Document:

Blueprint

 

 

LOAN
AGREEMENT

 

LIGHTPATH TECHNOLOGIES, INC.,

a
Delaware corporation

 

and

 

BANKUNITED, N.A.,

a
national banking association

 

 

Dated
as of February 26, 2019

 

 

 

 

TABLE OF CONTENTS

 

	

 

	

 

	

PAGE 

	

 

	

 

	

 

	

SECTION I.

	

DEFINITIONS AND INTERPRETATION

	

2

	

1.1.

	

Terms Defined

	

8

	

1.2.

	

Accounting Principles

	

8

	

1.3.

	

Construction

	

8

	

SECTION II.

	

THE LOANS

	

8

	

2.1.

	

Revolving Credit Facility - Description

	

8

	

2.2.

	

Term Loan Facility – Description

	

8

	

2.3

	

Guidance Line Facility – Description

	

9

	

2.4.

	

Intentionally Deleted:

	

9

	

2.5.

	

Advances and Payments:

	

9

	

2.6.

	

Interest:

	

10

	

2.7.

	

Additional Interest Provisions

	

10

	

2.8.

	

Fees and Charges

	

10

	

2.9.

	

Prepayments

	

11

	

2.10.

	

Use of Proceeds

	

11

	

2.11.

	

Capital Adequacy

	

11

	

SECTION III.

	

COLLATERAL

	

12

	

3.1.

	

Collateral

	

12

	

3.2.

	

Lien Documents

	

12

	

3.3.

	

Other Actions

	

12

	

3.4.

	

Searches, Certificates:

	

12

	

3.5.

	

Landlord's and Warehouseman's Waivers; Access
Agreements

	

12

	

SECTION IV.

	

CLOSING AND CONDITIONS PRECEDENT TO ADVANCES

	

13

	

4.1.

	

Resolutions, Opinions, and Other Documents

	

13

	

4.2.

	

Absence of Certain Events

	

14

	

4.3.

	

Warranties and Representations at Closing

	

14

	

4.4.

	

Compliance with this Agreement

	

14

	

4.5.

	

Reserved

	

14

	

4.6.

	

Closing

	

14

	

4.7.

	

Waiver of Rights

	

14

	

4.8.

	

Conditions for Future Advances

	

14

 

 

 

 

	

SECTION V.

	

REPRESENTATIONS AND WARRANTIES

	

15

	

5.1.

	

Organization and Validity

	

15

	

5.2.

	

Places of Business

	

15

	

5.3.

	

Pending Litigation

	

15

	

5.4.

	

Title to Properties

	

16

	

5.5.

	

Governmental Consent

	

16

	

5.6.

	

Taxes

	

16

	

5.7.

	

Financial Statements

	

16

	

5.8.

	

Full Disclosure

	

16

	

5.9.

	

Subsidiaries

	

16

	

5.10.

	

Investments, Guarantees, Contracts, etc

	

17

	

5.11.

	

Government Regulations, etc

	

17

	

5.12.

	

Business Interruptions

	

18

	

5.13.

	

Names and Intellectual Property

	

18

	

5.14.

	

Other Associations

	

18

	

5.15.

	

Environmental Matters

	

18

	

5.16.

	

Regulation O

	

19

	

5.17.

	

Capital Stock

	

19

	

5.18.

	

Solvency

	

19

	

5.19.

	

Perfection and Priority

	

19

	

5.20.

	

Commercial Tort Claims

	

19

	

5.21.

	

Anti-Terrorism Laws

	

19

	

SECTION VI.

	

BORROWER'S AFFIRMATIVE COVENANTS

	

20

	

6.1.

	

Payment of Taxes and Claims

	

20

	

6.2.

	

Maintenance of Properties and Corporate Existence

	

20

	

6.3.

	

Business Conducted

	

21

	

6.4.

	

Litigation

	

21

	

6.5.

	

Taxes

	

21

	

6.6.

	

Bank Accounts

	

21

	

6.7.

	

Employee Benefit Plans

	

21

	

6.8.

	

Financial Covenants

	

21

	

6.9.

	

Financial and Business Information

	

21

	

6.10.

	

Compliance Certificates

	

22

	

6.11.

	

Audit and Inspection; Field Exams; Appraisals

	

22

	

6.12.

	

Other Reports

	

23

	

6.13.

	

Information to Participant

	

23

	

6.14.

	

Material Adverse Developments

	

23

	

6.15.

	

Places of Business

	

23

	

6.16.

	

Annual Clean-Up

	

23

 

 

 

 

	

SECTION VII.

	

BORROWER'S NEGATIVE COVENANTS:

	

23

	

7.1.

	

Merger, Consolidation, Dissolution or Liquidation

	

24

	

7.2.

	

Acquisitions

	

24

	

7.3.

	

Liens and Encumbrances

	

24

	

7.4.

	

Transactions With Affiliates or Subsidiaries

	

24

	

7.5.

	

Shareholder Debt

	

24

	

7.6.

	

Subordinate Debt

	

25

	

7.7.

	

Guarantees

	

25

	

7.8.

	

Distributions, Bonuses and Other Indebtedness

	

25

	

7.9.

	

Miscellaneous Covenants

	

25

	

SECTION VIII.

	

DEFAULT

	

26

	

8.1.

	

Events of Default

	

26

	

8.2.

	

Cure

	

27

	

8.3.

	

Rights and Remedies on Default

	

27

	

8.4.

	

Nature of Remedies

	

29

	

8.5.

	

Set-Off

	

29

	

SECTION IX.

	

MISCELLANEOUS

	

30

	

9.1.

	

Governing Law

	

30

	

9.2.

	

Integrated Agreement

	

30

	

9.3.

	

Waiver

	

30

	

9.4.

	

Indemnity

	

30

	

9.5.

	

Time

	

30

	

9.6.

	

Expenses of Lender

	

31

	

9.7.

	

Brokerage

	

31

	

9.8.

	

Notices

	

31

	

9.9.

	

Headings

	

32

	

9.10.

	

Survival

	

32

	

9.11.

	

Successors and Assigns

	

32

	

9.12.

	

Duplicate Originals

	

32

	

9.13.

	

Modification

	

32

	

9.14.

	

Signatories

	

32

	

9.15.

	

Third Parties

	

32

	

9.16.

	

Discharge of Taxes, Borrower's Obligations, Etc

	

32

	

9.17.

	

Withholding and Other Tax Liabilities

	

33

	

9.18.

	

Consent to Jurisdiction

	

33

	

9.19.

	

Additional Documentation

	

33

	

9.20.

	

Advertisement

	

33

	

9.21.

	

Waiver of Jury Trial

	

34

	

9.22.

	

Consequential Damages

	

34

	

9.23.

	

Confidentiality

	

34

 

 

	

	
	
 

 

-1-

 

 

LOAN AGREEMENT

 

THIS
LOAN AGREEMENT (“Agreement”)
is dated as of February 26, 2019, by and between LIGHTPATH TECHNOLOGIES, INC., a Delaware
corporation, (“Borrower”),
and BANKUNITED, N.A., a
national banking association (“Lender”).

 

BACKGROUND

 

Borrower desires to
establish financing arrangements with Lender and Lender is willing
to make loans and extensions of credit to Borrower under the terms
and provisions hereinafter set forth.

 

NOW,
THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

 

                                     

SECTION
I. 

DEFINITIONS
AND INTERPRETATION

 

1.1. Terms
Defined

 

 
As used
in this Agreement, the following terms have the following
respective meanings:

 

Advance(s) - Any monies
advanced or credit extended to Borrower by Lender under the
Revolving Credit Facility, the Term Loan Facility and/or the
Guidance Line Facility, including, without limitation, cash
advances.

 

Advance Request - Section
2.5(c).

 

Affiliate - With respect to any
Person, (a) any Person which, directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under
common control with, such Person, or (b) any Person who is a
director or officer (i) of such Person, (ii) of any Subsidiary of
such Person, or (iii) any person described in clause (a) above. For
purposes of this definition, control of a Person shall mean the
power, direct or indirect, (x) to vote fifty percent (50%) or more
of the Capital Stock having ordinary voting power for the election
of directors (or comparable equivalent) of such Person, or (y) to
direct or cause the direction of the management and policies of
such Person whether by contract or otherwise. Control may be by
ownership, contract, or otherwise.

 

Anti-Terrorism Laws - Any
statute, treaty, law (including common law), ordinance, regulation,
rule, order, opinion, release, injunction, writ, decree or award of
any Governmental Authority relating to terrorism or money
laundering, including Executive Order No. 13224 and the USA Patriot
Act.

 

Asset Sale - The sale,
transfer, lease, license or other disposition by Borrower, or by
any Subsidiary of Borrower, to any Person other than Borrower or
any Subsidiary of Borrower, of any Property now owned, or hereafter
acquired, of any nature whatsoever in any transaction or series of
related transactions other than the sale of (i) Inventory in the
ordinary course of business, (ii) obsolete or worn out Equipment,
and (iii) other Collateral in an amount not to exceed $50,000.00 in
the aggregate during any fiscal year. An Asset Sale includes, but
is not limited to, a merger, consolidation, division, conversion,
dissolution or liquidation.

 

Assignment of Claims Act - The
Federal Assignment of Claims Act, 31 U.S.C. § 3727 et
seq., as amended from time to time.

 

Authorized Officer - Any
officer (or comparable equivalent) of Borrower authorized by
specific resolution of Borrower to request Advances or execute
Covenant Compliance Certificates as set forth in the authorization
certificate delivered to Lender substantially in the form of
Exhibit “A”
attached hereto.

 

Bank Affiliate - With respect
to Lender, any Person which, directly or indirectly, is in control
of, is controlled by, or is under common control with Lender. For
purposes of this definition, control of a Person shall mean the
power, direct or indirect, (x) to vote twenty five percent (25%) or
more of any class of Capital Stock having ordinary voting power for
the election of directors of such Person or other Persons
performing similar functions for any such Person, or (y) to direct
or cause the direction of the management and policies of such
Person whether by ownership of Capital Stock, contract or
otherwise.

 

Bankruptcy Code - Title 11 of
the United States Code entitled “Bankruptcy”,
as now or hereinafter in effect, or any successor
statute.

 

 

-2-

 

 

Base Rate - A fluctuating
interest rate equal to 30- day LIBOR at approximately 11:00 A.M.
(London Time) two (2) London Banking Days prior to each monthly
reset date, it being understood that
such rate is a reference rate, not necessarily the lowest,
established from time to time, which serves as the basis upon which
effective interest rates are calculated for loans making reference
thereto. The Base Rate determined by reference to LIBOR
shall be adjusted on a monthly basis, with each “monthly
reset date” being the first day of each month so that: (a)
the Base Rate for the month in which the Agreement is executed
shall be based upon LIBOR at approximately 11:00 A.M. (London Time)
two (2) London Banking Days before the first day of the month in
which this Agreement is executed; and (b) LIBOR for each month
thereafter shall be LIBOR at approximately 11:00 A.M. (London Time)
two (2) London Banking Days before the first day of the each such
month. Lender shall have no obligation to notify Borrower of any
changes in the LIBOR or of the effect of those changes in the on
the Base Rate.

 

Blocked Person - Section
5.21(b).

 

Borrower’s Information
Certificate - A certificate provided to Lender by Borrower
on or before the Closing Date concerning certain factual
information about Borrower, to be substantially in the form
attached hereto as Exhibit
“F”.

 

Business Day - A day other than
Saturday or Sunday when Lender is open for business in the State of
Florida.

 

Capitalized Lease Obligations -
Any Indebtedness represented by obligations under a lease that is
required to be capitalized for financial reporting purposes in
accordance with GAAP, consistently applied.

 

Capital Stock - Any and all
shares, interest, participations or other equivalents (however
designated) of capital stock of a corporation or membership
interest of a limited liability company, any and all other
ownership interests in a Person (other than a corporation) and any
and all warrants or options to purchase any of the
foregoing.

 

Change in Control – Means
a transaction in which any “person” or
“group” (within the meaning of Section 13(d) and 14
(d)(2) of the Securities Exchange Act of 1934) becomes the
“beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of a
sufficient number of shares of all classes of stock then
outstanding of Borrower ordinarily entitled to vote in the election
of directors, empowering such “person” or
“group” to elect a majority of the board of directors
of Borrower, who did not have such power before such
transaction.

 

Closing - Section
4.6.

 

Closing Date - Section
4.6.

 

Collateral - All of the
Property and interests in Property described in Section 3.1 of this
Agreement and all other Property that now or hereafter secures
payment of the Obligations and satisfaction by Borrower of all
covenants and undertakings contained in this Agreement and the
other Loan Documents, but specifically excluding the Excluded
Collateral.

 

Collateral Location - Any
location where Collateral is located, as identified and certified
by Borrower in Borrower’s Information
Certificate.

 

Commitment Fee - Section
2.8(a).

 

Covenant Compliance Certificate
- Section 6.10.

 

 

-3-

 

 

Default - Any event, act,
condition or occurrence which with notice, or lapse of time or
both, would constitute an Event of Default hereunder.

 

Distribution – (a) Cash
dividends or other cash distributions on any now or hereafter
outstanding Capital Stock of Borrower; (b) the redemption,
repurchase, defeasance or acquisition of such Capital Stock or of
warrants, rights or other options to purchase such Capital Stock;
and (c) any loans or advances (other than salaries), to any
shareholder(s), partner(s) or member(s) of Borrower.

 

EBITDA – Means net
income, less income or plus loss from discontinued operations and
extraordinary items, plus income taxes, plus interest expense, plus
depreciation and plus amortization.

 

Environmental Laws - Any and
all Federal, foreign, state, local or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decrees and any
and all common law requirements, and rules regulating, relating to
or imposing liability or standards of conduct concerning pollution,
protection of the environment, or the impact of pollutants,
contaminants or toxic or hazardous substances on human health or
the environment, as now or may at any time hereafter be in effect
from time to time.

 

ERISA - The Employee Retirement
Income Security Act of 1974, as the same may be in effect, from
time to time.

 

Event of Default - Section
8.1.

 

Excluded Collateral - Section
3.1.

 

Executive Order No. 13224 - The
Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001, as the same has been, or shall hereafter be,
renewed, extended, amended or replaced and as may be in effect from
time to time.

 

Expenses - Section
9.6.

 

 

Fixed Charge Coverage Ratio
– Means, as of any date, the ratio of (a) the sum of net
income, depreciation, amortization, interest expense, taxes,
non-cash stock compensation expense, non-cash foreign exchange
expense, losses on warrants and approved integration costs (capped
at $500,000.00), less cash taxes paid, gains on warrants,
distributions, increases in due from related, and non-financed
capital expenditures, to (b) all scheduled principal and interest
payments on debt (including capital lease payments) in each case
measured as of the last day of the most recently ended four (4)
consecutive fiscal quarters for which financial statements are
required to be delivered pursuant to Section 6.9(a).

 

GAAP - Generally accepted
accounting principles as in effect on the Closing Date applied in a
manner consistent with the most recent CPA prepared financial
statements of Borrower furnished to Lender and described in Section
5.7 herein.

 

Governmental Authority - Any,
foreign, federal, state or local government or political
subdivision, or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any court,
tribunal, grand jury, or arbitration.

 

Guarantors – The
following wholly owned subsidiaries of Borrower: GelTech Inc., a
Delaware corporation, ISP Optics Corporation, a New York
corporation (collectively “Domestic
Guarantors”), LightPath Optical Instrumentation
(Shanghai) Co., Ltd., a corporation formed under the laws of the
People’s Republic of China, LightPath Optical Instrumentation
(Zhenjiang) Co., Ltd., a corporation formed under the law of the
People’s Republic of China, and ISP Optics Latvia, SIA, a
corporation formed under the laws of the Republic of Latvia
(collectively, the “Foreign
Guarantors”).

 

Guidance Line Facility –
Section 2.3(a).

 

 

-4-

 

 

Guidance Line Note –
Section 2.3(b).

 

Hazardous Substances - Any
substances defined or designated as hazardous or toxic waste,
hazardous or toxic material, hazardous or toxic substance or
similar term, under any Environmental Law.

 

Indebtedness - Of any Person at
any date, without duplication, (i) all indebtedness of such Person
for borrowed money (including with respect to Borrower, the
Obligations) or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with
customary practices), (ii) any other indebtedness of such Person
which is evidenced by a note, bond, debenture or similar
instrument, (iii) all Capitalized Lease Obligations of such Person,
(iv) the face amount of all letters of credit issued for the
account of such Person and all drafts drawn thereunder, (v) all
obligations of other Persons which such Person has guaranteed, and
(vi) all liabilities secured by any Lien on any property owned by
such Person even though such Person has not assumed or otherwise
become liable for the payment thereof.

 

Interest Period - A thirty (30)
day period.

 

IRS - Internal Revenue
Service.

