Document:

Golden Queen Mining Co. Ltd. - Exhibit 10.5 - Filed by newsfilecorp.com

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
TO THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. 

NUMBER: CD4065133.003 

PRINCIPAL AMOUNT $1,732,398 

 

CONVERTIBLE DEBENTURE 

                          For
value received, Golden Queen Mining Co. Ltd. (the "Company")
hereby acknowledges itself indebted to Landon T. Clay of 188 Old Street Road,
Peterborough, New Hampshire, 03458 (the "Holder"), and promises to pay to
the Holder the amount of CAD$1,732,398 (the "Principal Amount"), on July
26, 2015 (the "Maturity Date") or such earlier date as the Principal
Amount may become due and payable (subject to and in accordance with the terms,
conditions and provisions of this Debenture (as defined herein), in lawful money
of Canada (or in lawful currency of the United States if agreed to by the Holder
and the Company on the payment date) at the head office of the Company, being
currently at 6411 Imperial Avenue, West Vancouver, British Columbia, V7W 2J5, or
at such other place or places within British Columbia, as may be designated by
the Company from time to time by notice in writing to the Holder, together with
all costs and expenses that may become payable to the Holder hereunder.

                          The
Company will pay interest annually (being each July 26 while this
Debenture remains outstanding) on the Principal Amount then outstanding at the
rate of 2% per annum from the date of issue, or from the last interest payment
date on which interest has been paid ("Interest Payment Date"), in
accordance with this Debenture money.

                          By
its acceptance of this Debenture hereof, the Holder acknowledges and agrees to
the terms and conditions hereof, including the terms and conditions set out in
Schedule "A" hereto, which are incorporated herein by reference and form a part
of this Debenture. 

                          IN
WITNESS WHEREOF, the Company has caused this Debenture to be executed as of July
25, 2014. 

GOLDEN QUEEN MINING CO. LTD.

 

	 	Per: 	“H. Lutz Klingmann” 
	 	  	Authorized Signatory
  

SCHEDULE "A" 

The following conditions are applicable to this Convertible
Debenture due July 26, 2015. 

ARTICLE 1 
INTERPRETATION 

1.1                    Definitions

                          In
this Debenture, unless there is something in the subject matter or context
inconsistent therewith, the expressions following shall have the following
meanings, namely: 

"this Debenture", "the Debenture",
"hereto", "herein", "hereby", "hereunder",
"hereof" and similar expressions refer to the convertible debenture
represented hereby and not to any particular Article, Section, subsection,
clause, subdivision or other portion hereof and include any and every instrument
supplemental or ancillary hereto and every debenture issued in replacement
hereof; 

"business day" means a day which is not a Saturday or
Sunday or a civic or statutory holiday in the city of Vancouver, British
Columbia; 

"Soledad Mountain Project" means the Company's Soledad
Mountain gold-silver project located in Kern County, California; 

"Close of Business" means 5:00 p.m. (Vancouver
Time) on a business day; 

"Company" means Golden Queen Mining Co. Ltd. and
includes any successor corporation thereto; 

"Company's Auditors" or "Auditors of the Company"
means an independent firm of chartered or certified managerial accountants duly
appointed as auditors of the Company; 

"Conversion Price" in respect of this Debenture, means
the effective price at which this Debenture may be converted into Shares, being
either (i) CAD$1.03 per Share at any time until the Maturity Date, or (ii) on
the Maturity Date, the lower of CAD$1.03 or the VWAP for the 5 trading days
immediately preceding the last business day prior to (and excluding) the
Maturity Date; 

"Counsel" means a barrister or solicitor or firm of
barristers or solicitors or other legal counsel retained or employed by the
Company; 

"director" means a director of the Company for the time
being and "directors" or "Board of Directors" means the board of
directors of the Company and reference to action by the directors means action
by the directors of the Company as a board; 

“Disinterested Shareholder Approval” means the approval
of shareholders of the Company by ordinary resolution passed at a properly
constituted meeting of such shareholders, excluding votes attached to shares
beneficially owned, or over which control and direction is exercised, by the
Holder, to the issuance to the Holder of Shares on conversion of this Debenture
in excess of the Insider Participation Limit; 

"Holder" means the Person from time to time registered
as the Holder of this Debenture; 

“Insider Participation Limit” means 9,831,338 Shares;

"Market Price" has the meaning given thereto in the
policies of the Toronto Stock Exchange; 

"Maturity Date" has the meaning given to it on the face
page hereof, provided that if such date is not a business day, then the Maturity
Date will be the immediately following business day; 

- 2 - 

"Person" means an individual, partnership, corporation
or other business or legal entity or any duly constituted government of or in
Canada and any minister, department, commission, board, bureau, agency,
authority, instrumentality or court and the like of any such government; 

"Principal Amount" has the meaning given to it on the
face page hereof; 

"Shares" means the common shares in the capital of the
Company, as such common shares exist at the close of business on the date of
execution and delivery of this Debenture and shall include any and all shares
resulting from any subdivision, redivision, reduction, combination or
consolidation, merger, amalgamation or reorganization and any common shares of
any company to which the Company may sell, lease or transfer or otherwise
dispose of all or substantially all of its property and assets; 

"Trading Day", when used with respect to the Shares,
shall mean a day on which the principal securities exchange on which the Shares
are listed or admitted to trading is open for the transaction of business or, if
the Shares are not listed or admitted to trading on any securities exchange, a
business day; 

“TSX” means the Toronto Stock Exchange;

“VWAP” means the volume weighted average price for the
Shares as reported by the TSX; and 

"written direction of the Company" means an instrument
in writing signed by and two directors or officers of the Company. 

1.2                    Interpretation

                          Words
importing the singular number only shall include the plural and vice versa and
words importing the masculine gender shall include the neuter or the feminine
gender and vice versa. 

1.3                   
Headings, Etc. 

                          The
division of this Debenture into Articles and Sections and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Debenture. 

1.4                   
Day Not a Business Day 

                          In
the event that any day on or before which any action is required to be taken
hereunder is not a business day, then such action shall be required to be taken
on or before the requisite time on the next succeeding day that is a business
day. 

1.5                   
Currency 

                         
All references to currency herein shall be to lawful money of Canada. 

1.6                   
Exhibits 

                          The
following are the Exhibits annexed to and incorporated in this Debenture and
which are deemed to be part hereof: 

	 	Exhibit "A" 	- 	Notice of Conversion 
	 	Exhibit "B" 	- 	Form of Transfer 

- 3 - 

ARTICLE 2 
CONVERSION OF DEBENTURES 

2.1                   
Conversion Privilege and Conversion Price 

	 	(a) 	
      Upon and subject to the provisions and conditions of this
      Article:

	 	 	 	 
	 		(i) 	
      the Holder shall have the right, at their option, at any
      time, and from time to time, on any business day prior to the Close of
      Business on the Maturity Date (or such later date as may be agreed upon by
      the Company and the Holder and approved by the TSX or such other stock
      exchange upon which the Shares may be listed from time to time) (the
      "Time of Expiry"), to convert; and

	 	 	 	 
	 		(ii) 	
      if not converted by the Holder on or prior to the
      business day immediately preceding the Maturity Date, the Issuer shall
      have the right to convert,

	 		
      in either case the full, but not less than the full,
      Principal Amount into Shares at the Conversion Price in effect on the Date
      of Conversion (as defined in subsection 2.2(b)).

	 	 	 
	 	(b) 	
      The Conversion Price shall be subject to adjustment as
      provided in Section 2.3.

	 	 	 
	 	(c) 	
      Such right of conversion shall extend only to the maximum
      number of whole Shares into which the aggregate principal amount of this
      Debenture surrendered for conversion at any one time by the Holder may be
      converted in accordance with the foregoing provisions of this Section,
      except that where the number of Shares to be issued on conversion of this
      Debenture by the Holder would exceed the Insider Participation Limit
      without Disinterested Shareholder Approval having been obtained by the
      Issuer prior to such conversion, then:

	 	(i) 	
      the Company shall issue the number of Shares equal to the
      Insider Participation Limit;

	 	 	 
	 	(ii) 	
      shall promptly call a meeting of its shareholders, to be
      held no later than 60 calendar days of the Date of Conversion for the
      purpose of obtaining the Disinterested Shareholder Approval;

	 	 	 
	 	(iii) 	
      if Disinterested Shareholder Approval is obtained at the
      meeting called pursuant to subsection 2(c)(ii) above, then the Company
      shall issue the remaining shares issuable upon conversion of the Debenture
      pursuant to this Section 2.1 that have not previously been issued pursuant
      to subsection 2(c)(i); and

	 	 	 
	 	(iv) 	
      if Disinterested Shareholder Approval is not obtained at
      the meeting called pursuant to subsection 2(c)(ii) above, then the Company
      shall pay the unconverted principal amount of this Debenture and all
      accrued and unpaid interest on the Maturity Date.

2.2                   
Manner of Exercise of Right to Convert 

	 	(a) 	
      If the Holder desires to convert this Debenture into
      Shares, the Holder shall, prior to the Time of Expiry, surrender this
      Debenture to the Company at its offices specified in Section 6.3 hereof
      together with a written notice of conversion, substantially in the form of
      Exhibit "A" hereto, duly executed by the Holder or his executors or
      administrators or other legal representatives or his or their attorney
      duly appointed by an instrument in writing in form and executed in a
      manner satisfactory to the Company, exercising the right of the Holder to
      convert this Debenture in accordance with the provisions of this Article.
      Thereupon, the Holder or his nominee(s) or assignee(s) shall be entitled
      to be entered in the books of the Company as at the Date of Conversion as
      the registered holder of the number of Shares into which this Debenture is
      convertible in accordance with the provisions of this Article and, as soon
      as practicable thereafter, the Company shall deliver to the Holder or his nominee(s)
  or assignee(s), certificates representing such Shares.

- 4 - 

	 	(b) 	
      For the purposes of this Article, this Debenture shall be
      deemed to be surrendered for conversion on the first business date (herein
      called the "Date of Conversion") on or immediately following the
      day which this Debenture is received by the Company in accordance with the
      provisions of this Article.

	 	 	 
	 	(c) 	
      Upon the surrender of this Debenture for conversion in
      accordance with this Article, the Holder shall be entitled to receive
      accrued and unpaid interest in respect thereof up to the Date of
      Conversion of the Debenture, and the Shares issued upon such conversion
      shall rank only in respect of dividends declared in favour of Shareholders
      of record on and after the Date of Conversion, from which applicable date
      such Shares will for all purposes be and be deemed to be issued and
      outstanding as fully paid and non-assessable Shares.

	 	 	 
	 	(d) 	
      The conversion of this Debenture by the Holder pursuant
      to this Article shall extinguish, satisfy or relieve the Company of its
      obligation to pay the Holder the Principal Amount of this Debenture so
      converted and surrendered.

