Document:

Exhibit 10.49

 

TELOS CORPORATION

SENIOR OFFICER INCENTIVE PROGRAM

(Adopted as Revised March 29, 2018)

Section 1. Purpose

The purpose of the Telos Corporation Senior Officer Incentive Program (the "Plan") is to attract and retain key employees of Telos Corporation ("Company") and to motivate those employees to put forth maximum efforts for both the short-term and the long-term success of the Company and to drive achievement of the Company's long-term growth and profitability objectives.

Section 2. Definitions

The following definitions are applicable to the Plan:

	
(a)

	
 "Award" means the grant to a Participant of a Bonus opportunity under the Plan.

(b)  "Board" means Board of Directors of the Company.

(c)  "Bonus" means either an MBO Bonus or a Strategic Growth Bonus, as applicable, made pursuant to the Plan with respect to a particular Performance Period.

(d)  "Code" shall mean the Internal Revenue Code of 1986, as amended.

(e)  "Committee" shall mean the Management Development and Compensation Committee of the Board or such other committee of the Board as the Board shall from time to time appoint to administer the Plan.

(f)  "Company" means Telos Corporation, a Maryland corporation, as well as its subsidiaries and affiliates.

(g)  "Designated Beneficiary" shall mean the beneficiary designated by the Participant, in a manner determined by the Committee, to receive payments due the Participant in the event of the Participant's death, or in the absence of an effective designation by the Participant, the Participant's surviving spouse, or, if there is no surviving spouse, the Participant's estate.

(h)  "Employee" shall mean a regular full-time salaried employee of the Company, and determined by the Committee to be eligible for one or more Awards under this Plan in accordance with Section 4(a), below.

(i) "Fiscal Year" shall mean the fiscal year of the Company.

(j) "MBO Bonus" means the cash payment(s) based on management business objectives determined under Section 6 and paid pursuant to Section 7(a), below.

(k)  "Participant" shall mean an Employee who is selected by the Committee to participate in the Plan pursuant to Section 4.

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(l) "Performance Goals" shall mean the performance objective or objectives relating to, in whole or in part, individual performance and/or the performance of the Company or any group, division, or operating unit of the Company during a Performance Period, as established by the Committee in writing, in accordance with Section 5.

(m)  "Performance Period" shall mean with respect to each Award the period for which the performance is calculated. For purposes of the MBO Bonus opportunity, the Performance Period shall be a Fiscal Year. For purposes of the Strategic Growth Bonus opportunity, the Performance Period shall be a period of three Fiscal Years. The initial Performance Period for the MBO Bonus shall be the 2016 Fiscal Year and the initial Performance Period for the Strategic Growth Bonus shall commence with the 2016 Fiscal Year.

(n)  "Strategic Growth Bonus" means the cash payment determined under Section 6 and paid pursuant to Section 7(b), below.

Section 3. Administration

(a) The Committee shall have such powers as may be necessary to discharge its duties hereunder. The Committee shall be responsible for the general administration and interpretation of this Plan and for carrying out its provisions, including the authority to construe and interpret the terms of this Plan, determine the amount and time of payment of any Bonuses, prescribe forms and procedures for purposes of Plan participation and distribution of Bonuses and adopt rules, regulations and to take such actions as it deems necessary or desirable for the proper administration of this Plan. The Committee may delegate its administrative tasks to Company employees or others as appropriate for proper administration of this Plan.

(b) Any rule or decision by the Committee or its delegate(s) that is not inconsistent with the provisions of this Plan shall be conclusive and binding on all persons, and shall be given the maximum deference permitted by law.

Section 4. Participation

(a) Participation in the Plan shall be limited to the Employees who the Committee has determined have a significant influence on the corporate performance of the Company. An Employee may be eligible for an MBO Bonus, a Strategic Growth Bonus, or both. The selection of Employees who are eligible for an MBO Bonus, a Strategic Growth Bonus, or both shall be made by the Committee prior to or as soon as administratively practicable following the beginning of the applicable Performance Period and shall thereafter be promptly communicated to the Participants.

(b) At any time during a Performance Period the Committee may designate new Participants or remove Employees from participation for that Performance Period, in its sole discretion. An Employee's participation in the Plan in any prior year or years shall not give the Employee the right to be a Participant in any subsequent year.

