Document:

Promissory Note by Optical Cable Corporation

 Exhibit 4.11 
  

									
	 LOAN NUMBER
	 	LOAN NAME	 	ACCT. NUMBER	 	NOTE DATE	 	INITIALS
	 156779
	 	 Optical Cable
 Corporation
	 	19398	 	09/22/06	 	MNM
					
	 NOTE AMOUNT
	 	INDEX (w/Margin)	 	RATE	 	MATURITY DATE	 	LOAN PURPOSE
	 $6,500,000.00
	 	 First Phase - Not
 Applicable
 Second Phase - Not
 Applicable
	 	 First Phase - 7.5%
 Second Phase - 7.5%
	 	10/01/11	 	Commercial
	
	 Creditor Use Only

 PROMISSORY NOTE 
 (Commercial - Draw) 
 DATE AND PARTIES. The date of this Promissory Note (Note) is September 22, 2006. The
parties and their addresses are: 
 LENDER: 
 VALLEY BANK 
 36 W. Church Ave. S.W. 
 Roanoke, Virginia 24011 
 Telephone: (540) 342-2265 
 BORROWER: 
 OPTICAL CABLE CORPORATION 
 a Virginia Corporation 
 5290 Concourse Drive 
 Roanoke, Virginia 24019 
 1. DEFINITIONS. As used in this Note, the terms have the following meanings: 
 A. Pronouns. The pronouns “I,” “me,” and “my” refer to each Borrower signing this Note, individually and together. “You” and “Your” refer to the Lender.

 B. Note. Note refers to this document, and any extensions, renewals, modifications and substitutions of this Note. 
 C. Loan. Loan refers to this transaction generally, including obligations and duties arising from the terms of all documents prepared or submitted
for this transaction such as applications, security agreements, disclosures or notes, and this Note. 
 D. Loan Documents. Loan
Documents refer to all the documents executed as a part of or in connection with the Loan. 
 E. Property. Property is any property,
real, personal or intangible, that secures my performance of the obligations of this Loan. 
 F. Percent. Rates and rate change
limitations are expressed as annualized percentages. 
 2. PROMISE TO PAY. For value received, I promise to pay you or your order, at your address, or
at such other location as you may designate, amounts advanced from time to time under the terms of this Note up to the maximum total principal balance of $6,500,000.00 (Principal), plus interest from the date of disbursement, on the unpaid
outstanding Principal balance until this Note is paid in full and Lender has no further obligations to make advances to you under this Loan. 
 All advances
made will be made subject to all other terms and conditions of this Loan. 
 3. INTEREST. Interest will accrue on the unpaid Principal balance of this
Note during the first phase of the Loan at the rate of 7.5 percent (Interest Rate) until October 1, 2007. After which time, interest will accrue on the unpaid Principal balance during the second phase of the Loan at a rate of 7.5
percent. 
 A. Interest After Default. If a default occurs under the terms of this Loan, including for failure to pay in full at
maturity, you may increase the Interest Rate payable on the outstanding Principal balance of this Note. In such event, interest will accrue on the outstanding Principal balance at the Interest Rate in effect from time to time under the terms of this
Loan, until paid in full. 
 B. Maximum Interest Amount. Any amount assessed or collected as interest under the terms of this Note will
be limited to the maximum lawful amount of interest allowed by state or federal law, whichever is greater. Amounts collected in excess of the maximum lawful amount will be applied first to the unpaid Principal balance. Any remainder will be refunded
to me. 
 C. Statutory Authority. The amount assessed or collected on this Note is authorized by the Virginia usury laws under Va. Code
§§ 6.1-330.49 et. seq. 
 D. Accrual. Interest accrues using an Actual/360 days counting method. 
 4. ADDITIONAL CHARGES. As additional consideration, I agree to pay, or have paid, these additional fees and charges. 

 A. Nonrefundable Fees and Charges. The following fees are earned when collected and will not be
refunded if I prepay this Note before the scheduled maturity date. 
 Loan Origination. A(n) Loan Origination fee of $32,500.00 payable
from separate funds on or before today’s date. 
 Flood Certification. A(n) Flood Certification fee of $25.00 payable from
separate funds on or before today’s date. 
 5. REMEDIAL CHARGES. In addition to interest or other finance charges, I agree that I will pay these
additional fees based on my method and pattern of payment. Additional remedial charges may be described elsewhere in this Note. 
 A. Late
Charge. If a payment is more than 7 days late, I will be charged 5.000 percent of the Unpaid Portion of Payment. I will pay this late charge promptly but only once for each late payment. 
 B. Returned Check Charge. I agree to pay a fee not to exceed $29.00 for each check, negotiable order of withdrawal or draft I issue in connection
with this Loan that is returned because it has been dishonored. 
 C. Trustee Fee. A(n) Trustee Fee equal to 5.000 percent of the
Balance of the Loan. 
 6. GOVERNING AGREEMENT. This Note is further governed by the Commercial Loan Agreement executed between you and me as a part
of this Loan, as modified, amended or supplemented. The Commercial Loan Agreement states the terms and conditions of this Note, including the terms and conditions under which the maturity of this Note may be accelerated. When I sign this Note, I
represent to you that I have reviewed and am in compliance with the terms contained in the Commercial Loan Agreement. 
 7. PAYMENT. I agree to pay
this Note in 60 installment payments. During the first phase of the Loan I will make 12 payments of accrued interest beginning November 1, 2006, and then on the 1st day of each month thereafter, until October 1, 2007.