2.3                   
Adjustments 

                          The
Conversion Price, in effect as at any date shall be subject to adjustment from
time to time as follows: 

	 	(a) 	
      Share Subdivision, Consolidation and Stock Dividend:
      If and whenever at any time prior to the Time of Expiry, the Company
      shall (i) subdivide or redivide the outstanding Shares into a greater
      number of Shares, (ii) reduce, combine or consolidate the outstanding
      Shares into a smaller number of Shares, or (iii) issue Shares, or
      securities convertible into or exchangeable for Shares, to the holders of
      all or substantially all of the outstanding Shares by way of stock
      dividend other than a dividend paid in the ordinary course, the Conversion
      Price in effect on the effective date of such subdivision, redivision,
      reduction, combination or consolidation or on the record date for such
      issue of Shares, or securities convertible into or exchangeable for
      Shares, by way of a stock dividend, as the case may be, shall in the case
      of the events referred to in clauses (i) and (iii) above, be decreased in
      proportion to the number of outstanding Shares resulting from such
      subdivision, redivision or dividend (including, in the case where
      securities convertible into or exchangeable for Shares are issued, the
      number of Shares that would have been outstanding had such securities been
      converted into or exchanged for Shares on such record date) or shall, in
      the case of the events referred to in clause (ii) above, be increased in
      proportion to the number of outstanding Shares resulting from such
      reduction, combination or consolidation, in each such case so that upon a
      subsequent conversion of this Debenture in accordance with the terms
      hereof the Holder shall receive the same number of Shares which he would
      have owned immediately following such event if he had converted the
      Debenture immediately prior to such event. Such adjustment shall be made
      successively whenever any event referred to in this subsection (a) shall
      occur, any such issue of Shares (or securities convertible into or
      exchangeable for Shares) by way of a stock dividend shall be deemed to
      have been made on the record date for the stock dividend for the purpose
      of calculating the number of outstanding Shares under subsections (b) and
      (c) of this Section 2.3; to the extent that any such securities
      convertible into or exchangeable for Shares are not converted into or
      exchanged for Shares prior to the expiration of the conversion or exchange
      right, the Conversion Price shall be readjusted effective as at the date
      of such expiration to the Conversion Price which would then be in effect
      based upon the number of Shares actually issued on the exercise of such
      conversion or exchange right.

	 	 	 
	 	(b) 	
      Rights Offering: If and whenever at any time prior
      to the Time of Expiry the Company (i) shall fix a record date for the
      issuance of rights, options or warrants to all or substantially all the
      holders of its outstanding Shares entitling them, for a period expiring
      not more than 45 days after such record date, to subscribe for or purchase
      Shares (or securities convertible into or exchangeable
  for Shares) or (ii) the Company agrees in any manner
      whatsoever to issue Shares (or securities convertible into or exchangeable
      for Shares) at a price per share (or having a conversion or exchange price
      per share) less than 95% of the Market Price of a Share on such record
      date or the date of any such agreement, as the case may be, the Conversion
      Price shall be adjusted immediately after such record date or date of such
      agreement so that it shall equal the price determined by multiplying the
      Conversion Price in effect on such record date or date of such agreement
      by a fraction, of which the numerator shall be the total number of Shares
      outstanding on such record date or date of such agreement plus a number of
      Shares equal to the number arrived at by dividing the aggregate price of
      the total number of additional Shares offered for subscription or purchase
      (or the aggregate conversion or exchange price of the securities
      convertible into or exchangeable for Shares so offered) by such Market
      Price per Share, and of which the denominator shall be the total number of
      Shares outstanding on such record date or date of such agreement plus the
      total number of additional Shares offered for subscription or purchase (or
      into which the securities convertible into or exchangeable for Shares so
      offered are convertible or exchangeable); any Shares owned by or held for
      the account of the Company shall be deemed not to be outstanding for the
      purpose of any such computation; such adjustment shall be made
      successively whenever such a record date is fixed or such agreement is
      entered into; to the extent that any such rights, options or warrants are
      not so issued or any such rights, options or warrants are not exercised
      prior to the expiration thereof, the Conversion Price shall be readjusted
      to the Conversion Price which would then be in effect if such record date
had not been fixed or, effective as at the date of such expiration, to the
      Conversion Price which would then be in effect based upon the number of
      Shares (or securities convertible into or exchangeable for Shares)
      actually issued upon the exercise of such rights, options or warrants, as
the case may be.

- 5 - 

	 	(c) 	
      Other Distributions to Shareholders: If and
      whenever at any time prior to the Time of Expiry the Company shall fix a
      record date for the making of a distribution to all or substantially all
      the holders of its outstanding Shares of (i) shares of any class other
      than Shares (or other securities convertible into or exchangeable for
      Shares) or (ii) rights, options or warrants (other than rights, options or
      warrants referred to in subsection 2.3(b) and rights, options or warrants
      to subscribe for or purchase Shares, or other securities convertible into
      or exchangeable for Shares, for a period of not more than 45 days after
      such record date at a price per Share, or having a conversion or exchange
      price per Share, not less than 95% of the Market Price of a Share on such
      record date), (iii) evidences of its indebtedness, or (iv) any assets,
      then, in each such case, the Conversion Price shall be adjusted
      immediately after such record date so that it shall equal the price
      determined by multiplying the Conversion Price in effect on such record
      date by a fraction, of which the numerator shall be the total number of
      Shares outstanding on such record date multiplied by the Market Price per
      Share on such record date, less the fair market value (as determined by
      the directors of the Company, which determination shall be conclusive,
      subject to TSX approval) of such shares or rights, options or warrants or
      evidences of indebtedness or assets so distributed, and of which the
      denominator shall be the total number of Shares outstanding on such record
      date multiplied by such Market Price per Share; any Shares owned by or
      held for the account of the Company shall be deemed not to be outstanding
      for the purpose of any such computation; such adjustment shall be made
      successively whenever such a record date is fixed, to the extent that such
      distribution is not so made, the Conversion Price shall be readjusted to
      the Conversion Price which would then be in effect if such record date had
      not been fixed or to the Conversion Price which would then be in effect
      based upon such shares or rights, options or warrants or evidences of
      indebtedness or actually distributed, as the case may be. The Company
      shall not make a distribution to holders of Shares as described in this
      subsection 2.3(c) where the fair market value (as determined by the
      Auditors of the Company, which determination shall be conclusive) of the
      Shares or rights, options or warrants or evidences of indebtedness or
      assets distributed exceeds the product of the Market Price per Share on
      the record date for such distribution and the total number of Shares
      outstanding on such record date unless the Holder is permitted to
      participate in such distribution as though and to the same effect as if it
      had converted this Debenture into Shares immediately prior to the
      applicable record date.

- 6 - 

	 	(d) 	
      Other Changes to Shares: In the case of any
      reclassification of, or other change in, the outstanding Shares of the
      Company other than subdivision, reduction, combination or consolidation,
      the Conversion Price shall be adjusted in such manner, if any, and at such
      time, as the directors determine to be appropriate on a basis consistent
      with this Section 2.3.

	 	 	 
	 	(e) 	
      Capital Reorganization, Merger: If and whenever at
      any time prior to the Time of Expiry there is a capital reorganization,
      consolidation, merger, arrangement or amalgamation of the Company with or
      into any other body corporate, trust, partnership or other entity or a
      sale or conveyance (with the consent of the Holder) whereby all or
      substantially all of the Company's undertaking and assets would become the
      property of any body corporate, trust, partnership or other entity and
      without limitation, the Holder, if he has not exercised his right of
      conversion under Section 2.1 prior to the effective date of such
      reorganization, consolidation, merger, arrangement, amalgamation sale,
      upon any such conversion at any time thereafter, shall be entitled to
      receive and shall accept, in lieu of the number of Shares to which he was
      theretofore entitled upon conversion, the aggregate number of Shares or
      other securities or property of the Company or of the body corporate,
      trust, partnership or other entity resulting from the reorganization,
      consolidation, merger, arrangement or amalgamation or to which such sale
      may be made, as the case may be, that the Holder would have been entitled
      to receive as a result of such reorganization, consolidation, arrangement,
      amalgamation or sale if, on the record date or effective date thereof, as
      the case may be, the Holder had been the registered holder of the number
      of Shares to which he was theretofore entitled upon conversion.

	 	 	 
	 	(f) 	
      Equitable Adjustment for Other Actions: If and
      whenever at any time prior to the Time of Expiry the Company shall take
      any action affecting its Shares, other than an action described in Section
      2.3(a) through (d), that, in the reasonable opinion of the Board of
      Directors, would materially adversely affect the rights of the Holder,
      then the number of Shares issuable upon the conversion of the Debenture or
      the Conversion Price thereof shall, subject to receipt by the Corporation
      of all required approvals (if any) from any stock exchange on which the
      Shares are listed, and all applicable securities regulatory authorities,
      be adjusted in such manner and at such time as the Board of Directors may
      determine, in their sole discretion, to be equitable in the circumstances.
      Failure of the Board of Directors to make an adjustment in accordance with
      this Section 2.3 shall be conclusive evidence that the directors have
      determined that it is equitable to make no adjustment in the
      circumstances. In the event that any such adjustment is made, the
      Corporation shall deliver a notice to the Holder in accordance with
      Section 2.7.

	 	 	 
	 	(g) 	
      Effective Date and Procedure for Adjustment: In
      any case in which this Section 2.3 shall require that an adjustment shall
      become effective immediately after a record date for an event referred to
      herein, the Company may defer, until the occurrence of such event, issuing
      to the Holder, in the case of the Debenture being converted after such
      record date and before the occurrence of such event, the additional Shares
      issuable upon such conversion by reason of the adjustment required by such
      event before giving effect to such adjustment; provided however, that the
      Company shall deliver to the Holder an appropriate instrument evidencing
      the Holder's right to receive such additional Shares upon the occurrence
      of the event requiring such adjustment and the right to receive any
      distributions made on such additional Shares declared in favour of holders
      of record of Shares on and after the Date of Conversion or the date fixed
      for redemption or such later date as the holders would, but for the
      provisions of this subsection (g), have become the holder of record of
      such additional Shares pursuant to subsection 2.3(b).

	 	 	 
	 	(h) 	
      Adjustments Cumulative: The adjustments provided
      for in this Section 2.3 are cumulative and shall apply to successive
      subdivisions, redivisions, reductions, combinations, consolidations,
      distributions, issues or other events resulting in any adjustment under
      the provisions of this Section. No adjustment of the Conversion Price
      shall be required unless such adjustment would require an increase or
      decrease of at least 1% in the Conversion Price then in effect; provided
      however, that any adjustments which by reason of this subsection (g) are
      not required to be made shall be carried forward and taken into account in
      any subsequent adjustment.

- 7 - 

	 	(i) 	
      In the event of any question arising with respect to the
      adjustments provided in this Section 2.3, such question shall be
      conclusively determined by a firm of chartered accountants or certified
      managerial accountants appointed by the Company (who may be the Auditors
      of the Company); such accountants shall have access to all necessary
      records of the Company and such determination shall be binding upon the
      Company, and the Holder.

	 	 	 
	 	(j) 	
      No adjustment in the Conversion Price shall be made in
      respect of any event described in subsections 2.3(a)(iii), 2.3(b) and
      2.3(c) if the Holder is entitled by the Company to and, subject to the
      consent of the TSX, participates in such event on the same terms mutatis
      mutandis as if he had converted his Debenture prior to the effective date
      or record date, as the case may be, of such event.

	 	 	 
	 	(k) 	
      Notwithstanding anything contained herein, the Conversion
      Price shall not be adjusted or be subject to adjustment as a result
    of:

	 	(i) 	
      The granting by the Company of options or other rights
      under any stock option plan, stock purchase plan, phantom stock plan,
      stock appreciation rights plan, or other deferred, share or incentive
      compensation plan to officers, directors, employees or consultants of the
      Company or its affiliates;

	 	 	 
	 	(ii) 	
      The issue by the Company of any Shares or other
      securities of the Company for valuable consideration to any persons other
      than as specifically provided for in this Section 2.3 (including without
      limitation the issue of Shares upon the exercise or conversion of any
      securities of the Company outstanding as at the Issue Date that are
      exercisable or convertible into Shares); or

	 	 	 
	 	(iii) 	
      The declaration or payment of any dividends on the Shares
      in the ordinary course.