 

Lien - Any interest of any kind
or nature in property securing an obligation owed to, or a claim of
any kind or nature in property by, a Person other than the owner of
the Property, whether such interest is based on the common law,
statute, regulation or contract, and including, but not limited to,
a security interest or lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt, a lease, consignment or
bailment for security purposes, a trust, or an assignment. For the
purposes of this Agreement, Borrower shall be deemed to be the
owner of any Property which it has acquired or holds subject to a
conditional sale agreement or other arrangement pursuant to which
title to the Property has been retained by or vested in some other
Person for security purposes.

 

Liquidity - On any date
reviewed by Lender, Borrower’s unencumbered cash accounts
maintained with Lender or at other financial institutions, plus the
value of its unencumbered Marketable Securities maintained with
Lender or at other financial institutions.

 

Loans - Collectively, the
unpaid balance of cash Advances under the Revolving Credit
Facility, the Term Loan Facility, and Guidance Line
Facility.

 

Loan Documents - Collectively,
this Agreement, the Notes, the Security Agreement, the UCC-1
Financing Statements, and all agreements, instruments and documents
executed and/or delivered in connection therewith, all as may be
supplemented, restated, superseded, amended or replaced from time
to time.

 

London Banking Days - Any day
on which commercial banks are open for general business (including
dealings in foreign exchange and foreign currency deposits) in
London England.

 

London Interbank Offered Rate or
LIBOR - With respect to each day during each Interest
Period, the rate for U.S. dollar deposits of one month maturity as
reported on the page of the Bloomberg report service
(“Index”),
or such similar service as determined by Lender, that displays the
ICE Benchmark Administration (IBA) interest settlement rates for
deposits in U.S. Dollars, as of 11:00 A.M. (London Time), on the
second London Banking Day before the relevant Interest Period
begins. If no LIBOR rate is published, then such rate shall be the
rate determined by Lender in its reasonable discretion with
reference to comparable rates published in the Index or by such
alternate method as reasonably selected by Lender.

 

 

-5-

 

 

Marketable Securities - Stocks,
bonds and mutual fund shares that can be readily sold for cash on
stock exchanges or over-the-counter markets.

 

Material Adverse Effect - A
material adverse effect with respect to (a) the business, assets,
properties, financial condition, stockholders’ equity,
contingent liabilities or results of operations of Borrower and its
Subsidiaries, taken as a whole, or (b) Borrower’s ability to
pay the Obligations in accordance with the terms hereof, or (c) the
validity or enforceability of this Agreement or any of the other
Loan Documents or the rights and remedies of Lender hereunder or
thereunder.

 

Maximum Aggregate Commitment
– Up to the sum of Seventeen Million Eight Hundred Thirteen
Thousand Five Hundred and No/100 Dollars
($17,813,500.00).

 

Maximum Revolving Loan Amount
– The sum of Two Million and No/100 Dollars
($2,000,000.00).

 

Notes – Collectively the
Revolving Credit Note, the Term Loan Note and the Guidance Line
Note.

 

Obligations - All existing and
future debts, liabilities and obligations of every kind or nature
at any time owing by Borrower to Lender or any other subsidiary of
Lender or Bank Affiliate, whether under this Agreement, or any
other existing or future instrument, document or agreement, between
Borrower or Lender or any other subsidiary of Lender or Bank
Affiliate, whether joint or several, related or unrelated, primary
or secondary, matured or contingent, due or to become due
(including debts, liabilities and obligations obtained by
assignment), and whether principal, interest, fees, indemnification
obligations hereunder or Expenses (specifically including interest
accruing after the commencement of any bankruptcy, insolvency or
similar proceeding with respect to Borrower, whether or not a claim
for such post-commencement interest is allowed), including, without
limitation, debts, liabilities and obligations in respect of the
Revolving Credit Facility, the Term Loan Facility and the Guidance
Line Facility, and any extensions, modifications, substitutions,
increases and renewals thereof; the payment of all amounts advanced
by Lender or any other subsidiary of Lender or Bank Affiliate to
preserve, protect and enforce rights hereunder and in the
Collateral; and all Expenses incurred by Lender or any other
subsidiary of Lender or any other Bank Affiliate. Without limiting
the generality of the foregoing, Obligations shall include any
other debts, liabilities or obligations owing to Lender or any
other subsidiary of Lender or Bank Affiliate in connection with any
lockbox, cash management, or other services (including electronic
funds transfers or automated clearing house transactions) provided
by Lender or any other subsidiary of Lender or Bank Affiliate to
Borrower, as well as any other loan, advances or extension of
credit, under any existing or future loan agreement, promissory
note, other instrument, document or agreement between Borrower and
Lender or any other subsidiary of Lender, or any other Bank
Affiliate.

 

Overadvance - Section
2.1(a).

 

PBGC - The Pension Benefit
Guaranty Corporation.

 

Permitted Indebtedness - (a)
Indebtedness to Lender in connection with the Revolving Credit
Facility, Term Loan Facility and Guidance Line Facility or
otherwise pursuant to the Loan Documents, (b) trade payables
incurred in the ordinary course of Borrower’s business; (c)
Indebtedness existing on the Closing Date that is identified and
described on Borrower’s Information Certificate attached
hereto and made part hereof, and any extension, renewal, or
refinancing thereof so long as (1) the principal amount thereof is
not increased; and (2) no material adverse changes are made to the
financial terms of such Indebtedness, and (d) Indebtedness incurred
in the ordinary course of business (in each case other than for an
obligation for money borrowed), in an aggregate outstanding amount
not at any time exceeding $500,000.00, and, if secured, secured
only by specific asset liens not affecting Lender’s security
interest in the Collateral. Changes in accounting treatment shall
not constitute additional Indebtedness.

 

Permitted Liens - (a) Liens
securing taxes, assessments or governmental charges or levies not
delinquent; (b) Liens incurred or deposits made in the ordinary
course of business in connection with workers’ compensation,
unemployment insurance, social security and other like laws; (c)
Liens on fixed assets security purchase money Indebtedness
permitted under Section 7.6; provided that, (i) such Lien attached
to such assets concurrently, or within 20 days of the acquisition
thereof, and only to the assets so acquired, and (ii) a description
of the asset acquired is furnished to Lender; (d) Liens existing on
the Closing Date which have been disclosed in writing to and
approved by Lender, (e) Liens in favor of Lender securing the
Obligations, (f) Liens of carriers, warehousemen, mechanics and
materialmen and other similar Liens imposed by law and arising in
the ordinary course of business, and (g) attachments, appeal bonds,
judgments and other similar Liens for sums not exceeding One
Hundred Thousand Dollars ($100,000.00) arising in connection with
court proceedings, provided the execution or other
enforcement of such Liens is effectively stayed and the claims
secured thereby are being actively contested in good faith and by
appropriate proceedings.

 

 

-6-

 

 

Person - An individual,
partnership, corporation, trust, limited liability company, limited
liability partnership, unincorporated association or organization,
joint venture or any other entity.

 

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

 

Regulation D - Regulation D of
the Board of Governors of the Federal Reserve System comprising
Part 204 of Title 12, Code of Federal Regulations, as in effect
from time to time, and any successor thereto.

 

Requirement of Law -
Collectively, all international, foreign, federal, state and local
laws, statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or
authorities, including the interpretation or administration thereof
by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any
Governmental Authority, in each case having the force of
law.

 

Responsible Officer – Any
of the president, the chief executive officer, the chief operating
officer, the chief financial officer, the treasurer or a vice
president of Borrower, or such other representative of Borrower as
may be designated in writing by any one of the foregoing with the
consent of Lender; and, with respect to the financial covenants
only, the chief financial officer or the treasurer of
Borrower.

 

Revolving Credit Facility -
Section 2.1(a).

 

Revolving Credit Maturity
Date – February 26, 2022, or such later date as
Lender may, in its sole and absolute discretion, designate in
writing to Borrower.

 

Revolving Credit Note - Section
2.1(b).

 

Subsidiary - With respect to
any Person at any time, (i) any corporation more than fifty percent
(50%) of whose voting stock is legally and beneficially owned by
such Person or owned by a corporation more than fifty percent (50%)
of whose voting stock is legally and beneficially owned by such
Person; (ii) any trust of which a majority of the beneficial
interest is at such time owned directly or indirectly, beneficially
or of record, by such Person or one or more Subsidiaries of such
Person; and (iii) any partnership, joint venture, limited liability
company or other entity of which ownership interests having
ordinary voting power to elect a majority of the board of directors
or other Persons performing similar functions are at such time
owned directly or indirectly, beneficially or of record, by, or
which is otherwise controlled directly, indirectly or through one
or more intermediaries by, such Person or one or more Subsidiaries
of such Person.

 

Term Loan Facility –
Section 2.2(a).

 

Term Loan Maturity
Date – February 26, 2022, or such later date as
Lender may, in its sole and absolute discretion, designate in
writing to Borrower.

 

Term Loan Note – Section
2.2(b).

 

Total Leverage Ratio –
The ratio of total Indebtedness to EBITDA.

 

Total Liabilities - At any
time, means all liabilities as determined in accordance with GAAP,
including accrued, contingent, current, long-term, secured or
unsecured liabilities.

 

UCC - The Uniform Commercial
Code as adopted in the State of Florida, as in effect from time to
time.

 

Other Capitalized Terms - Any
other capitalized terms used without further definition herein
shall have the respective meaning set forth in the
UCC.

 

 

-7-

 

 

1.2. Accounting
Principles

 

: Where
the character or amount of any asset or liability or item of income
or expense is required to be determined or any consolidation or
other accounting computation is required to be made for the
purposes of this Agreement, this shall be done in accordance with
GAAP as in effect on the Closing Date, to the extent applicable,
except as otherwise expressly provided in this Agreement. If there
are any changes in GAAP after the Closing Date that would affect
the computation of the financial covenants in this Agreement, such
changes shall only be followed, with respect to such financial
covenants, from and after the date this Agreement shall have been
amended to take into account any such changes.

 

1.3. Construction

 

 
No
doctrine of construction of ambiguities in agreements or
instruments against the interests of the party controlling the
drafting shall apply to any Loan Documents.

 

                                     

SECTION
II. 

THE
LOANS

 

2.1. Revolving
Credit Facility - Description

 

a. Subject to the
terms and conditions of this Agreement, Lender hereby establishes
for the benefit of Borrower a revolving credit facility
(collectively, the “Revolving Credit
Facility”) which shall include cash Advances extended
by Lender to or for the benefit of Borrower from time to time
hereunder. The aggregate principal amount of unpaid cash Advances
shall not at any time exceed the Maximum Revolving Loan Amount.
Subject to such limitation, the outstanding balance of Advances
under the Revolving Credit Facility may fluctuate from time to
time, to be reduced by repayments made by Borrower, to be increased
by future Advances which may be made by Lender, to or for the
benefit of Borrower, and, subject to the Event of Default
provisions of Section 8 below, shall be due and payable on the
Revolving Credit Maturity Date. If the aggregate principal amount
of unpaid cash Advances at any time exceeds the Maximum Revolving
Loan Amount (such excess referred to as “Overadvance”),
Borrower shall, repay the Overadvance in full immediately upon
notice of such Overadvance from Lender.

 

b. At Closing,
Borrower shall execute and deliver a promissory note to Lender for
the Maximum Commitment (“Revolving Credit
Note”). The Revolving Credit Note shall evidence
Borrower’s unconditional obligation to repay Lender for all
Advances made under the Revolving Credit Facility, with interest as
herein provided. Each Advance under the Revolving Credit Facility
shall be deemed evidenced by the Revolving Credit Note, which is
deemed incorporated herein by reference and made part
hereof.

 

c. The term of the
Revolving Credit Facility shall expire on the Revolving Credit
Maturity Date. On such date, unless having been sooner accelerated
by Lender pursuant to the terms hereof, and without impairing any
rights under Section 3.1 to the Collateral, all sums owing under
the Revolving Credit Facility shall be due and payable in full, and
as of and after such date Borrower shall not request and Lender
shall not make any further Advances under the Revolving Credit
Facility.

 

2.2. Term
Loan Facility – Description.

 

a.               Subject
to the terms and conditions of this Agreement, Lender hereby
establishes for the benefit of Borrower a Term Loan Facility (the
“Term Loan
Facility”) in the amount of Five Million Eight Hundred
Thirteen Thousand Five Hundred and No/100 Dollars
($5,813,500.00).

 

b.               At
Closing, Borrower shall execute and deliver a promissory note to
Lender in the amount of the Term Loan Facility (the
“Term Loan
Note”) providing for a five (5) year term, equal
monthly principal payments of $48,445.83, plus interest, commencing
on April 1, 2019, and on the first day of each month thereafter
until the Term Loan Maturity Date. On such date, unless having been
sooner accelerated by Lender pursuant to the terms hereof, and
without impairing any rights under Section 3.1 to the Collateral,
all sums owing under the Term Loan Facility shall be due and
payable in full.

 

c.               The
proceeds from the Term Loan Facility shall be used to pay in full
all existing indebtedness of Borrower owing to Avidbank, the fees
and expenses incurred in connection with closing the
Loans.

 

 

-8-

 

 

2.3. Guidance
Line Facility – Description.

 

a.               Subject
to the terms and conditions of this Agreement, Lender hereby
establishes for the benefit of Borrower a non-revolving guidance
line of credit (the “Guidance Line
Facility”) in the amount of Ten Million and No/100
Dollars ($10,000,000.00).

 

b.               At
Closing, Borrower shall execute and deliver a promissory note to
Lender in the amount of the Guidance Line Facility (the
“Guidance Line
Note”).

 

c.               The
proceeds from the Guidance Line Facility shall be utilized by
Borrower for future acquisitions and/or capital expenditures, in
each instance requiring the prior approval of Lender. Advances for
acquisitions shall not exceed eighty percent (80%) of cost;
advances for capital expenditures shall be determined by Lender on
a per request basis.

 

d.               Drawings
on the Guidance Line Facility shall be in a minimum amount of (i)
One Million and No/100 Dollars ($1,000,000.00) in the case of a
future acquisition, or (ii) Five Hundred Thousand and No/100
Dollars ($500,000.00) in the case of a capital expenditure, shall
be permitted up to the Revolving Credit Maturity Date, and shall
bear interest, payable monthly, from the date of each approved
advance.

 

e.               On
the annual anniversary of the Closing Date, the then outstanding
advances under the Guidance Line Facility shall begin amortizing
principal payments based on, with respect to approved acquisition
advances, a ten (10) year term and, with respect to approved
capital expenditure advances, a term to be determined by Lender
term not exceeding seven (7) years, payable in equal monthly
principal installments plus interest.

 

f.               Notwithstanding
the amortization periods set forth in the preceding subparagraph
and for avoidance of doubt, all sums due and payable under the
Guidance Line Facility shall be due and payable in full on the
Revolving Credit Maturity Date or the Term Loan Facility Maturity
Date, whichever first occurs.

 

g.               Drawings
under the Guidance Line Facility shall be subject to Lender
approval in its sole and absolute discretion at the time of each
draw request.

 

h.               At
the time of each draw request Borrower shall be in compliance, in
all material respects, with all covenants and conditions of all
credit facilities.

 

i.               Borrower
must demonstrate a proforma financial performance and condition
that provide a meaningful cushion relative to financial covenant
ratios as determined by Lender during its underwriting
process.

 

j.               With
respect to any acquisition Borrower must provide a quality of
earnings report acceptable to Lender.

 

2.4. Intentionally
Deleted.

 

 

 

2.5. Advances
and Payments:

 

a. Except to the
extent otherwise set forth in this Agreement, all payments of
principal and of interest on the Revolving Credit Facility, the
Term Loan Facility and the Guidance Line Facility, and all
Expenses, fees, indemnification obligations and all other charges
and any other Obligations of Borrower, shall be made to Lender at
its banking office at 7815 NW 148th Street, Miami
Lakes, Florida 33016, or such other office as Lender may designate
in writing, in United States dollars, in immediately available
funds.

 

b. Advances which may
be made by Lender from time to time under the Revolving Credit
Facility shall be made available by crediting such proceeds to
Borrower’s Account.

 

c. All Advances
requested by Borrower under the Revolving Credit Facility are to be
in writing pursuant to a written request (“Advance
Request”) executed by an Authorized Officer in the
form of Exhibit
“B” attached hereto. Requests for Advances must
be requested by 12:00 Noon, Eastern time, on the Business Day that
is the day before the Business Day such Advance is to be
made.

 

d. Upon receiving a
request for an Advance in accordance with subparagraph (c) above,
and subject to the conditions set forth in this Agreement, Lender
shall make the requested Advance available to Borrower on the day
the Advance has been requested to be made, or as soon as is
reasonably practicable thereafter.

 

 

-9-

 

 

2.6. Interest:

 

a. The unpaid
principal balance of cash Advances under the Notes shall bear
interest, subject to the terms hereof at a per annum rate equal to,
the Base Rate plus 275 basis points.