 Then, I agree to make 48 installment payments during the second phase of the Loan. The second phase of this Note is amortized over 300
payments. I will make 47 payments of $48,501.60 beginning on November 1, 2007, and on the 1st day of each month thereafter. A single “balloon payment” of the entire unpaid balance of Principal and interest will be
due October 1, 2011. 
 Payments will be rounded to the nearest $.01. With the final payment I also agree to pay any additional fees or charges owing
and the amount of any advances you have made to others on my behalf. Payments scheduled to be paid on the 29th, 30th or 31st day of a month that contains no such day will, instead, be made on the last day of such month. 
 Each payment I make on this Note will be applied first to interest that is due then to principal that is due, and finally to any charges that I owe other than principal
and interest. If you and I agree to a different application of payments, we will describe our agreement on this Note. You may change how payments are applied in your sole discretion without notice to me. The actual amount of my final payment will
depend on my payment record. 
 8. PREPAYMENT. I may prepay this Loan in full or in part at any time. Any partial prepayment will not excuse any later
scheduled payments until I pay in full. 
 9. LOAN PURPOSE. The purpose of this Loan is to fund future acquisitions and investments. 
 10. ADDITIONAL TERMS. This note is cross collateralized and cross defaulted with note numbers 156809 & 156833. 
 11. SECURITY. This Loan is secured by separate security instruments prepared together with this Note as follows: 
  

			
	 Document Name
	 	 Parties to Document

	 Leases And Rents Assignment - 5290
 Concourse
Drive
	 	Optical Cable Corporation
	Security Agreement - Optical Cable Corporation	 	Optical Cable Corporation
	Deed Of Trust - 5290 Concourse Drive	 	Optical Cable Corporation

 12. DUE ON SALE OR ENCUMBRANCE. You may, at your option, declare the entire balance of this Note to be
immediately due and payable upon the creation of, or contract for the creation of, any lien or encumbrance of all or any part of the Property. You agree that I may transfer or sell any part of my Property in the ordinary course of my business. This
right is subject to the restrictions imposed by federal law (12 C.F.R. 591), as applicable. 
 13. WAIVERS AND CONSENT. To the extent not prohibited
by law, I waive protest, presentment for payment, demand, notice of acceleration, notice of intent to accelerate and notice of dishonor. 
 A. Additional Waivers By Borrower. In addition, I, and any party to this Note and Loan, to the extent permitted by law, consent to certain actions you may take, and generally waive defenses that may be available based on these
actions or based on the status of a party to this Note. 
 (1) You may renew or extend payments on this Note, regardless of the number
of such renewals or extensions. 
 (2) You may release any Borrower, endorser, guarantor, surety, accommodation maker or any other
co-signer. 
 (3) You may release, substitute or impair any Property securing this Note. 
 (4) You, or any institution participating in this Note, may invoke your right of set-off. 
 (5) You may enter into any sales, repurchases or participations of this Note to any person in any amounts and I waive notice of such sales,
repurchases or participations. 
 (6) I agree that any of us signing this Note as a Borrower is authorized to modify the terms of this
Note or any instrument securing, guarantying or relating to this Note. 

 B. No Waiver By Lender. Your course of dealing, or your forbearance from, or delay in, the
exercise of any of your rights, remedies, privileges or right to insist upon my strict performance of any provisions contained in this Note, or any other Loan Document, shall not be construed as a waiver by you, unless any such waiver is in writing
and is signed by you. 
 14. COMMISSIONS. I understand and agree that you (or your affiliate) will earn commissions or fees on any insurance products,
and may earn such fees on other services that I buy through you or your affiliate. 
 15. APPLICABLE LAW. This Note is governed by the laws of
Virginia, the United States of America, and to the extent required, by the laws of the jurisdiction where the Property is located, except to the extent such state laws are preempted by federal law. 
 16. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. My obligation to pay the Loan is independent of the obligation of any other person who has also agreed to pay
it. You may sue me alone, or anyone else who is obligated on the Loan, or any number of us together, to collect the Loan. Extending the Loan or new obligations under the Loan, will not affect my duty under the Loan and I will still be obligated to
pay the Loan. This Note shall inure to the benefit of and be enforceable by you and your successors and assigns and shall be binding upon and enforceable against me and my personal representatives, successors, heirs and assigns. 
 17. AMENDMENT, INTEGRATION AND SEVERABILITY. This Note may not be amended or modified by oral agreement. No amendment or modification of this Note is effective
unless made in writing and executed by you and me. This Note and the other Loan Documents are the complete and final expression of the agreement. If any provision of this Note is unenforceable, then the unenforceable provision will be severed and
the remaining provisions will still be enforceable. 
 18. INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the
singular. The section headings are for convenience only and are not to be used to interpret or define the terms of this Note. 
 19. NOTICE, FINANCIAL
REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any notice will be given by delivering it or mailing it by first class mail to the appropriate party’s address listed in the DATE AND PARTIES section, or to any other
address designated in writing. Notice to one Borrower will be deemed to be notice to all Borrowers. I will inform you in writing of any change in my name, address or other application information. I agree to sign, deliver, and file any additional
documents or certifications that you may consider necessary to perfect, continue, and preserve my obligations under this Loan and to confirm your lien status on any Property. Time is of the essence. 
 20. CREDIT INFORMATION. I agree to supply you with whatever information you reasonably request. You will make requests for this information without undue
frequency, and will give me reasonable time in which to supply the information. 
 21. ERRORS AND OMISSIONS. I agree, if requested by you, to fully
cooperate in the correction, if necessary, in the reasonable discretion of you of any and all loan closing documents so that all documents accurately describe the loan between you and me. I agree to assume all costs including by way of illustration
and not limitation, actual expenses, legal fees and marketing losses for failing to reasonably comply with your requests within thirty (30) days. 
 22. SIGNATURES. By signing under seal, I agree to the terms contained in this Note. I also acknowledge receipt of a copy of this Note. 
 BORROWER: 
 Optical Cable Corporation 
  