	 	(l) 	
      If a state of facts shall exist to which the provisions
      of Section 2.3 are not strictly applicable, or if strictly applicable
      would not fairly adjust the rights of the Holder against dilution in
      accordance with the intent and purposes hereof, then the Company shall
      execute and deliver to the Holder an amendment hereto providing for an
      adjustment in the application of such provisions so as to adjust such
      rights as aforesaid. The Holder shall accept the certificate or opinion of
      a firm of independent chartered accountants (who may be the Company's
      Auditors) with respect to any such adjustment in the application of such
      provision, and as to questions of law in connection therewith shall accept
      an opinion of Counsel.

	 	 	 
	 	(m) 	
      At least 15 days prior to the effective date or record
      date, as the case may be, of any event that requires or might require an
      adjustment pursuant to this Section 2.3, the Company shall give notice to
      the Holder of the particulars of such event and, if determinable, the
      required adjustment.

	 	 	 
	 	(n) 	
      In the event that any adjustment for which the notice of
      adjustment referred to in paragraph (m) above has been given is not then
      determinable, the Company will give notice to the Holder of the required
      adjustment promptly after such adjustment is
  determinable.

2.4                   
No Requirement to Issue Fractional Shares

                         
The Company shall not be required to issue fractional Shares upon the conversion
of this Debenture pursuant to this Article and no cash amount shall be payable
to the Holder in lieu of such fractional Shares. 

2.5                   
Taxes and Charges on Conversion 

                          The
Company will from time to time promptly pay or make provision satisfactory to
the Holder for the payment of any and all taxes and charges which may be imposed
by the laws of Canada or any province thereof (except income tax or security transfer tax, if any)
which shall be payable with respect to the issuance or delivery to the Holder,
upon the exercise of his right of conversion, of Shares pursuant to the terms of
this Debenture. 

- 8 - 

2.6                   
Cancellation of Converted Debentures 

                          Upon
conversion of this Debenture under the provisions of this Article, the Debenture
so converted shall be forthwith delivered to and cancelled by the Company and no
Debenture shall be issued in substitution for the Debenture after conversion.

2.7                   
Notice of Adjustment 

                          The
Company shall from time to time, immediately after the occurrence of any event
which requires an adjustment or readjustment as provided in Section 2.3, deliver
a certificate of the Company to the Holder specifying the nature of the event
requiring the adjustment or readjustment and the amount of the adjustment
necessitated thereby and setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. The Company
shall, except in respect of any subdivision, redivision, reduction, combination
or consolidation of its Shares, forthwith give notice to the Holder in the
manner provided in Section 6.3 specifying the event requiring such adjustment or
readjustment and the results thereof, including the resulting Conversion Price;
provided that, if the Company has given notice under Section 2.8 covering all
the relevant facts in respect of such event no such notice need be given under
this Section 2.7. 

2.8                   
Notice of Special Matters 

                          The
Company covenants with the Holder that, so long as this Debenture remains
outstanding, it will give notice to the Holder in the manner provided in Section
6.3, of its intention to fix a record date or an effective date for any event
referred to in subsections (a), (b), (c) and (e) of Section 2.3 (other than the
subdivision, redivision, reduction, combination or consolidation of its Shares)
which may give rise to an adjustment in the Conversion Price and, in each case,
such notice shall specify the particulars of such event and the record date and
the effective date for such event; and, if prepared or available as at the date
that such notice is required to be given pursuant to this Section 2.8, such
notice shall be accompanied by the material (ie. proxy circular, information
booklets, etc.) sent to the holders of Shares in respect of the event in
question; provided that the Company shall only be required to specify in such
notice such particulars of such event as shall have been fixed and determined on
the date on which such notice is given. In any event, such notice shall be given
not less than 14 days in each case prior to such applicable record date or
effective date. 

2.9                   
Legend 

                          The
following legends shall appear on any certificate evidencing Shares issued upon
conversion of this Debenture prior to the date which is four months and one day
from the date hereof: 

                          
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS.” 

- 9 - 

ARTICLE 3 
COVENANTS OF THE COMPANY 

                         
The Company hereby covenants and agrees with the Holder as follows: 

3.1                   
To Pay Principal and Interest 

                          That
the Company will duly and punctually pay or cause to be paid to the Holder the
Principal Amount of and interest accrued on this Debenture on the dates, at the
places, in the monies, and in the manner described in this Debenture.

	 	(a) 	
      If no Event of Default has occurred and is continuing,
      interest on this Debenture may be paid at the option of the Holder by
      issuing and delivering fully-paid and non-assessable Shares in lieu of
      cash at a deemed price equal to Market Price at the time of payment,
      provided that the Holder shall give written notice of such election to the
      Company 10 business days prior to the particular Interest Payment Date,
      failing which the Company shall pay the interest in cash.

	 	 	 
	 	(b) 	
      If the interest is to be paid by the delivery of
      Shares,

	 	(i) 	
      the Holder or his nominee(s) or assignee(s) shall be
      entitled to be entered in the books of the Company as at the applicable
      Interest Payment Date as the registered holder of the number of Shares
      issued in satisfaction of the interest payment and, on or prior to the
      Interest Payment Date, the Company shall deliver to the Holder or his
      nominee(s) or assignee(s), certificates representing such
Shares;

	 	 	 
	 	(ii) 	
      certificates representing such Shares shall bear any
      legend required under applicable securities law; and

	 	 	 
	 	(iii) 	
      the Company shall not issue fractional Shares in
      satisfaction of any interest payments. The Company shall round the number
      of Shares down to the nearest whole Share and pay the equivalent dollar
      value of any fractional Shares that the Holder is otherwise entitled to
      satisfy interest payment on the applicable Interest Payment
  Date.

	 	(c) 	
      The amount received by the Holder in respect of any
      interest payable or the entitlement thereto will not be affected by
      whether the Company elects to satisfy the interest payment with Shares or
      cash.

	 	 	 
	 	(d) 	
      The delivery of the Shares (and cash equal to the value
      of fractional shares, if any) shall fully satisfy the Company's interest
      payment obligation on the applicable Interest Payment
  Date.

ARTICLE 4 
REPRESENTATIONS AND WARRANTIES

4.1                   
Representations and Warranties of the Company 

                          The
Company hereby represents and warrants with and to the Holder that the Company
is duly authorized and has the corporate and lawful power and authority to
create and issue this Debenture and that this Debenture represents a valid,
legal and binding obligation of the Corporation enforceable in accordance with
its terms. 

- 10 - 

ARTICLE 5 
EVENTS OF DEFAULT 

5.1                    Events
of Default 

                          Upon
the happening of any one or more of the following events (each an "Event of
Default"), namely: 

	 	(a) 	
      if the Company does not pay the Principal Amount of this
      Debenture when the same becomes due and payable under the terms of this
      Debenture;

	 	 	 
	 	(b) 	
      if the Company does not make payment of any interest due
      on this Debenture when the same becomes due and any such default continues
      for a period of five business days after notice of such default is given
      to the Company by the Holder.

	 	 	 
	 	(c) 	
      if a decree or order of a court having jurisdiction in
      the premises is entered adjudging the Company a bankrupt or insolvent
      under the Bankruptcy Act (Canada) or any other bankruptcy,
      insolvency or analogous laws, or issuing sequestration or process of
      execution against, or against any substantial part of, the property of the
      Company or appointing a receiver of, or of any substantial part of, the
      property of the Company or ordering the winding-up or liquidation of its
      affairs;

	 	 	 
	 	(d) 	
      if a resolution is passed for the winding-up or
      liquidation of the Company or if the Company institutes proceedings to be
      adjudicated a bankrupt or insolvent or consents to the institution of
      bankruptcy or insolvency proceedings against it under the Bankruptcy
      Act (Canada) or any other bankruptcy, insolvency or analogous laws, or
      consents to the filing of any such petition or to the appointment of a
      receiver of, or of any substantial part of, the property of the Company or
      makes a general assignment for the benefit of creditors or admits in
      writing its inability to pay its debts generally as they become due or
      takes corporate action in furtherance of any of the aforesaid purposes;
      or

	 	 	 
	 	(e) 	
      if an encumbrancer or encumbrancers, whether permitted or
      otherwise, takes possession of any part of the property of the Company or
      any execution, distress or other process of any court becomes enforceable
      against any part of the property of the Company, or a distress or like
      process is levied upon any of such property;

then in each and every such event the Holder may, by notice in
writing to the Company, declare the Principal Amount and interest on this
Debenture then outstanding and all other monies outstanding hereunder to be due
and payable and, if any such default remains unremedied for a period of three
days after receipt by the Company of such notice, the same shall forthwith
become immediately due and payable to the Holder, anything therein or herein to
the contrary notwithstanding, and the Company shall forthwith pay to the Holder
the Principal Amount and accrued and unpaid interest, together with interest at
the rate stated in this Debenture on such principal, interest and such other
monies from the date of the said declaration until payment is received by the
Holder 

ARTICLE 6 
MISCELLANEOUS 

6.1                   
Severability 

                          If
any covenant or provision herein or any portion thereof is determined to be
void, unenforceable or prohibited by the law of any province or the local
requirements of any provincial or federal governmental authority such shall not
be deemed to affect or impair the validity of any other covenant or provision
herein or portion thereof, as the case may be, nor the validity of such
covenant or provision or portion thereof, as the case may be, in any other
jurisdiction. 

- 11 - 

6.2                   
Laws of British Columbia 

                          This
Debenture shall be deemed to have been made and shall be construed in accordance
with the laws of the Province of British Columbia and the laws of Canada
applicable therein and shall be treated in all respects as a British Columbia
contract. The Holder and the Company hereby irrevocably submits to the
jurisdiction of the courts of the Province of British Columbia for any action,
suit or any other proceeding arising out of or relating to this Debenture and
any other agreement or instrument mentioned therein or any of the transactions
contemplated thereby. Each of the Holder and the Company agrees not to commence
any legal proceeding related hereto except in such court. Each of the Holder and
the Company irrevocably waives any objection which it may now or hereafter have
to the laying of the venue of any such proceeding in any such court and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum. EACH OF THE HOLDER AND THE
COMPANY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUCH
ACTION, SUIT OR PROCEEDING. Each of the Holder and the Company agrees that the
prevailing party in any action or proceeding arising out of or relating to this
Convertible Debenture or the transactions contemplated hereby shall be entitled
to recover its reasonable fees and expenses in connection therewith, including
legal fees. 

6.3                   
Notices 

                          All
notices, reports or other communication required or permitted by this Debenture
must be in writing and either delivered by hand or by any form of electronic
communication by means of which a written or typed copy is produced by the
receiver thereof and is effective on actual receipt unless sent by electronic
means in which case it is effective on the business day next following the date
of transmission, addressed to the relevant party, as follows: 

	 	(a) 	
      if to the Company:

Golden Queen Mining Co. Ltd. 
6411
Imperial Avenue 
West Vancouver, British Columbia, V7W 2J5 
Facsimile:
(604) 921-9446 
Attention: Lutz Klingmann, President 

	 	(b) 	
      if to the Holder:

Landon T. Clay 
188 Old Street Road

Peterborough, New Hampshire, 03458 
Facsimile: (401) 490-0749 

or the last address or telecopier number of the party
concerned, notice of which was given in accordance with this paragraph. 

