Document:

BUSINESS LOAN AGREEMENT
(ASSET BASED)

 

	Principal	Loan
    Date
 12-07-2012	Maturity	Loan
    No	Call / Coll	Account

    2920	Officer	Initials
	References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations.

 

	Borrower:	OURPET'S COMPANY, SMP COMPANY	Lender:	FIRSTMERIT BANK, N.A.
	 	INCORPORATED AND VIRTU COMPANY	 	COMMERCIAL CREDIT SERVICES #90383
	 	1300 EAST STREET	 	106 SOUTH MAIN STREET
	 	FAIRPORT HARBOR, OH 44077	 	AKRON, OH 44308
	 	 	 	(800) 554-4362
	 	 	 	 

 

THIS BUSINESS LOAN AGREEMENT
(ASSET BASED) dated December 7, 2012, is made and executed
between OURPET'S COMPANY, SMP COMPANY INCORPORATED and VIRTU COMPANY ("Borrower") and FIRSTMERIT BANK, N.A. ("Lender")
on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a
commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule attached
to this Agreement. Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon
Borrower's representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending
of any Loan by Lender at all times shall be subject to Lender's sole judgment and discretion; and (C) all such Loans shall be and
remain subject to the terms and conditions of this Agreement.

 

TERM. This Agreement
shall be effective as of December 7, 2012, and shall continue in full force and effect until such time as all of Borrower's Loans
in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and
charges, or until such time as the parties may agree in writing to terminate this Agreement.

 

LINE OF CREDIT. Lender
agrees to make Advances to Borrower from time to time from the date of this Agreement to the Expiration Date, provided the aggregate
amount of such Advances outstanding at any time does not exceed the Borrowing Base. Within the foregoing limits, Borrower may borrow,
partially or wholly prepay, and reborrow under this Agreement as follows:

 

Conditions Precedent to Each
Advance. Lender's obligation to make any Advance to or for the account of Borrower under this Agreement is subject to the following
conditions precedent, with all documents, instruments, opinions, reports, and other items required under this Agreement to be in
form and substance satisfactory to Lender:

 

(1)  Lender shall
have received evidence that this Agreement and all Related Documents have been duly authorized, executed, and delivered by Borrower
to Lender.

 

(2)  Lender shall have
received such opinions of counsel, supplemental opinions, and documents as Lender may request.

 

(3)  The security
interests in the Collateral shall have been duly authorized, created, and perfected with first lien priority and shall be in full
force and effect.

 

(4)  All guaranties
required by Lender for the credit facility(ies) shall have been executed by each Guarantor, delivered to Lender, and be in full
force and effect.

 

(5)  Lender, at its
option and for its sole benefit, shall have conducted an audit of Borrower's Accounts, Inventory, books, records, and operations,
and Lender shall be satisfied as to their condition.

 

(6)  Borrower shall
have paid to Lender all fees, costs, and expenses specified in this Agreement and the Related Documents as are then due and payable.

 

(7)  There shall
not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement, and Borrower
shall have delivered to Lender the compliance certificate called for in the paragraph below titled "Compliance Certificate."

 

Making Loan Advances.
Advances under this credit facility, as well as directions for payment from Borrower's accounts, may be requested orally or in
writing by authorized persons. Lender may, but need not, require that all oral requests be confirmed in writing. Each Advance shall
be conclusively deemed to have been made at the request of and for the benefit of Borrower (1) when credited to any deposit account
of Borrower maintained with Lender or (2) when advanced in accordance with the instructions of an authorized person. Lender, at
its option, may set a cutoff time, after which all requests for Advances will be treated as having been requested on the next succeeding
Business Day.

 

Mandatory Loan Repayments.
If at any time the aggregate principal amount of the outstanding Advances shall exceed the applicable Borrowing Base, Borrower,
immediately upon written or oral notice from Lender, shall pay to Lender an amount equal to the difference between the outstanding
principal balance of the Advances and the Borrowing Base. On the Expiration Date, Borrower shall pay to Lender in full the aggregate
unpaid principal amount of all Advances then outstanding and all accrued unpaid interest, together with all other applicable fees,
costs and charges, if any, not yet paid.

 

Loan Account. Lender
shall maintain on its books a record of account in which Lender shall make entries for each Advance and such other debits and credits
as shall be appropriate in connection with the credit facility. Lender shall provide Borrower with periodic statements of Borrower's
account, which statements shall be considered to be correct and conclusively binding on Borrower unless Borrower notifies Lender
to the contrary within thirty (30) days after Borrower's receipt of any such statement which Borrower deems to be incorrect.

 

COLLATERAL. To secure
payment of the Primary Credit Facility and performance of ail other Loans, obligations and duties owed by Borrower to Lender, Borrower
(and others, if required) shall grant to Lender Security Interests in such property and assets as Lender may require. Lender's
Security Interests in the Collateral shall be continuing liens and shall include the proceeds and products of the Collateral, including
without limitation the proceeds of any insurance. With respect to the Collateral, Borrower agrees and represents and warrants to
Lender:

 

Perfection of Security Interests.
Borrower agrees to execute all documents perfecting Lender's Security Interest and to take whatever actions are requested by Lender
to perfect and continue Lender's Security Interests in the Collateral. Upon request of Lender, Borrower will deliver to Lender
any and all of the documents evidencing or constituting the Collateral, and Borrower will note Lender's interest upon any and all
chattel paper and instruments if not delivered to Lender for possession by Lender. Contemporaneous with the execution of this Agreement,
Borrower will execute one or more UCC financing statements and any similar statements as may be required by applicable law, and
Lender will file such financing statements and all such similar statements in the appropriate location or locations. Borrower hereby
appoints Lender as its irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect or to continue
any Security Interest. Lender may at any time, and without further authorization from Borrower, file a carbon, photograph, facsimile,
or other reproduction of any financing statement for use as a financing statement. Borrower will reimburse Lender for all expenses
for the perfection, termination, and the continuation of the perfection of Lender's security interest in the Collateral. Borrower
promptly will notify Lender before any change in Borrower's name including any change to the assumed business names of Borrower.
Borrower also promptly will notify Lender before any change in Borrower's Social Security Number or Employer Identification Number.
Borrower further agrees to notify Lender in writing prior to any change in address or location of Borrower's principal governance
office or should Borrower merge or consolidate with any other entity.