 

b. Changes in the
interest rate applicable to any Loan shall become effective on the
same day there is a change in the Base Rate.

 

c. Interest
on any Loan shall be payable monthly, in arrears, on the first day
of each month, beginning on the first day of the first full
calendar month after the Closing Date, and on the Revolving Credit
Maturity Date or Term Loan Maturity Date, as
applicable.

 

2.7. Additional
Interest Provisions

 

a. Interest on the
Loans shall be calculated on the basis of a year of three hundred
sixty (360) days but charged for the actual number of days
elapsed.

 

b. After the
occurrence and during the continuance of an Event of Default
hereunder and at Lender’s election, the per annum effective
rate of interest on all outstanding principal under the Loans shall
be increased to five percent (5%) in excess of the Base Rate (the
“Default
Rate”). All such increases may be applied
retroactively to the date of the occurrence of the Event of
Default. Borrower agrees that the Default Rate payable to Lender is
a reasonable estimate of Lender’s damages and is not a
penalty.

 

c. All contractual
rates of interest chargeable on outstanding principal under the
Loans shall continue to accrue and be paid even after Default, an
Event of Default, maturity, acceleration, judgment, bankruptcy,
insolvency proceedings of any kind or the happening of any event or
occurrence similar or dissimilar.

 

d. In no contingency
or event whatsoever shall the aggregate of all amounts deemed
interest hereunder and charged or collected pursuant to the terms
of this Agreement exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that such court
determines Lender has charged or received interest hereunder in
excess of the highest applicable rate, Lender shall apply, in its
sole discretion, and set off such excess interest received by
Lender against other Obligations due or to become due and such rate
shall automatically be reduced to the maximum rate permitted by
such law.

 

2.8. Fees
and Charges

 

a. At Closing, Lender
shall have fully earned and Borrower shall unconditionally pay to
Lender a non-refundable fee (“Commitment
Fee”) with respect to the Revolving Credit Facility
and the Term Loan Facility and, with respect to the Guidance Line
Facility, at the time of each advance thereunder, equal to one
quarter of one percent (0.25%) of the Loan Amount or advance
amount.

 

b. Borrower shall
unconditionally pay to Lender a late charge equal to five percent
(5%) of any and all payments of principal or interest on the Loans
that are not paid within ten (10) days of the due date unless the
Default Rate has been applied. Such late charge shall be due and
payable regardless of whether Lender has accelerated the
Obligations. Borrower agrees that any late fee payable to Lender is
a reasonable estimate of Lender’s damages and is not a
penalty.

 

 

-10-

 

 

2.9. Prepayments

 

a. Borrower
may prepay the Revolving Credit Facility, the Term Loan Facility
and/or the Guidance Line Facility in whole or in part at any time
or from time to time, without penalty or premium. Any prepayment
shall be accompanied by all accrued and unpaid
interest.

 

b. Subject to Section
7.1 hereof, upon any Asset Sale, Borrower shall prepay outstanding
amounts under the Revolving Credit Facility in an amount equal to
the net proceeds of the Asset Sale (i.e., the gross proceeds less
the reasonable and customary costs of such sale or other
dispositions) upon Borrower’s receipt thereof.

 

2.10. Use
of Proceeds

 

 
The
extensions of credit under and proceeds of the Revolving Credit
Facility shall be used for working capital and general corporate
purposes.

 

2.11. Capital
Adequacy

 

 
If any
present or future law, governmental rule, regulation, policy,
guideline, directive or similar requirement (whether or not having
the force of law) imposes, modifies, or deems applicable any
capital adequacy, capital maintenance or similar requirement which
affects the manner in which Lender allocates capital resources to
its commitments (including any commitments hereunder), and as a
result thereof, in the good faith opinion of Lender, the rate of
return on Lender's capital with regard to the Loans is reduced to a
level below that which Lender could have achieved but for such
circumstances, then in such case and upon notice from Lender to
Borrower, from time to time, Borrower shall pay Lender such
additional amount or amounts as shall compensate Lender for such
reduction in Lender's rate of return. Such notice shall contain the
statement of Lender with regard to any such amount or amounts which
shall, in the absence of manifest error, be binding upon Borrower.
In determining such amount, Lender may use any reasonable method of
averaging and attribution that it deems applicable. Any rules,
regulations, policies, guidelines, directives or similar
requirements adopted, promulgated or implemented in connection with
(a) the Dodd-Frank Wall Street Reform and Consumer Protection Act
and (b) the Bank for International Settlements, the Basel Committee
on Banking Supervision (or any successor or similar authority) or
any United States Governmental Authority, in each case pursuant to
Basel III, shall in all events are deemed to have been imposed,
introduced and adopted after the date of this
Agreement.

 

 

-11-

 

                                    

SECTION
III.  

COLLATERAL

 

3.1. Collateral

 

 
As
security for the payment of the Obligations, and satisfaction by
Borrower of all covenants and undertakings contained in this
Agreement and the other Loan Documents, Borrower and each of
Domestic Guarantors hereby assigns and grants to Lender, a
continuing Lien on and security interest in, upon and to all assets
of Borrower and each of Domestic Guarantors, including but not
limited to the Property described in Exhibit “C” attached hereto
and made a part hereof, all whether now owned or hereafter
acquired, created or arising and wherever located, but specifically
excluding any and all Capital Stock in the Foreign Guarantors held
by Borrower or any Domestic Guarantor (the “Excluded
Collateral”).

 

3.2. Lien
Documents

 

 
At
Closing and thereafter as Lender deems necessary, Borrower and each
Domestic Guarantor shall execute and/or deliver to Lender, or have
executed and delivered (all in form and substance reasonably
satisfactory to Lender and its counsel):

 

a. Financing
statements pursuant to the UCC, which Lender may file in the
jurisdiction where Borrower is organized and in any other
jurisdiction that Lender deems appropriate;

 

b. Any other
agreements, documents, instruments and writings, including, without
limitation, intellectual property security agreements, required by
Lender to evidence, perfect or protect the Liens and security
interests in the Collateral or as Lender may reasonably request
from time to time.

 

3.3. Other
Actions

 

a. In addition to the
foregoing, Borrower and each Domestic Guarantor shall do anything
further that may be reasonably required by Lender to secure Lender
and effectuate the intentions and objects of this Agreement,
including, without limitation, the execution and delivery of
security agreements, contracts and any other documents required
hereunder.

 

b. Lender is hereby
authorized to file financing statements and amendments to financing
statements without Borrower’s or each Domestic
Guarantor’s signature, in accordance with the UCC. Borrower
and each Domestic Guarantor hereby authorizes Lender to file all
such financing statements and amendments to financing statements
describing the Collateral in any filing office as Lender, in its
sole discretion may determine. Borrower and each Domestic Guarantor
agrees to comply with the requests of Lender in order for Lender to
have and maintain a valid and perfected first security interest in
the Collateral including, without limitation, executing and causing
any other Person to execute such documents as Lender may require to
obtain Control (as defined in the UCC) over all deposit
accounts.

 

3.4. Searches,
Certificates:

 

a. Lender shall, prior
to or at Closing, and thereafter as Lender may determine from time
to time, at Borrower’s expense (provided, however, Borrower
shall only be responsible for the expenses of one set of searches
per year unless an Event of Default is then continuing, in which
case, all searches shall be at Borrower’s expense), obtain
the following searches (the results of which are to be consistent
with the warranties made by Borrower in this
Agreement):

 

i. UCC searches with
the Secretary of State and local filing office of each state where
Borrower is organized, maintains its executive office, a place of
business, or assets; and

 

ii. Judgment, state and
federal tax lien and corporate tax lien searches, in all applicable
filing offices of each state searched under subparagraph (i)
above.

 

b. Borrower shall,
prior to or at Closing deliver to Lender good standing certificates
showing Borrower to be in good standing in its state of
organization and in each other state in which it is doing and
presently intends to do business for which qualification is
required.

 

3.5. Landlord’s
and Warehouseman’s Waivers; Access Agreements

 

Borrower and each
Domestic Guarantor will cause each owner of any premises occupied
by Borrower or to be occupied by Borrower and each warehouseman of
any warehouse, where, in either event Collateral is held, to
execute and deliver to Lender an instrument, in form and substance
reasonably satisfactory to Lender.

 

 

-12-

 

                                    

SECTION
IV.   

CLOSING
AND CONDITIONS PRECEDENT TO ADVANCES

 

Closing
under this Agreement is subject to the following conditions
precedent (all instruments, documents and agreements to be in form
and substance satisfactory to Lender and Lender's
counsel):

 

4.1. Resolutions,
Opinions, and Other Documents

 

:
Borrower shall have delivered, or caused to be delivered to Lender
the following:

 

a. this Agreement, the
Notes and each of the other Loan Documents all properly
executed;

 

b. financing
statements and each of the other documents to be executed and/or
delivered by Borrower;`

 

c. certified copies of
(i) resolutions of Borrower’s board of directors authorizing
the execution, delivery and performance of this Agreement, the
Notes to be issued hereunder and each of the other Loan Documents
required to be delivered by any Section hereof and (ii)
Borrower’s articles or certificate of incorporation and
by-laws;

 

d. an incumbency
certificate for Borrower identifying all Authorized Officers, with
specimen signatures;

 

e. a collateral audit
of Borrower’s assets, liabilities, books and records,
satisfactory in all respects to Lender;

 

f. such financial
statements, reports, certifications and other operational
information as Lender may reasonably require, satisfactory in all
respects to Lender;

 

g. payment by Borrower
of all fees including, without limitation, the Commitment Fee, and
all Expenses associated with the Revolving Credit Facility, the
Term Loan Facility and the Guidance Line Facility;

 

h. searches and
certificates required under Section 3.4;

 

i. insurance
certificates and policies as required under Section
6.2;

 

j. all required field
exams shall have been completed to Lender’s
satisfaction;

 

k. Borrower’s
Information Certificate;

 

l. the waivers of
landlord’s or warehouse’s liens required under Section
3.5;

 

m. such other
documents reasonably required by Lender.

 

 

-13-

 

 

4.2. Absence
of Certain Events

 

 
At the
Closing Date, no Default or Event of Default hereunder shall have
occurred and be continuing.

 

4.3. Warranties
and Representations at Closing

 

 
The
warranties and representations contained in this Agreement shall be
true and correct in all respects on the Closing Date with the same
effect as though made on and as of that date. Borrower shall not
have taken any action or permitted any condition to exist which
would have been prohibited by any Section hereof.

 

4.4. Compliance
with this Agreement

 

 
Borrower shall have
performed and complied with all agreements, covenants and
conditions contained herein including, without limitation, the
provisions of Sections 6 and 7 hereof, which are required to be
performed or complied with by Borrower before or at the Closing
Date.

 

4.5. Reserved

 

4.6. Closing

 

 
Subject
to the conditions of this Section, the Loans shall be made
available on such date (the “Closing
Date”) and at such time as may be mutually agreeable
to the parties contemporaneously with the execution hereof
(“Closing”).

 

4.7. Waiver
of Rights

 

 
By
completing the Closing hereunder, or by making Advances hereunder,
Lender does not thereby waive a breach of any warranty or
representation made by Borrower hereunder or under any agreement,
document, or instrument delivered to Lender or otherwise referred
to herein, and any claims and rights of Lender resulting from any
breach or misrepresentation by Borrower are specifically reserved
by Lender.

 

4.8. Conditions
for Future Advances

 

 
The
making of Advances under the Revolving Credit Facility and/or the
Guidance Line Facility in any form following the Closing Date is
subject to the following conditions precedent (all instruments,
documents and agreements to be in form and substance satisfactory
to Lender and its counsel):

 

a. This Agreement and
each of the other Loan Documents shall be effective;

 

b. No event or
condition shall have occurred or become known to Borrower, or would
result from the making of any requested Advance, which could
reasonably be expected to have a Material Adverse
Effect;

 

c. No Default or Event
of Default then exists or after giving effect to the making of the
Advance would exist;

 

d. Each Advance is
within and complies with the terms and conditions of this Agreement
including, without limitation, the notice provisions contained in
Section 2.5 hereof;

 

e. No Lien (other than
a Permitted Lien) has been imposed on Borrower; and

 

f. Each representation
and warranty set forth in Section 5 and any other Loan Document in
effect at such time (as amended or modified from time to time) is
then true and correct in all material respects as if made on and as
of such date except to the extent such representations and
warranties are made only as of a specific earlier
date.

 

 

-14-

 

 

SECTION
V. 

REPRESENTATIONS
AND WARRANTIES

 

To
induce Lender to complete the Closing and make the initial Advances
under the Revolving Credit Facility and Loans to Borrower, Borrower
warrants and represents to Lender that:

 

5.1. Organization
and Validity

 

a. Borrower (i) is a
corporation, duly organized and validly existing under the laws of
the State of Delaware, (ii) Borrower is duly authorized and
qualified to conduct business in the State of Florida, (iii) has
the appropriate power and authority to operate its business and to
own its Property and (iv) is duly qualified, is validly existing
and in good standing and has lawful power and authority to engage
in the business it conducts in each state where the nature and
extent of its business requires qualification, except where the
failure to so qualify does not and could not reasonably be expected
to have a Material Adverse Effect. A list of all states and other
jurisdictions where Borrower is qualified to do business is shown
on Borrower’s Information Certificate attached hereto and
made part hereof.

 

b. The making and
performance of this Agreement and the other Loan Documents will not
violate any Requirement of Law, or the charter, minutes or bylaw
provisions of Borrower, or violate or result in a default
(immediately or with the passage of time) under any contract,
agreement or instrument to which Borrower is a party, or by which
Borrower is bound. Borrower is not in violation of any term of any
agreement or instrument to which it is a party or by which it may
be bound which violation has or could reasonably be expected to
have a Material Adverse Effect, or of its charter, minutes or bylaw
provisions.

 

c. Borrower has all
requisite power and authority to enter into and perform this
Agreement and to incur the obligations herein provided for, and has
taken all proper and necessary action to authorize the execution,
delivery and performance of this Agreement, and the other Loan
Documents as applicable.

 

d. This Agreement, the
Notes to be issued hereunder, and all of the other Loan Documents,
when delivered, will be valid and binding upon Borrower, and
enforceable in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the
enforcement of creditors’ rights generally and by general
equitable principles.

 

5.2. Places
of Business

 

: The
only places of business of Borrower, and the places where Borrower
keeps and intends to keep its Property, are at the addresses shown
on Borrower’s Information Certificate attached hereto and
made part hereof.

 

5.3. Pending
Litigation

 

: There
are no judgments or judicial or administrative orders or
proceedings pending, or to the knowledge of Borrower, threatened in
writing, against Borrower in any court or before any Governmental
Authority except as shown on Borrower’s Information
Certificate attached hereto and made part hereof. To the knowledge
of Borrower, there are no investigations (civil or criminal)
pending or threatened in writing against Borrower in any court or
before any Governmental Authority. Borrower is not in default with
respect to any order of any Governmental Authority. To the
knowledge of Borrower, no director or executive officer of Borrower
has been indicted in connection with or convicted of engaging in
any criminal conduct, or is currently subject to any lawsuit or
proceeding or under investigation in connection with any
anti-racketeering or other conduct or activity which may result in
the forfeiture of any property to any Governmental
Authority.

 

 

-15-

 

 

5.4. Title
to Properties

 

 
Borrower has good
and marketable title in fee simple (or its equivalent under
applicable law) to all the Property it purports to own, free from
Liens and free from the claims of any other Person, except for
Permitted Liens.

 

5.5. Governmental
Consent

 

:
Neither the nature of Borrower or of its business or Property, nor
any relationship between Borrower and any other Person, nor any
circumstance affecting Borrower in connection with the issuance or
delivery of this Agreement, the Notes or any other Loan Documents
is such as to require a consent, approval or authorization of, or
filing, registration or qualification with, any Governmental
Authority on the part of Borrower except for the filing of
financing statements in connection herewith and except for
consents, approvals, authorizations, filings, registrations, or
qualifications where the failure to obtain could not reasonably be
expected to result in a Material Adverse Effect.

 

5.6. Taxes

 

 
All tax
returns required to be filed by Borrower in any jurisdiction have
been filed, and all material taxes, assessments, fees and other
governmental charges upon Borrower, or upon any of its Property,
income or franchises, which are shown to be due and payable on such
returns have been paid, except for those taxes subject to a valid
filing extension and/or being contested in good faith with due
diligence by appropriate proceedings for which appropriate reserves
have been maintained under GAAP and as to which no Lien has been
entered. Borrower is not aware of any proposed additional tax
assessment or tax to be assessed against or applicable to
Borrower.