							
		 	By	 	 /s/ Tracy G. Smith
	 	(Seal)
		 	Tracy G. Smith , Vice President and CFO

 ACKNOWLEDGMENT (REQUIRED FOR CONFESSION OF JUDGMENT): 
 (Business or Entity) 
 COMMONWEALTH OF
                    , COUNTY (OR CITY) OF
                     ss. 
 This instrument was
acknowledged before me this      day of                     ,
                     by Tracy Smith - Vice President/CFO of Optical Cable Corporation a Virginia corporation, on behalf of the corporation.

 My commission expires: 
  

			
	 /s/ Cynthia Marie Tourville

	(Notary Public)Promissory Note by Optical Cable Corporation

 Exhibit 4.12 
  

									
	 LOAN NUMBER
	 	LOAN NAME	 	ACCT. NUMBER	 	AGREEMENT DATE	 	INITIALS
					
	 165779
	 	Optical Cable Corporation	 	19398	 	09/22/06	 	MNM
	 NOTE AMOUNT
	 	INDEX (w/Margin)	 	RATE	 	MATURITY DATE	 	LOAN PURPOSE
					
	 $6,500,000.00
	 	First Phase – Not Applicable	 	 First Phase - 7.5%
 Second Phase - 7.5%
	 	10/01/11	 	Commercial
					
		 	 Second Phase – Not Applicable
	 		 		 	
	
	 Creditor Use Only

 COMMERCIAL LOAN AGREEMENT 
 Draw Loan 
 DATE AND PARTIES. The date of this Commercial Loan Agreement (Agreement) is
September 22, 2006. The parties and their addresses are as follows: 
 LENDER: 
 VALLEY BANK 
 36 W. Church Ave. S.W. 
 Roanoke, Virginia 24011 
 BORROWER: 
 OPTICAL
CABLE CORPORATION 
 a Virginia Corporation 
 5290 Concourse Drive 
 Roanoke, Virginia 24019 
 1. DEFINITIONS. For the purposes of this Agreement, the following terms have the following meanings.

 A. Accounting Terms. In this Agreement, any accounting terms that are not specifically defined will have their customary meanings
under generally accepted accounting principles. 
 B. Insiders. Insiders include those defined as insiders by the United States
Bankruptcy Code, as amended; or to the extent left undefined, include without limitation any officer, director, partner, or any immediate family member of any of the foregoing, or any person or entity which, directly or indirectly, controls, is
controlled by or is under common control with it. 
 C. Loan. The Loan refers to this transaction generally, including obligations and
duties arising from the terms of all documents prepared or submitted for this transaction. 
 D. Loan Documents. Loan Documents refer
to all the documents executed as a part of or in connection with the Loan. 
 E. Pronouns. The pronouns “the Company” or
“Optical Cable Corporation” refer to the Borrower signing this Agreement. “You” and “your” refers to the Loan’s lender. 
 F. Property. Property is any property, real, personal or intangible, that secures the Company’s performance of the obligations of this Loan. 
 2. ADVANCES. Advances under this Agreement are made according to the following terms and conditions. 
 A. Multiple Advances. In accordance with the terms of this Agreement and other Loan Documents, you will provide me with a draw note and the maximum total principal balance will not exceed $6,500,000.00 (Principal). 
 B. Requests for Advances. The Company’s requests are a representation that the Company is in compliance with all the Loan Documents. When
required by you for a particular method of advance, the Company’s requests for an advance must specify the requested amount and the date and be accompanied with any agreements, documents, and instruments that you require for the Loan. Any
payment by you of any check, share draft or other charge may, at your option, constitute an advance on the Loan to the Company. All advances will be made in United States dollars. The Company will indemnify you and hold you harmless for your
reliance on any request for advances that you reasonably believe to be genuine. The only persons authorized to request advances are set forth in Schedule A to this Loan Agreement. The Company may revise Schedule A from time to time. Such revisions
will be signed by the Chief Executive Officer and the Chief Financial Officer of the Company. Requests for advances may be made by authorized persons in the form of fax, email or electronic sweep. 
 C. Advance Limitations. In addition to any other Loan conditions, requests for, and access to, advances are subject to the following limitations.

