Document:

Employment Agreement

 Exhibit 10.1 
  
 

 
  
 April 18, 2007 
  
 Patti Johnson 
 68 Del Casa Drive 
 Mill Valley, CA 94941 
  
 Dear Patti: 
  
 In anticipation and recognition of the important contributions we expect you will make to the success of Charlotte Russe Holding, Inc. &
Subsidiaries (Charlotte Russe or “the company”) I am pleased to formalize in writing our commitment to you concerning the terms of your employment as Executive Vice President, Chief Financial Officer of the Company. When signed by you,
this agreement shall supersede and be in place of any prior agreements or understandings between us and shall be the sole and exclusive agreement between us pertaining to your employment with the Company. 
  
 Duties. You will perform and discharge your duties and
responsibilities faithfully, diligently and to the best of your ability. You will devote substantially all of your working time and efforts to the business and affairs of the Company. 
  
 Base Salary. Your base salary will be paid at the rate of $7692.30 per week ($400,000.00 gross a year);
paid bi-weekly with payroll. Annually throughout your employment, your performance and salary will be reviewed. All payments under this paragraph or any other paragraph of this agreement will be made in accordance with the regular payroll practices
of the Company, reduced by applicable federal and state withholdings. 
  
 Executive Performance Bonus Plan. You will be eligible for an annual bonus, as determined by the Board of Directors in its sole discretion, based upon your achievement and the Company’s achievement of
annual performance goals established by the Board of Directors at the beginning of each fiscal year. All decisions by the Board of Directors pertaining to bonus eligibility and/or achievement are final. From the period beginning October 1, 2006
through September 30, 2007, you will be eligible to participate in the Executive Bonus Plan in which you will be eligible to earn 25%/50%/80% of your gross salary (which will coincide respectively with the Company achievement of a Min/Mid/Max
EBITDA Dollar target goal established by the Board of Directors). Bonuses under this Plan are earned at the end of the Company’s fiscal year. Based on your start date, this bonus will be pro-rated. In order to receive any portion of this bonus,
you must be actively employed at the completion of the Company’s fiscal year and at the time the bonus is paid out. Bonuses are typically paid out by November of that calendar year. 
  
 Notwithstanding anything in this above paragraph, for the period from your
start date until the end of this fiscal year, September 30, 2007 only, we will guarantee you a minimum bonus of $100,000.00 gross. In order to receive this guaranteed bonus payment, you must be actively employed at the completion
of the Company’s 2007 fiscal year and at the time the bonus is paid out. Note: In the event that you voluntarily resign your position within 12 months of your hire date, this guaranteed bonus amount must be repaid to the company.

  
 Stock Options. Upon your
employment, you will receive 80,000 options to purchase Company common stock at the closing NASDAQ price established on the day of grant (first of the month following your hire date). These options will be exercisable in accordance with our 1999
Equity Incentive Plan and subject to a 5 year vesting schedule. 
  
 In addition, the Company is conducting a study for the potential adoption of performance stock grants. If and when such stock grants are adopted and approved, as a senior executive, you would qualify for participation in such program.

 Relocation Allowance. The Company will reimburse you for up to
$150,000.00 of moving related expenses based on receipts presented to our Accounting Department within 12 months of your start date and includes costs related to buying and selling of residential properties. Moving related expenses
will also include moving company charges, travel (air or auto), food, and lodging expenses related to the actual process of relocation. To the extent that any of these relocation reimbursements are taxable to you, they will be “grossed-up”
accordingly. 
  
 In addition, the Company will
reimburse you for costs related to temporary housing in San Diego for three months from your date of hire. These reimbursements are subject to the terms and conditions of our Relocation Agreement which we will ask you to review and sign upon the
commencement of your employment. In the event that you resign your employment within 12 months of your start date, all relocation reimbursements that have been paid to you or on your behalf must be paid back to the Company. Please read this
relocation agreement and forward to the Human Resources Department prior to submitting any reimbursements. All of these relocation benefits must be claimed within 12 months of your hire date, and you must be actively employed as of the date you
incur these expenses. 
  
 Benefits. You will
accrue three weeks of paid vacation per year, to be taken at such times as you and Company mutually agree upon. Any additional weeks of vacation earned per year will accrue according to Company policy. In addition, you will also accrue 5 health
leave days per year. You will be eligible to participate in all benefit and welfare plans made generally available to senior management executives of the Company, as in effect from time to time, subject to Company’s right to modify or terminate
such plans or benefits at any time with respect to employees of similar rank and title. 
  
 401K. Eligibility for enrollment occurs quarterly after one year of continuous employment. As an additional benefit, the Company will match your contribution at the rate of 25% for
up to 4% of your eligible pay. The Company match portion of this savings plan has a vesting schedule of 25% per employment year. 
  
 Termination of Employment and Severance. You understand and agree that this agreement is not meant to constitute a contract of employment
for a specific term, and consequently your employment will be “at-will”. What this means is that either you or the Company may terminate your employment at any time, without notice and with or without “Cause” (as defined herein).
If the Company terminates your employment for Cause, or you terminate your employment, the Company’s only obligation to you under this Agreement will be to continue to pay your base salary through the date of termination and pay to you any
unused earned vacation as of the last date of your employment. If, however, the Company terminates your employment for any reason other than for Cause, including your death or disability, the Company will continue to pay your base salary for a
period of 12 months following such termination (and will make these payments to your beneficiary in the event of death). There are certain conditions that must be met in order for you to receive any severance payment under this agreement. First, you
must sign a general release agreement in favor of the Company. Second, you must abide by all terms of this agreement. 
  
 Third, any severance payment(s) made to you under this Agreement shall be offset by the amount of any interim earnings you may have and, will cease
altogether when you obtain a new position which pays you compensation equal to or higher than your rate of compensation as of the last date of your employment with the Company. The Company shall have the right to cease making any severance payment
under this agreement in the event you breach any provision of it. You will not be entitled to any fringe benefits following termination of employment, except as specifically provided in writing in the applicable benefit plan or policy. 

 
 For purposes of this agreement, “Cause” means (i) willful
breach of duty, gross neglect of duty, gross carelessness or gross misconduct in the performance of your duties; (ii) commission of a felony or other crime involving moral turpitude; (iii) commission of any act of dishonesty involving the
Company; (iv) the unauthorized disclosure of material privileged or confidential information related to the Company or its employees, except as may be compelled by legal process or court order; (v) the commission of a willful act or
omission which violates material Company policy, procedures, or otherwise constitutes unethical or detrimental business conduct; (vi) alcohol or controlled substance abuse that materially impacts the performance of your duties; or
(vii) any other willful act or omission which, in the opinion of the Board of Directors of the Company has, or is reasonably likely to have, a material adverse impact upon the Company. 

