (or any affiliate of Lender) thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 <u>Security Interest</u>. Borrower hereby grants and assigns to Lender, a security interest, to secure payment and performance of the Obligations, in all of Borrower's right, title and interest, now or hereafter acquired, to the payment of money from Lender (or any affiliate of Lender) to Borrower under any Swap Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 <u>Termination Events</u>. Full prepayment of the principal of the Term Note, whether voluntary or involuntary, will constitute a Termination Event (as defined in any Swap Transaction Document), permitting Lender to terminate the Swap Transaction Documents. Moreover, at no time during the term of the Loan may the then outstanding principal balance of the Loan be less than the then remaining notional amount under any Swap Transaction Documents, and any payment or prepayment of the Note below such notional amount will require an equivalent reduction in the notional amount under the Swap Transaction Documents. Any such termination of a Swap Transaction Document, or reduction in such notional amount, will subject Borrower to payment to Lender of all assessments, losses, fees and costs of any kind or nature as set forth in any and all Swap Transaction Documents or otherwise as may be incurred by Lender thereunder, which arise, directly or indirectly, as a result of such prepayment or termination.

Section 14. <u>MISCELLANEOUS</u>

.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1 <u>Obligations Absolute</u>. None of the following shall affect the Obligations of the Borrower to the Lender under this Agreement or the Lender's rights with respect to the Collateral:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) acceptance or retention by the Lender of other property or any interest in property as security for the Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) release by the Lender of any of the Borrower, the Guarantor, or of all or any part of the Collateral or of any party liable with respect to the Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) release, extension, renewal, modification, or substitution by the Lender of any Note, or any note evidencing any of the Obligations, or the compromise of the liability of the Guarantor of the Obligations; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) failure of the Lender to resort to any other security or to pursue the Borrower or any other obligor liable for any of the Obligations before resorting to remedies against the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 <u>Entire Agreement</u>. This Agreement and the other Loan Documents (i) are valid, binding and enforceable against the Borrower and the Lender in accordance with their respective provisions and no conditions exist as to their legal effectiveness; (ii) constitute the entire agreement between the parties with respect to the subject matter hereof and thereof; and (iii) are the final expression of the intentions of the Borrower and the Lender. No promises, either expressed or implied, exist between the Borrower and the Lender, unless contained herein or therein. This Agreement, together with the other Loan Documents, supersedes all negotiations, representations, warranties, commitments, term sheets, discussions, negotiations, offers or contracts (of any kind or nature, whether oral or written) prior to or contemporaneous with the execution hereof with respect to any matter, directly or indirectly related to the terms of this Agreement and the other Loan Documents. This Agreement and the other Loan Documents are the result of negotiations among the Lender, the Borrower and the other parties thereto, and have been reviewed (or have

had the opportunity to be reviewed) by counsel to all such parties are the products of all parties. Accordingly, this Agreement and the other Loan Documents shall not be construed more strictly against the Lender merely because of the Lender's involvement in their preparation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3 <u>Amendments; Waivers</u>. No delay on the part of the Lender in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by the Lender of any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right, power or remedy. No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or the other Loan Documents shall in any event be effective unless the same shall be in writing and acknowledged by the Lender, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.4 <u>WAIVER OF DEFENSES</u>. THE BORROWER, ON BEHALF OF ITSELF AND ANY GUARANTOR OF ANY OF THE OBLIGATIONS, WAIVES EVERY PRESENT AND FUTURE DEFENSE, CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH THE BORROWER MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY THE LENDER IN ENFORCING THIS AGREEMENT. PROVIDED THE LENDER ACTS IN GOOD FAITH, THE BORROWER RATIFIES AND CONFIRMS WHATEVER THE LENDER MAY DO PURSUANT TO THE TERMS OF THIS AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER GRANTING ANY FINANCIAL ACCOMMODATION TO THE BORROWER.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.5 <u>FORUM SELECTION AND CONSENT TO JURISDICTION</u>. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF MINNESOTA OR IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF MINNESOTA AND OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF MINNESOTA. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.6 <u>WAIVER OF JURY TRIAL</u>. THE LENDER AND THE BORROWER, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE

OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT, ANY OF THE OTHER OBLIGATIONS, THE COLLATERAL, OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, OR ANY COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH THE LENDER AND THE BORROWER ARE ADVERSE PARTIES, AND EACH AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER GRANTING ANY FINANCIAL ACCOMMODATION TO THE BORROWER.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.7 <u>Assignability</u>. The Lender may at any time assign the Lender's rights in this Agreement, the other Loan Documents, the Obligations, or any part thereof and transfer the Lender's rights in any or all of the Collateral, and the Lender thereafter shall be relieved from all liability with respect to such Collateral. In addition, the Lender may at any time sell one or more participations in the Loans. The Borrower may not sell or assign this Agreement, or any other agreement with the Lender or any portion thereof, either voluntarily or by operation of law, without the prior written consent of the Lender. This Agreement shall be binding upon the Lender and the Borrower and their respective legal representatives and successors. All references herein to the Borrower shall be deemed to include any successors, whether immediate or remote. In the case of a joint venture or partnership, the term "Borrower" shall be deemed to include all joint venturers or partners thereof, who shall be jointly and severally liable hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.8 <u>Confirmations</u>. The Borrower and the Lender agree from time to time, upon written request received by it from the other, to confirm to the other in writing the aggregate unpaid principal amount of the Loans then outstanding under such Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.9 <u>Confidentiality</u>. The Lender agrees to use commercially reasonable efforts (equivalent to the efforts the Lender applies to maintain the confidentiality of its own confidential information) to maintain as confidential all information provided to them by the Borrower and designated as confidential, except that the Lender may disclose such information (a) to Persons employed or engaged by the Lender in evaluating, approving, structuring or administering the Loans; (b) to any assignee or participant or potential assignee or participant that has agreed to comply with the covenant contained in this section (and any such assignee or participant or potential assignee or participant may disclose such information to Persons employed or engaged by them as described in clause (a) above); (c) as required or requested by any federal or state regulatory authority or examiner, or any insurance industry association, or as reasonably believed by the Lender to be compelled by any court decree, subpoena or legal or administrative order or process; (d) as, on the advice of the Lender's counsel, is required by law; (e) in connection with the exercise of any right or remedy under the Loan Documents or in connection with any litigation to which the Lender is a party; (f) to any nationally recognized rating agency that requires access to information about the Lender's investment portfolio in connection with ratings issued with respect to the Lender; (g) to any Affiliate of the Lender who may provide Bank Products to the Borrower or any Subsidiary, or (h) that ceases to be confidential through no fault of the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.10 <u>Binding Effect</u>. This Agreement shall become effective upon execution by the Borrower and the Lender. If this Agreement is not dated or contains any blanks when executed by the Borrower, the Lender is hereby authorized, without notice to the Borrower, to date this Agreement as of the date when it was executed by the Borrower, and to complete any such blanks according to the terms upon which this Agreement is executed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.11 <u>Governing Law</u>. This Agreement, the Loan Documents, and any Note shall be delivered and accepted in and shall be deemed to be contracts made under and governed by the internal laws of the State of Minnesota (but giving effect to federal laws applicable to national banks) applicable to contracts made and to be performed entirely within such state, without regard to conflict of laws principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.12 <u>Enforceability</u>. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by, unenforceable or invalid under any jurisdiction, such provision shall as to such jurisdiction, be severable and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.13 <u>Survival of Borrower Representations</u>. All covenants, agreements, representations and warranties made by the Borrower herein shall, notwithstanding any investigation by the Lender, be deemed material and relied upon by the Lender and shall survive the making and execution of this Agreement and the Loan Documents and the issuance of any Note, and shall be deemed to be continuing representations and warranties until such time as the Borrower has fulfilled all of its Obligations to the Lender, and the Lender has been indefeasibly paid in full in cash. The Lender, in extending financial accommodations to the Borrower, is expressly acting and relying on the aforesaid representations and warranties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.14 <u>Extensions of Lender's Commitment</u>. This Agreement shall secure and govern the terms of (i) any extensions or renewals of the Lender's commitment hereunder, and (ii) any replacement note executed by the Borrower and accepted by the Lender in its sole and absolute discretion in substitution for any Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.15 <u>Time of Essence</u>. Time is of the essence in making payments of all amounts due the Lender under this Agreement and in the performance and observance by the Borrower of each covenant, agreement, provision, and term of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.16 <u>Counterparts; Facsimile Signatures</u>. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement. Receipt of an executed signature page to this Agreement by facsimile or other electronic transmission shall constitute effective delivery thereof. Electronic records of executed Loan Documents maintained by the Lender shall deemed to be originals thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.17 <u>Notices</u>. Except as otherwise provided herein, the Borrower waives all notices and demands in connection with the enforcement of the Lender's rights hereunder. All notices,

requests, demands and other communications provided for hereunder shall be in writing and addressed as follows:

If to the Borrower:

Pro-Dex, Inc.