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Section 5. Performance Goals

The Committee shall establish Performance Goals with respect to the applicable Bonus opportunity for each Performance Period on the basis of such criteria, and to accomplish such objectives, as the Committee may from time to time determine. The Committee, in its discretion, may also establish a schedule or schedules for the Performance Period setting forth the percentage or portion of the applicable Awards that will be earned or forfeited based on the percentages of the Performance Goals for the period that are actually achieved or exceeded. The Performance Goals with respect to each Bonus opportunity shall be established in writing by the Committee prior to or as soon as administratively practicable after the commencement of the applicable Performance Period. During the Performance Period and until such time thereafter as the Bonus payment is either made or is commenced in accordance with Section 7, the Committee shall have the authority to adjust upward or downward the Performance Goals or the measure or measures of performance in such manner as it deems appropriate to reflect unusual, extraordinary or nonrecurring events, changes in applicable accounting rules or principles or in the Company's methods of accounting, changes in applicable tax law or regulations, changes in Fiscal Year or such other factors as the Committee may determine, including authority to determine that all or any portion of any Award has either been earned or, alternatively, has not been earned (regardless of achievement or failure to achieve the originally established Performance Goals).

Section 6. Determination of Amount of Bonus

(a) Calculation. For each Performance Period, the Committee shall determine (i) the extent to which the Performance Goals applicable to the Award made to each Participant for the applicable Performance Period are achieved or exceeded, and (ii) the amount of the total Bonus earned by each Participant for the applicable Performance Period. Notwithstanding, the foregoing, however, the Committee may, in its discretion and subject to the provision of Section 7(a), pay the MBO Bonus during the Performance Period based upon an assessment by the Committee of the Participant's progress during the Performance Period toward achieving the Performance Goals for that Performance Period.

(b) Limitations on Right to Receive Payment. Each Bonus under this Plan shall be paid solely from general assets of the Company. This Plan is unfunded and unsecured; nothing in this Plan shall be construed to create a trust or to establish or evidence any Participant's claim of any right to payment of a Bonus other than as an unsecured general creditor with respect to any payment to which he or she may be entitled. Notwithstanding anything to the contrary in this document, payments of any MBO Bonus and any Strategic Growth Bonus are subject to sufficient liquidity and cash availability in the Company.

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Section 7. Payment of Bonuses.

(a) Timing of Payment of MBO Bonus. Subject to the provisions of Section 9, below, the Committee shall establish the terms of payment with respect to the applicable MBO Bonus opportunity for each Performance Period in its discretion, in order to accomplish the objectives of the Plan. Such terms may include the payment of a portion of the bonus that is earned (or deemed earned pursuant to Section 8 below) and payable with respect to a Performance Period, as an Initial Payment, in a single sum cash payment during or shortly after the Performance Period (but as to such payments in no event later than two and one-half months after the end of the calendar year in which the Performance Period ends) and the deferral of the payment of the remainder of the bonus (Deferred Payments) until one or more later dates (Deferred Payment Dates), to be paid in installments on the last day of one or more calendar quarters following the end of the Performance Period, all on such terms, proportions and schedule as the Committee may deem appropriate. The terms, proportion and schedule of payment with respect to each Bonus opportunity in any Performance Period shall be established in writing by the Committee prior to or as soon as administratively practicable after the commencement of the applicable Performance Period. Company shall pay the MBO Bonus amounts to the Participant in accordance with the terms, proportions and schedule as established by the Committee and otherwise subject to the terms of this Plan.

(b) Timing of Payment of Strategic Growth Bonus. Subject to the provisions of Section 9, below, as soon as is administratively practicable following the determination of the amount of each Participant's Strategic Growth Bonus under Section 6 for a Performance Period, but in no event later than two and one-half months after the end of the calendar year in which the Performance Period ends, the Company shall pay to each Participant or his Designated Beneficiary, if applicable, in a single-sum cash payment the full amount of the Participant's Strategic Growth Bonus determined under Section 6.

Section 8.   Termination of Employment and Forfeitures

Subject to the provisions of Section 9:

(a) Awards that are granted but not earned by a Participant with respect to the applicable Performance Period shall be forfeited.

(b) Except as otherwise provided in this Section 8, the payment of a Bonus, if any (as determined by the Committee), with respect to a specific Performance Period requires that the Participant be an active employee on the Company's payroll (i) on the payment date (including any deferred payment date established by the Committee under Section 7(a)) in the case of an MBO Bonus, or (ii) the last day of each Performance Period in the case of a Strategic Growth Bonus.