 Restricted Activities. During the term of your employment with the Company, you will
not, directly or indirectly, be connected as an officer, employee, Board member, consultant, advisor, owner or otherwise (whether or not for compensation) with any business which competes with any business of the Company or its subsidiaries in any
area where such business is then being conducted or actively planned by the Company or a subsidiary. During the term of your employment with the Company, and for a period of two years thereafter, you will not, and you will not assist any other
person or entity to, hire or solicit the employment of any employees of the Company or any of its subsidiaries (or any person who in the prior six months was such an employee) or otherwise seek to induce any such employee to terminate his or her
employment with the Company or any of its subsidiaries. Other than in connection with the performance of your duties for the Company, you will not disclose to any person or entity any information obtained by you while in the employ of the Company,
the disclosure of which may be adverse to the interests of the Company, or use any such information to the detriment of the Company. You understand that your commitments in this paragraph are in exchange for the Company’s commitments to you in
this letter, and that the restrictions contained in the preceding two sentences apply after your employment terminates, regardless of the reason for such termination. 
  
 Miscellaneous. The headings in this agreement are for convenience only and do not affect the meaning
hereof. This letter constitutes the entire agreement between the Company and you, and supersedes any prior communications, agreements and understandings, whether written or oral, with respect to your employment and compensation and all matters
pertaining thereto. This agreement shall be governed by and construed in accordance with the law of the State of California. Should any action or proceeding be brought to construe or enforce the terms and conditions of this agreement, the losing
party will pay to the prevailing party all court costs and reasonable attorneys’ fees and costs incurred in such action or proceeding. Please also understand that by no means does the Company wish you to undertake any activities on behalf of
Charlotte Russe that would cause you to violate the terms of the Non Compete Agreement or any other obligation you may be under by virtue of your current employment or otherwise you expressly agree that you shall not do so in connection with your
employment with the Company. 
  
 Disputes. Any
dispute between the Company and you concerning the meaning or interpretation of this Agreement, or any alleged breach thereof, shall be resolved in a binding arbitration to be conducted in San Diego, California before a single neutral
arbitrator to be selected by the parties from a list of arbitrators on the Employment Dispute Panel of the Judicial Arbitration and Mediation Service (“JAMS”). Arbitration shall be initiated by the party desiring arbitration by serving
written notice to the other party. Said arbitration shall be conducted no later than 120 days following the date of said written notice, absent the written agreement of the parties otherwise. The prevailing party in such an arbitration shall be
entitled to costs of suit and attorneys’ fees, in addition to any award by the arbitrator. 
  
 Partial Invalidity. If the application of any provision of this agreement is held invalid or unenforceable, the remaining provisions shall
not be affected, but will continue to be given full force and in effect as if the part held invalid or unenforceable had not been included. 
  
 Acceptance. In accepting the terms and conditions reflected in this letter, you represent that you have not relied on any agreement
or representation, oral or written, express or implied, that is not set forth expressly in this letter. If this letter reflects your understanding, please sign and return a copy to me, whereupon it shall become a binding agreement between the
Company and you. 
  
 Very truly yours, 
  

			
	Charlotte Russe Holding, Inc. & Subsidiaries
		
	By: 	 	Hard copy with original signature to follow in mail
		
		 	 Mark Hoffman

		 	 Chief Executive Officer

  
 Accepted and Agreed To: 
  

			
	 /s/    PATRICIA K.
JOHNSON        
	    	 April 20, 2007

	Patricia K. Johnson	    	DateBusiness Loan Agreement

 Exhibit 10.1 
 BUSINESS LOAN AGREEMENT (ASSET BASED) 
  

							
	Borrower:	  	 M & I Electric Industries, Inc.
 6410 Long
Drive
 Houston, TX 77087
	  	Lender:	  	 JPMorgan Chase Bank, NA
 Beaumont Parkdale Business
Banking LPO
 6025 Eastex Freeway
 Beaumont, TX
77706

 THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated July 2, 2007, is made and executed between M & I
Electric Industries, Inc. (“Borrower”) and JPMorgan Chase Bank, NA (“Lender”) on the following terms and conditions, Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans
or other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement (“Loan”). Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender
is relying upon Borrower’s representations, warranties, and agreements as set forth in this Agreement, and (B) all such Loans shall be and remain subject to the terms and conditions of this Agreement. 
 TERM. This Agreement shall be effective as of July 2, 2007, and shall continue in full force and effect until such time as all of Borrower’s Loans in
favor of Lender have been paid in full, in principal, interest, costs, expenses, attorneys’ fees, and other fees and charges, or until such time as the parties may agree in writing to terminate this Agreement. 
 LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to time from the date of this Agreement to the Expiration Date, provided the aggregate amount
of such Advances outstanding at any time does not exceed the Borrowing Base. Within the foregoing limits, Borrower may borrow, partially or wholly prepay, and reborrow under this Agreement as follows: 
 Conditions Precedent to Each Advance. Lender’s obligation to make any Advance to or for the account of Borrower under this Agreement is
subject to the following conditions precedent, with all documents, instruments, opinions, reports, and other items required under this Agreement to be in form and substance satisfactory to Lender: 
 (1) Lender shall have received evidence that this Agreement and all Related Documents have been duly authorized, executed, and delivered by Borrower to
Lender. 
 (2) Lender shall have received such opinions of counsel, supplemental opinions, and documents as Lender may request. 
 (3) The security interests in the Collateral shall have been duly authorized, created, and perfected with first lien priority and shall be in full force
and effect. 
 (4) All guaranties required by Lender for the credit facility(ies) shall have been executed by each Guarantor, delivered to
Lender, and be in full force and effect. 
 (5) Lender, at its option and for its sole benefit, shall have conducted an audit of
Borrower’s Accounts, Inventory, books, records, and operations, and Lender shall be satisfied as to their condition. 
 (6) Borrower
shall have paid to Lender all fees, costs, and expenses specified in this Agreement and the Related Documents as are then due and payable. 
 (7) There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement, and Borrower shall have delivered to Lender the compliance certificate called for in the paragraph below
titled “Compliance Certificate.” 
 Making Loan Advances. Advances under this credit facility, as well as directions for
payment from Borrower’s accounts, may be requested orally or in writing by authorized persons. Lender may, but need not, require that all oral requests be confirmed in writing. Each Advance shall be conclusively deemed to have been made at the
request of and for the benefit of Borrower (1) when credited to any deposit account of Borrower maintained with Lender or (2) when advanced in accordance with the instructions of an authorized person. Lender, at its option, may set a
cutoff time, after which all requests for Advances will be treated as having been requested on the next succeeding Business Day. 
 Mandatory Loan Repayments. If at any time the aggregate principal amount of the outstanding Advances shall exceed the applicable Borrowing Base, Borrower, immediately upon written or oral notice from Lender, shall pay to Lender an
amount equal to the difference between the outstanding principal balance of the Advances and the Borrowing Base. On the Expiration Date, Borrower shall pay to Lender in full the aggregate unpaid principal amount of all Advances then outstanding and
all accrued unpaid interest, together with all other applicable fees, costs and charges, if any, not yet paid. 
 Loan Account. Lender
shall maintain on its books a record of account in which Lender shall make entries for each Advance and such other debits and credits as shall be appropriate in connection with the credit facility. Lender shall provide Borrower with periodic
statements of Borrower’s account, which statements shall be considered to be correct and conclusively binding on Borrower unless Borrower notifies Lender to the contrary within thirty (30) days after Borrower’s receipt of any such
statement which Borrower deems to be incorrect. 
 COLLATERAL. To secure payment of the Primary Credit Facility and performance of all other Loan,
obligations and duties owed by Borrower to Lender, Borrower (and others, if required) shall grant to Lender Security Interests in such property and assets as Lender may require. Lender’s Security Interests in the Collateral shall be continuing
liens and shall include the proceeds and products of the Collateral, including without limitation the proceeds of any insurance. With respect to the Collateral, Borrower agrees and represents and warrants to Lender: 
 Perfection of Security Interests. Borrower agrees to execute all documents perfacting Lender’s Security Interest and to take whatever actions
are requested by Lender to perfect and continue Lender’s Security Interests in the Collateral. Upon request of Lender, Borrower will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Borrower will
note Lender’s interest upon any and all chattel paper and instruments if not delivered to Lender for possession by Lender. Contemporaneous with the execution of this Agreement, Borrower will execute one or more UCC financing statements and any
similar statements as may be required by applicable law, and Lender will file such financing statements and all such similar statements in the appropriate location or locations. Borrower hereby appoints Lender as its irrevocable attorney-in-fact for
the purpose of executing any documents necessary to perfect or to continue any Security Interest. Lender may at any time, and without further authorization from Borrower, file a carbon, photograph, facsimile, or other reproduction of any financing
statement for use as a financing statement. Borrower will reimburse Lender for all expenses for the perfection, termination, and the continuation of the perfection of Lender’s security interest in the Collateral. Borrower promptly will notify
Lender before any change in Borrower’s name including any change to the assumed business names of Borrower. Borrower also promptly will notify Lender before any change in Borrower’s Social Security Number or Employer Identification Number.
Borrower further agrees to notify Lender in writing prior to any change in address or location of Borrower’s principal governance office or should Borrower merge or consolidate with any other entity. 
 Collateral Records. Borrower does now, and at all times hereafter shall, keep correct and accurate records of the Collateral, all of which records
shall be available to Lender or Lender’s representative upon demand for inspection and copying at any reasonable time. With respect to the Accounts, Borrower agrees to keep and maintain such records as Lender may require, including without
limitation information concerning Eligible Accounts and Account balances and agings. Records related to Accounts (Receivables) are or will be located at Borrower’s headquarters. With respect to the Inventory, Borrower agrees to keep and
maintain such records as Lender may require, including without limitation information concerning Eligible Inventory and records itemizing and describing the kind, type, quality, and quantity of Inventory, Borrower’s Inventory costs and selling
prices, and the daily withdrawals and additions to Inventory. Records related to Inventory are or will be located at Borrower’s headquarters. The above is an accurate and complete list of all locations at which Borrower keeps or maintains
business records concerning Borrower’s collateral. 
 Collateral Schedules. Concurrently with the execution and delivery of this
Agreement, Borrower shall execute and deliver to Lender schedules of Accounts and Inventory and schedules of Eligible Accounts and Eligible Inventory in form and substance satisfactory to the Lender. Thereafter supplemental schedules shall be
delivered according to the following schedule: With respect to Eligible Accounts, schedules shall be delivered with the Borrowing Base Certificate. With respect to Eligible Inventory, schedules shall be delivered with the Borrowing Base Certificate.