 

    	 

    	 

    

 

	 	BUSINESS LOAN AGREEMENT (ASSET
    BASED)	 
	 	(Continued)	Page 2

 

Collateral Records. Borrower
does now, and at all times hereafter shall, keep correct and accurate records of the Collateral, all of which records shall be
available to Lender or Lender's representative upon demand for inspection and copying at any reasonable time. With respect to the
Accounts, Borrower agrees to keep and maintain such records as Lender may require, including without limitation information concerning
Eligible Accounts and Account balances and agings. Records related to Accounts (Receivables) are or will be located at 1300 EAST
STREET, FAIRPORT HARBOR, OH 44077. With respect to the Inventory, Borrower agrees to keep and maintain such records as Lender may
require, including without limitation information concerning Eligible Inventory and records itemizing and describing the kind,
type, quality, and quantity of Inventory, Borrower's Inventory costs and selling prices, and the daily withdrawals and additions
to Inventory. Records related to Inventory are or will be located at 1300 EAST STREET, FAIRPORT HARBOR, OH 44077. The above is
an accurate and complete list of all locations at which Borrower keeps or maintains business records concerning Borrower's collateral.

 

Collateral Schedules.
Concurrently with the execution and delivery of this Agreement, Borrower shall execute and deliver to Lender schedules of Accounts
and Inventory and schedules of Eligible Accounts and Eligible Inventory in form and substance satisfactory to the Lender. Thereafter
supplemental schedules shall be delivered according to the following schedule: With respect to Eligible Accounts, schedules shall
be delivered AS DIRECTED BY THE RELATIONSHIP MANAGER. With respect to Eligible Inventory, schedules shall be delivered AS DIRECTED
BY THE RELATIONSHIP MANAGER.

 

Representations and Warranties
Concerning Accounts. With respect to the Accounts, Borrower represents and warrants to Lender: (1) Each Account represented
by Borrower to be an Eligible Account for purposes of this Agreement conforms to the requirements of the definition of an Eligible
Account; (2) All Account information listed on schedules delivered to Lender will be true and correct, subject to immaterial variance;
and (3) Lender, its assigns, or agents shall have the right at any time and at Borrower's expense to inspect, examine, and audit
Borrower's records and to confirm with Account Debtors the accuracy of such Accounts.

 

Representations and Warranties
Concerning Inventory. With respect to the Inventory, Borrower represents and warrants to Lender: (1) All Inventory represented
by Borrower to be Eligible Inventory for purposes of this Agreement conforms to the requirements of the definition of Eligible
Inventory; (2) All Inventory values listed on schedules delivered to Lender will be true and correct, subject to immaterial variance;
(3) The value of the Inventory will be determined on a consistent accounting basis; (4) Except as agreed to the contrary by Lender
in writing, all Eligible Inventory is now and at all times hereafter will be in Borrower's physical possession and shall not be
held by others on consignment, sale on approval, or sale or return; (5) Except as reflected in the Inventory schedules delivered
to Lender, all Eligible Inventory is now and at all times hereafter will be of good and merchantable quality, free from defects;
(6) Eligible Inventory is not now and will not at any time hereafter be stored with a bailee, warehouseman, or similar party without
Lender's prior written consent, and, in such event, Borrower will concurrently at the time of bailment cause any such bailee, warehouseman,
or similar party to issue and deliver to Lender, in form acceptable to Lender, warehouse receipts in Lender name evidencing the
storage of Inventory; and (7) Lender, its assigns, or agents shall have the right at any time and at Borrower's expense to inspect
and examine the Inventory and to check and test the same as to quality, quantity, value, and condition.

 

CONDITIONS PRECEDENT TO EACH ADVANCE.
Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment
to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

 

Loan Documents. Borrower
shall provide to Lender the following documents for the Loan: (1) the Note; (2) guaranties; (3) subordinations; (4) together with
all such Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender's counsel.

 

Borrower's Authorization.
Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the
execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other
resolutions, authorizations, documents and instruments as Lender or its counsel, may require.

 

Fees and Expenses Under
This Agreement. Borrower shall have paid to Lender all fees, costs, and expenses specified in this Agreement and the Related
Documents as are then due and payable.

 

Representations and Warranties.
The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered
to Lender under this Agreement are true and correct.

 

No Event of Default.
There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or
under any Related Document.

 

MULTIPLE BORROWERS. This Agreement
has been executed by multiple obligors who are referred to in this Agreement individually, collectively and interchangeably as
"Borrower." Unless specifically stated to the contrary, the word "Borrower" as used in this Agreement, including
without limitation all representations, warranties and covenants, shall include all Borrowers. Borrower understands and agrees
that, with or without notice to any one Borrower, Lender may (A) make one or more additional secured or unsecured loans or otherwise
extend additional credit with respect to any other Borrower; (B) with respect to any other Borrower alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other terms of any indebtedness, including increases
and decreases of the rate of interest on the indebtedness; (C) exchange, enforce, waive, subordinate, fail or decide not to perfect,
and release any security, with or without the substitution of new collateral; (D) release, substitute, agree not to sue, or deal
with any one or more of Borrower's or any other Borrower's sureties, endorsers, or other guarantors on any terms or in any manner
Lender may choose; (E) determine how, when and what application of payments and credits shall be made on any indebtedness; (F)
apply such security and direct the order or manner of sale of any Collateral, including without limitation, any non-judicial sale
permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) sell,
transfer, assign or grant participations in all or any part of the Loan; (H) exercise or refrain from exercising any rights against
Borrower or others, or otherwise act or refrain from acting; (I) settle or compromise any indebtedness; and (J) subordinate the
payment of all or any part of any of Borrower's indebtedness to Lender to the payment of any liabilities which may be due Lender
or others.