 (1) Obligatory Advances. You will make all Loan advances subject to this Agreement’s terms and conditions. 
 (2) Advance Amount. Subject to the terms and conditions contained in this Agreement, advances will be made in exactly the amounts requested by the
Company. 

 (3) Cut-Off Time. Requests for an advance received before 02:00 PM will be made on any day that
you are open for business, on the day for which the advance is requested. 
 (4) Disbursement of Advances. On the Company’s
fulfillment of this Agreement’s terms and conditions, you will disburse the advance in any manner as you and the Company agree. 
 (5)
Credit Limit. The Company understands that you will not ordinarily grant a request for an advance that would cause the unpaid principal of my Loan to be greater than the Principal limit. You may, at your option, grant such a request without
obligating yourselves to do so in the future. The Company will pay any over-advances in addition to its regularly scheduled payments. The Company will repay any over-advance by repaying you the amount of the over-advance in full within 10 days after
the over-advance occurs. 
 (6) Records. Your records will be conclusive evidence as to the amount of advances, the Loan’s unpaid
principal balances and the accrued interest. 
 D. Conditions. The Company will satisfy all of the following conditions before you
either issue any promissory notes or make any advances under this Agreement. 
 (1) No Default. There has not been a default under this
Agreement or any other Loan Documents nor would a default result from making the Loan or any advance. 
 (2) Information. The Company
believes you have received all documents, information, certifications and warranties as you may require, all properly executed, if appropriate, on forms acceptable to you. This includes, but is not limited to, the documents and other items listed in
the Loan Checklist Report which is hereby incorporated by reference into this Agreement. 
 (3) Inspections. The Company believes you
have made all inspections that you consider necessary and are satisfied with this inspection. 
 (4) Conditions and Covenants. The
Company will have performed and complied with all conditions required for an advance and all covenants in this Agreement and any other Loan Documents. 
 (5) Warranties and Representations. The warranties and representations by the Company contained in this Agreement are true and correct at the time of making the requested advance. 
 (6) Financial Statements. The Company’s most recent financial statements and other financial reports, delivered to you, are current, complete,
true and accurate in all material respects and fairly represent the Company’s financial condition in all materials respects. 
 (7)
Bankruptcy Proceedings. No proceeding under the United States Bankruptcy Code has been commenced by or against me or any of my affiliates. 
 3.
MATURITY DATE. I agree to fully repay the Loan by October 1, 2011. 
 4. WARRANTIES AND REPRESENTATIONS. The Company makes to you the
following warranties and representations which will continue as long as this Loan is in effect, except when this Agreement provides otherwise. 
 A. Power. The Company is duly organized, and validly existing and in good standing in all jurisdictions in which it operates. The Company has the power and authority to enter into this transaction and to carry on its business or
activity as it is now being conducted and, as applicable, is qualified to do so in each jurisdiction in which I operate. 
 B. Authority.
The execution, delivery and performance of this Loan and the obligation evidenced by the Note are within the Company’s powers, have been duly authorized, have received all necessary governmental approval, will not violate any provision of
law, or order of court or governmental agency, and will not violate any agreement to which the Company is a party or to which the Company is or any of its property is subject. 
 C. Name and Place of Business. Other than previously disclosed in writing to you I have not changed my name or principal place of business within
the last 10 years and have not used any other trade or fictitious name. Without your prior written consent, I do not and will not use any other name and will preserve my existing name, trade names and franchises. 
 D. Hazardous Substances. Except as I previously disclosed in writing and you acknowledge in writing, no Hazardous Substance, underground tanks,
private dumps or open wells are currently located at, on, in, under or about the Property. 
 E. Use of Property. After diligent
inquiry, I do not know or have reason to know that any Hazardous Substance has been discharged, leached or disposed of, in violation of any Environmental Law, from the property onto, over or into any other property, or from any other property onto,
over or into the property. 
 F. Environmental Laws. I have no knowledge or reason to believe that there is any pending or threatened
investigation, claim, judgment or order, violation, lien, or other notice under any Environmental Law that concerns me or the property. The property and any activities on the property are in full compliance with all Environmental Law. 
 G. Loan Purpose. The purpose of this Loan is to fund future acquistions and investments. 
 H. No Other Liens. I own or lease all property that I need to conduct my business and activities. I have good and marketable title to all property
that I own or lease. All of my Property is free and clear of all liens, security interests, encumbrances and other adverse claims and interests, except those disclosed to you or those you consent to in writing. 
 I. Compliance With Laws. I am not materially violating any laws, regulations, rules, orders, judgments or decrees applicable to me or my property,
except for those which I am challenging in good faith through proper proceedings after providing appropriate reserves in accordance with generally accepted accounting principles to fully pay the claim and its challenge should I lose. 
 J. Legal Dispute. There are no pending or threatened lawsuits, arbitrations or other proceedings against the Company or the Company’s property
that singly or together may materially and adversely affect the Company’s property, operations, financial condition, or business, other than any potential litigation which has been disclosed to you in writing. 