 Representations and Warranties Concerning Accounts. With respect to the Accounts, Borrower represents and warrants to Lender: (1)
Each Account represented by Borrower to be an Eligible Account for purposes of this Agreement conforms to the requirements of the definition of an Eligible Account; (2) All Account information listed on schedules delivered to Lender will be
true and correct, subject to immaterial variance; and (3) Lender, its assigns, or agents shall have the right at any time and at Borrower’s expense to inspect, examine, and audit Borrower’s records and to confirm with Account Debtors
the accuracy of such Accounts. 
 Representations and Warranties Concerning Inventory. With respect to the Inventory, Borrower
represents and warrants to Lender: (1) All Inventory represented by Borrower to be Eligible Inventory for purposes of this Agreement conforms to the requirements of the definition of Eligible Inventory; (2) All Inventory values listed on
schedules delivered to Lender will be true and correct, subject to immaterial variance; (3) The value of the Inventory will be determined on a consistent accounting basis; (4) Except as agreed to the contrary by Lender in writing, all
Eligible Inventory is now and at all times hereafter will be in Borrower’s physical possession and shall not be held by others on consignment, sale on approval, or sale or return; (5) Except as reflected in the Inventory schedules delivered to
Lender, all Eligible Inventory is now and at all times hereafter will be off good and merchantable quality, free from defects; (6) Eligible Inventory is not now 

 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 

  

 
and will not at any time hereafter be stored with a bailee, warehouseman, or similar party without Lender’s prior written consent, and, in such event,
Borrower will concurrently at the time of bailment cause any such bailee, warehouseman, or similar party to issue and deliver to Lender, in form acceptable to Lender, warehouse receipts in Lender name evidencing the storage of Inventory; and
(7) Lender, its assigns, or agents shall have the right at any time and at Borrower’s expense to inspect and examine the Inventory and to check and test the same as to quality, quantity, value, and condition. 
 CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to
the fulfillment to Lender’s satisfaction of all of the conditions set forth in this Agreement and in the Related Documents. 
 Loan
Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements perfecting Lender’s
Security Interests; (4) evidence of insurance as required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender’s
counsel. 
 Borrower’s Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified
resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its counsel, may
require. 
 Fees and Expenses Under This Agreement. Borrower shall have paid to Lender all fees, costs, and expenses specified in this
Agreement and the Related Documents as are then due and payable. 
 Representations and Warranties. The representations and warranties
set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct. 
 No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document. 
 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to , and covenants and agrees with, Lender that, as of the date of this Agreement, as of the date
of each Advance, as of the date of any renewal, extension or modification, and at all times any Indebtedness exists: 
 Organization.
Borrower is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Texas. Borrower is duly authorized to transact business in all other
states in which Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a
foreign corporation in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to transact the business in which
it is presently engaged or presently proposes to engage. Borrower maintains an office at 6410 Long Drive, Houston, TX 77087. Unless Borrower has designated otherwise in writing, the principal office is the office at which Borrower keeps its books
and records including its records concerning the Collateral. Borrower will notify Lender prior to any change in the location of Borrower’s state of organization or any change in Borrower’s name. Borrower shall do all things necessary to
preserva and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to
Borrower and Borrower’s business activities. 
 Authorization. Borrower’s execution, delivery, and performance of this
Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of Borrower’s articles of incorporation or
organization, or bylaws, or any agreement or other instrument binding upon Borrower or (2) any law governmental regulation, court decree, or order applicable to Borrower or to Borrower’s properties. Borrower has the power and authority to
execute and deliver the Note and the Related Documents and, if applicable, to grant Collateral as security for the Indebtedness. 
 Financial Information. Each of Borrower’s financial statements supplied to Lender truly and completely disclosed Borrower’s financial condition as of the date of the statement, and there has been no material adverse change
in Borrower’s financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements. 
 Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will
constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms. 
 Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower’s financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due
and payable, Borrower owns and has good title to all of Borrower’s properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower’s
properties are titled in Borrower’s legal name, and Borrower has not used or filed a financing statement under any other name for at least the last five (5) years. 
 Environmental Matters and Indemnity. Except as disclosed to Lender in writing prior to the execution of this Agreement, Borrower represents and warrants that: (1) During the period of ownership, use or
control of the Assets (which term, for all purposes of this section, shall include all plants, sites and facilities presently or formerly owned, operated, controlled or leased by the Borrower or any Grantor), (a) there has been no violation of any
Environmental Laws, and (b) there has been no use, generation, manufacture, storage, treatment, refinement, transportation, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from any of the
Assets; (2) Borrower has no knowledge of, or reason to believe that, during the period prior to the ownership, use or control of any of the Assets (as defined in clause (1) above) by Borrower or any Grantor, there has been (a) any breach
or violation of any Environmental Laws by any prior owners or occupants of any of the Assets, or (b) any use, generation, manufacture, storage, treatment, refinement, transportation, disposal, release or threatened release of any Hazardous Substance
by any person on, under, about or from any of the Assets; and (3) neither Borrower nor any Grantor have received any notice of, nor have any knowledge of, any actual or threatened claim, legal proceeding or investigation regarding Borrower, any
Grantor or any of the Assets (as defined in clause (1) above) related to Environmental Laws. The representations and warranties, contained herein are based on Borrower’s due diligence in investigating all of the Assets for Hazardous Substances.