 

REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds,
as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:

 

    	 

    	 

    

 

	 	BUSINESS LOAN AGREEMENT (ASSET
    BASED)	 
	 	(Continued)	Page 3

 

Organization. OURPET'S
COMPANY is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing
under and by virtue of the laws of the State of Colorado. OURPET'S COMPANY is duly authorized to transact business in the State
of Ohio and all other states in which OURPET'S COMPANY is doing business, having obtained all necessary filings, governmental licenses
and approvals for each state in which OURPET'S COMPANY is doing business. Specifically, OURPET'S COMPANY is, and at all times shall
be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse effect
on its business or financial condition. OURPET'S COMPANY has the full power and authority to own its properties and to transact
the business in which it is presently engaged or presently proposes to engage. OURPET'S COMPANY maintains an office at 1300 EAST
STREET, FAIRPORT HARBOR, OH 44077. Unless OURPET'S COMPANY has designated otherwise in writing, the principal office is the office
at which OURPET'S COMPANY keeps its books and records including its records concerning the Collateral. OURPET'S COMPANY will notify
Lender prior to any change in the location of OURPET'S COMPANY'S state of organization or any change in OURPET'S COMPANY'S name.
OURPET'S COMPANY shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges,
and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental
authority or court applicable to OURPET'S COMPANY and OURPET'S COMPANY'S business activities.

 

SMP COMPANY INCORPORATED is
a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and
by virtue of the laws of the State of Ohio. SMP COMPANY INCORPORATED is duly authorized to transact business in all other states
in which SMP COMPANY INCORPORATED is doing business, having obtained all necessary filings, governmental licenses and approvals
for each state in which SMP COMPANY INCORPORATED is doing business. Specifically, SMP COMPANY INCORPORATED is, and at all times
shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse
effect on its business or financial condition. SMP COMPANY INCORPORATED has the full power and authority to own its properties
and to transact the business in which it is presently engaged or presently proposes to engage. SMP COMPANY INCORPORATED maintains
an office at 1300 EAST STREET, FAIRPORT HARBOR, OH 44077. Unless SMP COMPANY INCORPORATED has designated otherwise in writing,
the principal office is the office at which SMP COMPANY INCORPORATED keeps its books and records including its records concerning
the Collateral. SMP COMPANY INCORPORATED will notify Lender prior to any change in the location of SMP COMPANY INCORPORATED's state
of organization or any change in SMP COMPANY INCORPORATED's name. SMP COMPANY INCORPORATED shall do all things necessary to preserve
and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances,
statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to SMP COMPANY INCORPORATED
and SMP COMPANY INCORPORATED's business activities.

 

VIRTU COMPANY is a corporation
for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the
laws of the State of Ohio. VIRTU COMPANY is duly authorized to transact business in all other states in which VIRTU COMPANY is
doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which VIRTU COMPANY
is doing business. Specifically, VIRTU COMPANY is, and at all times shall be, duly qualified as a foreign corporation in all states
in which the failure to so qualify would have a material adverse effect on its business or financial condition. VIRTU COMPANY has
the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes
to engage. VIRTU COMPANY maintains an office at 1300 EAST STREET, FAIRPORT HARBOR, OH 44077. Unless VIRTU COMPANY has designated
otherwise in writing, the principal office is the office at which VIRTU COMPANY keeps its books and records including its records
concerning the Collateral. VIRTU COMPANY will notify Lender prior to any change in the location of VIRTU COMPANY'S state of organization
or any change in VIRTU COMPANY'S name. VIRTU COMPANY shall do all things necessary to preserve and to keep in full force and effect
its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of
any governmental or quasi-governmental authority or court applicable to VIRTU COMPANY and VIRTU COMPANY'S business activities.

 

Assumed Business Names.
Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower.
Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business:
None.

 

Authorization. Borrower's
execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary
action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower's
articles of incorporation or organization, or bylaws, code of regulations, or (b) any agreement or other instrument binding upon
Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's properties.

 

Financial Information.
Each of Borrower's financial statements supplied to Lender truly and completely disclosed Borrower's financial condition as of
the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date
of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed
in such financial statements.

 

Legal Effect. This Agreement
constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal,
valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.

 

Properties. Except as
contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as accepted
by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of
Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements
relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and Borrower has not used or filed
a financing statement under any other name for at least the last five (5) years.

 

Hazardous Substances.
Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower's
ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge
of, or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral
by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by
any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of
the Collateral shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or
from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local
laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents
to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral
with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes
only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person.
The representations and warranties contained herein are based on Borrower's due diligence in investigating the Collateral for hazardous
waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or contribution
in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold
harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release of a hazardous waste or substance on the Collateral. The provisions
of this section of the Agreement, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness
and the termination, expiration or satisfaction of this Agreement and shall not be affected by Lender's acquisition of any interest
in any of the Collateral, whether by foreclosure or otherwise.

 

    	 

    	 

    

 

	 	BUSINESS LOAN AGREEMENT (ASSET
    BASED)	 
	 	(Continued)	Page 4

 

Litigation and Claims.
No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower
is pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial condition
or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in
writing.

 

Taxes. To the best of
Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been filed, and all
taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower
in good faith in the ordinary course of business and for which adequate reserves have been provided.

 

Lien Priority. Unless
otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment
of Borrower's Loan and Note, that would be prior or that may in any way be superior to Lender's Security Interests and rights in
and to such Collateral.

 

Binding Effect. This
Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well
as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.

 

AFFIRMATIVE COVENANTS. Borrower covenants and agrees
with Lender that, so long as this Agreement remains in effect, Borrower will:

 

Notices of Claims and Litigation.
Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all existing and
all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor
which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.

 

Financial Records. Maintain
its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit Borrower's
books and records at all reasonable times.

 

Financial Statements. Furnish
Lender with the following:

 

Additional Requirements.
1) BORROWER WILL PROVIDE TO THE LENDER MONTHLY BORROWING BASE CERTIFICATES WITHIN 20 DAYS OF MONTH END.

 

2)  THE MONTH END
BORROWING BASE SHALL BE SUPPORTED BY ACCOUNTS RECEIVABLE AND PAYABLE AGINGS, INVENTORY LISTING REPORTS AND OTHER REPORTS AS DESIGNATED
BY THE LENDER WITHIN 20 DAYS OF MONTH END.

 

3)  PROVIDE ANNUAL AUDITED
FINANCIAL STATEMENTS OF OURPET'S COMPANY WITHIN 120 DAYS OF FISCAL YEAR END.

 

4)  PROVIDE ANNUAL TAX
RETURNS OF OURPET'S COMPANY WITHIN 15 DAYS FROM APPLICABLE FILING DATE.