 K. Adverse Agreements. I am not a party to, nor am I bound by, any agreement that is now or is
likely to become materially adverse to my business, Property or operations. 
 L. Other Claims. There are no outstanding claims or
rights that would conflict with the execution, delivery or performance by me of the terms and conditions of this Agreement or the other Loan Documents. No outstanding claims or rights exist that may result in a lien on the Property, the
Property’s proceeds and the proceeds of proceeds, except liens that were disclosed to and agreed to by you in writing. 
 M. Solvency.
I am able to pay my debts as they mature, my assets exceed my liabilities and I have sufficient capital for my current and planned business and other activities. I will not become insolvent by the execution or performance of this Loan.

 5. FINANCIAL STATEMENTS. I will prepare and maintain my financial records using consistently applied generally accepted accounting principles then
in effect. I will provide you with financial information in a form that you accept and under the following terms. 
 A. Certification.
I represent and warrant that any financial statements that I provide you fairly represents my financial condition for the stated periods, is current, complete, true and accurate in all material respects, includes all of my direct or contingent
liabilities (to the extent required by generally accepted accounting principles) and there has been no material adverse change in my financial condition, operations or business since the date the financial information was prepared. 
 B. Frequency. Each year, the Company will provide to you its audited annual financial statements and any written reports prepared by the
Company’s independent accountants prepared in connection with the audit as soon as available or at least within 90 days after the close of the Company’s fiscal year. 
 (1) Interim Financial Reports. Each quarter, the Company will provide to you unaudited financial statements and any written reports prepared by the
Company’s independent accountants, as soon as available or at least within 45 days after the close of this business period. Any interim financial statements that I provide you will be audited statements. 
 D. SEC Reports. I will provide you with true and correct copies of all reports, notices or statements that I provide to the Securities and Exchange
Commission, any securities exchange or my stockholders, owners, or the holders of any material indebtedness as soon as available or at least within 10 days after issuance, to the extent not available on the SEC website. 
 E. Requested Information. I will provide you with any other information about my operations, financial affairs and condition within 15 days after
your reasonable request. 
 F. Additional Financial Statements Term. The quarterly, company prepared, Accounts Receivable Agings and
the annual, company prepared, Accounts Payable Agings will be required of Optical Cable Corporation. Optical Cable Corporation will also provide you with budgets and forecasts approved by the Board of Directors, tax returns (both Federal and state)
upon your request. 
 6. COVENANTS. Until the Loan and all related debts, liabilities and obligations are paid and discharged, I will comply with the
following terms, unless you waive compliance in writing. 
 A. Participation. I consent to you participating or syndicating the Loan
and sharing any information that you decide is necessary about me and the Loan with the other participants or syndicators. 
 B.
Inspection. Following your written request, I will immediately pay for all one-time and recurring out-of-pocket costs that are related to the inspection of my records, business or Property that secures the Loan. Upon reasonable notice, I will
permit you or your agents to enter any of my premises and any location where my Property is located during regular business hours to do the following. 
 (1) You may inspect, audit, check, review and obtain copies from my books, records, journals, orders, receipts, and any correspondence and other business related data. 
 (2) Upon the Company’s default of this Agreement or any other Loan Documents, you may discuss my affairs, finances and business with any one
who provides you with evidence that they are a creditor of mine, the sufficiency of which will be subject to your sole discretion. 
 (3)
You may inspect my Property, audit for the use and disposition of the Property’s proceeds and proceeds of proceeds; or do whatever you decide is necessary to preserve and protect the Property and your interest in the Property. 

After prior notice to me, you may discuss my financial condition and business operations with my independent accountants, if any, or my chief financial
officer and a representative of the Company may be present during these discussions. As long as the Loan is outstanding, I will direct all of my accountants and auditors to permit you to examine my records in their possession and to make copies of
these records. You will use your best efforts to maintain the confidentiality of the information you or your agents obtain, except you may provide your regulator and your independent accountants, if any, with required information about my financial
condition, operation and business or that of any parent, subsidiaries or affiliates of the Company. Provided the Company is not in default, you agree that your inspection of the Company’s records, business or Property shall be limited to once
per calendar year. 
 C. Business Requirements. I will preserve and maintain my present existence and good standing in the jurisdiction
where I am organized and all of my rights, privileges and franchises. I will do all that is needed or required to continue my business or activities as presently conducted, by obtaining licenses, permits and bonds everywhere I engage in business or
activities or own, lease or locate my property. I will obtain your prior written consent before I cease my business or before I engage in any new line of business that is materially different from my present business or new businesses presently
contemplated. 
 D. Compliance with Laws. I will not materially violate any laws, regulations, rules, orders, judgments or decrees
applicable to me or my Property, except for those which I challenge in good faith through proper proceedings after providing appropriate reserves to fully pay the claim and its appeal should I lose. Laws include without limitation the Federal Fair
Labor Standards Act requirements for producing goods, the federal Employee Retirement Income Security Act of 1974’s requirements for the establishment, funding and management of qualified deferred compensation plans for employees, health and
safety laws, environmental laws, tax laws, licensing and permit laws. On your request, I will provide you with written evidence that I have fully 