 Borrower hereby (1) releases and waives any future claims against any Indemnified Party for indemnity or contribution in the event
Borrower becomes liable for cleanup or other costs under any Environmental Laws, and (2) agrees to defend, indemnify and hold harmless each Indemnified Party against any and all obligations, actions, judgments, suits, claims, losses,
liabilities, damages, penalties, disbursements, costs and expenses (including, without limitation, reasonable attorneys’ and consultants’ fees), of any kind or nature, which any Indemnified Party may directly or indirectly sustain or
suffer resulting from, relating to, arising out of or arising as a consequence of (a) any breach of this section or the “Environmental Compliance and Reports” section below, (b) any use, generation, manufacture, storage, treatment,
refinement, transportation, disposal, release, or threatened release of any Hazardous Substance on, under, about or from any of the Assets, whether occuring during or prior to Borrower’s or any Grantor’s ownership of any of the Assets, and
whether or not the same was or should have been known to Borrower, (c) any investigatory or remedial action involving any of the Assets, the operations conducted at any of the Assets or any other operations of Borrower, any Grantor or any occupant
at any of the Assets; that is required by any Environmental Laws and (d) the contamination of any of the Assets by any Hazardous Substances, by any means whatsoever including, without limitation, any migration of any Hazardous Substances onto any of
the Assets, present or future). BORROWER SHALL INDEMNIFY THE RESPECTIVE INDEMNIFIED PARTY REGARDLESS OF WHETHER THE ACT, OMISSION, FACTS, CIRCUMSTANCE OR CONDITIONS GIVING RISE TO SUCH INDEMNIFICATION WERE CAUSED IN WHOLE OR IN PART BY THE
RESPECTIVE INDEMNIFIED PARTY’S SIMPLE (BUT NOT GROSS) NEGLIGENCE. The provisions of this section, including the obligation to indemnify, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this
Agreement and shall not be affected by Lender’s or any other Indemnified Party’s acquisition of any interest in any of the Assets, whether by foreclosure or otherwise. 
 Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower’s financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and
acknowledged by Lender in writing. 
 Taxes. To the best of Borrower’s knowledge, all of Borrower’s tax returns and reports
that are or were required to be filed, have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of business
and for which adequate reserves have been provided. 
 Lien Priority. Unless otherwise previously disclosed to Lender in writing.
Borrower has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower’s Indebtedness.

  

 Page 2 

 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 

  

 Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related
Documents are binding upon the signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms. 
 AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will: 
 Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower’s financial condition, and (2) all existing and all threatened litigation,
claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor. 
 Financial Records. Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit
Borrower’s books and records at all reasonable times. 
 Financial Statements. Furnish Lender with the following: 
 Annual Statements. As soon as available, but in no event later than 150 days after the end of each fiscal year, Borrower’s balance sheet and
income statement for the year ended, audited by a certified public accountant satisfactory to Lender. 
 Interim Statements. As soon as
available, but in no event later than 45 days after the end of each fiscal quarter, Borrower’s balance sheet and profit and loss statement for the period ended, prepared by Borrower. 
 Additional Requirements. 
 Borrowing
Base Documents. Deliver to Lender a Borrowing Base certificate, Accounts aging report, and such other supporting documentation as Lender may request from time to time, all in form and detail satisfactory to Lender, at the following intervals:
(a) whenever the Borrower requests an Advance which, following such requested Advance, will result in an outstanding principal balance on the line of credit of more than $500,000.00, and (b) so long as the outstanding principal balance on the
line of credit totals more than $500,000.00 during any calendar month, then within 30 days after the end of each such period. 
 All financial
reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct. 
 Additional Information. Furnish such additional information and statements, as Lender may request from time to time. 
 Financial Covenants end Ratios. Comply with the following covenants and ratios: 
 Working Capital Requirements. Other Working Capital requirements are as follows: 
 Current Ratio. Maintain a Current Ratio of not less than 1.75 to 1.00. The “Current Ratio” means current assets, excluding prepaid
expenses, divided by current liabilities. This ratio will be evaluated as of each quarter end. 
 Tangible Net Worth Requirements.
Other Net Worth requirements are as follows: 
 Unsubordinated Debt To Tangible Net Worth Ratio. Maintain an Unsubordinated Debt to
Tangible Net Worth Ratio of less than 1.25 to 1.00. The “Unsubordinated Debt to Tangible Net Worth Ratio” means a ratio of (a) total liabilities, excluding Subordinated Debt, divided by (b) Tangible Net Worth. This ratio will be evaluated
as of each quarter end. 
 Other Requirements. 
 Commencement of Evaluation of Ratios and Covenants. Each of the foregoing covenants and ratios will be evaluated for the first time based on the financial reports required herein for the period ending
June 30, 2007 and thereafter shall be periodically evaluated as provided in each such covenant or ratio. 
 Except as provided above, all
computations made to determine compliance with the requirements contained in this paragraph shall be made in accordance with generally accepted accounting principles, applied on a consistent basis, and certified by Borrower as being true and
correct. 
 Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may
require with respect to Borrower’s properties and operations, in form, amounts, and coverages reasonably acceptable to Lender and by insurance companies authorized to transact business in Texas. BORROWER MAY FURNISH THE INSURANCE REQUIRED BY
THIS AGREEMENT WHETHER THROUGH EXISTING POLICIES OWNED OR CONTROLLED BY BORROWER OR THROUGH EQUIVALENT COVERAGE FROM ANY INSURANCE COMPANY AUTHORIZED TO TRANSACT BUSINESS IN TEXAS. Borrower, upon request of Lender, will deliver to Lender from
time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days prior written notice to Lender. Each insurance
policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender
holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender’s loss payable or other endorsements as Lender may require. 
 Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following:
(1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of
determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually). Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the
actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower. 
 Guaranties. Prior to
disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantor named below, on Lender’s forms, and in the amount and under the conditions set forth in those guaranties. 
  