 

5)  PROVIDE QUARTERLY
INTERNAL FINANCIAL STATEMENTS OF OURPET'S COMPANY WITHIN 45 DAYS OF QUARTER END.

 

6)  PROVIDE ANNUAL
PERSONAL FINANCIAL STATEMENTS OF GUARANTORS WITHIN 120 DAYS OF FISCAL YEAR END ALONG WITH SUPPORTING DOCUMENTATION OF LIQUIDITY.

 

7)  PROVIDE ANNUAL TAX
RETURNS OF GUARANTORS WITHIN 15 DAYS FROM APPLICABLE FILING DATE.

 

All financial reports required
to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by
Borrower as being true and correct.

 

Additional Information.
Furnish such additional information and statements, as Lender may request from time to time.

 

Financial Covenants and Ratios.
Comply with the following covenants and ratios:

 

Minimum Income and
Cash flow Requirements. Other Cash Flow requirements are as follows:
Borrower shall not permit the Corporations Debt Service Coverage Ratio, on a consolidated basis, to be less than 1.15
to 1.00 measured quarterly on a trailing twelve month basis starting with the trailing twelve months for the quarter end March
31, 2013.

 

Debt Service Coverage Ratio
shall mean the sum of the net income or loss of Corporations after taxes and less cash distributions, cash dividends and advances
made to shareholders or related parties plus depreciation plus amortization plus interest expense, exclusive of extraordinary gains/loss,
divided by the sum of the scheduled and paid current maturities of long term debt plus cash interest expense due and paid plus
principal payments paid on subordinated debt plus unfunded capital expenditures less any new capital contributed from proceeds
of new subordinated debt and/or proceeds from stock issuance (only to the extent that such proceeds (1) were utilized to fund specific
unfunded capital expenditures, or (2) were utilized to refinance existing subordinated debt for the applicable accounting period.)

 

Unfunded capital expenditures defined
as Total Capital Expenditures less proceeds of long term debt (other than subordinated debt).

 

Tangible Net Worth Requirements.
Other Net Worth requirements are as follows: Borrower shall maintain Adjusted Tangible Capital of not less than $4,500,000.00,
tested at the end of each quarter end beginning December 31,
2012 and measured at each fiscal quarter end thereafter. Adjusted Tangible Capital means Tangible Capital plus subordinated
debt. Tangible Capital means Tangible Net Worth less any receivables, promissory notes, advances to, or investments in any affiliated
or other related entity to Borrower or individuals related to Borrower. Tangible Net Worth means total assets less total liabilities
as defined by GAAP, less any intangible assets. Intangible Assets means assets that have no tangible value, including but not limited
to goodwill, trademarks, patents, copyrights, and organization expenses.

 

Except as provided above, all
computations made to determine compliance with the requirements contained in this paragraph shall be made in accordance with generally
accepted accounting principles, applied on a consistent basis, and certified by Borrower as being true and correct.

 

Insurance. Maintain fire
and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower's
properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request
of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender.
Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any
way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender
holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender's loss payable or other endorsements
as Lender may require.

 

    	 

    	 

    

 

	 	BUSINESS LOAN AGREEMENT (ASSET
    BASED)	 
	 	(Continued)	Page 5

 

Insurance Reports. Furnish
to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably
request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the
policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and
the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however
not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the
actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower.

 

Guaranties. Prior to
disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantors named
below, on Lender's forms, and in the amounts and under the conditions set forth in those guaranties.

 

	Names of Guarantors	 	Amounts
	 	 	 
	STEVEN TSENGAS	 	Unlimited
	EVANGELIA TSENGAS	 	Unlimited

 

Subordination. Prior to disbursement
of any Loan proceeds, deliver to Lender subordination agreements on Lender's forms, executed by Borrower's creditors named below,
subordinating all of Borrower's indebtedness to such creditors, or such lesser amounts as may be agreed to by Lender in writing,
and any security interests in collateral securing that indebtedness to the Loans and security interests of Lender.

 

	Name of Creditor	 	Total Amount of Debt	 
	 	 	 	 
	EQUITY TRUST COMPANY CUSTODIAN	 	$	300,000.00	 
	FBO THOMAS C. BELRIN IRA	 	 	  	 
	LJR LIMITED PARTNERSHIP	 	$	150,000.00	 
	SENK PROPERTIES, LLC	 	$	50,000.00	 
	PETZONE PRODUCTS	 	$	50,000.00	 
	NELSON  D.  MOSTOW LIVING TRUST	 		 	 
	DTD 10-21-92	 	$	50,000.00	 
	BEACHCRAFT LIMITED PARTNERSHIP	 	$	75,000.00	 
	OVER THE HILL LIMITED	 	$	25,000.00	 

 

Other Agreements. Comply with all terms and conditions
of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately
in writing of any default in connection with any other such agreements.

 

Loan Proceeds. Use all Loan proceeds solely for Borrower's
business operations, unless specifically consented to the contrary by Lender in writing.

 

Taxes, Charges and Liens. Pay and discharge when due
all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and
liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties
would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or
profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, lien or claim
so long as (1) the legality of the same shall be contested in good faith by appropriate proceedings, and (2) Borrower shall have
established on Borrower's books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or claim
in accordance with GAAP.

 

Performance. Perform and comply, in a timely manner,
with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments
and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with
any agreement.

 

Operations. Maintain executive and management personnel
with substantially the same qualifications and experience as the present executive and management personnel; provide written notice
to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner.

 

Environmental Studies. Promptly conduct and complete,
at Borrower's expense, all such investigations, studies, samplings and testings as may be requested by Lender or any governmental
authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance under
applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned,
leased or used by Borrower.

 

Compliance with Governmental Requirements. Comply with
all laws, ordinances, and regulations, now or hereafter in effect, of ail governmental authorities applicable to the conduct of
Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation,
the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and
so long as, in Lender's sole opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to
post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest.

 

Inspection. Permit employees or agents of Lender at any
reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and to examine or audit
Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records. If Borrower
now or at any time hereafter maintains any records (including without limitation computer generated records and computer software
programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify
such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records
it may request, all at Borrower's expense.