 and timely paid my taxes, assessments and other governmental charges levied or imposed on me, my income
or profits and my property. Taxes include without limitation sales taxes, use taxes, personal property taxes, documentary stamp taxes, recordation taxes, franchise taxes, income taxes, withholding taxes, FICA taxes and unemployment taxes. I will
adequately provide for the payment of these taxes, assessments and other charges that have accrued but are not yet due and payable. 
 E.
New Organizations. I will obtain your written consent and any necessary changes to the Loan Documents before I organize or participate in the organization of any entity, merge into or consolidate with any one, permit any one else to merge into
me, acquire all or substantially all of the assets of any one else or otherwise materially change my legal structure, management, ownership or financial condition. 
 F. Dealings with Insiders. I will not purchase, acquire or lease any property or services from, or sell, provide or lease any property or services to, or permit any outstanding loans or credit extensions to, or
otherwise deal with, any Insiders except as required under contracts existing at the time I applied for the Loan and approved by you or as this Agreement otherwise permits and except to the extent that such dealings with Insiders are on customary
business terms at least as favorable to the Company as would be a similar transaction with a non-Insider. I will not change or breach these contracts existing at Loan application so as to cause an acceleration of or an increase in any payments due.
This provision does not apply to any dealings with the Company identified to you in writing. 
 G. Other Debts. I will pay when due any
and all other debts owed or guaranteed by me and will faithfully perform, or comply with all the conditions and obligations imposed on me concerning the debt or guaranty. 
 H. Other Liabilities. I will not incur, assume or permit any debt evidenced by notes, bonds or similar obligations, except: debt in existence on the date of this Agreement and fully disclosed to you; debt
subordinated in payment to you on conditions and terms acceptable to you; accounts payable incurred in the ordinary course of my business and paid under customary trade terms or contested in good faith with approved reserves under generally accepted
accounting principles. 
 I. Notice to You. I will promptly notify you of any material change in my financial condition, of the
occurrence of a default under the terms of this Agreement or any other Loan Document, or a default by me under any agreement between me and any third party which materially and adversely affects my property, operations, financial condition or
business. 
 J. Certification of No Default. On your request, my chief financial officer or my independent accountant will provide you
with a written certification that to the best of their knowledge no event of default exists under the terms of this Agreement or the other Loan Documents, and that there exists no other action, condition or event which with the giving of notice or
lapse of time or both would constitute a default. As requested, my chief financial officer will also provide you with computations demonstrating compliance with any financial covenants and ratios contained in this Agreement. If an action, condition
or event of default does exist, the certificate must accurately and fully disclose the extent and nature of this action, condition or event and state what must be done to correct it. 
 K. Use of Loan Proceeds. I will not permit the loan proceeds to be used to purchase, carry, reduce, or retire any loan originally incurred to
purchase or carry any margin stock or otherwise cause the Loan to violate Federal Reserve Board Regulations U or X, or Section 8 of the Securities and Exchange Act of 1934 and its regulations, as amended. 
 L. Dispose of No Assets. Without your prior written consent or as the Loan Documents permit, I will not sell, lease, assign, transfer, dispose of
or otherwise distribute all or substantially all of my assets to any person other than in the ordinary course of business for the assets’ depreciated book value or more. 
 M. No Other Liens. I will not create, permit or suffer any lien or encumbrance upon any of my properties for or by anyone, other than you, except
for: nonconsensual liens imposed by law arising out of the ordinary course of business on obligations that are not overdue or which I am contesting in good faith after making appropriate reserves; valid purchase money security interests on personal
property; or any other liens specifically agreed to by you in writing. 
 N. Guaranties. I will not guaranty or become liable in any
way as surety, endorser (other than as endorser of negotiable instruments in the ordinary course of business) or accommodation endorser or otherwise for the debt or obligations of any other person or entity, except to you or as you otherwise
specifically agree in writing. 
 O. No Default under Other Agreements. I will not allow to occur, or to continue unremedied, any act,
event or condition which constitutes a material default , or which, with the passage of time or giving of notice, or both, would constitute a material default under any material agreement, document, instrument or undertaking to which I am a party or
by which I may be bound. 
 P. Legal Disputes. I will promptly notify you in writing of any threatened or pending lawsuit, arbitration
or other proceeding against me or any of my property, not identified in my financial statements, or that singly or together with other proceedings may materially and adversely affect my property, operations, financial condition or business. I will
use my best efforts to bring about a favorable and speedy result of any of these lawsuits, arbitrations or other proceedings. 
 Q. Other
Notices. I will immediately provide you with any information that may materially and adversely affect my ability to perform this Agreement and of its anticipated effect. 
 R. No Change in Capital. I will not release, redeem, retire, purchase or otherwise acquire, directly or indirectly, any of my capital stock or
other equity security or partnership interest, or make any change in my capital structure, except to the extent required by any agreements signed prior to this Agreement and disclosed to you or with your prior written consent. 
 S. Loan Obligations. I will make full and timely payment of all principal and interest obligations, and comply with the other terms and agreements
contained in this Agreement and in the other Loan Documents. 
 T. Insurance. I will obtain and maintain insurance with insurers, in
amounts and coverages that are acceptable to you and customary with industry practice. This may include without limitation insurance policies for public liability, fire, hazard and extended risk, workers compensation, and, at your request, business
interruption and/or rent loss insurance. At your request, I will deliver to you certified copies of all of these insurance policies, binders or certificates. I will obtain and maintain a mortgagee or lender loss payee endorsement for you when these
endorsements are available. I will immediately notify you of cancellation or 