6.4                   
Transfer 

                          Subject
to any applicable securities laws, this Debenture is transferable by the Holder
and the term "Holder" shall mean any successor, transferee or assignee of
the current and any future Holder. 

- 12 - 

6.5                   
Enurement 

                          This
Debenture and all its provisions shall enure to the benefit of the Holder, its
successors and permitted assigns and shall be binding upon the Company, its
successors and assigns. 

6.6                   
Amendment 

                          This
Convertible Debenture may not be amended or modified in any manner nor may any
of its provisions be waived except by written amendment executed by the Holder
and the Company. A waiver, modification or amendment by a party shall only be
effective if (a) it is in writing and signed by the Holder and the Company, (b)
it specifically refers to this Convertible Debenture and (c) it specifically
states that the party, as the case may be, is waiving, modifying or amending its
rights hereunder. Any such amendment, modification or waiver shall be effective
only in the specific instance and for the specific purpose for which it was
given. 

6.7                   
Further Assurances 

                          The
Company hereby covenants and agrees that it will do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged and delivered, all and
every such other act, deed and assurance as the Holder shall reasonably require
for the better accomplishing and effectuating of the intentions and provisions
of this Debenture. The Company shall gross up each interest payment, if any
interest is subject to withholding tax, by an amount so that after deduction of
applicable withholding taxes the Holder will be receiving interest hereunder as
if no withholding taxes were payable. 

6.8                   
Securities Requirements 

                          By
its acceptance of this Debenture, the Holder acknowledges and agrees that if
required by applicable securities legislation, policy or order or by any
securities commission, stock exchange or other regulatory authority the Holder
will execute, deliver, file and otherwise assist the Company in filing such
reports, undertakings and other documents with respect to the issuance of this
Debenture or the Shares which may be acquired upon conversion as may be
required. By its acceptance of this Debenture, the Holder further acknowledges
that the Debenture will be, and any Shares acquired upon conversion of this
Debenture may be, subject to a restriction on resale under applicable securities
legislation until the appropriate hold period has been satisfied. Any obligation
represented by this Convertible Debenture whether on account of principal,
interest, costs of collection or otherwise, shall be made in full when due and,
at the request of the Holder, may be set-off against obligations owed by the
Holder to the Company. 

ARTICLE 7 
SUCCESSOR CORPORATION 

7.1                   
Certain Requirements 

                          The
Company shall not, directly or indirectly, sell, lease, transfer or otherwise
dispose of all or substantially all of its property and assets as an entirety to
any other corporation, and shall not amalgamate or merge with or into any other
corporation including in accordance with a plan of arrangement (any such other
corporation being herein referred to as a "successor corporation") and
unless: 

	 	(a) 	
      the successor corporation shall execute, prior to or
      contemporaneously with the consummation of any such transaction, an
      agreement supplemental hereto together with such other instruments as are
      reasonably satisfactory to the Holder and in the opinion of Counsel are
      necessary or advisable to evidence the assumption by the successor
      corporation of the due and punctual payment of the Principal Amount of
      this Debenture and the interest thereon in accordance with the terms
      hereof and all other monies payable hereunder and the covenant of the
      successor corporation to pay the same and its agreement to observe and
      perform all the covenants and obligations of the Company under this
      Debenture; and

- 13 - 

	 	(b) 	
      no condition or event shall exist as to the Company or
      the successor corporation either at the time of or immediately after the
      consummation of any such transaction and after giving full effect thereto
      or immediately after the successor corporation complying with the
      provisions of clause (a) above which constitutes or would constitute,
      after notice or lapse of time or both, an Event of
  Default.

7.2                   
Vesting of Powers in Successor 

                          Whenever
the conditions of Section 7.1 have been duly observed and performed the
successor corporation shall possess and from time to time may exercise each and
every right and power of the Company under this Debenture in the name of the
Company or otherwise and any act or proceeding by any provision of this
Debenture required to be done or performed by any directors or officers of the
Company may be done and performed with like force and effect by the directors or
officers of such successor corporation and thereupon the Company may be released
and discharged from liability under this Debenture and the Holder shall execute
any document or documents which it may be advised by the Company is or are
necessary or advisable for effecting or evidencing such release and discharge.

[The remainder of this page is intentionally blank.] 

EXHIBIT "A" 
to the Convertible Debenture of

Golden Queen Mining Co. Ltd. 

NOTICE OF CONVERSION 

TO:                  
Golden Queen Mining Co. Ltd. 

                          The
undersigned registered Holder of the within convertible debenture of Golden
Queen Mining Co. Ltd. due on July 26, 2015 (the "Debenture") hereby
irrevocably elects to convert $______________ of the principal amount of the
Debenture into common shares of Golden Queen Mining Co. Ltd. (the "Conversion
Securities") in accordance with the terms of the Debenture and directs that
the Conversion Securities issuable and deliverable upon the conversion be issued
and delivered as set out below. 

	Name(s) in Full and Social
      
Insurance Number(s) or Tax 
Identification
      Number(1) 	Address(es)

	Number of Common
      Shares 

	 	 	 
	 	 	 

(1)        Please print the
full name in which certificates representing the Conversion Securities are to be
issued. If any of the said Conversion Securities are to be issued to a person or
persons other than the registered holder of the Debenture, the registered holder
must pay to the Company all eligible transfer taxes or other government charges,
and the signature of the holder must be guaranteed by a Canadian chartered bank
or a trust company or by a member of a Canadian stock exchange. 

DATED this _______________day of ________________________,
20___. 

	 	 
	(Signature of Registered Holder) 	 
	 	 
	 	 
	(Name) 	 
	 	 
	 	 
	(Address) 	 
	 	 
	 	 
	(City and Province) 	 

[   ]       
Please check if the certificates representing the said Conversion Securities are
to be delivered at the office where the Debenture is surrendered, failing which
such certificate(s) will be mailed to the address(es) set out above.
Certificates will be delivered or mailed as soon as practicable after the
surrender of the Debenture to the Company. 

EXHIBIT "B" 
to the Convertible Debenture of

Golden Queen Mining Co. Ltd. 

FORM OF TRANSFER 

FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto ___________________________(the "Transferee") of
___________________________: Fax number: (____) _________________,
$___________________principal amount of the convertible debenture (the
"Debenture") of Golden Queen Mining Co. Ltd. registered in the name of
the undersigned and registered by the Debenture and hereby irrevocably appoints

______________________________
as the attorney of the undersigned to
transfer the Debenture on the register of transfers, with full power of
substitution, subject to compliance with the provisions of the Debenture. 

DATED the ________day of ________________, 20___. 

	  	) 	  
	  	) 	 
    
	  	) 	Signature of Registered Holder 
	  	) 	  
	  	) 	 
    
	Signature of Guarantee 	) 	Name of Registered Holder 
	  	) 	  

Signature of Transferor must be guaranteed by a Canadian
Schedule 1 chartered bank, a major trust company in Canada, a member firm of a
recognized stock exchange, or a member of the Securities Transfer Association
Medallion Program (Stamp) (SEMP) (MSP).CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. &sect;&sect; 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT
MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

REVOLVING LOAN AND SECURITY AGREEMENT

 

This REVOLVING
LOAN AND SECURITY AGREEMENT (this “Agreement”) is made as of November 28, 2014, by and among IRONCLAD
PERFORMANCE WEAR CORPORATION, a California corporation (“Ironclad California”), IRONCLAD PERFORMANCE
WEAR CORPORATION, a Nevada corporation (“Ironclad Nevada”, and, collectively with Ironclad California,
“Borrower”), and CAPITAL ONE, N.A. (“Bank”).

 

WHEREAS, Borrower has
requested that Bank provide Borrower with a revolving credit facility; and

 

WHEREAS, Bank is willing
to provide such revolving credit facility to Borrower upon the terms and subject to the conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration
of the mutual promises herein contained and for other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

SECTION 1

DEFINITION OF TERMS

 

1.1Definitions.
As used in this Agreement, all exhibits and schedules hereto and in any note, certificate, report, or other Security Documents
made or delivered pursuant to this Agreement, the following terms have the meanings assigned to them in this Section or in
the Section or recital referred to below:

 

“Account”
and “Account Receivable” includes accounts, accounts receivable, notes, notes receivable, rental agreements
and other rights to collect rent, contract rights, drafts, acceptances, instruments, chattel paper, general intangibles, and other
forms of obligation or rights to payment and receivables, whether or not yet earned by performance, including state and federal
tax refunds.

 

“Account Debtor”
means the party who is obligated on or under any Account or contract right.

 

“Affiliate”
of a Person means any Person controlling, controlled by or under common control with, such Person.

 

“Agreement”
means this Revolving Loan and Security Agreement, including the Schedules and Exhibits hereto, as the same may be modified,
amended, renewed, extended, or restated from time to time.

 

“Audits”
has the meaning set forth in Section 8.

 

“Borrowing Base”
means an amount equal to up to eighty percent (80%) of the value of Borrower’s Eligible Accounts, plus up to fifty percent
(50%) of the value of Borrower’s Eligible Inventory, plus up to thirty-five percent (35%) of the value of Borrower’s
Eligible In-Transit Inventory, minus the Borrowing Base Reserve; provided, however, that the portion of the Borrowing Base attributable
to the sum of Borrower’s Eligible Inventory plus Borrower’s Eligible In-Transit Inventory shall not exceed fifty percent
(50%) of the Revolving Line Limit; provided, further, that in no event shall the Borrowing Base exceed the Revolving Line Limit.

 

“Borrowing Base
Reserve” means, (i) initially, $[***], and (ii) once Borrower’s EBITDAS exceeds $[***] on a trailing twelve-month
basis, $0.00.

 

“Business Day”
means any day other than a Saturday, Sunday, or day on which banks are authorized to be closed under the laws of the State
of Texas.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	1	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

“Change in Control”
means a transfer of ownership or control of Stock in a Person equal to or greater than fifty percent (50%).

 

“Code”
means the Internal Revenue Code of 1986, as amended, and all regulations promulgated and rulings issued thereunder.

 

“Collateral”
means any and all personal or intangible property of Borrower in which Bank acquired, now has, or by this Agreement or any other
agreement acquires, or hereafter acquires a security interest or other rights or interests as security for the Indebtedness, including,
without limitation, Borrower’s obligations under this Agreement.

 

“Commodity Exchange
Act” means the Commodity Exchange Act (7 U.S.C. § et seq.), as amended from time to time, and any successor statute.

 

“Constituent
Documents” means, with respect to any Person, its partnership agreements, limited liability company agreements, articles
of organization, regulations, articles or certificate of incorporation, bylaws, organizational documents, trust agreement, or
such other document as may govern such Person’s formation, organization, and management.

 

“Debt Service
Coverage Ratio” means, with respect to Borrower and its subsidiaries, the ratio of (a) EBITDAS to (b) the sum of the
current portion of the Indebtedness, plus interest expense, plus all Subordinated Debt payments, calculated in accordance with
GAAP.

 

“Debtor Laws”
means all applicable liquidation, conservatorship, bankruptcy, moratorium, arrangement, receivership, insolvency, reorganization,
or similar laws from time to time in effect affecting the rights of creditors generally.

 

“Distributions”
means, with respect to any Stock issued by any Person, (a) the retirement, redemption, purchase, or other acquisition for value
of such Stock by such Person, (b) the declaration or payment of any dividend or distribution on or with respect to such Stock
by such Person, and (c) any other payment or distribution of any kind by such Person with respect to such Stock.

 

“Dominion Account”
has the meaning set forth in Section 9.1.