 

Compliance Certificates. Unless waived in writing by
Lender, provide Lender within forty-five (45) days after the end of each fiscal quarter, with a certificate executed by Borrower's
chief financial officer, or other officer or person acceptable to Lender, certifying that the representations and warranties set
forth in this Agreement are true and correct as of the date of the certificate and further certifying that, as of the date of the
certificate, no Event of Default exists under this Agreement.

 

Environmental Compliance and Reports. Borrower shall
comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an intentional or unintentional
action or omission on Borrower's part or on the part of any third party, on property owned and/or occupied by Borrower, any environmental
activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the
conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly
and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter
or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission
on Borrower's part in connection with any environmental activity whether or not there is damage to the environment and/or other
natural resources.

 

Additional Assurances. Make, execute and deliver to Lender
such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements, instruments, documents
and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security
Interests.

 

    	 

    	 

    

 

	 	BUSINESS LOAN AGREEMENT (ASSET
    BASED)	 
	 	(Continued)	Page 6

 

LENDER'S EXPENDITURES. If any action
or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to comply with
any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when
due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf
may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or
paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and
paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for
such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of
repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on
demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become
due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as
a balloon payment which will be due and payable at the Note's maturity.

 

NEGATIVE COVENANTS. Borrower covenants
and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender:

 

Capital Expenditures.
Make or contract to make capital expenditures, including leasehold improvements, in any fiscal year in excess of $500,000.00 or
incur liability for rentals of property (including both real and personal property) in an amount which, together with capital expenditures,
shall in any fiscal year exceed such sum.

 

Indebtedness and Liens.
(1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement,
create, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign, pledge,
lease, grant a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with
recourse any of Borrower's accounts, except to Lender.

 

Loans, Acquisitions and Guaranties.
(1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) purchase, create or acquire any interest
in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business.

 

Agreements. Enter into
any agreement containing any provisions which would be violated or breached by the performance of Borrower's obligations under
this Agreement or in connection herewith.

 

CESSATION OF ADVANCES. If Lender
has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have
no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms
of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower
or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged
a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any Guarantor,
or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify
or revoke such Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in good faith deems itself insecure,
even though no Event of Default shall have occurred.

 

RIGHT OF SETOFF. To the extent permitted
by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some
other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower
authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the debt against any and all
such accounts, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge
and setoff rights provided in this paragraph.

 

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

 

Payment Default. Borrower
fails to make any payment when due under the Loan.

 

Other Defaults. Borrower
fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the
Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower.

 

Default in Favor of Third
Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's or any Grantor's
property or Borrower's or any Grantor's ability to repay the Loans or perform their respective obligations under this Agreement
or any of the Related Documents.

 

False Statements. Any
warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the
Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.

 

Insolvency. The dissolution
or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Borrower.

 

Defective Collateralization.
This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document
to create a valid and perfected security interest or lien) at any time and for any reason.

 

Creditor or Forfeiture Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method,
by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment
of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there
is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture
proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies
or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.

 

Events Affecting Guarantor.
Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent,
or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.

 

Change in Ownership. Any
change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

 

Adverse Change. A material
adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Loan
is impaired.

 

    	 

    	 

    

 

	 	BUSINESS LOAN AGREEMENT (ASSET
    BASED)	 
	 	(Continued)	Page 7

 

Insecurity. Lender in good
faith believes itself insecure.

 

Right to Cure. If any
default, other than a default on Indebtedness, is curable and if Borrower or Grantor, as the case may be, has not been given a
notice of a similar default within the preceding twelve (12) months, it may be cured if Borrower or Grantor, as the case may be,
after Lender sends written notice to Borrower or Grantor, as the case may be, demanding cure of such default: (1) cure the default
within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiate steps which Lender deems
in Lender's sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.

 

EFFECT OF AN EVENT OF DEFAULT. If
any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and
obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including
any obligation to make further Loan Advances or disbursements), and, at Lender's option, all Indebtedness immediately will become
due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described
in the "Insolvency" subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall
have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may
be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or
to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender's right to declare a default and
to exercise its rights and remedies.

 

PRIOR AGREEMENTS. THIS LOAN AGREEMENT
SHALL SUPERSEDE ANY PRIOR BUSINESS LOAN AGREEMENT BETWEEN BORROWER AND LENDER.

 

CONTINUITY OF OPERATIONS. Borrower
covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:

 

(1) ENGAGE IN ANY BUSINESS ACTIVITIES SUBSTANTIALLY
DIFFERENT THAN THOSE IN WHICH BORROWER IS PRESENTLY ENGAGED, (2) CEASE OPERATIONS, LIQUIDATE, MERGE, TRANSFER, ACQUIRE OR CONSOLIDATE
WITH ANY OTHER ENTITY, CHANGES ITS NAME, DISSOLVE OR TRANSFER OR SELL COLLATERAL OUT OF THE ORDINARY COURSE OF BUSINESS.

 

CONTINUITY OF OPERATIONS. Borrower
covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:

 

(3) PURCHASE OR RETIRE ANY OF BORROWER'S OUTSTANDING
SHARES OR ALTER OR AMEND BORROWER'S CAPITAL STRUCTURE.

 

LETTER OF CREDIT DRAWS. BORROWER
HEREBY AUTHORIZES LENDER TO DRAW AGAINST THIS LINE OF CREDIT FOR REIMBURSEMENT OF ANY PAYMENTS MADE BY LENDER PURSUANT TO ANY LETTER
OF CREDIT, CHECK GUARANTEE LETTER, OR FOREIGN EXCHANGE CONTRACT, ISSUED OR SIGNED BY LENDER, OR ANY AFFILIATE OF LENDER, FOR THE
ACCOUNT OF BORROWER. BORROWER AGREES TO REIMBURSE LENDER FOR ANY SUCH PAYMENTS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
BORROWER AGREES THAT LENDER MAY REDUCE THE AVAILABILITY OF THIS LINE OF CREDIT BY THE AMOUNT OF THE LETTER OF CREDIT, CHECK GUARANTEE
LETTER OR 15% OF THE FOREIGN EXCHANGE CONTRACT, FOR THE PERIOD OF TIME THAT THE LETTER OF CREDIT, CHECK GUARANTEE LETTER OR FOREIGN
EXCHANGE CONTRACT, IS OUTSTANDING IF THE LETTER OF CREDIT, CHECK GUARANTEE LETTER OR FOREIGN EXCHANGE CONTRACT, IS ISSUED AGAINST
THIS LINE OF CREDIT.