 

5.7. Financial
Statements

 

 
The
most current available annual CPA prepared consolidated balance
sheet of Borrower and the related statements of profit and loss,
stockholders’ equity and cash flow as of such date have been
prepared in accordance with GAAP (complete copies of which have
been delivered to Lender prior to the Closing Date), and the most
current available interim consolidated balance sheet of Borrower,
and the related statements of profit and loss, stockholders’
equity and cash flow as of such date have been prepared in
accordance with GAAP (complete copies of which have been delivered
to Lender prior to the Closing Date) and present fairly, in all
material respects, the financial position of Borrower as of such
dates and the results of its operations for such
periods.

 

   
          
5.8. Full
Disclosure
 

 
The
financial statements referred to in Section 5.7 of this Agreement
do not, nor does any other written statement of Borrower to Lender
in connection with the negotiation of the Loans, contain any untrue
statement of a material fact. Such statements do not omit a
material fact, the omission of which would make the statements
contained therein misleading. There is no fact known to Borrower
which has not been disclosed in writing to Lender which has or
could reasonably be expected to have a Material Adverse
Effect.

 

5.9. Subsidiaries

 

 
As of
the Closing Date, Borrower does not have any Subsidiaries or
Affiliates, except the Guarantors. If any Subsidiary of Borrower is
acquired or formed after the date of this Agreement, Borrower will
promptly notify Lender thereof and, within ten (10) days after any
such Subsidiary is acquired or formed, such Subsidiary shall become
a Guarantor under the Revolving Credit Facility, the Term Loan
Facility and the Guidance Line Facility by executing and delivering
to Lender a Joinder to this Agreement, together with such other
Loan Documents as Lender may reasonably require (including, without
limitation, documentation pledging its assets as security for the
Loans), accompanied by (i) all other Loan Documents related
thereto, (ii) certified copies of certificates or articles of
incorporation or organization, by-laws, membership operating
agreements, and other organizational documents, appropriate
authorizing resolutions of the board of directors of such
Subsidiary, and (iii) such other documents as Lender may reasonably
request to effect the transactions contemplated under this
Section.

 

 

-16-

 

 

5.10. Investments,
Guarantees, Contracts, etc.

 

a. Borrower does not
own or hold equity or long term debt investments in, or have any
outstanding advances to, any other Person, except equity in the
Guarantors and as otherwise disclosed in writing to Lender prior to
Closing.

 

b. Borrower has not
entered into any leases for real or personal Property (whether as
landlord or tenant or lessor or lessee), except as (i) shown on
Borrower’s Information Certificate, attached hereto and made
part hereof and (ii) in the ordinary course of business and as
disclosed to Lender in writing.

 

c. Borrower is not a
party to any contract or agreement, or subject to any charter or
other corporate restriction, which has or could reasonably be
expected to have a Material Adverse Effect.

 

d. Except as otherwise
specifically provided in this Agreement, Borrower has not agreed or
consented to cause or permit any of its Property whether now owned
or hereafter acquired to be subject in the future (upon the
happening of a contingency or otherwise), to a Lien not permitted
by this Agreement.

 

5.11. Government
Regulations, etc.

 

a. The use of the
proceeds of and Borrower’s issuance of the Notes will not
directly or indirectly violate or result in a violation of
Section 7 of the Securities Exchange Act of 1934, as amended,
or any regulations issued pursuant thereto, including, without
limitation, Regulations U, T and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R., Chapter II. Borrower
does not own or intend to carry or purchase any “margin
stock” within the meaning of said
Regulation U.

 

b. Borrower has
obtained all licenses, permits, franchises or other governmental
authorizations necessary for the ownership of its Property and for
the conduct of its business, except where the failure to so obtain
could not reasonably be expected to result in a Material Adverse
Effect.

 

c. As of the date
hereof, no employee benefit plan (“Pension
Plan”), as defined in Section 3(2) of ERISA,
maintained by Borrower or under which Borrower could have any
liability under ERISA (i) has failed to meet the minimum funding
standards established in Section 302 of ERISA, (ii) has failed
to comply in a material respect with all applicable requirements of
ERISA and of the Internal Revenue Code, including all applicable
rulings and regulations thereunder, (iii) has engaged in or been
involved in a prohibited transaction under Section 406 of
ERISA or Section 4975 of the Internal Revenue Code which would
subject Borrower to any material liability, or (iv) has been
terminated if such termination would subject Borrower to any
material liability. Borrower has not assumed, or received notice of
a claim asserted against Borrower for, withdrawal liability (as
defined in Section 4207 of ERISA) with respect to any
multi-employer pension plan and is not a member of any Controlled
Group (as defined in ERISA). Borrower has timely made all
contributions when due with respect to any multi-employer pension
plan in which it participates and no event has occurred triggering
a claim against Borrower for withdrawal liability with respect to
any multi-employer pension plan in which Borrower
participates.

 

d. Borrower is not in
violation of or receipt of written notice that it is in violation
of any Requirement of Law (including, without limitation,
Environmental Laws), a violation of which causes or could
reasonably be expected to cause a Material Adverse
Effect.

 

e. Borrower is current
with all reports and documents required to be filed with any state
or federal securities commission or similar agency and is in
compliance in all material respects with all applicable rules and
regulations of such commissions, except where the failure to be
current or in compliance could not reasonably be expected to result
in a Material Adverse Effect.

 

 

-17-

 

 

5.12. Business
Interruptions

 

 
Within
five (5) years prior to the date hereof, none of the business,
Property or operations of Borrower have been materially and
adversely affected in any way by any casualty, strike, lockout,
combination of workers, order of the United States of America, or
any state or local government, or any political subdivision or
agency thereof, directed against Borrower. There are no pending or,
to Borrower’s knowledge, threatened labor disputes, strikes,
lockouts or similar occurrences or grievances affecting Borrower.
No labor contract of Borrower is scheduled to expire prior to the
Revolving Credit Maturity Date.

 

5.13. Names
and Intellectual Property

 

a. Within five (5)
years prior to the Closing Date, Borrower has not conducted
business under or used any other name (whether corporate or
assumed) except for the names shown on Borrower’s Information
Certificate attached hereto and made part hereof. Borrower is the
sole owner of all names listed on such Borrower’s Information
Certificate and any and all business done and all invoices issued
in such trade names are Borrower's sales, business and invoices.
Each trade name of Borrower represents a division or trading style
of Borrower and not a separate Subsidiary or Affiliate or
independent entity.

 

b. Borrower is the
sole owner or valid licensee of all trademarks, service marks,
patents or copyrights which Borrower uses, plans to use or has a
right to use with respect to the Collateral.

 

c. Except as set forth
on Schedule
5.13(c), Borrower does not require any copyrights, patents,
trademarks or other intellectual property, or any license(s) to use
any patents, trademarks or other intellectual property in order to
provide services to its customers in the ordinary course of
business and Lender will not require any copyrights, patents,
trademarks or other intellectual property or any licenses to use
the same in order to provide such services after the occurrence and
during the continuation of an Event of Default.

 

d. Except for such
claims and infringements that could not reasonably be expected to
have a Material Adverse Effect, to Borrower’s knowledge, no
claim has been asserted and is pending challenging or questioning
the use of any trademarks or service marks or their validity and
effectiveness, and, to Borrower’s knowledge, the use of any
intellectual property rights by Borrower or any Subsidiary, the
granting of a right or a license in respect of the intellectual
property rights from Borrower or any Subsidiary, or any slogan or
other advertising device, product, process, method, substance, part
or other material now employed, or now contemplated to be employed,
by Borrower or any Subsidiary does not infringe on any rights of
any other Person.

 

5.14. Other
Associations

 

 
Borrower is not
engaged and has no interest in any joint venture or partnership
with any other Person except with the Guarantors or as otherwise
disclosed in writing to Lender prior to Closing.

 

5.15. Environmental
Matters

 

 
Except
as disclosed in writing to Lender prior to Closing:

 

a. To Borrower’s
knowledge, no Property presently owned, leased or operated by
Borrower contains, or has previously contained, any Hazardous
Substances in amounts or concentrations which (i) constitute or
constituted a violation of, or (ii) could give rise to liability
under, any Environmental Law.

 

b. To Borrower’s
knowledge, Borrower is in material compliance, and, for the
duration of all applicable statutes of limitations periods, has
been in material compliance with all applicable Environmental Laws,
and there is no contamination at, under or about any properties
presently owned, leased, or operated by Borrower or violation of
any Environmental Law with respect to such properties which could
reasonably be expected to interfere with any of their continued
operations or reasonably be expected to impair the fair saleable
value thereof.

 

c. Borrower has not
received any written (or to Borrower’s knowledge, oral)
notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or
compliance assessment with Environmental Laws and Borrower has no
knowledge that any such notice will be received or is being
threatened.

 

d. To Borrower’s
knowledge, Hazardous Substances have not been transported or
disposed of in a manner or to a location which are reasonably
likely to give rise to liability of Borrower under any
Environmental Law.

 

e. No judicial
proceeding or governmental or administrative action is pending, or
to the knowledge of Borrower, threatened under any Environmental
Law to which Borrower is, or to Borrower’s knowledge will be,
named as a party, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding, the
implementation of which is reasonably likely to have a Material
Adverse Effect.

 

 

-18-

 

 

5.16. Regulation
O

 

 
No
director or executive officer of Borrower is a director or
executive officer or principal shareholder of Lender. For the
purposes hereof the terms “director”,
“executive
officer” and “principal
shareholder” (when used with reference to Lender),
have the respective meanings assigned thereto in Regulation O
issued by the Board of Governors of the Federal Reserve
System.

 

5.17. Capital
Stock

 

 
Borrower’s
organizational chart is as shown on Borrower’s Information
Certificate attached hereto and made part hereof. All of the
Capital Stock of Borrower has been duly and validly authorized and
issued and is fully paid and non-assessable and has been sold and
delivered to the holders thereof in compliance with, or under valid
exemption from, all Federal and state laws and the rules and
regulations of all Governmental Authorities governing the sale and
delivery of securities.

 

5.18. Solvency

 

 
After
giving effect to the transactions contemplated under this
Agreement, Borrower is solvent, is able to pay its debts as they
become due, and has capital sufficient to carry on its business and
all businesses in which it is about to engage, and now owns
Property having a value both at fair valuation and at present fair
salable value greater than the amount required to pay
Borrower’s debts. Borrower will not be rendered insolvent by
the execution and delivery of this Agreement or any of the other
Loan Documents executed in connection with this Agreement or by the
transactions contemplated hereunder or thereunder.

 

5.19. Perfection
and Priority

 

: This
Agreement and the other Loan Documents are effective to create in
favor of Lender legal, valid and enforceable Liens in all right,
title and interest of Borrower in the Collateral, and when
financing statements have been filed in the jurisdiction of
incorporation of Borrower, Borrower will have granted to Lender,
and Lender will have perfected first priority Liens in the
Collateral, superior in right to any and all other Liens, existing
or future except for Liens described in clause (a) of Permitted
Liens. Lender covenants and agrees to discharge and release any
financing statements upon the satisfaction in full of the
Obligations and the termination of this Agreement.

 

5.20. Commercial
Tort Claims

 

: As of
the Closing Date, Borrower is not a party to any Commercial Tort
Claims, except as shown on Borrower’s Information Certificate
attached hereto and made part hereof.

 

5.21. Anti-Terrorism
Laws:

 

a. General. Neither Borrower nor
any Affiliate of Borrower is in violation of any Anti-Terrorism Law
or engages in or conspires to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts
to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.

 

b. Executive Order No. 13224.
Neither Borrower nor any Affiliate of Borrower, or to
Borrower’s knowledge, any of its respective agents acting or
benefiting in any capacity in connection with the Loans, Letters of
Credit or other transactions hereunder, is any of the following
(each a “Blocked
Person”):

 

i. a Person that is
listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order No. 13224;

 

ii. a Person owned or
controlled by, or acting for or on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order No. 13224;

 

iii. a
Person with which Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

 

iv. a Person that
commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order No.
13224;

 

v. a Person that is
named as a “specially designated national” on the most
current list published by the U.S. Treasury Department Office of
Foreign Asset Control at its official website or any replacement
website or other replacement official publication of such list;
or

 

vi. a Person who is
affiliated with a Person listed above.

 

 

-19-

 

 

SECTION
VI.  

BORROWER'S
AFFIRMATIVE COVENANTS

 

Borrower covenants
that until all of the Obligations are paid and satisfied in full
and the Revolving Credit Facility has been terminated,
that:

 

6.1. Payment
of Taxes and Claims

 

:
Borrower shall pay, before they become delinquent, all taxes,
assessments and governmental charges, or levies imposed upon it, or
upon Borrower's Property, and all claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other Persons,
entitled to the benefit of statutory or common law Liens which, in
any case, if unpaid, would result in the imposition of a Lien upon
its Property; provided however, that Borrower shall not be required
to pay any such tax, assessment, charge, levy, claim or demand if
the amount, applicability or validity thereof, shall at the time,
be contested in good faith and by appropriate proceedings by
Borrower, and if Borrower shall have set aside on its books
adequate reserves in respect thereof, if so required in accordance
with GAAP; which deferment of payment is permissible so long as no
Lien other than a Permitted Lien has been entered and Borrower's
title to, and its right to use, its Property are not materially
adversely affected thereby.

 

6.2. Maintenance
of Properties and Corporate Existence

a. Property - Borrower shall
maintain its Property in good condition (normal wear and tear
excepted) make all necessary renewals, replacements, additions,
betterments and improvements thereto in the reasonable business
judgment of Borrower and will pay and discharge when due the cost
of repairs and maintenance to its Property (unless such costs are
being contested in good faith), and will pay all rentals prior to
becoming delinquent for all real estate leased by Borrower (unless
such rentals are being contested in good faith).

 

b. Property Insurance, Public and
Products Liability Insurance - Borrower shall maintain
insurance (i) on all insurable tangible Property against fire,
flood, casualty and such other hazards (including, without
limitation, extended coverage, workmen's compensation, boiler and
machinery, with inflation coverage by endorsement) and (ii) against
general public liability, product liability, inventory and business
interruption, in each case in such amounts, with such deductibles
and with such insurers as are customarily used by companies
operating in the same industry as Borrower. At or prior to Closing,
Borrower shall furnish Lender with duplicate original policies of
insurance or such other evidence of insurance as Lender may
reasonably require, and any certificates of insurance shall be
issued on Acord Form-27. In the event Borrower fails to procure or
cause to be procured any such insurance or to timely pay or cause
to be paid the premium(s) on any such insurance, Lender may do so
for Borrower, but Borrower shall continue to be liable for the
same. The policies of all such casualty insurance shall contain
standard Lender's Loss Payable Clauses (and, with respect to
liability and interruption insurance, additional insured clauses)
issued in favor of Lender under which all losses thereunder shall
be paid to Lender as Lender's interest may appear. Such policies
shall expressly provide that the requisite insurance cannot be
altered or canceled without thirty (30) days prior written notice
to Lender and shall insure Lender notwithstanding the act or
neglect of Borrower. Borrower hereby appoints Lender as Borrower's
attorney-in-fact, exercisable at Lender's option to endorse any
check which may be payable to Borrower in order to collect the
proceeds of such insurance and any amount or amounts collected by
Lender pursuant to the provisions of this Section may be applied by
Lender, in its sole discretion, to any Obligations or to repair,
reconstruct or replace the loss of or damage to Collateral as
Lender in its discretion may from time to time determine. Borrower
further covenants that all insurance premiums owing under its
current policies have been paid. Borrower shall notify Lender,
immediately, upon Borrower's receipt of a notice of termination,
cancellation, or non-renewal from its insurance company of any such
policy.

 

c. Financial Records - Borrower
shall keep current and accurate books of records and accounts in
which full and correct entries will be made of all of its business
transactions, and will reflect in its financial statements adequate
accruals and appropriations to reserves, all in accordance with
GAAP. Borrower shall not change its fiscal year end date without
the prior written consent of Lender (such consent not to be
unreasonably withheld or delayed).

 

d. Corporate Existence and Rights
- Borrower shall do (or cause to be done) all things reasonably
necessary to preserve and keep in full force and effect its
existence, good standing, rights and franchises. Borrower shall
obtain and maintain any and all licenses, permits, franchises or
other governmental authorizations necessary to the ownership of the
Property or the conduct of its businesses, except where the failure
to obtain or maintain could not reasonably be expected to result in
a Material Adverse Effect.

 

e. Compliance with Laws - Borrower
shall be in compliance with any and all Requirements of Law to
which it is subject, whether federal, state or local, including,
without limitation, Environmental Laws, except where the failure to
be in compliance could not reasonably be expected to result in a
Material Adverse Effect. Borrower shall timely satisfy all
assessments, fines, costs and penalties imposed (after exhaustion
of all appeals, provided a stay has been put in effect during such
appeal) by any Governmental Authority against Borrower or any
Property of Borrower.