 termination of insurance. I will require all insurance policies to provide you with at least 10 days
prior written notice to you of cancellation or modification. I consent to you using or disclosing information relative to any contract of insurance required by the Loan for the purpose of replacing this insurance. I also authorize my insurer and you
to exchange all relevant information related to any contract of insurance required by any document executed as part of this Loan. 
 U.
Property Maintenance. I will keep all tangible and intangible property that I consider necessary or useful in my business in good working condition by making all needed repairs, replacements and improvements and by making all rental, lease or
other payments due on this property. 
 V. Property Loss. I will immediately notify you, and the insurance company when appropriate, of
any material casualty, loss or depreciation to the Property or to my other property that affects my business. 
 W. Accounts Receivable
Collection. I will collect and otherwise enforce all of my unpaid Accounts Receivable at my cost and expense, until you end my authority to do so, which you may do at any time to protect your best interests. Notwithstanding the foregoing, you
agree that you will not end its authority to collect the Company’s unpaid Accounts Receivables until the Company is in default of this Agreement or any other loan Documents. I will not sell, assign or otherwise dispose of any Accounts
Receivable without your written consent. 
 X. Reserves. You may set aside and reserve Loan proceeds for Loan interest, fees and
expenses, taxes, and insurance. I grant you a security interest in the reserves. No interest will accrue on any reserve Loan proceeds. Disbursement of reserves is disbursement of the Loan’s proceeds. At my request, you will disburse the
reserves for the purpose they were set aside for, as long as I am not in default under this Agreement. You may directly pay these reserved items, reimburse me for payments I made, or reduce the reserves and increase the Loan proceeds available for
disbursement. 
 Y. Additional Taxes. I will pay all filing and recording costs and fees, including any recordation, documentary or
transfer taxes or stamps, that are required to be paid with respect to this Loan and any Loan Documents. 
 7. DEFAULT. I will be in default if any of
the following occur: 
 A. Payments. I fail to make a payment in full within 5 days of when due. 
 B. Insolvency or Bankruptcy. The death, dissolution or insolvency of, appointment of a receiver by or on behalf of, application of any debtor
relief law, the assignment for the benefit of creditors by or on behalf of, the voluntary or involuntary termination of existence by, or the commencement of any proceeding under any present or future federal or state insolvency, bankruptcy,
reorganization, composition or debtor relief law by or against me or any co-signer, endorser, surety or guarantor of this Agreement or any other obligations I have with you. 
 C. Business Termination. I merge, dissolve, reorganize, end my business or existence, or a partner or majority owner dies or is declared legally
incompetent. 
 D. Failure to Perform. I fail to perform any condition or to keep any promise or covenant of this Agreement.

 E. Other Documents. A default occurs under the terms of any other Loan Document. 
 F. Other Agreements. I am in default on any other debt or agreement I have with you. 
 G. Misrepresentation. I make any verbal or written statement or provide any financial information that is untrue, inaccurate, or conceals a
material fact at the time it is made or provided. 
 H. Judgment. I fail to satisfy or appeal any judgment against me. 
 I. Forfeiture. The Property is used in a manner or for a purpose that threatens confiscation by a legal authority. 
 J. Name Change. I change my name or assume an additional name without notifying you before making such a change. 
 K. Property Transfer. I transfer all or a substantial part of my money or property. 
 L. Property Value. You determine in good faith that the value of the Property has declined or is impaired. 
 M. Material Change. Without first notifying you, there is a material change in my business, including ownership, management, and financial
conditions. 
 N. Insecurity. You determine in good faith that a material adverse change has occurred in my financial condition from
the conditions set forth in my most recent financial statement before the date of this Agreement or that the prospect for payment or performance of the Loan is impaired for any reason. 
 8. REMEDIES. After I default, and after you give any legally required notice and opportunity to cure the default, you may at your option do any one or more of the following. 
 A. Acceleration. You may make all or any part of the amount owing by the terms of the Loan immediately due. If I am a debtor in a bankruptcy
petition or in an application filed under section 5(a)(3) of the Securities Investor Protection Act, the Loan is automatically accelerated and immediately due and payable without notice or demand upon filing of the petition or application.