 

FEE PROVISION. UPON RECEIPT OF A
BILLING FROM LENDER, I AGREE TO PAY THE STATED LOAN FEE AND, WHEN APPLICABLE, THE STATED DOCUMENT PREPARATION FEE.

 

MISCELLANEOUS PROVISIONS. The following
miscellaneous provisions are a part of this Agreement:

 

Amendments. This Agreement,
together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth
in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment.

 

Attorneys' Fees; Expenses.
Borrower agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses,
incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement,
and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal
expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services.
Borrower also shall pay all court costs and such additional fees as may be directed by the court.

 

Caption Headings. Caption
headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this
Agreement.

 

Consent to Loan Participation.
Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation interests in the
Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever,
to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any
other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters.
Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of
such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as
the absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement or agreements
governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have
now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender
or such purchaser may enforce Borrower's obligation under the Loan irrespective of the failure or insolvency of any holder of any
interest in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests
irrespective of any personal claims or defenses that Borrower may have against Lender.

 

Governing Law. This Agreement
will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of
Ohio without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Ohio.

 

Choice of Venue. If there
is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of SUMMIT County, State of Ohio.

 

Joint and Several Liability.
All obligations of Borrower under this Agreement shall be joint and several, and all references to Borrower shall mean each and
every Borrower. This means that each Borrower signing below is responsible for all obligations in this Agreement. Where any one
or more of the parties is a corporation, partnership, limited liability company or similar entity, it is not necessary for Lender
to inquire into the powers of any of the officers, directors, partners, members, or other agents acting or purporting to act on
the entity's behalf, and any obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed
under this Agreement.

 

    	 

    	 

    

 

	 	BUSINESS LOAN AGREEMENT (ASSET
    BASED)	 
	 	(Continued)	Page 8

 

No Waiver by Lender.
Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other
right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise
to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course
of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender's rights
or of any of Borrower's or any Grantor's obligations as to any future transactions. Whenever the consent of Lender is required
under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.

 

Notices. Any notice required
to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received
by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses
shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal
written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes,
Borrower agrees to keep Lender informed at all times of Borrower's current address. Unless otherwise provided or required by law,
if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers.

 

Severability. If a court
of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any person or circumstance,
that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other person or circumstance.
If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending
provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality,
invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of
any other provision of this Agreement.

 

Subsidiaries and Affiliates
of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation
any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's
subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to
require Lender to make any Loan or other financial accommodation to any of Borrower's subsidiaries or affiliates.

 

Successors and Assigns.
All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower's
successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have
the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender.

 

Survival of Representations
and Warranties. Borrower understands and agrees that in extending Loan Advances, Lender is relying on all representations,
warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to
Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender,
all such representations, warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Related
Documents, shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, and
shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full, or until this Agreement
shall be terminated in the manner provided above, whichever is the last to occur.

 

Time is of the Essence.
Time is of the essence in the performance of this Agreement.

 

Waive Jury. All parties to
this Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party against
any other party.

 

DEFINITIONS. The following capitalized
words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all
references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular
shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise
defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and
terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date of this Agreement:

 

Account. The word "Account"
means a trade account, account receivable, other receivable, or other right to payment for goods sold or services rendered owing
to Borrower (or to a third party grantor acceptable to Lender).

 

Account Debtor. The words
"Account Debtor" mean the person or entity obligated upon an Account.

 

Advance. The word "Advance"
means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf under the terms and conditions of this
Agreement.

 

Agreement. The word "Agreement"
means this Business Loan Agreement (Asset Based), as this Business Loan Agreement (Asset Based) may be amended or modified from
time to time, together with all exhibits and schedules attached to this Business Loan Agreement (Asset Based) from time to time.

 

Borrower. The word "Borrower"
means OURPET'S COMPANY, SMP COMPANY INCORPORATED and VIRTU COMPANY and includes all co-signers and co-makers signing the Note and
all their successors and assigns.

 

Borrowing Base. The
words "Borrowing Base" mean AS DETERMINED BY THE LENDER FROM TIME TO TIME, THE LESSER OF (1) $5,000,000.00 OR (2) THE
SUM OF (A) 80.000% OF THE AGGREGATE AMOUNT OF ELIGIBLE ACCOUNTS, PLUS (B) 40.000% OF THE AGGREGATE AMOUNT OF ELIGIBLE INVENTORY
WITH ADVANCES LIMITED TO THE LESSER OF (A) 40.000 OF ELIGIBLE INVENTORY OR (B) $2,000,000.00.

 

Business Day. The words
"Business Day" mean a day on which commercial banks are open in the State of Ohio.

 

Collateral. The word
"Collateral" means all property and assets granted as collateral security for a Loan, whether real or personal property,
whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest,
mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel
trust, factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract,
or otherwise. The word Collateral also includes without limitation all collateral described in the Collateral section of this Agreement.

 

Eligible Accounts. The
words "Eligible Accounts" mean at any time, all of Borrower's Accounts which contain selling terms and conditions acceptable
to Lender. The net amount of any Eligible Account against which Borrower may borrow shall exclude all returns, discounts, credits,
and offsets of any nature. Unless otherwise agreed to by Lender in writing, Eligible Accounts do not include:

 

    	 

    	 

    

 

	 	BUSINESS LOAN AGREEMENT (ASSET
    BASED)	 
	 	(Continued)	Page 9

 

(1)  Accounts with respect
to which the Account Debtor is employee or agent of Borrower.

 

(2)  Accounts with
respect to which the Account Debtor is a subsidiary of, or affiliated with Borrower or its shareholders, officers, or directors.

 

(3)  Accounts with
respect to which goods are placed on consignment, guaranteed sale, or other terms by reason of which the payment by the Account
Debtor may be conditional.

 

(4)  Accounts with
respect to which Borrower is or may become liable to the Account Debtor for goods sold or services rendered by the Account Debtor
to Borrower.