(c) With respect to the Strategic Growth Bonus, if a Participant dies or ceases to be an Employee by reason of extended disability (such as entitles the Participant to long-term disability payments under the applicable long-term disability plan of the Company), there shall be forfeited as of the cessation of employment a portion of the Strategic Growth Bonus Award equal to the value of the Strategic Growth Bonus Award initially granted to the Participant for that Performance Period multiplied by a fraction, (i) the numerator of which shall be the number of full calendar months from the date of the Participant's cessation of employment to the end of the Performance Period, and (ii) the denominator of which shall be the number of months representing the entire Performance Period; provided, that the Committee is authorized to declare (before or as soon as practicable after such cessation of employment) that a lesser percentage of the Strategic Growth Bonus Award shall be forfeited as of the date of such cessation of employment. With respect to the portion of the Strategic Growth Bonus Award that is not so forfeited as of the date of such cessation of employment, the Performance Period shall continue and the remaining percentage of the Strategic Growth Bonus Award that is earned or forfeited shall be determined based upon the extent to which the applicable Performance Goals for such Performance Period have been achieved or exceeded. Payment of a Strategic Growth Bonus Award that has been earned and not forfeited shall be made in accordance with Section 7.

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(d) With respect to the MBO Bonus, if the Participant's active employment with the Company is terminated for any reason, other than death or disability, prior to the payment of any Deferred Payments on any of the Deferred Payment Dates as established by the Committee as specified in Section 7(a), above, the Participant's right to further payment of any then unpaid portion of the MBO Bonus shall be forfeited in its entirety.

(e) With respect to the MBO Bonus, if the Participant's active employment with the Company is terminated by reason of death or disability after the end of the applicable Performance Period, but prior to full payment of any Deferred Payments as established by the Committee as specified in Section 7(a), above, the entire remaining earned and unpaid deferred portion of the Participant's MBO Bonus shall be immediately paid to the Participant or his or her Designated Beneficiary, if applicable, in a single-sum cash payment. If the Participant's active employment with the Company is terminated by reason of death or disability prior to the end of the applicable Performance Period, the Participant shall have no right to payment of an MBO Bonus for that Performance Period; provided, however, the Committee may determine, in its discretion and in view of all relevant circumstances, to pay all or a portion of the MBO Bonus that otherwise might have been earned and paid had the Participant's employment not been terminated by reason of death or disability prior to the end of the Performance Period.

Section 9. Mergers, Sales and Change in Control

(a) In the case of a Change in Control of the Company, all Performance Periods shall be deemed to have ended as of the end of the most recent quarterly accounting period prior to the date of the Change in Control of the Company, all Performance Goals necessary to earn the maximum Bonus for each Performance Period shall be deemed to have been achieved, and the full maximum Bonus shall be paid (without regard to Section 7(a)) to the Participant or his Designated Beneficiary, if applicable, in a single-sum payment on the date of the Change in Control of the Company.

(b) "Change in Control of the Company" means an occasion upon which (i) any one person, or more than one person acting as a group (as defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)), other than a member of the Board or fiduciary holding securities under an employee benefit plan of the Company or a corporation controlled by the Company, acquires (either directly and/or through becoming the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act)), directly or indirectly, securities of the Company representing 50% or more of the combined voting power of the Company's then outstanding securities (or has acquired securities representing 50% or more of the combined voting power of the Company's then outstanding securities during the 12-month period ending on the date of the most recent acquisition of Company securities by such person); (ii) during any period of twelve (12) consecutive months, a majority of the members of the Board of Directors is replaced by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors before the date of the appointment or election; or (iii) any one person, or more than one person acting as a group (as defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or person) all, or substantially all, of the Company's assets.

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Section 10.               Miscellaneous Provisions

(a) The rights or interest of a Participant or Designated Beneficiary under the Plan may not be assigned, encumbered or transferred until such time as payment is made in accordance with Section 7, except to the extent rights may pass upon the death of the Participant to a Designated Beneficiary pursuant to the terms of this Plan.

(b) No Employee or other person shall have any claim or right to be granted an Award under the Plan. Neither the Plan nor any action taken under the Plan shall be construed as giving any Employee or other person any right to be retained in the employ of the Company.

(c) Awards granted or earned under the Plan shall not be deemed compensation in determining the amount of any entitlement under any retirement or other employee benefit plan of the Company.