 

“EBITDAS”
means, as of any applicable date of determination and as determined in accordance with GAAP, the net income of Borrower for the
twelve (12)-month period then ended, plus (a) interest expense, tax expense, depreciation and amortization expenses, and stock
option expenses for the same period, excluding (b) (i) any extraordinary gain or loss, and any interest income from Affiliates
of the Borrower for the same period, and also excluding (ii) gains or losses resulting from changes of market values of any interest
rate Hedge Agreement to which Borrower is a party.

 

“Eligible Account”
means an Account of Borrower which meets each of the following requirements:

 

(a)it arises from
the sale of goods or from services rendered, such goods have been shipped or delivered to the Account Debtor under such
Account and such services have been fully performed and have been accepted by the Account Debtor, and the Borrower’s
full right to payment for all sums due from such Account Debtor with respect to such Account has been earned and then be due
and payable;

 

(b)it is
a valid and legally enforceable obligation of the Account Debtor thereunder according to its express terms, and is not subject
to any offset, counterclaim, cross-claim, or other defense on the part of such Account Debtor denying liability thereunder in
whole or in part;

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	2	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

(c)it is
not subject to any Lien, security interest or similar adverse rights or interests whatsoever other than the security interest
in favor of Bank hereunder;

 

(d)it is
evidenced by an invoice, dated the date of shipment (in the case of goods sold or leased) or the date of performance (in the case
of services rendered) and having payment terms acceptable to the Bank;

 

(e)it is
not owing by an Account Debtor whose obligations the Bank, acting in its sole discretion, has notified the Borrower are not deemed
to constitute an Eligible Account;

 

(f)it is
not due from an Affiliated corporation or entity, subsidiary corporation or entity, parent corporation or entity, stockholder,
officer, director or employee of Borrower or any such Affiliate, subsidiary, or parent corporation or entity; or any individual
or entity Affiliated or related to any of the foregoing, whether by blood, marriage, or otherwise;

 

(g)it is
not due from an individual consumer;

 

(h)it does
not constitute retainages, progress billings, or deferred payments under a contract not fully performed;

 

(i)it is
not evidenced by an instrument, promissory note or chattel paper;

 

(j)it does
not constitute, in whole or in part, interest or finance charges on outstanding balances;

 

(k)it is
an Account with respect to which no return, repossession, rejection, cancellation, repudiation, or bankruptcy has occurred or
has been threatened;

 

(l)it is
an Account with respect to which Borrower continues to be in full conformity with the representations, warranties, and covenants
of Borrower made with respect thereto;

 

(m)it is
not subject to any sales terms, trial terms, sales-or-return terms, consignment terms, guaranteed sales performance or
warranties or representations relating to minimum sales volume, C.O.D. terms, cash terms, or similar terms or conditions;

 

(n)it is
not owed by an Account Debtor that is not an individual residing in the United States or a corporation or partnership organized
and validly existing under the laws of a state within the United States, unless payment is secured by a letter of credit acceptable
to Bank;

 

(o)it is
not an Account subject, in whole or in part, to any “bill and hold” or similar arrangement pursuant to which the invoice
is delivered prior to the actual delivery of the sold or leased goods or the performance of the services;

 

(p)it is
not an Account with respect to which (i) sixty (60) days or more has passed since the invoice due date, if the invoice due date
is less than or equal to ninety (90) days from the date of the invoice, (ii) one hundred and fifty (150) days or more has passed
since the date of the invoice, if the invoice due date is greater than ninety (90) days from the date of the invoice, or (iii)
sixty (60) days or more has passed since the invoice due date, if the Account Debtor is [***],[***], or [***];

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	3	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

(q)it is
not owed by any Account Debtor with respect to which fifty percent (50%) or more of its total Accounts owing to the Borrower remain
unpaid after (i) sixty (60) days from the relevant invoice due date, if the invoice due date is less than or equal to ninety (90)
days from the date of the invoice, (ii) one hundred and fifty (150) days from the relevant invoice due date, if the invoice due
date is greater than ninety (90) days from the date of the invoice, or (iii) sixty (60) days from the relevant invoice due date,
if the Account Debtor is [***];

 

(r)it
is not an Account owed by an Account Debtor whose account balance exceeds twenty-five percent (25%) of the total of Borrower’s
aggregate Accounts Receivable, except to the extent of such Eligible Accounts of such Account Debtor that do not exceed twenty-five
percent (25%) of the total of Borrower’s aggregate Accounts Receivable, or except as expressly permitted from time to time
by Bank exercising its reasonable credit judgment;

 

(s)it is
not an Account as to which Borrower or any other party to such Account is in default in the performance or observance of any of
the terms thereof;

 

(t)it is
not an Account in which the Account Debtor is the United States of America or any department, agencies, or instrumentality thereof,
unless Borrower assigns its rights to payment of such Account to Bank, in form and substance satisfactory to Bank, and so as to
comply with all requirements of the law;

 

(u)it is
not an Account that Bank exercising its reasonable credit judgment, has deemed to be unacceptable;

 

(v)it is not a
contra Account;

 

(w)it is
not an “On Credit Hold” Account; and

 

(z)it is
not an Account that has had a net positive credit balance for more than sixty (60) days.

 

“Eligible In
Transit Inventory” means Inventory that would otherwise constitute Eligible Inventory except for the fact that it is
in transit, and that has been produced, is in transit to one of Borrower’s places of business, and is fully insured against
loss or damage while in transit.

 

“Eligible Inventory”
means Inventory of Borrower meeting each of the following requirements:

 

(a)it is
not subject to special marketing conditions or marketability limitations judged by the Bank, in its sole discretion, to be unacceptable;

 

(b)it is
not Work in Progress, parts, supplies, nor does it include any Packaging and Supplies, marketing materials, promotional items,
private label inventory, or inventory subject to patents, trademarks or licenses owned by a third party;

 

(c)it is
not materials or supplies used or to be used, or consumed or to be consumed in the normal course of business of Borrower;

 

(d)it is
new and unused;

 

(e)it is
owned by Borrower and is not subject to any lien or security interest whatsoever, other than the security interest granted to
Bank hereunder;

 

(f)it is
held for sale in the normal and ordinary course of Borrower’s business;

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	4	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

(g)it is
located at one of Borrower’s places of business in the United States and is not in transit;

 

(h)it is
not of a type of inventory that is subject to any recall, class action litigation, governmental action, order, inquiry or investigation;

 

(i)it is
not located on any leased premises unless Bank has a signed landlord subordination agreement from the relevant landlord in form
and substance acceptable to Bank;

 

(j)it is
not on consignment and no warehouse receipt or document of title is or has been issued in respect of such Inventory;

 

(k)it is
not expired, opened, discontinued, obsolete or damaged inventory; and

 

(l)it is
not inventory or of a class of inventory which is considered by Bank, exercising its reasonable credit judgment, to be “slow
moving” or “excess inventory” based, in part, upon whether the inventory or class of inventory exceeds a one
(1) year supply based on recent sales or usage based on a rolling twelve (12) months.

 

The value of all Eligible
Inventory shall be determined on the basis of any and all factors and criteria as the Bank, in its sole discretion, and without
reference to any standards of reasonableness shall deem appropriate, including, without limitation, that unless the Bank shall
determine that some other basis is more appropriate, such value shall be determined on the basis of the lower of cost or market
value, net of all handling charges, taxes, assessments, and interest and finance charges.

 

“Environmental
Laws” means any Legal Requirement pertaining to air, emissions, water discharge, noise emissions, solid or liquid waste
disposal, hazardous waste or materials, industrial hygiene, or other environmental, health, or safety matters or conditions on,
under or about real property or any portion thereof, and similar laws of any Governmental Authority having jurisdiction over real
property as such Legal Requirement may be amended or supplemented from time to time, and regulations promulgated and rulings issued
pursuant to such laws.

 

“Equipment”
means any “equipment” as such term is defined in Section 9.102(33) of the UCC, now owned or hereafter acquired
by Borrower and, in any event, shall include, without limitation, all machinery, equipment, furnishings, fixtures, leasehold
improvements, vehicles and computers and other electronic data-processing and other office equipment now owned or hereafter
acquired by Borrower and any and all additions, substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.

 

“Event of Default”
has the meaning set forth in Section 10.

 

“Excluded Swap
Obligation” means, with respect to any guarantor of a Swap Obligation, including the grant of a security interest to
secure the guaranty of such Swap Obligation, any Swap Obligation if, and to the extent that, such Swap Obligation is or becomes
illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the
application or official interpretation of any thereof) by virtue of such guarantor’s failure for any reason to constitute
an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations there under at the
time the guaranty or grant of such security interest becomes effective with respect to such Swap Obligation.  If a Swap Obligation
arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation
that is attributable to swaps for which such Swap Obligation or security interest is or becomes illegal.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	5	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

“GAAP”
means those generally accepted accounting principles and practices, applied on a consistent basis, which are recognized as such
by the American Institute of Certified Public Accountants acting through its Accounting Principles Board and the Financial Accounting
Standards Board and/or their respective successors and which are applicable in the circumstances as of the date in question.

 

“General Intangibles”
means any “general intangibles” as such term is defined in Section 9.102(42) of the UCC, now owned or hereafter
created or acquired by Borrower, and in any event shall include, without limitation, all choses in action, causes of action, corporation
or other business records, deposit accounts, Intellectual Property inventions, designs, patents, patent applications, trademarks,
trade names, trade secrets, goodwill, copyrights, registrations, licenses, franchises, rights to royalties, blueprints, drawings,
confidential information, catalogs, sales literature, video tapes, consulting agreements, employment agreements, customer lists,
tax refund claims, computer programs, insurance policies, deposits with insurers, all claims under guaranties, security interests
or other security held by or granted to Borrower to secure payment of any of the Accounts by an Account Debtor, all rights to
indemnification and all other intangible property of every kind and nature (other than Accounts).

 

“Governmental
Authority” means, with respect to any Person, any government (or any political subdivision or jurisdiction thereof),
court, bureau, agency, or other governmental authority having jurisdiction over such Person or any of its business, operations,
or properties.

 

“Governmental
Authorization” means any approval, consent, license, permit, waiver, or other authorization issued, granted, given,
or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Legal Requirement.

 

“Guaranty”
of any Person means any contract or understanding of such Person pursuant to which such Person guarantees, or in effect guarantees,
any Liabilities of any other Person (the “Primary Obligor”) in any manner, whether directly or indirectly, including
agreements to insure the holder of the Liabilities of the Primary Obligor against loss in respect thereof.

 

“Hazardous Material”
means any hazardous, toxic, or dangerous waste, substance, or material defined as such in or for the purpose of any Environmental
Law.

 

“Hedge Agreement”
means (a) any agreement (including terms and conditions incorporated by reference therein) which is a rate swap agreement, basis
swap, credit derivative transaction, forward rate agreement, commodity swap, commodity option, forward commodity contract, equity
or equity index swap or option, forward bond or forward bond price or forward bond index transaction, interest rate option, forward
foreign exchange agreement, spot foreign exchange agreement, cap agreement, floor agreement, collar agreement, currency swap agreement,
cross-currency rate swap agreement, currency option, spot contract, or any other similar agreement (including any option to enter
into any of the foregoing), whether or not such agreement is governed by or subject to any master agreement, (b) any and all agreements
of any kind, and any and all related confirmations, which are subject to the terms and conditions of, or governed by, any form
of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange
Master Agreement or any other master agreement, or (c) any combination of the foregoing.