 

(5)  Accounts which are
subject to dispute, counterclaim, or setoff.

 

(6)  Accounts with
respect to which the goods have not been shipped or delivered, or the services have not been rendered, to the Account Debtor.

 

(7)  Accounts with
respect to which Lender, in its sole discretion, deems the creditworthiness or financial condition of the Account Debtor to be
unsatisfactory.

 

(8)  Accounts of any
Account Debtor who has filed or has had filed against it a petition in bankruptcy or an application for relief under any provision
of any state or federal bankruptcy, insolvency, or debtor-in-relief acts; or who has had appointed a trustee, custodian, or receiver
for the assets of such Account Debtor; or who has made an assignment for the benefit of creditors or has become insolvent or fails
generally to pay its debts (including its payrolls) as such debts become due.

 

(9)  Accounts which have
not been paid in full within 90 DAYS from the invoice date.

 

(10)  U.S. GOVERNMENT
ACCOUNTS WITHOUT DIRECT ASSIGNMENT.

 

11)  FOREIGN ACCOUNTS
(EXCLUDING CANADIAN ACCOUNTS EXCEPT FOR QUEBEC ACCOUNTS).

 

12)  TAINT RULE-THE
ENTIRE AMOUNT OF EVERY ACCOUNT WITH 25% OR MORE OF THE AGGREGATE AMOUNT OWED MORE THAN 90 DAYS FROM THE INVOICE DATE.

 

13)  CREDITS OVER 90
DAYS FROM THE INVOICE DATE.

 

Eligible Inventory. The words "Eligible
Inventory" mean, at any time, all of Borrower's Inventory as defined below, except:

 

(1)  Inventory which
is not owned by Borrower free and clear of all security interests, liens, encumbrances, and claims of third parties.

 

(2)  Inventory which
Lender, in its sole discretion, deems to be obsolete, unsalable, damaged, defective, or unfit for further processing.

 

(3)  WORK IN PROCESS
(WIP).

 

Environmental Laws. The words "Environmental
Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health
or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub.
L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant
thereto.

 

Event of Default. The words "Event
of Default" mean any of the events of default set forth in this Agreement in the default section of this Agreement.

 

Expiration Date. The words "Expiration Date"
mean the date of termination of Lender's commitment to lend under this Agreement.

  

GAAP. The word "GAAP"
means generally accepted accounting principles.

 

Grantor. The word "Grantor"
means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, including without limitation
all Borrowers granting such a Security Interest.

 

Guarantor. The word "Guarantor"
means any guarantor, surety, or accommodation party of any or all of the Loan.

 

Guaranty. The word "Guaranty"
means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.

 

Hazardous Substances. The words
"Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated,
stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are
used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste
as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation,
petroleum and petroleum by-products or any fraction thereof and asbestos.

 

Indebtedness. The word "Indebtedness"
means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other
indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents.

 

Inventory. The word "Inventory"
means all of Borrower's raw materials, work in process, finished goods, merchandise, parts and supplies, of every kind and description,
and goods held for sale or lease or furnished under contracts of service in which Borrower now has or hereafter acquires any right,
whether held by Borrower or others, and all documents of title, warehouse receipts, bills of lading, and all other documents of
every type covering all or any part of the foregoing. Inventory includes inventory temporarily out of Borrower's custody or possession
and all returns on Accounts.

 

Lender. The word "Lender"
means FIRSTMERIT BANK, N.A., its successors and assigns.

 

Loan. The word "Loan"
means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule
attached to this Agreement from time to time.

 

Note. The word "Note"
means THE PROMISSORY NOTE DATED JUNE 28, 2011, IN THE ORIGINAL PRINCIPAL AMOUNT OF $5,000,000.00 FROM BORROWER TO LENDER, TOGETHER
WITH ALL RENEWALS OF, EXTENSIONS OF, MODIFICATIONS OF, REFINANCINGS OF, CONSOLIDATIONS OF AND SUBSTITUTIONS
FOR THE NOTE OR CREDIT AGREEMENT.

 

    	 

    	 

    

 

	 	BUSINESS LOAN AGREEMENT (ASSET
    BASED)	 
	 	(Continued)	Page 10

 

Permitted Liens. The
words "Permitted Liens" mean (1) liens and security interests securing Indebtedness owed by Borrower to Lender; (2) liens
for taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not
yet delinquent; (4) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower
in the ordinary course of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred
under the paragraph of this Agreement titled "Indebtedness and Liens"; (5) liens and security interests which, as of
the date of this Agreement, have been disclosed to and approved by the Lender in writing; and (6) those liens and security interests
which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of Borrower's assets.

 

Primary Credit Facility.
The words "Primary Credit Facility" mean the credit facility described in the Line of Credit section of this Agreement.

 

Related Documents. The
words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the Loan.

 

Security Agreement.
The words "Security Agreement" mean and include without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating
a Security Interest.

 

Security Interest. The
words "Security Interest" mean, without limitation, any and all types of collateral security, present and future, whether
in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention
contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created
by law, contract, or otherwise.

 

BORROWER ACKNOWLEDGES HAVING READ ALL
THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT (ASSET BASED) AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT (ASSET
BASED) IS DATED DECEMBER 7, 2012.

 

	BORROWER:	 
	 	 
	OURPET'S COMPANY	 
	 	 	 
	By:	/s/ STEVEN TSENGAS	 
	 	STEVEN TSENGAS, Chief Executive Officer of

OURPET'S COMPANY	 
	 	 	 
	SMP COMPANY INCORPORATED	 
	 	 	 
	By:	/s/ JOHN SILVESTRI	 
	 	JOHN SILVESTRI, President/Chief Operating Officer

of SMP COMPANY INCORPORATED	 
	 	 	 
	VIRTU COMPANY	 
	 	 	 
	By:	/s/ JOHN SILVESTRI	 
	 	JOHN SILVESTRI, President/Chief Operating Officer

of VIRTU COMPANY	 
	 	 	 
	LENDER:	 
	 	 
	FIRSTMERIT BANK, N.A.	 
	 	 	 