 

 

-20-

 

 

6.3. Business
Conducted

 

 
Borrower shall
continue in the business presently operated by it and any
businesses reasonably incidental or complimentary thereto using its
commercially reasonable efforts to maintain its customers and
goodwill. Borrower shall not engage, directly or indirectly, in any
material respect in any line of business substantially different
from the businesses conducted by Borrower immediately prior to the
Closing Date.

 

6.4. Litigation

 

 
Borrower shall give
prompt (and in any event not later than five (5) Business Days)
notice to Lender of any litigation which could reasonably be
expected to result in a Material Adverse Effect.

 

6.5. Taxes

 

 
Borrower shall pay
all taxes (other than taxes based upon or measured by any
Lender’s income or revenues or any personal property tax), if
any, in connection with the issuance of the Notes and the recording
of any lien documents. The obligations of Borrower hereunder shall
survive the payment of Borrower’s Obligations hereunder and
the termination of this Agreement.

 

6.6. Bank
Accounts

 

 
Until
the Obligations are paid in full, Borrower shall maintain all of
its domestic (non-foreign) depository and disbursement account(s)
and treasury management services with Lender.

 

6.7. Employee
Benefit Plans

 

 
Borrower shall (a)
fund all of its Pension Plan(s) in a manner that will satisfy the
minimum funding standards of Section 302 of ERISA, (b) furnish
Lender, promptly upon Lender’s request, with copies of all
reports or other statements filed with the United States Department
of Labor, the PBGC or the IRS with respect to all Pension Plan(s),
or which Borrower, or any member of a Controlled Group, may receive
from the United States Department of Labor, the IRS or the PBGC,
with respect to all such Pension Plan(s), and (c) promptly advise
Lender of the occurrence of any reportable event (as defined in
Section 4043 of ERISA, other than a reportable event for which the
thirty (30) day notice requirement has been waived by the
PBGC) or prohibited transaction (under Section 406 of ERISA or
Section 4975 of the Internal Revenue Code) with respect to any
such Pension Plan(s) and the action which Borrower proposes to take
with respect thereto. Borrower will make all contributions when due
with respect to any multi employer pension plan in which it
participates and will promptly advise Lender upon (x) its receipt
of notice of the assertion against Borrower of a claim for
withdrawal liability, (y) the occurrence of any event which,
to the best of Borrower's knowledge, would trigger the assertion of
a claim for withdrawal liability against Borrower, and (z) upon the
occurrence of any event which, to the best of Borrower's knowledge,
would place Borrower in a Controlled Group as a result of which any
member (including Borrower) thereof may be subject to a claim for
withdrawal liability, whether liquidated or
contingent.

 

6.8. Financial
Covenants

 

 
Borrower shall
maintain and comply with the following financial
covenants:

 

a. a minimum Fixed
Charge Coverage Ratio of 1.25 to 1.00 to be tested
quarterly.

 

b. a maximum Total
Leverage Ratio of 4.00 to 1.00. to be tested
quarterly.

6.9. Financial
and Business Information

 

  Borrower shall
deliver or cause to be delivered to Lender the
following:

 

a. Financial Statements and Collateral
Reports - such data, reports, statements and information,
financial or otherwise, as Lender may reasonably request,
including, without limitation:

 

i. Within forty-five
(45) days after the end of each calendar quarter, the consolidated,
consolidating (if applicable) and combined income and cash flow
statements of Borrower and its Subsidiaries/Affiliates for such
quarter and for the expired portion of the fiscal year ending with
the end of such quarter, setting forth in comparative form the
corresponding figures for the corresponding periods of the previous
fiscal year, and the consolidated, consolidating (if applicable)
and combined balance sheet of Borrower and its
Subsidiaries/Affiliates as at the end of such quarter, setting
forth in comparative form the corresponding figures as at the end
of the corresponding periods of the previous fiscal year, all in
reasonable detail and certified by Borrower’s chief financial
officer to have been prepared from the books and records of
Borrower;

 

 -21-

 

  

ii. within one hundred
twenty (120) days after the end of each fiscal year of Borrower,
commencing with the fiscal year ending June 30, 2019, the audited
consolidated, consolidating (if applicable) and combined income and
cash flow statements of Borrower and its Subsidiaries/Affiliates
for such year, and the consolidated, consolidating (if applicable)
and combined balance sheet of Borrower and its
Subsidiaries/Affiliates as at the end of such fiscal year, setting
forth in each case in comparative form the corresponding figures as
at the end of and for the previous fiscal year, all in reasonable
detail, including all supporting schedules, and reviewed by an
independent public accounting firm acceptable to Lender, and
certified to have been prepared in accordance with GAAP, and such
independent public accountants shall also certify that in making
the examinations necessary to their certification mentioned above
they have reviewed the terms of this Agreement and the accounts and
conditions of Borrower during the accounting period covered by the
certificate and that such review did not disclose the existence of
any condition or event which constitutes a Default or an Event of
Default (or if such conditions or events existed, describing them)
together with copies of any management letters provided by such
accountants to management of Borrower; and

 

b. Notice of Event of Default -
promptly (and in no event later than two (2) Business Days
thereafter) upon becoming aware of the existence of any condition
or event which constitutes a Default or an Event of Default under
this Agreement, a written notice specifying the nature and period
of existence thereof and what action Borrower is taking (and
proposes to take) with respect thereto;

 

c. Notice of Claimed Default -
promptly (and in no event later than five (5) Business Days
thereafter) upon receipt by Borrower of a written of default given
to Borrower by any creditor for Indebtedness; and

 

d. Securities and Other Reports
– so long as Borrower shall be required to file reports with
the Securities and Exchange Commission pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended, promptly upon its becoming available, one copy of each
financial statement, report, notice or proxy statement sent by
Borrower to stockholders generally, and, a copy of each regular or
periodic report, and any registration statement, or prospectus in
respect thereof, filed by Borrower with any securities exchange or
with federal or state securities and exchange commissions or any
successor agency.

 

6.10. Compliance
Certificates

 

: Along
with the financial statements to be delivered to Lender at the end
of each fiscal quarter pursuant to Section 6.9(a)(i) hereof and the
annual financial statements delivered pursuant to Section
6.9(a)(ii) hereof, Borrower shall deliver to Lender a certificate
(“Covenant Compliance
Certificate”), in the form of Exhibit "E", attached hereto and made
part hereof, from the chief financial officer, chief executive
officer, or president of Borrower (and as to certificates
accompanying the annual financial statements of Borrower, also
certified by Borrower’s independent certified public
accountant) setting forth:

 

a. Event of Default - that the
signer has reviewed the relevant terms of this Agreement, and has
made (or caused to be made under his/her supervision) a review of
the transactions and conditions of Borrower from the beginning of
the accounting period covered by the financial statements being
delivered therewith to the date of the certificate, and that such
review has not disclosed the existence during such period of any
condition or event which constitutes a Default or an Event of
Default or, if any such condition or event exists, specifying the
nature and period of existence thereof and what action Borrower has
taken or proposes to take with respect thereto.

 

b. Covenant Compliance - the
information (including detailed calculations) required in order to
establish that Borrower is in compliance with the requirements of
Section 6.8 of this Agreement, as of the end of the period covered
by the financial statements delivered.

 

6.11. Audit
and Inspection; Field Exams; Appraisals

 

:
Borrower shall permit any of Lender’s officers or other
representatives to visit and inspect upon reasonable prior notice
during normal business hours any of the Collateral Locations of
Borrower (provided that, while an Event of Default exists, Lender
may make such visits and inspections at any time without prior
notice) to examine and audit all of Borrower's Collateral, books of
account, records, reports and other papers, to make copies and
extracts therefrom and to discuss its affairs, finances and
accounts with its officers, employees and independent certified
public accountants all at Borrower's expense at the standard rates
charged by Lender for such activities, plus Lender's reasonable
out-of-pocket expenses (all of which amounts shall be Expenses),
provided however, (i) Borrower shall at all times have the right to
be present at any such inspection or audit (which such right shall
not exist if an Event of Default shall then exist), and (ii) so
long as no Event of Default shall have occurred and be continuing,
Borrower shall only be responsible for reimbursing Lender for one
(1) inspection or audit per fiscal year. On an annual basis, or as
otherwise deemed necessary by Lender during the existence of an
Event of Default, Lender may, in its discretion obtain a field
exam, in each case at Borrower’s sole cost and expense,
provided however, (i) Borrower shall at all times have the right to
be present at any such inspection (which such right shall not exist
if an Event of Default shall then exist), and (ii) so long as no
Event of Default shall have occurred and be continuing, Borrower
shall only be responsible for reimbursing Lender for one (1) field
exam fiscal year. Field exams shall be conducted by an appraiser
reasonably acceptable to Lender and shall be in form and substance
satisfactory to Lender.

 

 

-22-

 

 

6.12. Other
Reports

 

:
Borrower further agrees that, if requested by Lender, it shall
promptly (and in no event later than five (5) Business Days)
furnish Lender with copies of all reports filed with any federal,
state or local Governmental Authority.

 

6.13. Information
to Participant

 

:
Subject to Section 9.23, Lender may divulge to any participant,
assignee or co-lender or prospective participant, assignee or
co-lender it may obtain in the Loans or any portion thereof, all
information, and furnish to such Person copies of any reports,
financial statements, certificates, and documents obtained under
any provision of this Agreement, or related agreements and
documents.

 

6.14. Material
Adverse Developments

 

:
Borrower agrees that promptly (and in no event later than five (5)
Business Days) upon becoming aware of any development or other
information outside the ordinary course of business and excluding
matters of a general economic, financial or political nature which
would reasonably be expected to have a Material Adverse Effect it
shall give to Lender telephonic notice specifying the nature of
such development or information and such anticipated effect. In
addition, such verbal communication shall be confirmed by written
notice thereof to Lender on the same day such verbal communication
is made or the next Business Day thereafter.

 

6.15. Places
of Business

 

:
Borrower shall give thirty (30) days prior written notice to Lender
of any changes in the Collateral Location of any of its respective
places of business, of the places where records concerning its
Accounts are kept, or the establishment of any new, or the
discontinuance of any existing, place of business.

 

6.16. Annual
Clean-Up.
On an annual basis (measured on each annual anniversary of the date
of this Agreement), the outstanding principal balance under the
Revolving Credit Facility shall be reduced to zero for a period of
thirty (30) consecutive days.

 

 

-23-

 

                                     

SECTION
VII.  

BORROWER'S
NEGATIVE COVENANTS:

 

Borrower covenants
that until all of the Obligations are paid and satisfied in full
and the Revolving Credit Facility has been terminated,
that:

 

7.1. Merger,
Consolidation, Dissolution or Liquidation

 

a. Borrower shall not
engage in any Asset Sale other than equipment that is replaced by
other equipment of comparable or superior quality and value within
ninety (90) days of such Asset Sale, unless Borrower shall prepay
outstanding amounts under the Revolving Credit Facility in an
amount equal to the net proceeds of such Asset Sale (i.e., the
gross proceeds less the reasonable and customary costs of such sale
or other dispositions) upon Borrower’s receipt
thereof.

 

b. Borrower shall not
merge or consolidate with any other Person or commence a
dissolution or liquidation.

 

7.2. Acquisitions

 

 
Without
the prior written consent of Lender or otherwise in conjunction
with an Advance under the Guidance Line Facility, Borrower shall
not acquire all or substantially all of the Capital Stock or
acquire any assets of any Person in any transaction or in any
series of related transactions or enter into any sale and leaseback
transaction. Notwithstanding the foregoing, Borrower may acquire
assets having a purchase price of less than $500,000.00, without
Lender’s consent, provided (i) Borrower does not obtain any
institutional or investor financing for the acquisition of such
assets; (b) the acquisition of such assets does not cause an Event
of Default under this Agreement and (c) prior to the acquisition
Borrower delivers to Lender a proforma financial statement
reflecting that after such acquisition Borrower will be in
compliance with the financial covenants in Section 6.8 of this
Agreement.

 

7.3. Liens
and Encumbrances

 

 
Borrower shall not:
(i) execute a negative pledge agreement with any Person covering
any of its Property, or (ii) cause or permit or agree or consent to
cause or permit in the future (upon the happening of a contingency
or otherwise), its Property (including, without limitation, the
Collateral), whether now owned or hereafter acquired, to be subject
to a Lien or be subject to any claim except for Permitted
Liens.

 

7.4. Transactions
With Affiliates or Subsidiaries

 

a. Borrower shall not
enter into any transaction with any Subsidiary or other Affiliate,
including, without limitation, the purchase, sale, or exchange of
Property, or the loaning or giving of funds to any Affiliate or any
Subsidiary unless: (i) such Subsidiary or Affiliate is engaged in a
business substantially related to the business conducted by
Borrower, is a “Guarantor” hereunder and the
transaction is in the ordinary course of and pursuant to the
reasonable requirements of Borrower’s business and upon terms
substantially the same and no less favorable to Borrower as it
would obtain in a comparable arm’s length transactions with
any Person not an Affiliate or a Subsidiary, and so long as such
transaction is not prohibited hereunder; or (ii) such transaction
is intended for incidental administrative purposes.

 

b. Except in
compliance with the requirements in this Agreement, Borrower shall
not create or acquire any Subsidiary.

 

7.5. Shareholder
Debt. Borrower shall not obtain any additional loans from
related parties without Lender’s prior written consent which
consent shall not be unreasonably denied or delayed but may be
conditioned on the execution by the holder of such debt of a
subordination of debt agreement, provided, however, that Lender may
prohibit Borrower from making any payments of interest thereunder
until the Obligations are paid in full if Lender determines, in its
commercially reasonable discretion, that payment of such interest
could reasonably be likely to result in a Default or Event of
Default and/or if Borrower is unable to demonstrate to
Lender’s reasonable satisfaction that after making such
interest payment Borrower will comply with the financial covenants
in Section 6.8 of this Agreement. Borrower hereby warrants and
represents that there is no other Shareholder Debt outstanding as
of the Closing Date.

 

 

-24-

 

 

7.6. Subordinate
Debt. Borrower agrees that all present and/or future related
party debt shall be subordinate to the lien, interest and rights of
Lender under the Loans and in and to the Collateral. At the request
of Lender, Borrower shall cause the holder of any related party
debt to execute and record or file such documents or instruments as
may be requested by Lender to evidence the subordination of such
debt to Lender’s rights, title and interest under the Loans
and in the Collateral.

 

7.7. Guarantees

 

.
Excepting the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection, Borrower shall
not become or be liable, directly or indirectly, primary or
secondary, matured or contingent, in any manner, whether as
guarantor, surety, accommodation maker, or otherwise, for the
existing or future Indebtedness of any kind of any Person (other
than Lender in connection with the Loans and the Loan
Documents).

 

7.8. Distributions,
Bonuses and Other Indebtedness

 

: At
the time of Closing, Borrower shall not: (a) if an Event of Default
exists or would result after the payment of such Distribution,
declare or pay or make any forms of Distribution to holders of
Borrower’s Capital Stock; (b) hereafter incur or become
liable for any Indebtedness other than Permitted Indebtedness; (c)
make any prepayments on any existing or future Indebtedness (other
than the Obligations); or (d) make any payments on Subordinated
Debt in violation of the subordination provisions in Section 7.6
hereof.

 

7.9. Miscellaneous
Covenants

a. Borrower shall not
become or be a party to any contract or agreement which at the time
of becoming a party to such contract or agreement materially
impairs Borrower's ability to perform under this Agreement, or
under any other instrument, agreement or document to which Borrower
is a party or by which it is or may be bound.

 

b. Borrower shall not
carry or purchase any “margin stock” within the meaning
of Regulations U, T or X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter II.

 

 

-25-

 

 

SECTION
VIII. 