2361 McGaw Avenue

Irvine, CA 92614

Attention: Alisha Charlton

with a copy to (which will not constitute notice):

Rutan & Tucker, LLP

18575 Jamboree Road, Suite 900

Irvine, CA 92612

Attention: Garett Sleichter

If to the Lender:

UMB Bank, N.A.

9800 Bren Road East 6810001

Minnetonka, MN 55343

Attention: Dianne Wegscheid

with a copy to (which will not constitute notice):

Winthrop & Weinstine, P.A.

225 South 6th Street, Suite 3500

Minneapolis, MN 55402

Attention: Anthony Todero

or, as to each party, at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this subsection. All notices addressed as above shall be deemed to have been properly given (i) if served in person, upon acceptance or refusal of delivery; (ii) if mailed by certified or registered mail, return receipt requested, postage prepaid, on the third day following the day such notice is deposited in any post office station or letter box; or (iii) if sent by recognized overnight courier, on the first day following the day such notice is delivered to such carrier. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.18 <u>Release of Claims Against Lender</u>. In consideration of the Lender making the Loans, the Borrower and all other Obligors do each hereby release and discharge the Lender of and from any and all claims, harm, injury, and damage of any and every kind, known or unknown, legal or equitable, which any Obligor may have against the Lender from the date of their respective first contact with the Lender until the date of this Agreement including any claim arising from any reports (environmental reports, surveys, appraisals, etc.) prepared by any parties hired or

recommended by the Lender. The Borrower and all other Obligors confirm to Lender that they have reviewed the effect of this release with competent legal counsel of their choice, or have been afforded the opportunity to do so, prior to execution of this Agreement and the Loan Documents and do each acknowledge and agree that the Lender is relying upon this release in extending the Loans to the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.19 <u>Costs, Fees and Expenses</u>. The Borrower shall pay or reimburse the Lender for all reasonable costs, fees and expenses incurred by the Lender or for which the Lender becomes obligated in connection with the negotiation, preparation, consummation, administration, collection of the Obligations or enforcement of this Agreement, the other Loan Documents and all other documents provided for herein or delivered or to be delivered hereunder or in connection herewith (including any amendment, supplement or waiver to any Loan Document), or during any workout, restructuring or negotiations in respect thereof, including reasonable consultants' fees and attorneys' fees and time charges of counsel to the Lender, which shall also include attorneys' fees and time charges of attorneys who may be employees of the Lender or any Affiliate of the Lender, plus costs and expenses of such attorneys or of the Lender; search fees, costs and expenses; and all taxes payable in connection with this Agreement or the other Loan Documents, whether or not the transaction contemplated hereby shall be consummated. In furtherance of the foregoing, the Borrower shall pay any and all stamp and other taxes, UCC search fees, filing fees and other costs and expenses in connection with the execution and delivery of this Agreement, any Note and the other Loan Documents to be delivered hereunder, and agrees to save and hold the Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such costs and expenses. That portion of the Obligations consisting of costs, expenses or advances to be reimbursed by the Borrower to the Lender pursuant to this Agreement or the other Loan Documents which are not paid on or prior to the date hereof shall be payable by the Borrower to the Lender on demand. If at any time or times hereafter the Lender:

(a) employs counsel for advice or other representation (i) with respect to this Agreement or the other Loan Documents, (ii) to represent the Lender in any litigation, contest, dispute, suit or proceeding or to commence, defend, or intervene or to take any other action in or with respect to any litigation, contest, dispute, suit, or proceeding (whether instituted by the Lender, the Borrower, or any other Person) in any way or respect relating to this Agreement, the other Loan Documents or the Borrower's business or affairs, or (iii) to enforce any rights of the Lender against the Borrower or any other Person that may be obligated to the Lender by virtue of this Agreement or the other Loan Documents; (b) takes any action to protect, collect, sell, liquidate, or otherwise Dispose of any of the Collateral; and/or (c) attempts to or enforces any of the Lender's rights or remedies under the Agreement or the other Loan Documents, the costs and expenses incurred by the Lender in any manner or way with respect to the foregoing, shall be part of the Obligations and be secured by the Collateral, payable by the Borrower to the Lender on demand and may be funded, if the Lender so elects, by the Lender making a Revolving Credit Loan or other loan under this Agreement on the Borrower's behalf, and paying the same to the persons to whom such costs, fees or expenses are payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.20 <u>Indemnification</u>. The Borrower agrees to defend (with counsel satisfactory to the Lender), protect, indemnify, exonerate and hold harmless each Indemnified Party from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and distributions of any kind or nature (including the disbursements and the reasonable fees of counsel for each Indemnified Party thereto, which shall also include, without

limitation, reasonable attorneys' fees and time charges of attorneys who may be employees of any Indemnified Party), which may be imposed on, incurred by, or asserted against, any Indemnified Party (whether direct, indirect or consequential and whether based on any federal, state or local laws or regulations, including securities laws, Environmental Laws, commercial laws and regulations, under common law or in equity, or based on contract or otherwise) in any manner relating to or arising out of this Agreement or any of the Loan Documents, or any act, event or transaction related or attendant thereto, the preparation, execution and delivery of this Agreement and the Loan Documents, including the making or issuance and management of the Loans, the use or intended use of the proceeds of the Loans, the enforcement of the Lender's rights and remedies under this Agreement, the Loan Documents, any Note, any other instruments and documents delivered hereunder, or under any other agreement between the Borrower and the Lender; provided, however, that the Borrower shall not have any obligations hereunder to any Indemnified Party with respect to matters determined by a court of competent jurisdiction by final and non-appealable judgment to have been caused by or resulting from the willful misconduct or gross negligence of such Indemnified Party. To the extent that the undertaking to indemnify set forth in the preceding sentence may be unenforceable because it violates any law or public policy, the Borrower shall satisfy such undertaking to the maximum extent permitted by applicable law. Any liability, obligation, loss, damage, penalty, cost or expense covered by this indemnity shall be paid to each Indemnified Party on demand, and failing prompt payment, together with interest thereon at the Default Rate from the date incurred by each Indemnified Party until paid by the Borrower, shall be added to the Obligations of the Borrower and be secured by the Collateral. The provisions of this section shall survive the satisfaction and payment of the other Obligations and the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.21 <u>Waiver</u>. To the fullest extent permitted by Applicable Law, Borrower shall not assert, and hereby waives, any claim against any Indemnified Party, on any theory of liability, for 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, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit, or the use of the proceeds thereof. No Indemnified Party referred to in this section shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.22 <u>Revival and Reinstatement of Obligations</u>. If the incurrence or payment of the Obligations by any Obligor or the transfer to the Lender of any property should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors' rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (collectively, a "<u>Voidable Transfer</u>"), and if the Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that the Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorney fees of the Lender, the Obligations shall automatically be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.23 <u>Customer Identification - USA Patriot Act Notice</u>. The Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the "Act"), and the Lender's policies and practices, the Lender is required to obtain, verify and record certain information and documentation that identifies the Borrower, which information includes the name and address of the Borrower and such other information that will allow the Lender to identify the Borrower in accordance with the Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.24 <u>Electronic Records</u>. The Borrower acknowledges and agrees that this Agreement and each other Loan Document and all paper records related to the transaction with which the Loan Documents are a part and whether or not the paper records were submitted in advance of, contemporaneously with or subsequent to, the execution of the Loan Documents may, at the option of the Lender, be converted by any digital or electronic method or process to an electronic record or subsequently further converted or migrated to another electronic record format or electronic storage medium. The Borrower acknowledges and agrees that upon conversion to an electronic record as authorized herein such electronic record shall be the record of the transaction and the electronic record shall have the same legal force and effect as the paper documents from which it was converted. The Borrower waives any legal requirement that any documents digitally or electronically converted be embodied, stored, or reproduced in a tangible media. The Borrower agrees that a printed or digitally reproduced copy of the electronic record shall be given the same legal force and effect as a signed writing. In addition, the Borrower authorizes and agrees to destruction of the paper documents by the Lender upon conversion of the paper documents to a digital or electronic record.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.25 <u>Amendment and Restatement</u>. This Agreement amends and restates the Existing Credit Agreement in its entirety, but neither this Agreement nor the other Loan Documents will satisfy the Loans or other Obligations existing under the Existing Credit Agreement.