			
	 Name of Guarantor
	  	Amount
	 American Electric Technologies, Inc.
	  	Unlimited

 Other Agreements. Comply with all terms and conditions of all other agreements, whether now
or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements. 
 Loan Proceeds. Use all Loan proceeds solely for Borrower’s business operations, unless specifically consented to the contrary by Lender in writing. 
 Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge
upon any of Borrower’s properties, income, or profits. 
 Performance. Perform and comply, in a timely manner, with all terms,
conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any
agreement. 
 Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the
present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner. 
 Environmental Studies. Promptly conduct and complete, at Borrower’s expense, all such investigations, studies, samplings and testings as may
be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or
directive, at or affecting any property or any facility owned, leased or used by Borrower. 
 Compliance with Governmental
Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower’s properties, businesses and operations, and to the use or occupancy of the
Collateral, including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as
Borrower has notified Lender in writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond,
reasonably satisfactory to Lender, to protect Lender’s interest. 
 Inspection. Permit employees or agents of Lender at any
reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower’s other Assets and to examine or audit Borrower’s books, accounts, and records and to make copies and memoranda of Borrower’s books, accounts and
records. If Borrower now or at any time hereafter maintains any records including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon
request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower’s expense. 
  

 Page 3 

 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 

  

 Environmental Compliance and Reports. Neither Borrower, nor any Grantor, tenant, contractor,
agent or other authorized user of any of the Assets shall use, generate, manufacture, store, treat, refine, transport, dispose of, or release any Hazardous Substance on, under, about or from any of the Assets. Borrower will at all times comply, and
will cause any Grantor to comply, with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject including, without limitation, all Environmental Laws. Borrower will furnish to Lender as soon
as possible and in any event within 10 days after receipt by the Borrower or any Grantor, a copy of (a) any notice or claim to the effect that Borrower or any Grantor is or may be liable to any person as a result of the release by Borrower or
any Grantor or any other person of any Hazardous Substance into the environment and (b) any notice alleging any violation of any Environmental Law by Borrower or any Grantor. Borrower will permit, and will cause any Grantor to permit, Lender,
by its representatives and agents, to enter upon and test any of the Assets, and inspect any of Borrower’s or any Grantor’s books and records, all at such reasonable times and intervals as Lender may designate, in order to determine
Borrower’s and any Grantor’s compliance with both this section and the “Environmental Matters and Indemnify” section above. Any such inspections or tests made by Lender shall be at Borrower’s expense and for Lender’s
purposes only and shall not be construed to create any responsibility or liability of the part of Lender to Borrower, any Grantor, or any other person. 
 Change of Location. Immediately notify Lender in writing of any additions to or changes in location of Borrower’s businesses, principal office, or Collateral, other than in the ordinary course of business.

 Title to Assets and Property. Maintain good and marketable title to all of Borrower’s Assets and property. 
 Other Information. From time to time Borrower will provide Lender with such other information as Lender may reasonably request. 
 Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments,
financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security Interests. 
 LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender’s interest in the Collateral or if Borrower fails to
comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower’s failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at
any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures paid by Lender for such purposes will then bear interest at the Note rate from the date paid by Lender to
the date of repayment by Borrower. To the extent permitted by applicable law, all such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on demand, (B) be added to the balance
of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy, (2) the remaining term of the Note, or (3) be treated as a balloon payment which
will be due and payable at the Note’s maturity. Any Collateral also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. 
 NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of
Lender: 
 Debts and Indebtedness. (1) Except for trade debt incurred in the normal course of business and Indebtedness to Lender,
create, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower’s Assets (except as allowed as Permitted
Liens), or (3) sell with or without recourse any of Borrower’s accounts, except to Lender. 
 Additional Financial Restrictions.
Primary Deposit Relationship. Fail to establish and maintain its primary depository relationship for its operating accounts with Lender. 
 Affiliate Transactions. Enter into any transaction, including without limitation, the purchase, sale or exchange or property or rendering of services with any Affiliate, except in the ordinary course of and pursuant to the reasonable
requirements of Borrower’s business and upon fair and reasonable terms no less favorable than would be obtained in a comparable arms length transaction with a person or entity not an Affiliate of Borrower. As used herein the term
“Affiliate” means any individual or entity directly or indirectly under common ownership or control with Borrower. 
 Continuity
of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change its name,
dissolve or transfer or sell Collateral out of the ordinary course of business, (3) pay any dividends or make any other distributions on Borrower’s stock (other than dividends payable in its stock), provided, however that notwithstanding the
foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if Borrower is a “Subchapter S Corporation” (as defined in the Internal Revenue Code of 1986, as amended),
Borrower may pay cash dividends on its stock to its shareholders from time to time in amounts necessary to enable the shareholders to pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law
which arise solely from their status as Shareholders of a Subchapter S Corporation because of their ownership of shares of Borrower’s stock, (4) purchase, redeem or retire any of Borrower’s outstanding shares, or (5) alter or
amend Borrower’s capital structure. 
 Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to
any other person, enterprise or entity. (2) purchase, create or acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business. 
 Agreements. Borrower will not enter into any agreement containing any provisions which would be violated or breached by the performance of
Borrower’s obligations under this Agreement or in connection herewith. 
 RIGHT OF SETOFF. Borrower grants to Lender a security interest in, as
well as a right of setoff against, and hereby assigns, conveys, delivers, pledges and transfers to Lender, as security for repayment of the Indebtedness, all Borrower’s right, title and interest in and to all Borrower’s accounts (whether
checking, savings, or some other account) with Lender or any subsidiary or affiliate of JPMorgan Chase & Co. (each hereinafter referred to as a “Lender Affiliate”) and all other obligations at any time owing by Lender or any
Lender Affiliate to Borrower. This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which the grant
of a security interest would be prohibited by law. Borrower authorizes Lender, without prior notice to Borrower and irrespective of (i) whether or not Lender has made any demand under the Note or the Related Documents or (ii) whether such
Indebtedness is contingent, matured or unmatured, to the extent permitted by law, to collect, charge and/or setoff all sums owing on the Indebtedness against any and all such accounts and other obligations, and, at Lender’s option, to
administratively freeze or direct a Lender Affiliate to administratively freeze all such accounts and other obligations to allow Lender to protect Lender’s security interest, collection, charge and setoff rights provided in this paragraph.

 DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: 
 Payment Default. Borrower fails to make any payment when due under the Loan. 
 Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any
of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 
 Transfer of Assets. Borrower leases, sells, or otherwise conveys, or agrees to lease, sell, or otherwise convey, a material part of its Assets or business outside of the ordinary course of business. 