DEFAULT

 

8.1. Events
of Default

 

 
Each of
the following events shall constitute an event of default
(“Event of
Default”):

 

a. Payments - if Borrower fails
(i) to make any payment of principal or (ii) to make any payment of
interest or any Overadvance or amounts, or otherwise under the
Obligations within three (3) Business Days of the date such payment
is due and payable; or

 

b. Other Charges - if Borrower
fails to pay any other charges, fees, Expenses or other monetary
obligations owing to Lender arising out of or incurred in
connection with this Agreement within three (3) Business Days of
the date such payment is due and payable; or

 

c. Particular Covenant Defaults -
if Borrower fails to perform, comply with or observe any covenant
or undertaking contained in this Agreement and (other than with
respect to the covenants contained in Sections 6.8, 6.11, 7.1, 7.2,
7.3, 7.5, 7.7, and 7.8 for which no cure period shall exist), such
failure continues for twenty (20) days after Borrower receives
notice thereof or any Responsible Officer of Borrower becomes aware
thereof; provided, however, that if the default cannot by its
nature be cured within the twenty (20) day period or cannot after
diligent attempts by Borrower be cured within such twenty (20) day
period, and such default is likely to be cured within a reasonable
time, then Borrower shall have an additional reasonable period
(which shall not in any case exceed an additional twenty (20) days)
to attempt to cure such default, and within such reasonable time
period the failure to have cured such default shall not be deemed
an Event of Default; or

 

d. Financial Information - if any
statement, report, financial statement, or certificate made or
delivered by Borrower or any of its officers, employees or agents,
to Lender is not true and correct, in all material respects, when
made; or

 

e. Warranties or Representations -
if any warranty, representation or other statement by or on behalf
of Borrower contained in or pursuant to this Agreement, the other
Loan Documents, or in any document, agreement or instrument
furnished in compliance with, relating to, or in reference to this
Agreement, is false, erroneous, or misleading in any material
respect when made; or

 

f. Agreements with Others - (i) if
Borrower shall default beyond any grace period in the payment of
principal or interest of any Indebtedness of Borrower in excess of
$250,000, in the aggregate; or (ii) if Borrower otherwise defaults
under the terms of any such Indebtedness if the effect of such
default is to enable the holder of such Indebtedness to accelerate
the payment of Borrower's obligations, which are the subject
thereof, prior to the maturity date or prior to the regularly
scheduled date of payment; or

 

g. Other Agreements with Lender and
Affiliates - if Borrower breaches or violates the terms of,
or if a default (and expiration of any applicable cure period), or
an Event of Default, occurs under, any other existing or future
agreement (related or unrelated) (including, without limitation,
the other Loan Documents) between Borrower and Lender;
or

 

h. Judgments - if any final
judgment for the payment of money for an aggregate amount in excess
of $250,000 (i) which is not fully covered by insurance or (ii) for
which Borrower has not established a cash or cash equivalent
reserve in the full amount of such judgment, shall be rendered by a
court of record against Borrower and such judgment shall continue
unsatisfied and in effect for a period of forty-five (45)
consecutive days without being vacated, discharged, satisfied or
bonded pending appeal; or

 

i. Assignment for Benefit of Creditors,
etc. - if Borrower makes or proposes in writing, an
assignment for the benefit of creditors generally, offers a
composition or extension to creditors, or makes or sends notice of
an intended bulk sale of any business or assets now or hereafter
owned or conducted by Borrower; or

 

j. Bankruptcy, Dissolution, etc. -
upon the commencement of any action for the dissolution or
liquidation of Borrower, or the commencement of any proceeding to
avoid any transaction entered into by Borrower, or the commencement
of any case or proceeding for reorganization or liquidation of
Borrower's debts under the Bankruptcy Code or any other state or
federal law, now or hereafter enacted for the relief of debtors,
whether instituted by or against Borrower; provided however, that
Borrower shall have forty-five (45) days to obtain the dismissal or
discharge of involuntary proceedings filed against it, it being
understood that during such forty-five (45) day period, Lender
shall not be obligated to make Advances hereunder and Lender may
seek adequate protection in any bankruptcy proceeding;
or

 

 

-26-

 

 

k. Receiver- upon the appointment
of a receiver, liquidator, custodian, trustee or similar official
or fiduciary for any Borrower or for Borrower’s Property;
or

 

l. Execution Process, etc. - the
issuance of any execution or distraint process against any material
portion of the Property of Borrower; or

 

m. Termination of Business - if
Borrower ceases any material portion of its business operations as
presently conducted for a period of more than ten (10) consecutive
Business Days unless Borrower is entitled to receive proceeds of
business interruption insurance in connection therewith;
or

 

n. Pension Benefits, etc. - if
Borrower fails to comply with ERISA so that proceedings are
commenced to appoint a trustee under ERISA to administer Borrower's
employee plans or the PBGC institutes proceedings to appoint a
trustee to administer such plan(s), or a Lien is entered to secure
any deficiency or claim or a "reportable event" as defined under
ERISA occurs; or

 

o. Investigations - any indication
or evidence received by Lender that reasonably leads it to believe
Borrower may have directly or indirectly been engaged in any type
of activity which, would be reasonably likely to result in the
forfeiture of any property of Borrower to any Governmental
Authority, which could reasonably be expected to result in a
Materially Adverse Effect; or

 

p. Change of Control - if there
shall occur a Change of Control; or

 

q. Liens - if any Lien in favor of
Lender shall cease to be valid, enforceable and perfected and prior
to all other Liens other than Permitted Liens or if Borrower or any
Governmental Authority shall assert any of the foregoing;
or

 

r. Material Adverse Effect –
if there is any change in the financial condition of Borrower and
its Subsidiaries, taken as a whole, which, in Lender’s
reasonable opinion, has or would be reasonably likely to have a
Material Adverse Effect; or

 

s. Other Loan Documents - if any
other Person (other than Lender) party to a Loan Document, breaches
or violates any term, provision or condition of such Loan
Document.

 

8.2. Cure

 

 
Nothing
contained in this Agreement or the Loan Documents shall be deemed
to compel Lender to accept a cure of any Event of Default
hereunder.

 

8.3. Rights
and Remedies on Default

 

a. In addition to all
other rights, options and remedies granted or available to Lender
under this Agreement or the Loan Documents (each of which is also
then exercisable by Lender), or otherwise available at law or in
equity, upon or at any time after the occurrence and during the
continuance of a Default or an Event of Default, Lender may, in its
discretion, withhold or cease making Advances under the Revolving
Credit Facility and the Guidance Line Facility.

 

b. In addition to all
other rights, options and remedies granted or available to Lender
under this Agreement or the Loan Documents, or otherwise available
at law or in equity, upon or at any time after the occurrence and
during the continuance of an Event of Default Lender may, in its
discretion, terminate the Revolving Credit Facility and the
Guidance Line Facility and declare the Obligations, immediately due
and payable, all without demand, notice, presentment or protest or
further action of any kind (it also being understood that the
occurrence of any of the events or conditions set forth in Sections
8.1(j),(k) or (l) shall automatically cause an acceleration of the
Obligations.

 

 

-27-

 

 

c. In addition to all
other rights, options and remedies granted or available to Lender
under this Agreement or the Loan Documents, or otherwise available
at law or in equity, upon or at any time after the acceleration of
the Obligations following the occurrence of an Event of Default
(other than the rights with respect to clause (iv) below which
Lender may exercise at any time after an Event of Default and
regardless of whether there is an acceleration), Lender may, in its
discretion, exercise all rights under the UCC and any other
applicable law or in equity, and under all Loan Documents permitted
to be exercised after the occurrence of an Event of Default,
including the following rights and remedies (which list is given by
way of example and is not intended to be an exhaustive list of all
such rights and remedies):

 

       
           
           
         
(1)    The right to take possession of, send notices
regarding and collect directly the Collateral, with or without
judicial process (including without limitation the right to notify
the United States postal authorities to redirect mail addressed to
Borrower to an address designated by Lender);
or

 

i. By its own means or
with judicial assistance, enter Borrower's premises and take
possession of the Collateral, or render it unusable, or dispose of
the Collateral on such premises in compliance with subsection (e)
below, without any liability for rent, storage, utilities or other
sums, and Borrower shall not resist or interfere with such action;
or

 

ii. Require Borrower at
Borrower's expense to assemble all or any part of the Collateral
(other than real estate or fixtures) and make it available to
Lender at any place designated by Lender; or

 

iii. The
right to enjoin any violation of Section 7.1, it being agreed that
Lender's remedies at law are inadequate.

 

d. Borrower hereby
agrees that a notice received by it at least seven (7) days before
the time of any intended public sale or of the time after which any
private sale or other disposition of the Collateral is to be made,
shall be deemed to be reasonable notice of such sale or other
disposition. If permitted by applicable law, any perishable
inventory or Collateral which threatens to speedily decline in
value or which is sold on a recognized market may be sold
immediately by Lender without prior notice to Borrower. Borrower
covenants and agrees not to interfere with or impose any obstacle
to Lender's exercise of its rights and remedies with respect to the
Collateral, after the occurrence of an Event of Default hereunder.
Lender shall have no obligation to clean up or prepare the
Collateral for sale. If Lender sells any of the Collateral upon
credit, Borrower will only be credited with payments actually made
by the purchaser thereof, that are received by Lender. Lender may,
in connection with any sale of the Collateral specifically disclaim
any warranties of title or the like.

 

e. The purchase money
proceeds or avails of any sale made under or by virtue of this
Article 8, together with any other sums which then may be held by
Lender under this Loan Agreement, whether under the provisions of
this Article 8 or otherwise, shall be applied as
follows:

 

i. First: To the
payment of all Lender Expenses, including without limitation, the
costs and expenses of such sale, including, but not limited to, the
reasonable compensation to Lender its agents and counsel, and any
sums that may be due under and/or pursuant to any statute, rule,
regulation and/or law which imposes any tax, charge, fee and/or
levy in connection with and/or arising from the exercise of any
right and/or remedy under this Loan Agreement or the requirement
that any sum be paid in order to record and/or file any deed,
instrument of transfer or other such document in connection with
any such sale and of any judicial proceedings wherein the same may
be made, and of all expenses, liabilities and advances made or
incurred by Lender under this Loan Agreement, together with
interest at the Default Rate on all advances made by
Lender.

 

ii. Second: To the
payment of the whole amount then due, owing or unpaid hereunder for
interest on the unpaid principal, including, without limitation,
interest at the Default Rate from and after the happening of any
Event of Default from the due date of any such payment of principal
until the same is paid.

 

iii. Third:
To the payment of the whole amount then due, owing or unpaid upon
the other Obligations and any other sums required to be paid
thereunder with interest on such other Obligations and other sums
at the Default Rate from and after the happening of any Event of
Default from the due date of any such other Obligations and other
sums until the same is paid.

 

iv. Fourth: To the
payment of any other Obligations and any other sums required to be
paid by Borrower pursuant to any provision of this Agreement, the
Notes or the other Loan Documents.

 

v. Fifth: To the
payment of the surplus, if any, as required by Applicable
Law.

 

 

-28-

 

 

8.4. Nature
of Remedies

 

: All
rights and remedies granted Lender hereunder and under the Loan
Documents, or otherwise available at law or in equity, shall be
deemed concurrent and cumulative, and not alternative remedies, and
Lender may proceed with any number of remedies at the same time
until all Obligations are satisfied in full. The exercise of any
one right or remedy shall not be deemed a waiver or release of any
other right or remedy, and Lender, upon or at any time after the
occurrence of an Event of Default, may proceed against Borrower, at
any time, under any agreement, with any available remedy and in any
order.

 

8.5. Set-Off

 

: In
addition to all other rights, options and remedies granted or
available to Lender under this Agreement or the Loan Documents
(each of which is also then exercisable by Lender), upon or at any
time after the occurrence and during the continuance of an Event of
Default, Lender (and any participant) shall have and be deemed to
have, without notice to Borrower, the immediate right of set-off
against any bank account of Borrower with Lender, or of Borrower
with any other subsidiary of Lender or Bank Affiliate or any
participant and may apply the funds or amount thus set-off against
any of Borrower's Obligations hereunder.

 

If any
bank account of Borrower with Lender, any other subsidiary of
Lender or Bank Affiliate or any participant is attached or
otherwise liened or levied upon by any third party, Lender (and
such participant) shall have and be deemed to have, without notice
to Borrower, the immediate right of set-off and may apply the funds
or amount thus set-off against any of Borrower's Obligations
hereunder.

 

 

-29-

 

                                      

SECTION
IX. 

MISCELLANEOUS

 

9.1. Governing
Law

 

 
THIS
AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS AND DECISIONS OF THE STATE OF
FLORIDA, WITHOUT REFERENCE TO CONFLICT OF LAWS
PRINCIPLES.

 

9.2. Integrated
Agreement

 

 
The
Notes, the other Loan Documents, all related agreements, and this
Agreement shall be construed as integrated and complementary of
each other, and as augmenting and not restricting Lender's rights
and remedies. If, after applying the foregoing, an inconsistency
still exists, the provisions of this Agreement shall constitute an
amendment thereto and shall control.

 

9.3. Waiver

 

 
No
omission or delay by Lender in exercising any right or power under
this Agreement or any related agreements and documents will impair
such right or power or be construed to be a waiver of any Default,
or Event of Default or an acquiescence therein, and any single or
partial exercise of any such right or power will not preclude other
or further exercise thereof or the exercise of any other right, and
as to Borrower no waiver will be valid unless in writing and signed
by Lender and then only to the extent specified.

 

9.4. Indemnity

 

a. Borrower releases
and shall indemnify, defend and hold harmless Lender, and any Bank
Affiliates and their respective officers, employees and agents, of
and from any claims, demands, liabilities, obligations, judgments,
injuries, losses, damages and costs and expenses (including,
without limitation, reasonable legal fees) resulting from (i) acts
or conduct of Borrower under, pursuant or related to this Agreement
and the other Loan Documents, (ii) Borrower's breach or violation
of any representation, warranty, covenant or undertaking contained
in this Agreement or the other Loan Documents and, (iii) Borrower's
failure to comply with any Requirement of Law (including, without
limitation, Environmental Laws, etc.), and (iv) any claim by any
other creditor of Borrower against Lender or any Bank Affiliates
arising out of any transaction whether hereunder or in any way
related to the Loan Documents or any and all costs, expenses,
fines, penalties or other damages resulting therefrom, unless
resulting solely from acts or conduct of Lender or any Bank
Affiliates constituting willful misconduct or gross
negligence.

 

b. Promptly after
receipt by an indemnified party under subsection (a) above of
notice of the commencement of any action by a third party, such
indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof. The
omission so to notify the indemnifying party shall relieve the
indemnifying party from any liability which it may have to any
indemnified party under such subsection only if the indemnifying
party is unable to defend such actions as a result of such failure
to so notify. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnified party), and, after notice from
the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any
legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of
investigation.

 

9.5. Time

 

 
Whenever Borrower
shall be required to make any payment, or perform any act, on a day
which is not a Business Day, such payment may be made, or such act
may be performed, on the next succeeding Business Day. Time is of
the essence in Borrower's performance under all provisions of this
Agreement and all related agreements and documents.

 

 

-30-

 

 

9.6. Expenses
of Lender

 

: At
Closing and from time to time thereafter, Borrower will pay upon
demand of Lender all reasonable costs, fees and expenses of Lender
in connection with (i) the analysis, negotiation, preparation,
execution, administration, delivery and termination of this
Agreement, and other Loan Documents and the documents and
instruments referred to herein and therein, and any amendment,
amendment and restatement, supplement, waiver or consent relating
hereto or thereto, whether or not any such amendment, amendment and
restatement, supplement, waiver or consent is executed or becomes
effective, search costs, the reasonable fees, expenses and
disbursements of counsel for Lender, any fees or expenses incurred
by Lender under Section 6.11 for which Borrower is obligated
thereunder, and reasonable charges of any expert consultant to
Lender, (ii) the enforcement of Lender’s rights hereunder, or
the collection of any payments owing from, Borrower under this
Agreement and/or the other Loan Documents or the protection,
preservation or defense of the rights of Lender hereunder and under
the other Loan Documents, and (iii) any refinancing or
restructuring of the credit arrangements provided under this
Agreement and other Loan Documents in the nature of a "work-out" or
of any insolvency or bankruptcy proceedings, or otherwise
(including the reasonable fees and disbursements of counsel for
Lender and, with respect to clauses (ii) and (iii), reasonable
allocated costs of internal counsel) (collectively, the
“Expenses”).

 

9.7. Brokerage

 

: This
transaction was brought about and entered into by Lender and
Borrower acting as principals and without any brokers, agents or
finders being the effective procuring cause hereof. Borrower
represents that it has not committed Lender to the payment of any
brokerage fee, commission or charge in connection with this
transaction. If any such claim is made on Lender by any broker,
finder or agent or other person, Borrower hereby indemnifies,
defends and saves such party harmless against such claim and
further will defend, with counsel satisfactory to Lender, any
action or actions to recover on such claim, at Borrower's own cost
and expense, including such party's reasonable counsel fees.
Borrower further agrees that until any such claim or demand is
adjudicated in such party's favor, the amount demanded shall be
deemed an Obligation of Borrower under this Agreement.

 

9.8. Notices

 

a. Any notices or
consents required or permitted by this Agreement shall be in
writing and shall be deemed given if delivered in person to the
person listed below or if sent by telecopy or by nationally
recognized overnight courier, as follows, unless such address is
changed by written notice hereunder:

 

 

If to Lender
to: 

BankUnited,
N.A.

189
South Orange Avenue, Suite 1250S

Orlando, Florida
32801

Attention: Jackson
Young, Senior Vice President

Telecopy
No.:                                                       

 

With copies to
Lender’s counsel: 

GrayRobinson,
P.A.

301
East Pie Street, Suite 1400

Orlando, Florida
32801

Attention: Phillip
R. Finch, Esq.

Telecopy No.:
407-244-5690

 

If to Borrower
to: 

LightPath
Technologies, Inc.