 

“Indebtedness”
means all present and future indebtedness, obligations, and Liabilities and all renewals and extensions thereof, or any part thereof,
now or hereafter owed to Bank by Borrower and its Affiliates, whether arising pursuant to any of the Security Documents, or otherwise,
and all renewals and extensions thereof, together with all interest accruing thereon and reasonable costs, expenses, and attorneys’
fees incurred in the enforcement or collection thereof.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	6	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

“Intellectual
Property” means all trademarks, tradenames, trade-dress, operating manuals, software, copyrights, patents and applications
owned, licensed or used by Borrower or its subsidiaries.

 

“Inventory”
means any “inventory” as such term is defined in Section 9.102(48) of the UCC, wherever located, now owned or
hereafter acquired by Borrower and, in any event, shall include, without limitation, all and related merchandise and other personal
property now owned or hereafter acquired by Borrower that are held for sale or lease, or are furnished or to be furnished under
a contract of service or are raw materials, work in process, or materials or supplies used or to be used, or consumed or to be
consumed, in Borrower’s business, and all shipping and packaging materials relating to any of the foregoing.

 

“Investment”
in any Person means any investment, whether by means of Stock purchase, loan, advance, extension of credit, capital contribution,
or otherwise, in or to such Person, the Guaranty of any Liabilities of such Person, or the subordination of any claim against
such Person to other Liabilities of such Person.

 

“Legal Requirement”
means any federal, state, local, municipal, foreign, international, multi-national, or other administrative order, constitution,
law, ordinance, principle of common law, regulation, statute, or treaty as in effect on the date in question.

 

“Liabilities”
means (without duplication), with respect to any Person, all indebtedness, obligations, and liabilities of such Person, including,
without limitation, (a) all “liabilities” which would be reflected on a balance sheet of such Person, (b) all obligations
of such Person in respect of any guaranty, letter of credit, or bankers’ acceptance, (c) all obligations of such Person
in respect of any capital lease, (d) all obligations, indebtedness, and liabilities secured by any lien or any security interest
on any property or assets of such Person, and (e) any obligation to redeem or repurchase any of such Person’s Stock.

 

“Lien”
means any lien, mortgage, security interest, tax lien, pledge, encumbrance, conditional sale or title retention arrangement, or
any other interest in property designed to secure the repayment of Liabilities, whether arising by agreement or under any statute
or law, or otherwise.

 

“Loan Account”
means a record maintained by Bank setting forth all borrowings, charges, expenses, payments, credits and debits of Borrower.

 

“Lockbox”
has the meaning set forth in Section 9.1.

 

“Lockbox Agreement”
has the meaning set forth in Section 9.1.

 

“Material Adverse
Effect” means any material adverse changes in, or effect upon, (a) the validity, performance, or enforceability of any
Security Documents, (b) the financial condition or business operations of Borrower and Guarantors, taken as a whole, or (c) the
ability of Borrower to fulfill its obligations under the Security Documents.

 

“Maturity Date”
means November 30, 2016.

 

“Maximum Rate”
means the highest non-usurious rate of interest (if any) permitted from day to day by applicable law.

 

“Overadvance”
has the meaning set forth in Section 2.4.

 

“Overline”
has the meaning set forth in Section 2.4.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	7	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

“Packaging and
Supplies” means boxes, labels, cartons pallets, etc., which are not Inventory, but are listed or tracked within Borrower’s
inventory system.

 

“Person”
means an individual, corporation, joint venture, general or limited partnership, limited liability company, trust, unincorporated
organization, or government, or any agency or political subdivision thereof.

 

“Permitted Liens”
means (a) Liens imposed by mandatory provisions of law such as for materialmen’s, mechanic’s, warehousemen’s,
and other Liens of a similar nature arising in the ordinary course of Borrower’s business, securing a Liability not yet
due and liens of Landlord’s arising pursuant to the terms of real property leases for which a Landlord’s Waiver has
been obtained, (b) Liens for taxes imposed upon a Person or upon such Person’s income, profits, or property, if the
same are not yet due and payable or if the same are being contested in good faith and as to which adequate reserves are maintained
in accordance with GAAP, (c) good faith deposits in connection with leases, real estate bids or contracts (other than contracts
involving the borrowing of money), pledges or deposits to secure (or in lieu of) surety, stay, appeal, or customs bonds and deposits
to secure the payment of taxes, assessments, customs, duties, or other similar charges, (d) encumbrances consisting of zoning
restrictions, easements, or other restrictions on the use of real property, (e) purchase money security interests that Bank has
consented to in writing, (f) Liens held by Bank, (g) the interests of lessors under operating leases which are subordinate to
Bank, (h) Liens set forth on Schedule 7.5 hereto.

 

“Potential Default”
means the occurrence of any event which in and of itself would be an Event of Default with passage of time or giving of notice
or both.

 

“Proceeds”
means all forms of payment received by or due to Borrower from the collection of Accounts or sale, lease, exchange, collection,
or other disposition of inventory or other property constituting Collateral hereunder and any and all claims against any third
party for loss or damage to any Collateral, including insurance claims, and further, without limiting the generality of the foregoing,
Proceeds shall include all Accounts, checks, cash, money orders, drafts, chattel paper, instruments, notes, or other documents
evidencing payment obligations to Borrower for sale or exchange of Collateral.

 

“Properties”
means all of a Person’s property of every kind and character, personal, intangible and mixed.

 

“Qualified
ECP Guarantor” means at any time, a corporation, partnership, proprietorship, organization, trust or other entity with
total assets exceeding $10,000,000.00.

 

“Revolving Line”
means a line of credit in favor of Borrower in the maximum amount of the Revolving Line Limit.

 

“Revolving Line
Limit” means Six Million and No/100 Dollars ($6,000,000.00), except as provided in Section 2.6.

 

“Revolving Loan”
means the revolving credit facility made or to be made hereunder to Borrower by Bank pursuant to Section 2.1.

 

“Revolving Note”
means the Revolving Line of Credit Note, dated the date hereof, evidencing the Revolving Loan executed by Borrower and delivered
to the Bank pursuant to the

terms of this Agreement in the maximum principal
amount of $6,000,000.00, together with any renewals, extensions, or modifications thereof.

 

“Security Documents”
means this Agreement, the Revolving Note, any Specified Hedge Agreement, the closing documents set forth on Exhibit “C”
attached hereto, and any agreements, documents (and with respect to this Agreement, and such other agreements and documents,
any renewals, extensions, amendments, or supplements thereto), or certificates at any time executed or delivered pursuant to the
terms of this Agreement.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	8	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

“Specified Hedge
Agreement” means any Hedge Agreement entered into by the Borrower and Bank related to interest rates under this Agreement.

 

“Stock”
means all shares, options, warrants, general or limited partnership interests, membership interests, or other ownership interests
(regardless of how designated) of or in a corporation, partnership, limited liability company, trust, or other entity, whether
voting or nonvoting, including common stock, preferred stock, or any other “equity security” (as such term is defined
in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended).

 

“Subordinated
Debt” means all Liabilities of Borrower to its subordinated creditors that are expressly and validly subordinated to
the Indebtedness pursuant to documents in form and substance acceptable to Bank.

 

“Subsidiary”
means, with respect to any Person, any corporation, association, partnership, joint venture, limited liability company or other
business entity of which such Person or any Subsidiary of such Person, directly or indirectly, either: (a) in respect of a corporation
or limited liability company, owns or controls more than fifty percent (50%) of the outstanding stock or other ownership interests,
having ordinary voting power to elect a majority of the board of directors or similar managing body, irrespective of whether or
not a class or classes shall or might have voting power by reason of the happening of any contingency; or (b) in respect of an
association, partnership, joint venture, or other business entity, is entitled to share in more than fifty percent (50%) of the
profits and losses, however determined.

 

“Swap Obligation”
means any Specified Hedge Agreement that constitutes a “swap” within the meaning of section 1a(47) of the Commodity
Exchange Act, as amended from time to time.

 

“Tangible Net
Worth” means, with respect to any Person, net worth plus all Subordinated Debt, less (i) any and all loans and
other advances to Affiliates, subsidiaries, parent, employees, officers, stockholders, directors, or other related entities; (ii)
notes, notes receivable, accounts, accounts receivable, inter-company receivable, and other amounts owing from Affiliates, subsidiaries,
parent, employees, officers, stockholders, directors, or other related entities; (iii) treasury stock, good will, trademarks,
trade names, patents, and deferred charges; and (iv) any and all other intangible assets, calculated in accordance with GAAP.

 

“UCC”
means the Texas Business and Commerce Code, as amended, or, if applicable, the Uniform Commercial Code, as adopted by any state
whose laws govern any aspect of the obligations of the parties hereunder.

 

“Work in Progress”
means further process is required to consider the item a finished good. Work in Progress items are “in between” the
raw material and finished goods state.

 

1.2
Accounting Terms. As used in this Agreement, and in the Revolving Note, and in any certificate, report or other document
made or delivered pursuant to this Agreement, accounting terms not defined in Section 1.1, and accounting terms partly
defined in Section 1.1 to the extent not defined, has, as of any date, the respective meanings given to them
under GAAP and all references to balance sheets or other financial statements means such statements, prepared in accordance
with GAAP as of such date.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	9	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

1.3 Rules
of Construction. When used in this Agreement: (a) “or” is not exclusive; (b) a reference to a law
includes any amendment or modification to such law; (c) a reference to a Person includes its permitted successors and
permitted assigns; (d) except as provided otherwise, all references to the singular shall include the plural and vice versa;
(e) except as provided in this Agreement, a reference to an agreement, instrument or document shall include such agreement,
instrument, or document as the same may be amended, modified or supplemented from time to time in accordance with its terms
and as permitted by the Security Documents; (f) all references to Sections, Schedules, or Exhibits shall be to Sections,
Schedules, or Exhibits of this Agreement, unless otherwise indicated; (g) all Exhibits to this Agreement shall be
incorporated into this Agreement; (h) the words “include,” “includes,” and “including”
shall be deemed to be followed by the phrase “without limitation;” and (i) except as otherwise provided herein,
in the computation of time from a specified date to a later specified date, the word “from” means “from and
including” and words “to” and “until” each mean “to but excluding.”

 

SECTION 2

THE REVOLVING LINE

 

2.1Revolving
Loan. Subject to the terms and conditions of this Agreement, and so long as no Potential Default or Event of Default has occurred
and is continuing:

 

(a)From
the date hereof until the Maturity Date, or such future date to which the Maturity Date may be extended, the Bank agrees to extend
to Borrower a revolving credit line in the amount of the Borrowing Base; provided, however, that in no event shall the aggregate
sum of all advances made by the Bank to Borrower under the Revolving Loan exceed the Revolving Line Limit. Within such limits,
the Borrower may borrow, repay, and reborrow hereunder, from the date of this Agreement until the Maturity Date.

 

(b)Each
request by a Borrower for an advance under the Revolving Loan shall be received by a duly authorized representative of Bank not
later than 11:00 a.m. Texas time, on the date of the requested advance, which shall be on a Business Day. Further, each such request
for advance shall be in writing and shall specify: (i) the amount of the requested advance; and (ii) the proposed date of the
advance (which shall be a Business Day). Bank, at its option, may accept telephonic requests for advances, provided that such
acceptance shall not constitute a waiver of the Bank’s right to delivery of a written notice in connection with subsequent
advances and further provided that all such telephonic requests are immediately confirmed by the Borrower in writing, whether
by facsimile or otherwise. Bank shall make such advances available to the Borrower by depositing the same, in immediately available
funds, in an account of Borrower maintained with Bank, or by such other means as is acceptable to Bank and Borrower. A responsible
officer of Borrower may call Bank before delivering a request for advance to receive an indication of the interest rates then
in effect, but the indicated rates do not bind Bank or affect the interest rate that is actually in effect when Borrower delivers
its Notice of Borrowing.