[NO FURTHER TEXT ON THIS PAGE; SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the Borrower and the Lender have executed this Credit and Secmity Agreement as of the date first above written.

---

| | |
|:---|:---|
| **BORROWER:** | **BORROWER:** |
| PRO-DEX, INC.,<br> a Colorado corporation  | PRO-DEX, INC.,<br> a Colorado corporation  |
| By: | /s/ Rick L. Van Kirk |
|  | Name: Rick L. Van Kirk<br>Title: Chief Executive Officer |

---

---

| | |
|:---|:---|
| **LENDER:** | **LENDER:** |
| UMB BANK, N.A.  | UMB BANK, N.A.  |
| By: | /s/ Dianne Wegscheid |
|  | Name: Dianne Wegscheid<br>Title: Senior Vice President |

---

## Exhibit 10.3

**EXHIBIT 10.3**

**TERM NOTE D**

---

| | |
|:---|:---|
| $6650000.00 | February 9, 2026 |
| Minnetonka, Minnesota |  |

---

FOR VALUE RECEIVED, PRO-DEX, INC., a Colorado corporation (the <u>"Borrower"),</u> whose address is 2361 McGaw Avenue, Irvine, California 92614, promises to pay to the order of UMB BANK, N.A., a national banking association, previously doing business as Minnesota Bank & Trust, a division of UMB Bank, N.A., successor by merger to MINNESOTA BANK & TRUST, A DIVISION OF HTLF BANK, as successor by merger with MINNESOTA BANK & Lender"), whose address is 9800 Bren Road East, Suite 200, Minnetonka, Minnesota 55343, on or before the Term Loan Maturity Date, as defined in the Credit Agreement, the principal sum of SIX MILLION SIX HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($6,650,000.00), which amount is the principal amount of Term Loan D made by the Lender to the Borrower under and pursuant to that certain Second Amended and Restated Credit and Security Agreement dated as of even date herewith, executed by and between the Borrower and the Lender (as amended, supplemented or modified from time to time, the "<u>Credit Agreement"),</u> together with interest (computed on the actual number of days elapsed on the basis of a 360 day year) on the principal amount of Term Loan D outstanding from time to time as provided in the Credit Agreement. Capitalized words and phrases not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.

The outstanding principal of this Note, and all accrued interest thereon, shall be payable as provided in the Credit Agreement, and the outstanding principal balance of this Note, and all accrued and unpaid interest thereon, shall be due and payable in full on the Term Loan Maturity Date, unless payable sooner pursuant to the provisions of the Credit Agreement.

This Note evidences Term Loan D incurred by the Borrower under and pursuant to the Credit Agreement, to which reference is hereby made for a statement of the terms and conditions under which the Term Loan Maturity Date or any payment hereon may be accelerated. The holder of this Note is entitled to all of the benefits and security provided for in the Credit Agreement.

Principal and interest shall be paid to the Lender at its address set forth above, or at such other place as the holder of this Note shall designate in writing to the Borrower. The disbursement(s) of Term Loan D made by the Lender, and all payments on account of the principal and interest thereof shall be recorded on the books and records of the Lender and the principal balance as shown on such books and records, or any copy thereof certified by an officer of the Lender, shall be rebuttably presumptive evidence of the principal amount owing hereunder.

Except for such notices as may be required under the terms of the Credit Agreement, the Borrower waives presentment, demand, notice, protest, and all other demands, or notices, in connection with the delivery, acceptance, performance, default, or enforcement of this Note, and assents to any extension or postponement of the time of payment or any other indulgence.