(d) The Committee may adopt and apply rules that will ensure that the Company will be able to comply with applicable provisions of any Federal, state or local law relating to the withholding of tax, including but not limited to the amount, if any, includable in income of a Participant after the expiration of the Performance Period.

(e) The Plan shall be construed in accordance with and governed by the laws of the State of Maryland.

(f) The Section headings contained in this Plan are for convenience of reference only and shall not limit or otherwise affect the meaning or interpretation of this Plan or any of its terms and conditions.

(g) It is intended that the payments under the Plan qualify as short-term deferrals exempt from the requirements of Code Section 409A and the Plan shall be interpreted accordingly. To the extent that any Bonus under the Plan is subject to Code Section 409A, the terms and administration of such Bonus shall comply with the provisions of Section 409A, applicable IRS guidance and good faith reasonable interpretations thereof, and, to the extent necessary to achieve compliance, shall be modified, replaced, or terminated at the discretion of the Committee.

Section 11.   Amendment or Termination

The Committee may amend, suspend or terminate the Plan at any time and in such manner and to such extent as it deems advisable. No amendment, suspension or termination shall impair any right theretofore granted to any Participant, without the consent of the Participant. Notwithstanding the foregoing, the Plan may be amended at any time, including retroactively, to conform the Plan to the provisions and requirements of Section 409A of the Code and the regulations and guidance thereunder, and no such amendment shall be considered prejudicial to any interest of any Participant hereunder.

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Section 12.   Effective Date

This Plan is effective as of the date it is adopted by the Committee.

Section 13. Indemnification of Committee

In addition to such other rights of indemnification as they may have as members of the Board or as members of the Committee, each member of the Committee shall be indemnified by the Company against the reasonable expenses, including attorney's fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which he or she may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any Awards granted thereunder, and against all amounts paid by him or her in settlement thereof, provided such settlement is approved by independent legal counsel selected by the Company, or paid by him in satisfaction of a judgment in any such action, suit or proceeding except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Committee member is liable for gross negligence or misconduct in his duties; provided that within 60 days after the institution of such action, suit or proceeding, the Committee member shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same.

7Exhibit 10.21

 

 

 

Comerica Bank

December __, 2017

 

Northern Power Systems, Inc.

Attention: Ciel Caldwell

29 Pitman Road

Barre, Vermont 05641

 

		Re:	$2,500,000 Working Capital Transaction Specific Revolving Credit Facility (the “Export
Revolving Loan”) Guaranteed by the Export-Import Bank of the United States (“Ex-Im Bank”)

 

Dear Ms. Caldwell:

 

This Letter Agreement
shall constitute the agreement between Comerica Bank (“Lender”) and Northern Power Systems, Inc. (“Borrower”)
with respect to the Export Revolving Loan described above in the maximum amount of $2,500,000 (the “Maximum Amount”),
and shall become effective upon the execution and delivery to Lender (in form satisfactory to Lender) of this Letter Agreement
and each of the other documents, listed on the Closing Checklist attached hereto as Exhibit “A” (such documents, together
with each other document, instrument and agreement previously, contemporaneously; or subsequently delivered pursuant hereto called
the “Documents”), and the satisfaction of all other requirements set forth on the Closing Checklist.

 

So long as the Export
Revolving Loan or any part thereof shall remain outstanding:

 

		(a)	Subject to the terms and conditions of this letter agreement, Lender agrees to make loans to Borrower
on a revolving basis in such amount as Borrower shall request at any time until the Maturity Date (as defined in the Master Revolving
Note dated as of June 30, 2014 in the original principal amount of $6,000,000 made by Borrower to Lender, as it may be amended
from time to time (the “Note”)) up to the Maximum Amount.

 