 

2.2Conditions
to Each Advance. The obligation of the Bank to make any advance after the date of this Agreement under the Revolving Loan
is subject to the full and complete satisfaction of each of the following conditions precedent as of the date of each advance:

 

(a)The
representations and warranties set forth in Section 5 of this Agreement are true and correct as of the date of the making
of such advance to the same extent as if the representation or warranty had been made on the date of each advance;

 

(b)No
Event of Default has occurred and is continuing, or will result from, the making of such advance; and

 

(c)Bank
has received such additional approvals or documents as Bank may reasonably request.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	10	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

2.3Borrower’s Loan
Account. All borrowings under the Revolving Loan will be evidenced by the Revolving Note and by entering such advances as
debits to Borrower’s Loan Account. Bank also will record in Borrower’s Loan Account other charges, expenses, and items
properly chargeable to Borrower hereunder, all payments made by such Borrower on account of its indebtedness hereunder, and other
appropriate debits and credits. The debit balance of Borrower’s Loan Account will reflect the amount of Borrower’s
indebtedness under the Revolving Loan from time to time hereunder. Notwithstanding the foregoing, no failure by Bank to properly
reflect any advance actually made or any such charge, expense, or item actually incurred in Borrower’s Loan Account will
relieve Borrower from its true and correct obligations with respect thereto. At least once each month, Bank will render a statement
of account for Borrower’s Loan Account. Each such statement will be considered correct and be conclusively binding upon
Borrower except to the extent that Bank receives a written notice of Borrower’s exceptions within thirty (30) days after
such statement has been mailed by ordinary mail to Borrower. Terms and conditions with respect repayment of the Revolving Loan
are set forth in the Revolving Note.

 

2.4Excess Advances.
In the event the unpaid principal amount of the outstanding balance of Borrower’s Loan Account for the Revolving Loan ever
exceeds the amount of the Revolving Line Limit, Borrower agrees to pay the excess amount (an “Overline”) immediately
upon demand by Bank.  In the event the unpaid principal amount of the outstanding balance of Borrower’s Loan Account
for the Revolving Loan ever exceeds the Borrowing Base, Borrower agrees to pay the excess amount (an “Overadvance”)
immediately upon demand by Bank. Overlines and Overadvances will bear interest at the rate stated in the Revolving Note. 
If not sooner paid, interest on Overlines and Overadvances will be paid on the last day of each month, until the Revolving Loan
Maturity Date.  Upon request of Bank, Borrower will execute a promissory note, payable to the order of Bank, to represent
the amount of any Overline and any Overadvance; however, Borrower acknowledges and agrees that the records of Bank and this Agreement
will constitute conclusive evidence of any Overline or Overadvance and the obligation of Borrower to repay any Overline and Overadvance,
with interest. All Overlines and Overadvances for which Bank has not demanded payment earlier, and all unpaid and accrued interest
on Overlines and Overadvances not due and payable earlier, will be due and payable on the Revolving Loan Maturity Date. 
Borrower acknowledges and agrees that Bank is not obligated to fund any advance that would create an Overline or an Overadvance.

 

2.5Following
Maturity. In the event that the availability of advances under the Revolving Line expires by the terms of this Agreement,
or by the terms of any agreement extending the expiration date of this Agreement, Bank may, in its sole discretion, make requested
advances; however, it is expressly acknowledged and agreed that, in such event, Bank has the right, in its sole discretion, to
decline to make any requested advance and may require payment in full of Borrower’s Loan Account with respect to the Revolving
Loan, and the making of any such advances will not be construed as a waiver of such right by Bank.

 

2.6Increase
in Revolving Line Limit.  Borrower may, at any time prior to the Maturity Date, request in writing
that the Revolving Line Limit be increased, subject to the following terms and conditions:

 

(a)No
Potential Default or Event of Default exists on the effective date of such increase after giving effect to such increase;

 

(b)Borrower will deliver,
with its written request for an increase, a current Borrowing Base Certificate, which will contain a borrowing base calculation
sufficient to justify, in Bank’s sole discretion, such increase;

 

(c)After
giving effect to such increase, the Revolving Line Limit will not exceed Eight Million and No/100 Dollars ($8,000,000.00);

 

(d)Borrower may request
only one increase in the Revolving Line Limit during the term of this Agreement;

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	11	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

(e)Borrower will deliver
to Bank on or before the effective date of such increase the following documents in form and substance satisfactory to Bank: (1) resolutions
of the governing body of Borrower, certified by the Secretary or an Assistant Secretary (or other custodian of records) of such
Person, which authorize the increase in the Revolving Line Limit; (2) a certificate, dated as of the effective date of such
increase certifying that no Potential Default or Event of Default has occurred and is continuing, and certifying that the representations
and warranties made by Borrower herein and in the Security Documents are true and complete in all material respects with the same
force and effect as if made on and as of such date (except to the extent any such representation or warranty expressly relates
only to any earlier and/or specified date); and (3) such other agreements, instruments and information (including supplements
or modifications to this Agreement and/or the Security Documents) executed by Borrower as Bank deems necessary in order to document
the increase to the Revolving Line Limit and to protect, preserve and continue the perfection and priority of the liens, security
interests, rights and remedies of Bank hereunder and under the Security Documents in light of such increase;

 

(f)Borrower
will execute and deliver to Bank a replacement Revolving Note reflecting the new amount of the Revolving Line Limit after giving
effect to the increase (and the prior Revolving Note will be deemed to be cancelled); and

 

(g)On
the effective date of such increase, Borrower will pay all costs and expenses incurred by Bank in connection with the negotiations
regarding, and the preparation, negotiation, execution and delivery of all agreements and instruments executed and delivered by
Bank or Borrower in connection with such increase (including all fees for any supplemental or additional public filings of any
Security Documents necessary to protect, preserve and continue the perfection and priority of the liens, security interests, rights
and remedies of Bank hereunder and under the Security Documents in light of such increase).

 

2.7Purpose.
All funds borrowed under the Revolving Line will be used to provide additional working capital, for general corporate purposes,
and for the acquisition of equipment.

 

2.8Fees.

 

(a)Borrower
will pay to Bank an unused line fee at the rate of [***] per annum on the average daily Unused Revolving Loan Amount from the
date of this Agreement to and including the Maturity Date, due and payable quarterly in arrears on the first day of the month
of each quarter and on the Maturity Date. For the purposes of this Section, “Unused Revolving Loan Amount”
means the Revolving Line Limit reduced by the aggregate sum of all outstanding advances made by Bank to Borrower under the Revolving
Line.

 

(b)Borrower
acknowledges that the fees payable hereunder are bona fide fees and are intended as reasonable compensation to Bank for agreeing
to make funds available to Borrower as described herein and for no other purposes.

 

2.9Advance
Not a Waiver. No advance shall constitute a waiver of any of the conditions of Bank’s obligations hereunder, nor,
in the event Borrower is unable to satisfy any such condition, shall any advance have the effect of precluding Bank from
thereafter declaring Event of Default.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	12	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

SECTION 3

COLLATERAL AND GUARANTIES

 

3.1Grant
of Security Interest. As security for the payment and performance of all Indebtedness, Bank has and is hereby granted a continuing
lien on, a security interest in and a right of set-off against the following Collateral:

 

(a)all
Accounts of Borrower, whether now or hereafter existing, created, arising or acquired;

 

(b)all
Inventory of Borrower, whether now or hereafter existing, created, arising or acquired;

 

(c)all
Equipment of Borrower, whether now or hereafter existing, created, arising or acquired;

 

(d)all
General Intangibles of Borrower, whether now or hereafter existing, created, arising, or acquired, including, without limitation,
the Intellectual Property;

 

(e)without
limitation to the foregoing, all contract rights, chattel paper, documents, documents of title, warehouse receipts, bills of lading,
notes, and notes receivable instruments of Borrower, whether now or hereafter existing, created, arising, or acquired;

 

(f)without
limitation to the foregoing, all goods, instruments, notes, notes receivable, documents, documents of title, warehouse receipts,
bills of lading, certificates of title, policies and certificates of insurance, securities, chattel paper, deposits, cash and
other property now or hereafter owned by Borrower or in which it now or hereafter has an interest, which are now or may hereafter
be in the possession of or deposited with Bank, or which are otherwise assigned to Bank, or as to which Bank may now or hereafter
control possession by documents of title or otherwise;

 

(g)all books
and records now owned and hereafter acquired relating to any other Collateral and all files, correspondence, computer programs,
tapes, disks and related data processing software owned by Borrower or in which Borrower has an interest that contains information
concerning or relating to any of the other Collateral or any item thereof; and

 

(h)all Proceeds
and products of all of the foregoing, including, without limitation, insurance proceeds.

 

No submission by Borrower to Bank of any schedule
or other particular identification of Collateral will be necessary to vest in Bank a security interest in each and every item
of Collateral now existing or hereafter acquired, but rather, such security interest will vest in Bank immediately upon the creation
or acquisition of any item of Collateral, without the necessity for any other or further action by Borrower or Bank.

 

3.2Applicable UCC. To
the extent applicable, the UCC in effect in the State of Texas governs the security interests provided for herein.

 

3.3Perfection and Protection
of Liens. Borrower hereby irrevocably authorizes Bank to file (and will upon Bank’s request execute and deliver to Bank)
any financing statements, continuation statements, extension agreements and other documents, properly completed and executed (and
acknowledged when required) by Borrower in form and substance reasonably satisfactory to Bank, for the purpose of perfecting,
confirming, or protecting Bank’s Liens and other rights in the Collateral.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	13	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

SECTION 4

CONDITIONS PRECEDENT

 

The obligation of Bank
to make the first advance under the Revolving Loan is subject to the conditions precedent that, on or before the date of such
advance or funding, (a) Borrower has paid to Bank (i) all fees to be received by Bank pursuant to this Agreement or any other
Security Document, and (ii) an amount equal to the estimated fees and out-of-pocket expenses of Bank’s counsel incurred
in connection with the preparation, execution, and delivery of the Security Documents and the consummation of the transactions
contemplated thereby; (b) Bank has received duly executed copies of (i) a current Borrowing Base Certificate, (ii) a current customer
address list, including the names, addresses and telephone numbers of all Account Debtors, and (iii) each of the documents and
items listed on Exhibit “C”, each dated as of the date of the Revolving Loan, if applicable, and each in form
and substance satisfactory to Bank, in its sole discretion; (c) no Event of Default exists; (d) no change that would cause a Material
Adverse Effect has occurred since the date of the financial statements referenced in Section 5.7; and (e) the representations
and warranties contained in each of the Security Documents will be true and correct in all material respects as though made on
the date of the Revolving Loan.

 

SECTION 5

REPRESENTATIONS AND WARRANTIES

 

To induce Bank to make
the Loan hereunder, Borrower represents and warrants to Bank that:

 

5.1Organization
and Good Standing. Borrower is duly organized and in good standing under the laws of the state of its organization, or formation,
as the case may be, is duly qualified and in good standing in all states in which it is doing business, has the power and authority
to own its properties and assets and to transact the business in which it is engaged in each jurisdiction in which it operates,
and is or will be qualified in those states where qualification is required.