Term Loan D evidenced hereby has been made and this Note has been delivered at the Lender's main office set forth above. This Note shall be governed and construed in accordance with the laws of the State of Minnesota, in which state it shall be performed, and shall be binding upon the Borrower, and its legal representatives, successors, and assigns. Wherever possible, each provision of the Credit Agreement and this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Credit Agreement or this Note shall be prohibited by or be invalid under such law, such provision shall be severable, and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of the Credit Agreement or this Note. The term "Borrower" as used herein shall mean all parties signing this Note, and each one of them, and all such parties, their respective successors and assigns, shall be jointly and severally obligated hereunder.

[REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, Maker has caused this Note to be duly executed to be effective as of the day and year first set forth above.

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| | |
|:---|:---|
| **BORROWER:** | **BORROWER:** |
| PRO-DEX, INC.,<br> a Colorado corporation  | PRO-DEX, INC.,<br> a Colorado corporation  |
| By: | /s/ Rick L. Van Kirk |
|  | Name: Rick L. Van Kirk<br>Title: Chief Executive Officer |

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## Exhibit 10.4

**EXHIBIT 10.4**

**THIRD AMENDED AND RESTATED REVOLVING CREDIT NOTE**

---

| | |
|:---|:---|
| $11000000.00 | February 9, 2026 |
| Minnetonka, Minnesota |  |

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FOR VALUE RECEIVED, PRO-DEX, INC., a Colorado corporation (the <u>"Borrower"),</u> whose address is 2361 McGaw Avenue, Irvine, California 92614, promises to pay to the order of UMB BANK, N.A., a national banking association, previously doing business as Minnesota Bank & Trust, a division of UMB Bank, N.A., successor by merger to MINNESOTA BANK & TRUST, A DIVISION OF HTLF BANK, as successor by merger with MINNESOTA BANK & Lender"), whose address is 9800 Bren Road East, Suite 200, Minnetonka, Minnesota 55343, on or before the Revolving Loan Maturity Date, as defined in the Credit Agreement, the lesser of (i) ELEVEN MILLION AND 00/100THS DOLLARS (U.S. $11,000,000.00), or (ii) the aggregate principal amount of all Revolving Loans outstanding under and pursuant to that certain Second Amended and Restated Credit and Security Agreement dated as of even date herewith, executed by and between the Borrower and the Lender, as amended, restated, or otherwise modified (the <u>"Credit Agreement"),</u> and made available by the Lender to the Borrower at the maturity or maturities and in the amount or amounts stated on the records of the Lender, together with interest (computed on the actual number of days elapsed on the basis of a 360 day year) on the aggregate principal amount of all Revolving Loans outstanding from time to time as provided in the Credit Agreement. Capitalized words and phrases not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.

This Note evidences the Revolving Loans, Letters of Credit, and other indebtedness incurred by the Borrower under and pursuant to the Credit Agreement, to which reference is hereby made for a statement of the terms and conditions under which the Revolving Loan Maturity Date or any payment hereon may be accelerated. The holder of this Note is entitled to all of the benefits and security provided for in the Credit Agreement. All Revolving Loans shall be repaid by the Borrower on the Revolving Loan Maturity Date, unless payable sooner pursuant to the provisions of the Credit Agreement.

Principal and interest shall be paid to the Lender at its address set forth above, or at such other place as the holder of this Note shall designate in writing to the Borrower. Each Revolving Loan made, and all Letters of Credit issued, by the Lender, and all payments on account of the principal and interest thereof shall be recorded on the books and records of the Lender and the principal balance as shown on such books and records, or any copy thereof certified by an officer of the Lender, shall be rebuttably presumptive evidence of the principal amount owing hereunder.

Except for such notices as may be required under the terms of the Credit Agreement, the Borrower waives presentment, demand, notice, protest, and all other demands, or notices, in connection with the delivery, acceptance, performance, default, or enforcement of this Note, and assents to any extension or postponement of the time of payment or any other indulgence.

The Revolving Loans and the Letters of Credit evidenced hereby have been made and/or issued and this Note has been delivered at the Lender's main office set forth above. This Note shall be governed and construed in accordance with the laws of the State of Minnesota, in which state it shall be performed, and shall be binding upon the Borrower, and its legal representatives, successors, and assigns. Wherever possible, each provision of the Credit Agreement and this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Credit Agreement or this Note shall be prohibited by or be invalid under such law, such provision shall be severable, and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of the Credit Agreement or this Note. The term "Borrower" as used herein shall mean all parties signing this Note, and each one of them, and all such parties, their respective successors and assigns, shall be jointly and severally obligated hereunder.