	By:	/s/
    Eric Hollinger	 
	 	Authorized Signer	 

 

LASER PRO Lending. Ver. 12.3.10.002 Copr.
Harland Financial Solutions, Inc. 1997, 2012. All Rights Reserved. - OH N:\CFI\LPL\C40 FC TR-43603 PR 51Customer No. 2920

 

Note No. 53125

AMENDMENT TO NOTE

 

This Amendment to Note (“Amendment”)
is effective as of December 7, 2012 by and between FirstMerit Bank, N.A., (hereafter “Lender”) and OurPet's
Company, Virtu Company, and SMP Company Incorporated (hereafter “Borrower”) (Collectively “Parties”).

 

Whereas Lender loaned to the OurPet's Company
the sum of $5,000,000.00 evidenced by an Amended and Restated Promissory Note dated June 28, 2011 including any and all amendments
thereto (the “Note”); and

 

Whereas, Lender and Borrower desire to
modify and amend the terms of the Note which has a principal balance of $2,276,031.93 as of December 5, 2012;

 

Now, therefore, in consideration of the
foregoing and of other good and valuable consideration the receipt of which is hereby acknowledged by the Parties hereto, the Note
is modified and amended to read as follows:

 

		1.	Virtu Company and SMP Company Incorporated hereby agree to become a Borrower under the Note, effective December 7, 2012.

 

		2.	Virtu Company and SMP Company Incorporated hereby acknowledge that they have received a copy of the Note, have read the same
and are familiar with its terms and conditions.

 

		3.	The section of said Note titled "Promise to Pay" is hereby deleted in its entirety and is replaced with the following:

 

Promise to Pay: OurPet's
Company, Virtu Company, and SMP Company Incorporated ("Borrower"), jointly and severally promise to pay to FirstMerit
Bank, N.A. ("Lender"), or order, in lawful money of the United States of America, the principal amount of Five Million
and 00/100 Dollars ($5,000,000.00) or so much as may be outstanding, together with interest on the unpaid outstanding principal
balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance.

 

		4.	The Borrower's final payment (“Maturity Date”) of said Note is hereby amended from June 30, 2013 to June 30, 2014.

 

		5.	The interest only period of said Note is hereby extended for an additional nineteen (19) months until June 30, 2014.

 

It is expressly agreed by the Parties that
this Amendment does not change any other terms or conditions of the Note not specifically amended herein, and that such terms and
conditions not amended shall remain in full force and effect and are expressly applicable to the terms of this Amendment.

 

The undersigned Borrower hereby ratifies
and affirms its liability to Lender pursuant to the aforesaid indebtedness and loan relationship, evidenced in part, by this Amendment
and agrees that its liability thereon shall continue in full force and effect and represents to Lender that it has no defenses,
set-offs, or other claims against Lender. The undersigned Borrower releases and forever discharges Lender, its present and future,
directors, officers, employees, agents, attorneys, successors and assigns, of and from, any and all actions, claims, and/or demands
(whether these are now known or unknown, or whether these now exist or may hereafter accrue through the date of this Amendment)
which said Borrower may hold against Lender, its present and future directors, officers, employees, agents, attorneys, successors
and/or assigns, as a result of said Parties' business , legal and contractual relationship, which in any manner arises under, arises
in, or relates to, the indebtedness and loan relationship, evidenced in part, by this Amendment. The undersigned Borrower further
agrees that in the event its indebtedness and loan relationship, evidenced in part, by this Amendment, is secured by any lien or
security interest, nothing contained herein or done pursuant hereto shall affect such lien or security interest or the priority
of the same with regard to other encumbrances. The undersigned Borrower further agrees that the present principal balance of its
indebtedness and loan relationship, evidenced by this Amendment to Lender is in the amount stated above.

 

    	Page 1 of 2

    	 

    

 

The undersigned Borrower hereby irrevocably
authorizes and empowers any attorney-at-law, including an attorney engaged by Lender, to appear in any court of record and to confess
judgment against Borrower for the unpaid amount of the aforesaid Note, as amended, as evidenced by an affidavit signed by an officer
of Lender setting forth the amount then due, attorneys' fees plus costs of suit, and to release all errors, and waive all rights
of appeal. If a copy of the aforesaid Note, as amended, verified by an affidavit, shall have been filed in the proceeding, it will
not be necessary to file the original as a warrant of attorney. Borrower hereby waives the right to any stay of execution and the
benefit of all exemption laws now or hereafter in effect. No single exercise of the foregoing warrant and power to confess judgment
will be deemed to exhaust the power, whether or not any exercise shall be held by any court to be invalid, voidable, or void; but
the power will continue undiminished and may be exercised from time to time as Lender may elect until all amounts owing on the
aforesaid Promissory Note, as amended, have been paid in full. Borrower hereby waives any conflict of interest that an attorney
engaged by Lender may have in acting on behalf of Borrower in confessing judgment against Borrower while such attorney is engaged
by Lender. Borrower expressly consents to such attorney acting for Borrower, in confessing judgment.

 

	NOTICE: FOR THIS NOTICE "YOU' MEANS THE BORROWER AND "CREDITOR"AND '"HIS" MEANS LENDER.
	 
	   WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.

 

	BORROWER:	 	 
	 	 	 
	OurPet's Company	 	 
	 	 	 
	By:	/s/ Steven Tsengas	 	12/7/12
	 	Steven Tsengas, President	 	Date
	 	 	 
	Virtu Company	 	 
	 	 	 
	By:	/s/ John Silverstri	 	12/7/12
	 	John Silverstri, President/Chief Operating Officer	 	Date
	 	 	 
	SMP Company Incorporated	 	 
	 	 	 
	By:	/s/ John Silvestri	 	12/7/12
	 	John Silvestri, President/Chief Operating Officer	 	Date
	 	 	 
	GUARANTOR:	 	 
	 	 	 
	By:	/s/ Steven Tsengas	 	12/7/12
	      Steven Tsengas, an Individual	 	Date
	 	 	 
	By:	/s/ Evangelia Tsengas	 	12/7/12
	      Evangelia Tsengas, an Individual	 	Date
	 	 	 
	LENDER:	 	 
	 	 	 
	FirstMerit Bank, N.A	 	 
	 	 	 
	By:	/s/ Eric Hollinger	 	12/7/12
	 	Eric Hollinger, vice president	 	Date

 

    	Page 2 of 2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00210-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00210-of-00352.parquet"}]]