2603
Challenger Tech Court, Suite 100

Orlando, Florida
32826

Attention: J. James
Gaynor, CEO

Telecopy No.:
407-382-4007

 

With copies to
Borrower’s counsel: 

Baker
Hostetler

SunTrust
Center

200
South Orange Avenue, Suite 2300

Orlando, Florida
32801-3432

Attention: Alissa
K. Lugo, Esq.

Telecopy No.
407-841-0168

 

b. Any notice sent by
Lender, or Borrower by any of the above methods shall be deemed to
be given when so received.

 

c. Lender shall be
fully entitled to rely upon any telecopy transmission or other
writing purported to be sent by any Authorized Officer (whether
requesting an Advance or otherwise) as being genuine and
authorized.

 

 

-31-

 

 

9.9. Headings

 

 
The
headings of any paragraph or Section of this Agreement are for
convenience only and shall not be used to interpret any provision
of this Agreement.

 

9.10. Survival

 

 
All
warranties, representations, and covenants made by Borrower herein,
or in any agreement referred to herein or on any certificate,
document or other instrument delivered by it or on its behalf under
this Agreement, shall be considered to have been relied upon by
Lender, and shall survive the delivery to Lender of the Notes,
regardless of any investigation made by Lender or on its behalf.
All statements in any such certificate or other instrument prepared
and/or delivered for the benefit of Lender shall constitute
warranties and representations by Borrower hereunder. Except as
otherwise expressly provided herein, all covenants made by Borrower
hereunder or under any other agreement or instrument shall be
deemed continuing until all Obligations are satisfied in full. All
indemnification obligations under this Agreement, including under
Section 6.5, 9.4 and 9.7, shall survive the termination of this
Agreement and payment of the Obligations.

 

9.11. Successors
and Assigns

 

 
This
Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties. Borrower may not
transfer, assign or delegate any of its duties or obligations
hereunder. Borrower acknowledges and agrees that Lender may at any
time, and from time to time, (a) sell participating interests in
the Loans, and Lender's rights hereunder to other financial
institutions, and (b) sell, transfer, or assign the Loans and
Lender's rights hereunder, to any one or more additional banks or
financial institutions or other person in the business of
commercial lending or holding commercial loans, subject (as to
Lender's rights under this clause (b)) to Borrower's written
consent, which consent shall not be unreasonably withheld; provided
that, no consent under this clause (b) shall be required if an
Event of Default exists at the time of such sale, transfer or
assignment.

 

9.12. Duplicate
Originals

 

; Effect of Facsimile
and Photocopied Signatures: Two or more duplicate originals
of this Agreement may be signed by the parties, each of which shall
be an original but all of which together shall constitute one and
the same instrument. This Agreement
(and the other Loan Documents) may be executed in several
counterparts, each of which is an original.  It shall not
be necessary in making proof of this Agreement, the Loan Documents
or any counterpart thereof to produce or account for any of the
other counterparts.  A copy of this Agreement and the
Loan Documents signed by one party and faxed or scanned and emailed
to another party (as a PDF or similar image file) shall be deemed
to have been executed and delivered by the signing party as though
an original.  A photocopy or PDF of this Agreement and
the other Loan Documents shall be effective as an original for all
purposes.

 

9.13. Modification

 

 
No
modification hereof or any agreement referred to herein shall be
binding or enforceable unless in writing and signed by Borrower and
Lender.

 

9.14. Signatories

 

 
Each
individual signatory hereto represents and warrants that he is duly
authorized to execute this Agreement on behalf of his principal and
that he executes the Agreement in such capacity and not as a
party.

 

9.15. Third
Parties

 

 
No
rights are intended to be created hereunder, or under any related
agreements or documents for the benefit of any third party donee,
creditor or incidental beneficiary of Borrower. Nothing contained
in this Agreement shall be construed as a delegation to Lender of
Borrower's duty of performance, including, without limitation,
Borrower's duties under any account or contract with any other
Person.

 

9.16. Discharge
of Taxes, Borrower's Obligations, Etc.

 

 
Lender,
in its sole discretion, shall have the right at any time, and from
time to time, with at least ten (10) days prior notice to Borrower
if Borrower fail to do so, to: (a) pay for the performance of any
of Borrower's obligations hereunder, and (b) discharge taxes or
Liens, at any time levied or placed on Borrower's Property in
violation of this Agreement unless Borrower is in good faith with
due diligence by appropriate proceedings contesting such taxes or
Liens and maintaining proper reserves therefor in accordance with
GAAP. Expenses and advances shall be added to the Revolving Credit
Facility, and bear interest at the rate applicable to the Revolving
Credit Facility, until reimbursed to Lender. Such payments and
advances made by Lender shall not be construed as a waiver by
Lender of a Default or Event of Default under this
Agreement.

 

 

-32-

 

 

9.17. Withholding
and Other Tax Liabilities

 

:
Lender shall have the right to refuse to make any Advances from
time to time unless Borrower shall, at Lender's request, have given
to Lender evidence, reasonably satisfactory to Lender, that
Borrower has properly deposited or paid, as required by law, all
withholding taxes and all federal, state, city, county or other
taxes due up to and including the date of the requested Advance.
Copies of deposit slips showing payment shall constitute
satisfactory evidence for such purpose. In the event that any Lien,
assessment or tax liability against Borrower shall arise in favor
of any taxing authority, whether or not notice thereof shall be
filed or recorded as may be required by law, Lender shall have the
right (but shall not be obligated, nor shall Lender hereby assume
the duty) to pay any such Lien, assessment or tax liability by
virtue of which such charge shall have arisen; provided, however,
that Lender shall not pay any such tax, assessment or Lien if the
amount, applicability or validity thereof is being contested in
good faith and by appropriate proceedings by Borrower. In order to
pay any such Lien, assessment or tax liability, Lender shall not be
obliged to wait until such lien, assessment or tax liability is
filed before taking such action as hereinabove set forth. Any sum
or sums which Lender shall have paid for the discharge of any such
Lien shall be added to the Revolving Credit Facility and shall be
paid by Borrower to Lender with interest thereon at the rate
applicable to the Revolving Credit Facility, upon demand, and
Lender shall be subrogated to all rights of such taxing authority
against Borrower.

 

9.18. Consent
to Jurisdiction

 

/Venue: EACH OF THE PARTIES
HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVES, IN CONNECTION WITH ANY
SUIT, ACTION OR PROCEEDING BROUGHT BY OR ON BEHALF OF THE OTHER
PARTY ON THIS LOAN AGREEMENT, ANY AND EVERY RIGHT SUCH PARTY MAY
HAVE (I) TO OBJECT TO THE JURISDICTION OR VENUE OF ANY STATE COURT
SITTING IN ORANGE COUNTY, FLORIDA, OR ANY FEDERAL COURT LOCATED IN
ORANGE COUNTY, FLORIDA, (II) TO INJUNCTIVE RELIEF, (III) TO
INTERPOSE ANY COUNTERCLAIM THEREIN (OTHER THAN COMPULSORY
COUNTERCLAIMS), AND (IV) TO HAVE THE SAME CONSOLIDATED WITH ANY
OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING. EACH OF THE PARTIES
HEREBY AGREES AND CONSENTS, IN ADDITION TO ANY METHODS OF SERVICE
OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, TO SERVICE OF PROCESS
IN ANY SUCH SUIT BEING MADE UPON SUCH PARTY BY MAIL AT THE ADDRESS
SET FORTH IN THIS LOAN AGREEMENT, AND SERVICE SO MADE SHALL BE
COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.
THE FOREGOING WAIVERS ARE GIVEN KNOWINGLY AND VOLUNTARILY BY SUCH
PARTY. EACH OF THE PARTIES IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF ANY OR
ALL OF THE FOREGOING WAIVERS.

 

9.19. Additional
Documentation

 

:
Borrower shall execute and/or re-execute, and cause any Guarantor
or other Person party to any Loan Document, to execute and/or
re-execute and to deliver to Lender or Lender’s counsel, as
may be deemed reasonably appropriate, any document or instrument
signed in connection with this Agreement which was incorrectly
drafted and/or signed, as well as any document or instrument which
should have been signed at or prior to the Closing, but which was
not so signed and delivered. Borrower agrees to comply with any
written request by Lender within ten (10) days after receipt by
Borrower of such request.

 

9.20. Advertisement

 

a. Lender, with the
consent of Borrower (such consent not to be unreasonably withheld
or delayed), shall have the right to announce and publicize the
financing established hereunder, as it deems appropriate, by means
and media selected by Lender. Such publication shall include all
pertinent information relating to such financing, including without
limitation, the term, purpose, and loan amount and name of
Borrower.

 

 

b. The form and
content of the sign and/or published information shall be in the
sole discretion of Lender and shall be considered the sole and
exclusive property of Lender. All expenses related to publicizing
the financing shall be the sole responsibility of
Lender.

 

 

-33-

 

 

9.21. Waiver
of Jury Trial

 

 
BORROWER AND LENDER
MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
LOAN AGREEMENT, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
LOAN AGREEMENT, OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE
OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR
BORROWER AND LENDER TO ENTER INTO THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

9.22. Consequential
Damages

 

 
Neither
Lender nor agent or attorney of Lender, shall be liable for any
consequential damages arising from any breach of contract, tort or
other wrong relating to the establishment, administration or
collection of the Obligations.

 

9.23. Confidentiality

 

 
In
handling any confidential information Lender and all employees and
agents of Lender, including but not limited to accountants, shall
exercise the same degree of care that it exercises with respect to
its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received or
received pursuant to this Agreement except that disclosure of such
information may be made (i) to the subsidiaries or affiliates
of Lender in connection with their present or prospective business
relations with Borrower, (ii) to prospective transferees or
purchasers of any interest in the loans, provided that they are
similarly bound by confidentiality obligations, (iii) as
required by law, regulations, rule or order, subpoena, judicial
order or similar order, (iv) as may be required in connection
with the examination, audit or similar investigation of Lender and
(v) as Lender may determine in connection with the enforcement
of any remedies hereunder.  Confidential information hereunder
shall not include information that either:  (a) is in the
public domain or in the knowledge or possession of Lender when
disclosed to Lender, or becomes part of the public domain after
disclosure to Lender through no fault of Lender; or (b) is
disclosed to Lender by a third party, provided Lender does not have
actual knowledge that such third party is prohibited from
disclosing such information.

 

[SIGNATURE
PAGES FOLLOW]

 

 

 

-34-

 

 

WITNESS the due execution of this
Agreement as a document under seal as of the date first written
above.

 

BORROWER:

 

 

LIGHTPATH
TECHNOLOGIES, INC.,

a
Delaware corporation

 

 

By: 
/s/ J. James
Gaynor                                                               

J.
James Gaynor, President

 

GUARANTORS:

 

 

	

GELTECH INC., a Delaware corporation

 

 

By: /s/
J.James Gaynor

J.
James Gaynor, President

 

	

ISP OPTICS CORPORATION, a New York corporation

 

 

By: /s/
J. James Gaynor

J.
James Gaynor, President

 

	

LIGHTPATH OPTICAL INSTRUMENTATION (SHANGHAI) CO., LTD., a
company formed under the law of the People’s Republic of
China

 

 

By: /s/
J. James Gaynor

 

 

	

LIGHTPATH OPTICAL INSTRUMENTATION (ZHENJIANG) CO., LTD., a
company formed under the law of the People’s Republic of
China

 

 

By: /s/
J. James Gaynor

 

 

 

 

 

 

	

ISP OPTICS LATVIA, SIA, a company formed under the law of
the Republic of Latvia

 

 

By: /s/
J. James Gaynor

 

 

 

 

 

 

 

LENDER:

 

 

BANKUNITED, N.A., a national banking
association

 

By:

/s/ Jackson Young

Jackson
Young, Senior Vice President

 

 

 

 

EXHIBIT
“A”

 

FORM OF AUTHORIZATION CERTIFICATE

 

 

 

 

 

DATE:
________________, 20____

 

 

 

BANKUNITED,
N.A.

189
South Orange Avenue, Suite 1250

Orlando,
FL 32801

Attention:
Jackson Young

 

Ladies/Gentlemen:

 

The
following individuals are authorized to request loan advances
against _________________’s (“Borrower”) line of credit and
transfer funds from any of Borrower’s accounts per written
instructions received via fax:

 

	
Authorized Person

	
 

	
Title

	
 

	
Signature

	
1.

	
 

	
 

	
 

	
 

	
2.

	
 

	
 

	
 

	
 

	
3.

	
 

	
 

	
 

	
 

 

      

Acknowledged and approved:

 

 

 

 

By:           

 

 

 

 

 

EXHIBIT “B”

 

FORM OF REVOLVING CREDIT ADVANCE REQUEST

 

TO BE
PROVIDED BY BANK

 

 

 

EXHIBIT “C”

 

DESCRIPTION OF COLLATERAL

 

“All
assets” of Borrower, wherever located and whether now owned
or existing or hereafter acquired or arising, other the Excluded
Collateral. Without limiting the generality of the foregoing, the
Collateral also covers the following types and items of
property:

 

All
Accounts (as hereinafter defined), as-extracted collateral, cash
proceeds, chattel paper, commercial tort claims, deposit accounts,
documents, equipment, farm products, fixtures, financial assets,
General Intangibles (as hereinafter defined), goods, instruments,
Inventory (as hereinafter defined), investment property, letter of
credit rights, letters of credit, money, non-cash proceeds,
proceeds, software, supporting obligations and other personal
property, both now existing and hereafter existing, acquired and
arising, owned by Borrower and in which Borrower has any property
rights and benefits, of whatsoever kind and description,
wheresoever located and inclusive of property in Borrower’s
constructive possession and control, property in Borrower’s
actual possession and control, and property in the possession and
control of a third person for and on behalf of Borrower; and,
without limiting the foregoing but in furtherance thereof, the
following now existing and hereafter acquired and arising property
and property rights and benefits, together with all replacements,
substitutions, additions, accessions, products and proceeds thereof
and of anything described herein:

 

Accounts. All
“accounts” as such term is defined in the Uniform
Commercial Code in effect in the State of Florida , as amended from
time to time, (the “Code”) owned by Borrower and all
accounts in which Borrower has any rights (including, without
limitation, rights to grant a security interest in accounts owned
by other persons), both now existing and hereafter owned, acquired
and arising; and, to the extent not included in the term accounts
as so defined after ascribing a broad meaning thereto, all accounts
receivable, health-care-insurance receivables, credit and charge
card receivables, bills, acceptances, documents, choses in action,
chattel paper (both tangible and electronic), promissory notes and
other instruments, deposit accounts, commercial tort claims, letter
of credit rights and letters of credit, rights to payment for money
or funds advanced or sold other than through use of a credit card,
lottery winnings, rights to payment with respect to investment
property, general intangibles and other forms of obligations and
rights to payment of any nature, now owing to Borrower and
hereafter arising and owing to Borrower, together with (i) the
proceeds of all of the accounts and other property and property
rights described hereinabove, including all of the proceeds of
Borrower’s rights with respect to any of its goods and
services represented thereby, whether delivered or returned by
customers, and all rights as an unpaid vendor and lienor, including
rights of stoppage in transit and of recovering possession by any
proceedings, including replevin and reclamation, and (ii) all
customer lists, books and records, ledgers, account cards, and
other records including those stored on computer or electronic
media, whether now in existence or hereafter created, relating to
any of the foregoing.

 

Inventory. All
“inventory” (as such term is defined in the Code) owned
by Borrower and all inventory in which Borrower has any rights
(including, without limitation, rights to grant a security interest
in inventory owned by other persons), both now existing and
hereafter owned, acquired and arising, including, without
limitation, inventory in transit, inventory in the constructive
possession and control of Borrower, inventory in the actual
possession and control of Borrower and inventory held by others for
Borrower’s account; and, to the extent not included in the
term inventory as so defined after ascribing a broad meaning
thereto, all now existing and hereafter acquired goods manufactured
or acquired for sale or lease, and any piece goods, raw materials,
as extracted collateral, work in process and finished merchandise,
component materials, and all supplies, goods, incidentals, office
supplies, packaging materials and any and all items used or
consumed in the operation of the business of Borrower or which may
contribute to the finished product or to the sale, promotion and
shipment thereof by Borrower and by others on the account of
Borrower, together with (i) the proceeds and products of all of the
inventory and other property and property rights described
hereinabove, (ii) all additions and accessions thereto and
replacements and substitutions therefor, (iii) all documents
related thereto and (iv) all customer lists, books and records,
ledgers, account cards, and other records including those stored on
computer or electronic media, whether now in existence or hereafter
created, relating to any of the foregoing.