This Note constitutes a renewal and restatement of, and replacement and substitution for, that certain Second Amended and Restated Revolving Credit Note dated as of April 8, 2025, in the maximum principal amount of Eleven Million and 00/100 Dollars ($11,000,000.00), executed by the Borrower and made payable to the order of the Lender (the "<u>Prior Note").</u> The indebtedness evidenced by the Prior Note is continuing indebtedness evidenced hereby, and nothing herein shall be deemed to constitute a payment, settlement, or novation of the Prior Note, or to release or otherwise adversely affect any lien, mortgage, or security interest securing such indebtedness or any rights of the Lender against any guarantor, surety, or other party primarily or secondarily liable for such indebtedness.

[REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, Maker has caused this Note to be duly executed to be effective as of the day and year first set forth above.

---

| | |
|:---|:---|
| **BORROWER:** | **BORROWER:** |
| PRO-DEX, INC.,<br> a Colorado corporation  | PRO-DEX, INC.,<br> a Colorado corporation  |
| By: | /s/ Rick L. Van Kirk |
|  | Name: Rick L. Van Kirk<br>Title: Chief Executive Officer |

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## Exhibit 99.1

Exhibit 99.1

![ProDexLogoAndTag_High Res](image_002.jpg)

Contact: Richard L. Van Kirk, Chief Executive Officer

(949) 769-3200

***For Immediate Release***

**PRO-DEX, INC. ANNOUNCES ACQUISITION OF**

**ADVANCED PRECISION MACHINING**

**IRVINE, CA,** February 12, 2026 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced that on February 9, 2026 it completed its acquisition of Advanced Precision Machining LLC, ("APM"), formerly operated as Advanced Precision Machining, Inc., a manufacturing facility located in Costa Mesa, Calif. APM manufactures several of our machined sub-assemblies and also produces parts and assemblies for aerospace and defense systems. In addition, it serves as a Prime Contractor for the U.S. Government and therefore maintains registrations under the International Traffic in Arms Regulations ("ITAR") as well as a Joint Certification Program ("JCP") certification. We anticipate that we will operate APM independently of Pro-Dex and therefore, due to the length of their accounting close, we anticipate that our future consolidated results of operations will likely be announced closer to or on our statutory Securities and Exchange Commission deadlines.

"We are excited that APM is joining the Pro-Dex family," said Rick Van Kirk, President and CEO of Pro-Dex. "APM has been a quality supplier of ours for several decades and we look forward to applying some of APM's leading edge automation and technology to streamline our manufacturing and assembly operations in Irvine."

Mr. Van Kirk continued, "This transaction is part of our expansion plans based upon the recently announced contract extension with our largest customer and resultant expectant revenue growth. Additionally, we anticipate maintaining and expanding APM's business with other industries."

**<u>About Pro-Dex, Inc.:</u>**

Pro-Dex, Inc. specializes in the design, development, and manufacture of autoclavable, battery-powered and electric, multi-function surgical drivers and shavers used primarily in the orthopedic, thoracic, and maxocranial facial markets. We have patented adoptive torque-limiting software and proprietary sealing solutions that appeal to our customers, primarily medical device distributors. Additionally, we provide engineering, quality, and regulatory consulting services to our customers. We also manufacture and sell rotary air motors to a wide range of industries; however, these motors comprise a de minimis portion of our business. For more information, visit the Company's website at www.pro-dex.com.

Statements herein concerning the Company's plans, growth and strategies may include 'forward-looking statements' within the context of the federal securities laws. Statements regarding the Company's future events, developments and future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future (including, without limitation, expected revenue growth and the ability maintain and expand APM's business), are forward-looking statements within the meaning of these laws. The Company's actual results may differ materially from those suggested as a result of various factors. The risks included above are not exhaustive. For a more detailed description of risks associated with the Company, interested parties should refer to the risk factors and other disclosures concerning the operational and business concerns of the Company set forth in the Company's filings with the Securities and Exchange Commission.