Defaults with Respect to Third Parties. Borrower fails to make any payment when due or fails to comply with or perform any term, obligation,
covenant or condition contained in any agreement between any other person and Borrower. 
 False Statements. Any warranty,
representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Agreement, the Note, or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or
becomes false or misleading at any time thereafter 
 Judgments or Decrees. One or more judgments or decrees shall be entered against
the Borrower and such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal. 
 Insolvency. The
dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor
workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 
 Defective
Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason.

  

 Page 4 

 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 

  

 Creditor or Forfeiture Proceedings. Commencement of foreclosure, replevin, repossession,
attachment, levy, execution, or forfeiture proceedings, whether by judicial proceeding, self-help, or any other method, by any creditor of Borrower, or by any governmental agency against the Collateral or any assets of Borrower. This includes a
garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis
of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by
Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. 
 Failure to Comply with Laws. Borrower fails to
comply with all applicable statutes, laws, ordinances and governmental rules, regulations and orders to which it is subject or which are applicable to its business, property and assets. 
 Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower. 
 Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance
of the Loan is impaired. 
 Events Affecting Guarantor. Any of the preceeding Events of Default occurs with respect to any guarantor of
the Indebtedness as if the word “guarantor” were substituted for the word “Borrower” in such Event of Default, or any guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any
guaranty. 
 Insecurity. Lender in good faith believes itself insecure. 
 EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or
the Related Documents or any other agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender’s option, all Indebtedness immediately will become due and payable, all without
notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the “Insolvency” subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights
and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender’s rights and remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender’s right to declare a
default and to exercise its rights and remedies. 
 JURY WAIVER. THE UNDERSIGNED AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT,
THE RELATED DOCUMENTS, OR ANY RELATIONSHIP BETWEEN OR AMONG THE UNDERSIGNED AND LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING EVIDENCED BY THIS DOCUMENT AND THE RELATED DOCUMENTS. 
 GOVERNING LAW. The Lender’s loan production office for this transaction is located at the address and in the State (the “LPO State”) indicated in
the LPO address or the loan production office address on the first page of this document. This document will be governed by and interpreted in accordance with federal law and the laws of the LPO State, except for matters related to interest and the
exportation of interest, which matters shall be governed by and interpreted in accordance with federal law (including, but not limited to, statutes, regulations, interpretations and opinions) and the laws of the State of Ohio. However, if there is
ever a question about whether any provision of this document is valid or enforceable, the provision that is questioned will be governed by whichever state or federal law would find the provision to be valid and enforceable. The loan transaction
which is evidenced by this document has been made in the State of Ohio. 
 VENUE. If there is a lawsuit, the undersigned agrees to submit to the
jurisdiction of the courts of the county in the LPO State in which the Lender’s loan production office is located. 
 EXCLUSION FROM LOAN
AGREEMENT. Lender and Borrower hereby agree that, in addition to any loan or financial accommodation described on any Exhibit attached to this Agreement, if any, the following types of loans or financial accommodations, whether now existing or
hereafter arising, are excluded from this Agreement: (i) any loan evidenced by a promissory note payable to Lender which is the subject of a U. S. Small Business Administration guaranty, and (ii) any construction loan governed by a
construction loan agreement. 
 USE OF LOAN PROCEEDS. No portion of any Advance or Loan shall be used directly or indirectly to purchase ineligible
securities, as defined by applicable regulations of the Federal Reserve Board, underwritten by any affiliate of JPMorgan Chase & Co. during the underwriting period and for 30 days thereafter. 
 ADDITIONAL PROVISION - LETTERS OF CREDIT. Lender may from time to time prior to the maturity of the Note evidencing the Primary Credit Facility, based upon an
Application and Agreement For Standby/Commercial Letter of Credit (“Application”) to be executed by Borrower and Lender, issue a letter of credit (“Letter of Credit”) for the account of Borrower; provided however, that the
maximum aggregate amount of the unfunded commitments and unpaid reimbursements (collectively, the “Letter of Credit Liabilities”) with respect to all Letters of Credit shall not exceed at any time the lesser of (i) 56,000,000.00. or
(ii) 56,000,000.00 minus the then outstanding principal amount of the Advances, or (iii) an amount equal to the Borrowing Base minus the then outstanding principal amount of the Advances. Each Letter of Credit shall have an expiration date
of on or prior to one (1) year after date of issuance, shall have an expiration date that does not exceed the scheduled maturity date of the Note evidencing the Primary Credit Facility by more than 90 days, and shall be issued pursuant to an
Application which shall be in form and substance as required by Lender. Pursuant to the applicable Application, each funding under a Letter of Credit shall be reimbursed by Borrower to Lender upon demand. Borrower agrees to pay Lender all fees and
expenses associated with each Letter of Credit. 
 ADDITIONAL PROVISION - MODIFICATION OF LINE OF CREDIT. The first portion of the paragraph
“LINE OF CREDIT” in this Agreement is amended to read in its entirety as follows: 
 LINE OF CREDIT. Lender agrees to make Advances to
Borrower from time to time from the effective date of this Agreement until the maturity date of the Note evidencing the Primary Credit Facility, provided that the aggregate amount of such Advances outstanding at any time does not exceed the lesser
of (i) 56,000,000.00 minus the Letter of Credit Liabilities, or (ii) an amount equal to the Borrowing Base minus the Letter of Credit Liabilities. Within the foregoing limits. Borrower may borrow, partially or wholly prepay, and reborrow
under this Agreement as follows: 
 ADDITIONAL PROVISION - Mandatory Loan Repayments. The paragraph “Mandatory Loan Repayments” in this
Agreement is amended to read in its entirety as follows: 
 Mandatory Loan Repayments. If at any time, the aggregate principal amount of the
outstanding Advances shall exceed the applicable Borrowing Base minus the Letter of Credit Liabilities, Borrower, immediately upon written or oral notice from Lender, shall pay to Lender an amount equal to such excess. On the Expiration Date,
Borrower shall pay to Lender in full the aggregate unpaid principal amount of all Advances then outstanding and all accrued unpaid interest, together with all other applicable fees, costs and charges, if any, not yet paid. 
 MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement: 
 Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. 
 Attorneys’ Fees; Expenses. Borrower agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s reasonable
attorneys’ fees and Lender’s legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such
enforcement. Costs and expenses include Lender’s reasonable attorneys’ fees and legal expenses whether or not there is a lawsuit, including Lender’s reasonable attorneys’ fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court. 

Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement. 
 Consent to Loan Participation. Borrower agrees and consents to Lender’s sale or transfer, whether
now or later, of one or more participation interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices
of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any participation interests will be considered as the absolute owners of such interests in the
Loan and will have all the rights granted under the participation agreement or agreements 

  

 Page 5 

 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 

  

 
governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender
or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower’s obligation under the Loan irrespective of the failure or insolvency of any holder of any interest
in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender. 
 Indemnification. Borrower agrees to indemnify, defend and hold each of the Indemnified Parties harmless from and against any and all liabilities,
obligations, claims, losses, damages, penalties, fines, forfeitures, actions, judgments, suits, costs, expenses, and disbursements of any kind or nature (including, without limitation, Lender’s attorneys’ fees) (collectively,
“Claims”) which may be imposed upon, incurred by or assessed against any Indemnified Party (whether or not caused by any Indemnified Party’s sole, concurrent, or contributory negligence) arising in connection with this Agreement, any
Related Document, or any of the Assets (including, without limitation, the enforcement of this Agreement and the Related Documents and the defense of any Indemnified Party’s action or inaction in connection with this Agreement and the Related
Documents) or in connection with the Borrower’s failure to perform all of Borrower’s obligations under this Agreement or any Related Document, except to the limited extent that the claims against any such Indemnified Party are proximately
caused by such Indemnified Party’s gross negligence or willful misconduct. The Indemnification provided for in this section shall survive the termination of this Agreement and shall extend to and continue to benefit each individual or entity
who is or has at any time been an Indemnified Party. 
 Borrower’s indemnity obligations under this section shall not in any way be
affected by the presence or absence of covering insurance, or insurance policy or policies affecting the Assets and/or Borrower’s business activities. Should any claim, action or proceeding be made or brought against any Indemnified Party by
reason of any event as to which Borrower’s indemnification obligations apply, then, upon such Indemnified Party’s demand, Borrower, at its sole cost and expense, shall defend such claim, action or proceeding in Borrower’s name, if
necessary, by the attorneys for Borrower’s insurance carrier (if such claim, action or proceeding is covered by insurance), or otherwise by such attorneys as such Indemnified Party shall approve. Lender may also elect to engage its own
attorneys at its reasonable discretion to defend Borrower or any Indemnified Party and to assist in their defense, and Borrower agrees to pay the fees and disbursements of such attorneys upon Lender’s request. 
 No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender’s
right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver
of any of Lender’s rights or of any of Borrower’s or any Grantor’s, obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance
shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. 
 Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to
change the party’s address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower’s current address. Unless otherwise provided or required by law, if there is more than one Borrower, any notice given by
Lender to any Borrower is deemed to be notice given to all Borrowers. 
 Payment of Interest and Fees. Notwithstanding any other
provision of this Agreement or any provision of any Related Document, Borrower does not agree or intend to pay, and Lender does not agree or intend to charge, collect, take, reserve or receive (collectively referred to herein as “charge or
collect”), any amount in the nature of interest or in the nature of a fee for the Loan which would in any way or event (including demand, prepayment, or acceleration) cause Lender to contract for, charge or collect more for the Loan than the
maximum Lender would be permitted to charge or collect by any applicable federal or Texas state law. Any such excess interest or unauthorized fee will, instead of anything stated to the contrary, be applied first to reduce the unpaid principal
balance of the Loan, and when the principal has been paid in full, be refunded to Borrower. 
 Severability. If a court of competent
jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality,
invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. 
 Successors and Assigns. All covenants and agreements contained by or on behalf of Borrower shall bind Borrower’s successors and assigns and shall inure to the benefit of Lender, its successors and assigns.
Borrower shall not, however, have the right to assign Borrower’s rights under this Agreement or any interest therein, without the prior written consent of Lender. 
 Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances. Lender is relying on all representations, warranties, and covenants made by Borrower in this
Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties and
covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, and shall remain in full force
and effect until such time as Borrower’s Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur. 
 Time is of the Essence. Time is of the essence in the performance of this Agreement. 
 DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean
amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Texas Uniform Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date of this Agreement: 
 Account. The word “Account” means a trade account, account
receivable, other receivable, or other right to payment for goods sold or services rendered owing to Borrower (or to a third party grantor acceptable to Lender). 
 Advance. The word “Advance” means a disbursement of loan funds made, or to be made, to or for the benefit of Borrower and, if applicable, includes the issuance by or on behalf of Lender of any letters
of credit for the account of Borrower and the extension of any loans or other credit accommodations by Lender to Borrower. 
 Advance.
The word “Advance” means a disbursement of loan funds made, or to be made, to or for the benefit of Borrower and, if applicable, includes the issuance by or on behalf of Lender of any letters of credit for the account of Borrower and the
extension of any loans or other credit accommodations by Lender to Borrower. 
 Agreement. The word “Agreement” means this
Business Loan Agreement (Asset Based), as this Business Loan Agreement (Asset Based) may be amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement (Asset Based) from time to time.

 Assets. The word “Asset” means any property or interest in property of any kind or description of Borrower or any Grantor,
or any property or interest in property of any Grantor which is subject to a security interest in favor of Lender, whether such assets are real, personal, tangible, intangible, or mixed, and whether such assets are owned, leased or operated by
Borrower, or any such Grantor. 
 Borrower. The word “Borrower” means M & I Electric Industries, Inc., and all other
persons and entities signing the Note in whatever capacity. 
 Borrowing Base. The words “Borrowing Base” mean, as determined
by Lender from time to time, the lesser of (1) $6,000,000.00 or (2) the sum of (a) 80.000% of the aggregate amount of Eligible Accounts (not to exceed in corresponding Loan amount based on Eligible Accounts $6,000,000.00),
plus (b) 40.000% of the aggregate amount of Eligible Inventory (not to exceed in corresponding Loan amount based on Eligible Inventory $200,000.00). 
 Business Day. The words “Business Day” mean a day on which commercial banks are open in the State of Texas. 
 Collateral. The word “Collateral” means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly or indirectly, whether granted
now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment
trust, conditional sales, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security of lien interest whatsoever, whether created by law, contract, or otherwise. The word
Collateral also includes without limitation all collateral described in the Collateral section of this Agreement. 
  

 Page 6 

 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 

  