		(b)	Liabilities may additionally be incurred by Borrower hereunder (and the availability of the Maximum
Amount may be utilized) by the issuance by Bank (at requests of Borrower and upon letter of credit applications and agreements
delivered by Borrower to Bank) of letters of credit (‘L/C’), upon such terms as Borrower and Bank may hereafter separately
agree with respect to such L/C’s, provided however, that the aggregate amount of L/C’s outstanding shall not exceed
the Maximum Amount. At no time shall the aggregate advances requested by Borrower and outstanding under the Export Revolving
Loan exceed the lesser of the Maximum Amount or the Export-Related Borrowing Base, less any L/C’s issued by Bank at the request
of Borrower. Each L/C (including any renewal thereof) shall expire not later than twelve (12) months after the date of issuance
thereof. If any L/C’s extend beyond the Maturity Date (as defined in the Note), then, effective as of the Maturity Date,
the balance in any deposit accounts held by Bank and the certificates of deposit or time deposit accounts issued by Bank in Borrower’s
name (and any interest paid thereon or proceeds thereof, including any amounts payable upon the maturity or liquidation of such
certificates or accounts), shall automatically secure such obligations to the extent of the then continuing or outstanding and
undrawn L/C’s; provided, however, that if there are insufficient balances in such accounts to secure such obligations, Borrower
shall immediately deposit such additional funds as are necessary to fully secure such obligations. Borrower authorizes Bank to
hold such balances in pledge and to decline to honor any drafts thereon or any requests by Borrower or any other person to pay
or otherwise transfer any part of such balances for so long as the L/C’s are outstanding or continue. In connection with
the L/C’s, Borrower shall pay to Bank standard documentation, administration, payment and cancellation charges assessed by
Bank, at the times, in the amounts and on the terms set forth or to be set forth from time to time in the standard fee schedule
of the Bank in effect from time to time, including a per annum letter of credit fee with respect to the undrawn amount of each
L/C issued pursuant hereto (based on the amount of each L/C) in an amount determined by the Bank.

 

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		(c)	Borrower shall provide or cause to be provided to Lender such financial statements and tax returns
of Borrower as are described in Section 11 of the Loan Authorization Notice dated as of even date herewith by Lender and the Export-Import
Bank of the United States (the “Loan Authorization Notice”). In addition, Borrower shall provide Lender all
the financial statements required pursuant to the Loan and Security Agreement mentioned in Section (f) below on the dates set forth
in the Loan and Security Agreement, even if such timing for delivery conflicts with due dates provided in the Loan Authorization
Notice, together with all budgets, projections, or other financial exhibits that the Lender may reasonably request, or that may
be required by Ex-Im Bank from time to time. Bank agrees and acknowledges that the financial statements of the Borrower will be
included in the consolidated financial statements of Northern Power Systems Corp.

 

		(d)	Within 5 business days after the last day of each calendar month or earlier when and as required
by Section 2.04 of the Borrower Agreement of even date herewith (the “Borrower Agreement”), Borrower shall provide
Lender the Export-Related Borrowing Base Certificate (as defined in the Borrower Agreement) and reports detailing agings of Borrower’s
accounts receivable and accounts payable and a schedule of Inventory bound for export, each report to be in form satisfactory to
Lender.

 

		(e)	Borrower shall comply with all covenants set forth in the Documents, including, but not limited
to, the Borrower Agreement and the Loan Authorization Notice, and shall cooperate with Lender in all audits, reviews, and inspections
required to be performed by Lender under any agreement between Lender and Ex-Im Bank.

 

		(f)	So long as any indebtedness or commitment is outstanding under the Export Revolving Loan and/or
the Documents, all conditions, representations, warranties, covenants and other provisions of the loan documents set forth in that
certain Amended and Restated Loan and Security Agreement dated December 31, 2013, as amended from time to time, between Borrower
and Lender (the “Loan and Security Agreement”), and each other agreement, document and instrument executed in
connection therewith, along with any amendment, replacement or renewal evidence thereof (collectively, the “Other Loan
Documents”), are hereby incorporated into this Letter Agreement and shall apply mutatis mutandis to Borrower.
As incorporated and made applicable herein, such conditions, representations, warranties, covenants and other provisions of the
Other Loan Documents shall survive any termination or cancellation of indebtedness evidenced thereby and so shall continue to apply
to Borrower as set forth therein in spite of any such termination or cancellation, until such time as the Export Revolving Loan
has been irrevocably paid in full. Any failure by Borrower to satisfy or comply with (or cause any other person or entity to satisfy
or comply with) such conditions, representations, warranties, or other provisions of the Other Loan Documents shall constitute
a default hereunder and under the Documents.