 

 

 

 

General Intangibles. All
“general intangibles” (as such term is defined in the
Code) of Borrower, whether now existing or hereafter owned,
acquired or arising, or in which Borrower now has or hereafter
acquires any rights, and, to the extent not included in the term
general intangibles as so defined after ascribing a broad meaning
thereto, all now existing and hereafter acquired things in action,
payment intangibles, rights to payment of loan funds not evidenced
by chattel paper or an instrument, contract rights, causes of
action, business records, inventions, designs, patents, patent
applications, software, trademarks, trademark registrations and
applications therefor, goodwill, trade names, trade secrets, trade
processes, copyrights, copyright registrations and applications
therefor, licenses, permits, franchises, customer lists, computer
programs, all claims under guaranties and other supporting
obligations, tax refund claims, claims under letters-of-credit and
all letter-of-credit rights, rights and claims against carriers and
shippers, leases, claims under insurance policies, condemnation
proceeds, all rights to indemnification and all other intangible
personal property of every kind and nature, together with (i) the
proceeds of all of the general intangibles and other property and
property rights described hereinabove, and (ii) all customer lists,
books and records, ledgers, account cards, and other records
including those stored on computer or electronic media, whether now
in existence or hereafter created, relating to any of the
foregoing.

 

Equipment. All
“equipment” (as such term is defined in the Code) of
Borrower, whether now existing or hereafter owned, acquired or
arising, or in which Borrower now has or hereafter acquires any
rights, including, without limitation, equipment now in
Borrower’s possession and control, equipment in transit,
equipment in storage and equipment hereafter acquired by way of
replacement, substitution, addition or otherwise, and, to the
extent not included in the term equipment as so defined after
ascribing a broad meaning thereto, all now existing and hereafter
acquired fuel and gas tanks, monitoring wells, environmental
remediation equipment, compressors, car wash equipment, convenience
store coolers and lifts, dispensers, register system, furniture,
furnishings, fixtures (including, without limitation, those located
at, upon or about, or attached to, any real estate subject to any
lease), machinery, parts, supplies, apparatus, appliances,
patterns, molds, dies, blueprints, fittings and computer systems
and related hardware and software of every description, together
with (i) the proceeds and products of all of the equipment and
other property and property rights described hereinabove,
including, without limitation, insurance proceeds and condemnation
proceeds, (ii) all books and records, abstracts of title, leases
and all other contracts and agreements relating thereto or used in
connection therewith, and (iii) all customer lists, books and
records, ledgers, account cards, and other records including those
stored on computer or electronic media, whether now in existence or
hereafter created, relating to any of the foregoing.

 

Excluded Collateral - Any and all shares, interest,
participations or other equivalents (however designated) of capital
stock of a corporation or membership interest of a limited
liability company, any and all other ownership interests in the
following: LightPath Optical Instrumentation (Shanghai) Co., Ltd.,
a corporation formed under the laws of the People’s Republic
of China, LightPath Optical Instrumentation (Zhenjiang) Co., Ltd.,
a corporation formed under the law of the People’s Republic
of China, and ISP Optics Latvia, SIA, a corporation formed under
the laws of the Republic of Latvia.

 

 

EXHIBIT “D”

 

INTENTIONALLY DELETED

 

 

 

 

EXHIBIT “E”

 

COVENANT COMPLIANCE CERTIFICATE

 

	
BANKUNITED, N.A.

	
 _________________,
20___

189
South Orange Avenue, Suite 1250

Orlando,
Florida 32801

Attention:
Jackson Young

 

The
undersigned, the _____________________ of Lightpath Technologies,
Inc., a Delaware corporation (“Borrower”), gives this certificate
to BANKUNITED, N.A., a national banking association ("Lender"), in accordance with the
requirements of that certain Loan Agreement dated February _____,
2019, by and between Borrower and Lender ("Loan Agreement"). Capitalized terms used
in this Certificate, unless otherwise defined herein, shall have
the meanings ascribed to them in the Loan Agreement.

 

1.           Based
upon my review of the consolidated balance sheets and statements of
income of Borrower for the fiscal period ending __________________,
20__, copies of which are attached hereto, I hereby certify
that:

 

a.  The Total
Leverage Ratio of Borrower is ____________________.

 

b.  The Fixed
Charge Coverage Ratio of Borrower is
___________________.

 

Attached as
Schedule "A" are the details
underlying such financial covenant calculations.

 

2.           No
Default exists on the date hereof, other than: ____________________
[if none, so state]; and

 

3.           
No Event of Default exists on the date hereof, other than:
__________________ [if none, so state].

 

Very
truly yours,

 

LIGHTPATH
TECHNOLOGIES, INC.

 

	
By:  ________________________

	
Name: ______________________

	
Title: _______________________

 

 

 

 

 

EXHIBIT “F”

 

BORROWER’S INFORMATION CERTIFICATE

 

This
Information Certificate to the Loan Agreement by and between
LightPath Technologies, Inc. and BankUnited, N.A. (the
“Agreement”) are set forth on the following pages. To
the extent that any representation or warranty contained in the
Agreement is limited or qualified by the materiality of the matters
to which the representation or warranty is given, the inclusion of
any matter in this Information Certificate does not constitute a
determination by any party to the Agreement that such matters are
material. Nor in such cases where a representation or warranty is
given or other information is provided shall the disclosure of any
matter in the Schedule of Exceptions imply that any other
undisclosed matter having a greater value or other significant is
material.

 

The
contents of all documents referred to in this Information
Certificate are incorporated by reference in this Information
Certificate as though fully set forth in this Information
Certificate, as applicable, and the information and disclosures
contained in each section of this Information Certificate shall be
deemed to be disclosed and incorporated by reference in each of the
other section of this Information Certificate were the
applicability of such disclosure to such other sections of this
Information Certificate is responsive as though fully set forth in
such other sections of this Information Certificate. All
information disclosed in any of the Borrower’s public filings
with the Securities and Exchange Commission during the twenty-four
(24) month period prior to the Effective Date are incorporated by
reference in this Information Certificate, as applicable, as though
fully set forth in c or in the Agreement.

 

The
inclusion in sections of this Information Certificate of any matter
or document shall not imply any representation, warranty or
undertaking not expressly given in the Agreement nor shall such
disclosure be taken as extending the scope of any of the
representations or warranties. Nothing in sections of this
Information Certificate constitutes an admission of any liability
or obligation of any party to the Agreement to any third
party.

 

All
capitalized terms used herein shall have the same meanings ascribed
to such terms in the Agreement, unless otherwise defined
herein.

 

Section 5.1(a):

 

State of Incorporation: Delaware

 

States of Qualification: Florida

 

Section 5.2

 

Places of Business:

 

LightPath
Technologies, Inc. and ISP Optics Corporation facilities at 2603
Challenger Tech Court, Suites 100 & 130, Orlando, FL 32826, and
12501 Research Parkway, Suite 180, Orlando, FL 32826

 

ISP
Optics Corporation facility at 50 South Buckhout Street #106,
Irvington, NY 10533

 

LightPath
Optical Instrumentation (Shanghai) Co., Ltd. facility at Room1608,
No.1118, Yecheng Road, Jiading District, Shanghai City,
China

 

LightPath
Optical Instrumentation (Zhenjiang) Co., Ltd. facility at
40th
Building, No, 99 Jing Road, Zhenjiang New District, Jiangsu,
China

 

ISP
Optics Latvia, SIA facility at 24A Ganibu Dambis Street, Riga,
Latvia LV-1005

 

 

 

 

Section 5.3

 

Pending Litigation: See Schedule 2

 

Section 5.10(b)

 

Real Property Leases:

 

Lease
dated January 25, 2001 between LightPath Technologies, Inc. and
Challenger Discovery, LLC

 

Lease
dated April 20, 2018 between LightPath Technologies, Inc. and CIO
University Tech, LLC

 

Lease
dated June 25, 2010 between ISP Optics Corporation and Stanford
Bridge, LLC

 

Lease
dated October 16, 2015 between LightPath Optical Instrumentation
(Shanghai) Co., Ltd. And Zhenjiang New Area Administrative
Committee

 

Lease
dated October 16, 2015 between LightPath Optical Instrumentation
(Shanghai) Co., Ltd. And Zhenjiang New Area Administrative
Committee

 

Lease
dated June 25, 2010 between ISP Optics Latvia SIA and JSC
Dambis

 

 

Personal Property Leases:

 

Equipment
capital leases with TFG-Florida, L.P. for manufacturing equipment
in the aggregate approximate balance of approximately $1,024,000 as
of January 31, 2019.

 

Equipment
capital lease with Scottrade Bank for manufacturing equipment in
the aggregate approximate balance of approximately $11,000 as of
January 31, 2019.

 

Equipment
operating lease with Sissine’s Office Systems, Inc. (through
Marlin Business Bank) for printers in the approximate monthly
amount of $1,703 for sixty-three (63) months.

 

Equipment
capital lease with First Lease for phone systems in the approximate
balance of $44,000 as of January 31, 2019.

 

 

 

 

Section 5.13(a)

 

Business/Trade
Names:                   
LightPath Technologies, Inc.

ISP
Optics Corporation (f/n/a International Scientific Products
Corporation)

GelTech
Inc.

LightPath Optical
Instrumentation (Shanghai) Co., Ltd

LightPath Optical
Instrumentation (Zhenjiang) Co., Ltd.

ISP
Optics Latvia, SIA

Section 5.17

 

Borrower Organizational Chart:

 

LightPath
Technologies, Inc. owns all of the issued and outstanding stock of
the following:

 

ISP
Optics Corporation

GelTech
Inc.

LightPath Optical
Instrumentation (Shanghai) Co., Ltd

LightPath Optical
Instrumentation (Zhenjiang) Co., Ltd.

 

ISP
Optics Corporation owns all of the issued and outstanding stock of
ISP Optics Latvia, SIA.

 

Section 5.20

 

Commercial Tort Claims: None

 

 

  

 

SCHEDULE 1
TO

 

BORROWER’S
INFORMATION CERTIFICATE

 

 

 

 

Board of Directors:

 

Robert
Ripp

Sohail
Khan

Steven
Brueck

Louis
Leeburg

Craig
Dunham

M.
Scott Faris

Joseph
Menaker

J.
James Gaynor

 

	
 Officer
Names:

 J.
James Gaynor

 Alan
Symmons

 Donald
O. Retreage, Jr.

 Dorothy
M. Cipolla

	
 Title:

 President
& Chief Executive Officer

 Executive
VP of Operations

 Chief
Financial Officer

 VP
and Executive Director of Compliance, Treasury &
Tax

 

      

 

 

SCHEDULE 2
TO

 

BORROWER’S
INFORMATION CERTIFICATE

 

 

 

Permitted Indebtedness:

 

Leases
disclosed on Section 5.10(b) of this Information
Certificate

 

 

 

Permitted Liens:

 

Leases
disclosed on Section 5.10(b) of this Information
Certificate

 

UCC
Financing Statement, File No. 2009 0235694, in favor of Air Liquide
Industrial U.S. LP, filed with the Delaware Department of State on
January 23, 2009.

 

UCC
Financing Statement, File No. 2015 0915156, in favor of Scottrade
Bank, filed with the Delaware Department of State on March 4,
2015.

 

UCC
Financing Statement, File No. 2016 5886492, in favor of
TFG-Florida, L.P. (Tetra Financial), filed with the Delaware
Department of State on September 26, 2016.

 

UCC
Financing Statement, File No. 2017 7523881, in favor of
TFG-Florida, L.P. (Tetra Financial), filed with the Delaware
Department of State on November 13, 2017.

 

UCC
Financing Statement, File No. 2018 3214638, in favor of
TFG-Florida, L.P. (Tetra Financial), filed with the Delaware
Department of State on May 11, 2018.

 

UCC
Financing Statement, File No. 2018 5947938, in favor of Firstlease,
Inc., filed with the Delaware Department of State on August 28,
2018.

 

UCC
Financing Statement, File No. 2018 6614966, in favor of
TFG-Florida, L.P. (Tetra Financial), filed with the Delaware
Department of State on September 25, 2018.

 

UCC
Financing Statement, File No. 2018 7874643, in favor of Marlin
Business Bank, filed with the Delaware Department of State on
November 14, 2018.

 

 

 

 

 

 

SCHEDULE 5.13(c)

 

OWNED UNITED STATES ISSUED TRADEMARKS, SERVICE MARKS

 

TRADEMARK REGISTRATIONS

 

 

 

 

 

	

Mark

	

Type

	

Registered

	

Country

	

Renewal

Date

	

LightPath®

	

service mark

	

Yes

	

United States

	

October 22, 2022

	

GRADIUMTM

	

Trademark

	

Yes

	

United States

	

April 29, 2027

	

Circulight

	

Trademark

	

No

	

-

	

-

	

BLACK DIAMOND

	

Trademark

	

No

	

-

	

-

	

GelTech

	

Trademark

	

No

	

-

	

-

	

Oasis

	

Trademark

	

No

	

-

	

-

	

LightPath®

	

service mark

	

Yes

	

People’s Republic of China

	

September 13, 2025

	

ISP Optics®

	

Trademark

	

Yes

	

United States

	

August 12, 2020Blueprint

  Exhibit 10.2

TERM LOAN NOTE

 

	
$5,813,500.00

	
February 26,
2019

                                                                                                             
 

FOR
VALUE RECEIVED and intending to be legally bound, the undersigned,
LIGHTPATH TECHNOLOGIES,
INC., a Delaware corporation (“Borrower”), jointly and severally,
promise to pay, in lawful money of the United States of America, to
the order of BANKUNITED,
N.A., a national banking association (“Lender”), at the address set forth
in Section 2.5(a) of the Loan Agreement, the maximum aggregate
principal sum of up to Five Million Eight Hundred Thirteen Thousand
Five Hundred and No/100 Dollars ($5,813,500.00) or such lesser sum
which represents the principal balance outstanding under the Term
Loan Facility established pursuant to the provisions of that
certain Loan Agreement dated of even date herewith, between
Borrower and Lender (as it may be supplemented, restated,
superseded, amended or replaced from time to time,
“Loan
Agreement”). The outstanding principal balance
hereunder shall be payable in accordance with the terms of the Loan
Agreement. The outstanding principal balance of this Note, plus all
accrued but unpaid interest, shall be due and payable on the Term
Loan Maturity Date. The actual amount due and owing from time to
time hereunder shall be evidenced by Lender's records of receipts
and disbursements with respect to the Term Loan Facility, which
shall, in the absence of manifest error, be conclusive evidence of
the amount. All capitalized terms used herein without further
definition shall have the respective meanings ascribed thereto in
the Loan Agreement.

 

Borrower further
agrees to pay interest on the outstanding principal balance
hereunder from time to time at the per annum rates set forth in the
Loan Agreement. Interest shall be calculated on the basis of a year
of 360 days but charged for the actual number of days elapsed, and
shall be due and payable as set forth in the Loan
Agreement.

 

This
Term Loan Note is that certain Term Loan Note referred to in the
Loan Agreement.

 

If an
Event of Default occurs and is continuing under the Loan Agreement,
the unpaid principal balance of this Term Loan Note along with all
accrued and unpaid interest and unpaid Expenses shall become, or
may be declared, immediately due and payable as provided in the
Loan Agreement. The obligations evidenced by this Term Loan Note
are secured by the Collateral.

 

This
Term Loan Note may be prepaid only in accordance with the terms and
conditions of the Loan Agreement.

 

Borrower hereby
waives protest, demand, notice of nonpayment and all other notices
in connection with the delivery, acceptance, performance or
enforcement of this Term Loan Note.

 

This
Term Loan Note shall be governed by and construed in accordance
with the substantive laws of the State of Florida (without giving
effect to principles of conflicts of law). The provisions of this
Term Loan Note are to be deemed severable and the invalidity or
unenforceability of any provision shall not affect or impair the
remaining provisions of this Term Loan Note which shall continue in
full force and effect. No modification hereof shall be binding or
enforceable against Lender unless approved in writing by
Lender.

 

BORROWER (AND
LENDER BY ITS ACCEPTANCE HEREOF) HEREBY WAIVES ANY AND ALL RIGHTS
IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION,
PROCEEDING OR COUNTERCLAIM ARISING WITH RESPECT TO RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE LOAN DOCUMENTS OR
WITH RESPECT TO ANY CLAIMS ARISING OUT OF ANY DISCUSSIONS,
NEGOTIATIONS OR COMMUNICATIONS INVOLVING OR RELATED TO ANY PROPOSED
RENEWAL, EXTENSION, AMENDMENT, MODIFICATION, RESTRUCTURE,
FORBEARANCE, WORKOUT, OR ENFORCEMENT OF THE TRANSACTIONS
CONTEMPLATED HEREUNDER OR UNDER THE LOAN DOCUMENTS.

 

 

[EXECUTION PAGES FOLLOW]

 

[SIGNATURE PAGE OF TERM LOAN NOTE]

 

 

IN
WITNESS WHEREOF, and intending to be legally bound hereby, Borrower
has executed these presents the day and year first above
written.

 

LIGHTPATH
TECHNOLOGIES, INC.

a
Delaware corporation

 

 

By:

/s/ J. James Gaynor

J.
James Gaynor, President

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