 B. Sources. You may use any and all remedies you have under state or federal law or in any Loan Document. 
 C. Insurance Benefits. You may make a claim for any and all insurance benefits or refunds that may be available on my default. 
 D. Payments Made On My Behalf. Amounts advanced on my behalf will be immediately due and may be added to the balance owing under the terms of the
Loan, and accrue interest at the highest post-maturity interest rate. 
 E. Termination. You may terminate my right to obtain advances
and may refuse to make any further extensions of credit. 
 F. Set-Off. You may use the right of set-off. This means you may set-off any amount due
and payable under the terms of the Loan against any right I have to receive money from you. My right to receive money from you includes any deposit or share account balance I have with you; any money owed to me on an item presented to you or in your
possession for collection or exchange; and any repurchase agreement or other non-deposit obligation. “Any amount due and payable under the terms of the Loan” means the total amount to which you are entitled to demand payment under the
terms of the Loan at the time you set-off. 

 Subject to any other written contract, if my right to receive money from you is also owned by someone who
has not agreed to pay the Loan, your right of set-off will apply to my interest in the obligation and to any other amounts I could withdraw on my sole request or endorsement. Your right of set-off does not apply to an account or other obligation
where my rights arise only in a representative capacity. It also does not apply to any Individual Retirement Account or other tax-deferred retirement account. You will not be liable for the dishonor of any check when the dishonor occurs because you
set-off against any of my accounts. I agree to hold you harmless from any such claims arising as a result of your exercise of your right of set-off. 
 G. Waiver. Except as otherwise required by law, by choosing any one or more of these remedies you do not give up your right to use any other remedy. You do not waive a default if you choose not to use a remedy. By electing not to use
any remedy, you do not waive your right to later consider the event a default and to use any remedies if the default continues or occurs again. 
 9.
COLLECTION EXPENSES AND ATTORNEYS’ FEES. On or after Default, to the extent permitted by law, I agree to pay all expenses of collection, enforcement or protection of your rights and remedies under this Agreement or any other Loan Document.
Expenses include (unless prohibited by law) reasonable attorneys’ fees, court costs, and other legal expenses. These expenses are due and payable immediately. If not paid immediately, these expenses will bear interest from the date of payment
until paid in full at the highest interest rate in effect as provided for in the terms of this Loan. All fees and expenses will be secured by the Property I have granted to you, if any. In addition, to the extent permitted by the United States
Bankruptcy Code, I agree to pay the reasonable attorneys’ fees incurred by you to protect your rights and interests in connection with any bankruptcy proceedings initiated by or against me. 
 10. APPLICABLE LAW. This Agreement is governed by the laws of Virginia, the United States of America, and to the extent required, by the laws of the jurisdiction
where the Property is located 
 11. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. My obligation to pay the Loan is independent of the obligation of
any other person who has also agreed to pay it. You may sue me alone, or anyone else who is obligated on the Loan, or any number of us together, to collect the Loan. Extending the Loan or new obligations under the Loan, will not affect my duty under
the Loan and I will still be obligated to pay the Loan. You may assign all or part of your rights or duties under this Agreement or the Loan Documents without my consent. If you assign this Agreement, all of my covenants, agreements, representations
and warranties contained in this Agreement or the Loan Documents will benefit your successors and assigns. I may not assign this Agreement or any of my rights under it without your prior written consent. The duties of the Loan will bind my
successors and assigns. 
 12. AMENDMENT, INTEGRATION AND SEVERABILITY. This Agreement may not be amended or modified by oral agreement. No amendment
or modification of this Agreement is effective unless made in writing and executed by you and me. This Agreement and the other Loan Documents are the complete and final expression of the understanding between you and me. If any provision of this
Agreement is unenforceable, then the unenforceable provision will be severed and the remaining provisions will still be enforceable. 
 13.
INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the singular. The section headings are for convenience only and are not to be used to interpret or define the terms of this Agreement. 
 14. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any notice will be given by delivering it or mailing it by first class
mail to the appropriate party’s address listed in the DATE AND PARTIES section, or to any other address designated in writing. Notice to one Borrower will be deemed to be notice to all Borrowers. I will inform you in writing of any change in my
name, address or other application information. I will provide you any financial statement or information you request. All financial statements and information I give you will be correct and complete. I agree to sign, deliver, and file any
additional documents or certifications that you may consider necessary to perfect, continue, and preserve my obligations under this Loan and to confirm your lien status on any Property. Time is of the essence. 
 15. CROSS-DEFAULT. A default under this Agreement or any of the Loan Documents shall be deemed a default under (i) the Commercial Loan Agreement and loan
documents executed in connection therewith by the Company dated even date herewith in connection with the $2,000,000 loan made by you to the Company and (ii) the Commerical Loan Agreement and loan documents executed in connection therewith
dated even date herewith in connection with the $5,000,000 loan made by you to the Company. 
 16. SIGNATURES. By signing under seal, I agree to the
terms contained in this Agreement. I also acknowledge receipt of a copy of this Agreement. 
 BORROWER: 
 Optical Cable Corporation 
  

							
		 	By	 	 /s/ Tracy G. Smith
	 	(Seal)
		 	Tracy G. Smith , Vice President and CFO

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