 Default. The word “Default” means the Default set forth in this Agreement in the
section titled “Default”. 
 Eligible Accounts. The words “Eligible Accounts” mean at any time, all of
Borrower’s Accounts which contain selling terms and conditions acceptable to Lender. The net amount of any Eligible Account against which Borrower may borrow shall exclude all returns, discounts, credits, and offsets of any nature. Unless
otherwise agreed to by Lender in writing, Eligible Accounts do not include: 
 (1) Accounts with respect to which the Account Debtor is
employee or agent of Borrower. 
 (2) Accounts with respect to which the Account Debtor is a subsidiary of, or affiliated with Borrower or its
shareholders, officers, or directors. 
 (3) Accounts with respect to which goods are placed on consignment, guaranteed sale, or other terms
by reason of which the payment by the Account Debtor may be conditional. 
 (4) Accounts with respect to which the Account Debtor is not a
resident of the United States, except to the extent such Accounts are supported by insurance, bonds or other assurances satisfactory to Lender. 
 (5) Accounts with respect to which Borrower is or may become liable to the Account Debtor for goods sold or services rendered by the Account Debtor to Borrower. 
 (6) Accounts which are subject to dispute, counterclaim, or setoff. 
 (7) Accounts with respect to which the
goods have not been shipped or delivered, or the services have not been rendered, to the Account Debtor. 
 (8) Accounts with respect to which
Lender, in its sole discretion, deems the creditworthiness or financial condition of the Account Debtor to be unsatisfactory. 
 (9) Accounts
of any Account Debtor who has filed or has had filed against it a petition in bankruptcy or an application for relief under any provision of any state or federal bankruptcy, insolvency, or debtor-in-relief acts; or who has had appointed a trustee,
custodian, or receiver for the assets of such Account Debtor; or who has made an assignment for the benefit of creditors or has become insolvent or fails generally to pay its debts (including its payrolls) as such debts become due. 
 (10) Accounts with respect to which the Account Debtor is the United States government or any department or agency of the United States. 
 (11) Accounts which have not been paid in full within 90 days from the invoice date. The entire balance of any Account of any single Account Debtor
will be ineligible whenever the portion of the Account which has not been paid within 90 days from the invoice date is in excess of 15.000% of the total amount outstanding on the Account. 
 (12) That portion of the Accounts of any single Account Debtor which exceeds 25.000% of all of Borrower’s Accounts. 
 (13) That portion of Accounts which constitute retainage 
 (14) Accounts which arise from projects which are bonded. 
 (15) ADDITIONAL ACCOUNTS RECEIVABLE
PROVISION: The entire balance of any Account due for M & I Far East PTE, Ltd., will be ineligible whenever the portion of the Account which has not been paid in full within one hundred fifty (150) days from the invoice date is in excess of
15% of the total amount outstanding on such Account Debtor’s Account (notwithstanding the exclusion herein applicable to all other Account Debtors). 
 Eligible Inventory. The words “Eligible Inventory” mean, at any time, all of Borrower’s Inventory as defined below, except: 
 (1) Inventory which is not owned by Borrower free and clear of all security interests, liens, encumbrances, and claims of third parties. 
 (2) Inventory which Lender, in its sole discretion, deems to be obsolete, unsalable, damaged, defective, or unfit for further processing. 
 (3) Work in progress. 
 Environmental
Laws. The words “Environmental Laws” mean any and all federal, state, local and foreign statutes, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to (i) the protection of the environment, (ii) the effect of the environment on human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or land, or (iv) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances
or wastes or the clean-up or other remediation thereof. 
 Event of Default. The words “Event of Default” mean any of the
events set forth in the section of this Agreement entitled “Default”. 
 Expiration Date. The words “Expiration
Date” mean the date of termination of Lender’s commitment to lend under this Agreement. 
 GAAP. The word “GAAP”
means generally accepted accounting principles. 
 Grantor. The word “Grantor” means each and all of the persons or entities
granting a Security Interest in any Collateral for the Loan, including without limitation all Borrowers granting such a Security Interest. 
 Guarantor. The word “Guarantor” means any guarantor, surety, or accommodation party of any or all of the Loan. 
 Hazardous Substances. The words “Hazardous Substances” mean all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law. 
 Indebtedness. The word “Indebtedness” means all principal, interest, and other amounts, costs and expenses payable under the Note or
Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents, together with interest on such amounts as provided in this Note, and all obligations, debts and
liabilities, plus interest thereon, of Borrower, or any one or more of them, to Lender, as well as claims by Lender against Borrower or any one or more of them, whether now existing or hereafter arising, whether related or unrelated to the purpose
of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, absolute or contingent, liquidated or unliquidated and whether Borrower may be liable individually or jointly with others, whether obligated as guarantor,
surety, accommodation party or otherwise, and whether recovery upon such amounts may be hereafter may become barred by any statute of limitations, and whether the obligation to repay such amount may be or hereafter may become otherwise
unenforceable, and further includes, without limitation, all principal, interest, and other amounts, costs and expenses payable under the Related Documents, whether executed by the Borrower or by any other person or entity, together with all
renewals of, extensions of, modifications of, consolidations of and substitutions for the Related Documents, together with the interest thereon as provided in the Related Documents. 
 Indemnified Parties. The words “Indemnified Parties” mean the Lender and each of its affiliates, and each of their respective
shareholders, directors, offices, employees and agents. 
 Inventory. The word “Inventory” means all of Borrower’s raw
materials, work in process, finished goods, merchandise, parts and supplies, of every kind and description, and goods held for sale or lease or furnished under contracts of service in which Borrower now has or hereafter acquires any right, whether
held by Borrower or others, and all documents of title, warehouse receipts, bills of lading, and all other documents of every type covering all or any part of the foregoing. Inventory includes inventory temporarily out of Borrower’s custody or
possession and all returns on Accounts. 
 Lender. The word “Lender” means JPMorgan Chase Bank, NA, its successors and
assigns. 
 Note. The word “Note” means any and all promissory note or notes which evidence Borrower’s Loans in favor of
Lender, as well as any amendment, modification, renewal and replacement thereof. 
 Permitted Liens. The words “Permitted
Liens” mean (1) liens and security interests securing Indebtedness owed by Borrower to Lender; (2) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen,
mechanics, warehousemen, or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent; (4) purchase money liens or purchase money security interests upon or in any property
acquired or held by Borrower in the ordinary course of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under the paragraph of this Agreement titled “Indebtedness and Liens”; and (5)
liens and security interests which, as of the date of this Agreement, have been disclosed to and approved by the Lender in writing. 
  

 Page 7 

 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 

  

 Primary Credit Facility. The words “Primary Credit Facility” mean the credit
facility described in the Line of Credit section of this Agreement. 
 Related Documents. The words “Related Documents” mean
all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now
existing or hereafter arising, executed in connection with the Indebtedness. 
 Security Agreement. The words “Security
Agreement” mean and include without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security
Interest. 
 Security Interest. The words “Security Interest” mean, without limitation, any and all types of collateral
security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment
trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise. 
 Subordinated Debt. The words “Subordinated Debt” mean all present and future obligations, liabilities, claims, rights and demands of any
kind which may be owing from Borrower to any creditor, other than Lender, to include, without limitation, principal, interest, costs, attorney’s fees, sums paid for protecting the rights of a holder of security, all contingent obligations (such
as a guaranty) and all other obligations of any nature whatsoever owed to such a creditor, which have been subordinated in all respects to the Indebtedness owed to Lender by written agreement acceptable to Lender to include, without limitation,
deferral of any payment of principal to the creditor, deferral of interest payments upon occurrence of any Event of Default, and subordination of any Security Interest of such creditor until all Indebtedness is paid. 
 Tangible Net Worth. The words “Tangible Net Worth” mean Borrower’s total assets excluding all intangible assets (i.e. goodwill,
trademarks, patents, copyrights, organizational expenses, and similar intangible items, but including leaseholds and leasehold improvements) less total liabilities excluding Subordinated Debt. 
 BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT (ASSET BASED) AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT
(ASSET BASED) IS DATED JULY 2, 2007. 
  

			
	BORROWER:
	
	M & I ELECTRIC INDUSTRIES, INC.
		
	By:	 	 

		 	Arthur Dauber, President of M & I Electric Industries, Inc.
	
	LENDER:
	
	JPMORGAN CHASE BANK, NA
		
	By:	 	 

		 	Authorized Signer

  

 Page 8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}]]