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		(g)	Borrower shall pay to Lender (i) a facility fee in an amount equal to 1.75% (the “Annual
Facility Fee”) of the Maximum Amount in connection with the Export Revolving Loan; provided that the Annual Facility
Fee due as of the date of this Letter shall be for the 18 month period commencing January 1, 2017 and ending June 30, 2019, and
(ii) all of Lender’s costs and expenses incurred in connection with the negotiation, preparation and closing of the Export
Revolving Loan and in administering and/or enforcing any of Lender’s rights and remedies with respect to the loans, including
without limitation Lender’s attorneys’ fees and expenses. In addition, Borrower shall pay to Bank an unused commitment
fee (the “Unused Fee”) in an amount equal to the product of (i) 0.25% multiplied by (ii) the difference between
(1) the Maximum Amount and (2) the average aggregate outstanding principal balance of all advances under the Export Revolving Loans
during the applicable quarter plus the average aggregate outstanding face amount of all L/C’s during the applicable
quarter. Such Unused Fee shall not be refundable under any circumstance and shall be computed and shall be payable quarterly in
arrears within 5 days of the last day of each such quarter and on the Maturity Date (as defined in the Note) for the periods ending
on such date.

 

		(h)	Borrower acknowledges and agrees that it is bound by the terms of the Loan Authorization Notice.

 

		(i)	Notwithstanding anything to the contrary in the Borrower Agreement, the Borrower Agreement and
the Loan Authorization Notice shall be amended as provided in the Ex-Im Waiver Letter (defined below) to be delivered by Ex-Im
Bank in connection herewith.

 

		(j)	The Export Revolving Loan shall be cross-defaulted and cross-collateralized with any and all other
agreements, loans or indebtedness from Lender to Borrower and the loan documentation related thereto, including but not limited
to the Loan and Security Agreement.

 

		(k)	Notwithstanding anything to the contrary in the Borrower Agreement, including, but not limited
to Section 1.01:

 

(i)       The
Advance Rate shall be no greater than (a) 90% with respect to Eligible Export-Related Accounts Receivable; and (b) 70% with respect
to Eligible Export-Related Inventory; provided that the preceding shall be in all respects subject to the waiver letter from Ex-Im
Bank dated November 28, 2017 (“Ex-Im Waiver Letter”), pertaining to Eligible Export-Related Accounts Receivable
payable in Euros or Pounds (collectively, “Approved Foreign Currency”); provided that notwithstanding anything
to the contrary in the Ex-Im Waiver Letter, the advance rate for Eligible Export-Related Accounts Receivable payable in Approved
Foreign Currency that are hedged against foreign currency exchange risks shall not exceed 90%, and the advance rate for Eligible
Export-Related Accounts Receivable payable in Approved Foreign Currency that are not hedged against foreign currency exchange risks
shall not exceed seventy percent (70%).

 

(ii)       Eligible
Export-Related Accounts Receivable shall not include any Account Receivable (a) that is not paid within 60 days of its original
invoice due date; (b) with credit balances over 180 days past the date of the invoice; (c) which are foreign government accounts,
unless backed by an assignment of claims reasonably satisfactory to Lender; (d) which are contra accounts or inter-company accounts;
(e) of a Buyer for whom 50% or more of the Accounts Receivable of such Buyer are due and payable more than 150 days from the date
of the invoice (the “Cross Aging Limitation”); or (f) when combined with all other Accounts Receivable owing
by any one Buyer, including its subsidiaries and affiliates, represents more than 50% of all Accounts Receivable.

 

(iii)       Eligible
Export-Related Inventory may include Inventory where Buyers have made deposits for such Inventory to Borrower prior to shipment
so long as such deposits are not subject to any offsets, deductions, defenses, disputes, or
counterclaims and are not otherwise backed by a letter of credit.

 

(iv)       There
shall be deducted from the Export-Related Borrowing Base an amount equal to (x) twenty five percent (25%) of the undrawn amount
of outstanding Commercial Letters of Credit and Standby Letters of Credit and (y) one hundred
percent (100%) of the undrawn amount of outstanding Warranty Letters of Credit less
the amount of cash collateral held by Bank to secure Warranty Letters of Credit.

 

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		(l)	Notwithstanding anything to the contrary in the Master Guarantee Agreement, the portion of the
Credit Accommodations to Borrower supporting Warranty Letters of Credit shall not exceed any limitation applicable thereto set
forth in the Ex-Im Waiver Letter.

 

		(m)	Capitalized terms used herein and not defined to the contrary have the meanings given them in the
Borrower Agreement.

 

 

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Please review this
letter agreement and the Documents. You may accept the terms of this Letter Agreement by returning executed originals of this letter
and the Documents to me.

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EXHIBIT “A”

 

CLOSING CHECKLIST

 

[See Document No. 30,236,900]

 

Exhibit A-1

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