 

5.2Authorization
and Power. Borrower has full power and authority to execute, deliver, and perform the Security Documents to be executed by
it, all of which has been duly authorized by all proper and necessary action.

 

5.3No Conflicts
or Consents. Neither the execution and delivery of the Security Documents, nor the consummation of any of the transactions
therein contemplated, nor compliance with the terms and provisions thereof, will contravene or conflict with any Legal Requirement
to which Borrower is subject, any Governmental Authorization applicable to Borrower, any indenture, loan agreement, mortgage,
deed of trust, or other material agreement or instrument binding on Borrower, or any Constituent Document of Borrower. No consent,
approval, authorization, or order of any court, Governmental Authority, shareholder, director, partner, member, or third party
is required in connection with the execution, delivery, or performance by Borrower of any of the Security Documents, except for
consents, approvals, authorizations and orders which have been obtained and delivered to Bank.

 

5.4Enforceable
Obligations. The Security Documents have been duly executed and delivered by Borrower and are the legal and binding obligations
of Borrower, enforceable in accordance with their respective terms, except as limited by Debtor Laws and subject to general principles
of equity, regardless of whether considered in a proceeding in equity or at law.

 

5.5Ownership of Collateral.
Except for (a) the security interests granted hereby or by any other document executed in favor of Bank, and (b) Permitted
Liens, Borrower is and, as to Accounts, Inventory, and other Collateral arising or to be acquired after the date hereof, will
be, the sole and exclusive owner of the Accounts, Inventory, and each and every other item of Collateral, free from any Lien,
and Borrower will defend its Accounts, Inventory, and each and every other item of Collateral and all Proceeds and products thereof
against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to Bank.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	14	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

5.6Offices. Set forth
on Schedule 5.6 is a list of each location of Borrower at which Inventory and other tangible Collateral is located, records
of Borrower pertaining to Accounts are kept and of Borrower’s chief executive office.

 

5.7Financial Condition.
Borrower has delivered to Bank copies of the financial statements of the Borrower, as of September 30, 2014; such financial
statements are true and correct, fairly represent the financial condition of each such Person as of such date and have been prepared
in accordance with GAAP; as of the date hereof, there are no obligations or Liabilities (including contingent and indirect Liabilities)
of such Person which are material and are not reflected in such financial statements which are otherwise required to be disclosed
in accordance with GAAP; and no Material Adverse Effect has occurred since the date of such financial statements.

 

5.8No Default.
No event has occurred and is continuing which constitutes a Potential Default or an Event of Default.

 

5.9No Litigation.
There are no actions, suits or legal, equitable, arbitration or administrative proceedings pending, or to the knowledge of
Borrower threatened, against Borrower that could reasonably be expected to, if adversely determined, result in liability in excess
of $100,000.00 or otherwise have a Material Adverse Effect, except as described in Schedule 5.9.

 

5.10Use of Proceeds;
Margin Stock. The proceeds of the Revolving Loan will be used by Borrower solely for the purposes specified in Section 2.9.
None of such proceeds will be used for the purpose of purchasing or carrying any “margin stock” as defined in Regulations
T, U, or X of the Board of Governors of the Federal Reserve System or for any other purpose which might constitute this transaction
a “purpose credit” within the meaning of such Regulations. If requested by Bank, then Borrower will furnish to Bank
a statement in conformity with the requirements of the Federal Reserve Form U-1 referred to in said Regulation U to the foregoing
effect. No part of the proceeds of the Revolving Loan will be used for any purpose which violates, or is inconsistent with, the
provisions of Regulation X.

 

5.11Taxes. All
tax returns required to be filed by Borrower in any jurisdiction have been filed and all taxes shown to be due on such tax returns
(including mortgage recording taxes), assessments, fees, and other governmental charges upon Borrower or upon any of its properties,
income, or franchises have been paid except for taxes being contested in good faith by appropriate proceedings diligently prosecuted
and as to which adequate reserves have been established in accordance with GAAP. To the best of Borrower’s knowledge, there
is no proposed tax assessment against Borrower and all tax Liabilities of Borrower are adequately provided for. No income tax
Liability of Borrower has been asserted by the Internal Revenue Service for taxes in excess of those already paid.

 

5.12Compliance
with Law.

 

(a)(i) Borrower
is in compliance with its Constituent Documents, and with all Legal Requirements which are applicable to it or to the conduct
or operation of its business or the ownership or use of any of its assets; and (ii) Borrower has not received any notice
or other communication from any Governmental Authority or other Person of any event or circumstance that could constitute a violation
of, or failure to comply with, any material Legal Requirement.

 

(b)(i) Borrower
is in compliance with all of the terms and requirements of each Governmental Authorization held by it; (ii)  Borrower has
not received any notice or other communication from any Governmental Authority or other Person of any event or circumstance that
could constitute a violation of, or failure to comply with, any term or requirement of any Governmental Authorization, or of any
actual or potential revocation, withdrawal, cancellation, or termination of, or material modification to, any Governmental Authorization;
and (iii) all applications required to have been filed for the renewal of any required Governmental Authorizations have been
duly filed on a timely basis with the appropriate Governmental Authorities, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly made on a timely basis with the appropriate Governmental Authorities.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	15	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

5.13Subsidiaries
and Affiliates. Borrower has no subsidiaries or Affiliates other than set forth in Schedule 5.13.

 

5.14Sufficiency
of Capital. Borrower is, and after consummation of this Agreement and, after giving effect to all Liabilities incurred in
connection herewith, will be solvent.

 

5.15Operation of
Business. Borrower possesses all material licenses, permits, franchises, patents, copyrights, trademarks, and trade names,
or rights thereto, necessary to conduct its business substantially as now conducted and as presently proposed to be conducted,
and Borrower is not in violation of any valid rights of others with respect to any of the foregoing.

 

5.16Disclosure.
No statement, certificate, information, report, representation, or warranty made by Borrower in this Agreement or in any other
Security Document or furnished to Bank in connection with this Agreement or any of the transactions contemplated hereby contains
any untrue statement of a material fact. There is no fact known to Borrower that has a Material Adverse Effect, or which might
in the future reasonably be expected to have a Material Adverse Effect, on the business condition (financial or otherwise), operations,
prospects, or properties of Borrower that has not been disclosed in writing to Bank.

 

5.17Environmental
Matters.

 

(a)Borrower
and all of its respective properties, assets, and operations are in full compliance with all Environmental Laws except where the
failure to be in compliance would reasonably be expected not to have a Material Adverse Effect. Borrower is not aware of, nor
has Borrower received notice of, any past, present, or future conditions, events, activities, practices, or incidents which may
interfere with or prevent the compliance or continued compliance of Borrower with all Environmental Laws;

 

(b)Borrower
has obtained all permits, licenses, and authorizations that are required under applicable Environmental Laws, and all such permits
are in good standing and Borrower is in compliance with all of the terms and conditions of such permits, except where the failure
to be in compliance would reasonably be expected not to have a Material Adverse Effect;

 

(c)No
Hazardous Materials exist on, about, or within or have been used, generated, stored, transported, disposed of on, or released
from any of the properties or assets of Borrower. The use which Borrower makes and intends to make of its properties and assets
will not result in the use, generation, storage, transportation, accumulation, disposal,
or release of any Hazardous Material on, in, or from any of its properties or assets;

 

(d)To
the knowledge of Borrower, neither Borrower nor any of its respective currently or previously owned or leased properties or operations
is subject to any outstanding or threatened order from or agreement with any Governmental Authority or other Person or subject
to any judicial or docketed administrative proceeding with respect to (i) failure to comply with Environmental Laws, (ii) remedial
action, or (iii) any Liabilities under any Environmental Law arising from a release or threatened release;

 

(e)There
are to Borrower’s knowledge no conditions or circumstances associated with the currently or previously owned or leased properties
or operations of Borrower that could reasonably be expected to give rise to any Liabilities under any Environmental Laws;

 

(f)Borrower
is not a treatment, storage, or disposal facility requiring a permit under the Resource Conservation and Recovery Act, 42 U.S.C.
§ 6901 et seq., regulations thereunder or any comparable provision of state law. Borrower is in compliance with all applicable
financial responsibility requirements of all Environmental Laws;

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	16	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

(g)Borrower
has not filed or failed to file any notice required under applicable Environmental Law reporting a release; and

 

(h)No Lien
arising under any Environmental Law has attached to any property or revenues of Borrower.

 

5.18Intellectual Property.
All material Intellectual Property owned or used by Borrower is listed, together with application or registration numbers, where
applicable, in Schedule 5.18. Borrower owns, or is licensed to use, all Intellectual Property necessary to conduct its
business as currently conducted except for such Intellectual Property the failure of which to own or license could not reasonably
be expected to have a Material Adverse Effect. Each Person identified on Schedule 5.18 will maintain the patenting and
registration of all Intellectual Property with the United States Patent and Trademark Office, the United States Copyright Office,
or other appropriate Governmental Authority, except with respect to such Intellectual Property such Person determines in its sole
but reasonable commercial judgment the patenting or registration need not be maintained.

 

5.19Survival of
Representations and Warranties. All representations and warranties by Borrower herein will survive delivery of the Revolving
Note and the making of the Revolving Loan.

 

SECTION 6

AFFIRMATIVE COVENANTS

 

Until payment in full
of the Indebtedness, Borrower agrees that, unless Bank otherwise consents in writing:

 

6.1Financial Statements,
Reports and Documents. Borrower will deliver to Bank each of the following:

 

(a)As soon
as available, and in any event within one hundred twenty (120) days following the end of Borrower’s fiscal year, an audited
financial statement for Borrower, prepared by an independent certified public accountant acceptable to Bank, showing the financial
condition of Borrower and its subsidiaries on a consolidated basis, at the close of such fiscal year and the results of its operations
during such fiscal year, which financial statements will be materially complete and correct, prepared in accordance with GAAP,
and will include, without limitation, an operating statement, an income statement, a balance sheet, a reconciliation of equity
amounts, a source and application of funds report, an annual budget and such other matters as Bank may reasonably request;

 

(b)As soon
as available, and in any event within forty-five (45) days following the end of each calendar quarter, internally prepared financial
statements for Borrower and its subsidiaries on a consolidated basis, signed by a duly authorized representative, and showing
the results of its operations during such calendar quarter, which statements will include, without limitation, an income statement,
a balance sheet, and such other matters as Bank may reasonably request;

 

(c)As soon
as available and in any event within forty-five (45) days from the end of each calendar quarter, a Compliance Certificate for
Borrower in the form attached to this Agreement as Exhibit ”A” for the fiscal year or calendar month having
then ended, as applicable, together with supporting financial statements and reports;

 

(d)As soon
as available, and in any event within twenty (20) days from the end of each calendar month, a Borrowing Base Certificate prepared
by Borrower and signed by a duly authorized representative in form acceptable to Bank, which will contain such supporting information
as Bank requests, including, without limitation, an Inventory schedule and a perpetual Inventory listing;

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	17	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

(e)As soon
as available, and in any event within twenty (20) days after the filing thereof, and in any event by October 15 of each year,
a copy of the federal income tax returns of Borrower and its subsidiaries and all requests for extensions to the filing thereof;

 

(f)As soon
as available, and in any event within thirty (30) days following the end of each calendar month, reports including, (i) agings
of the Accounts Receivables aged by invoice due date, (ii) Accounts Receivable of Borrower, with foreign accounts and country
of origin noted, and a reconciliation report fully reconciled to the general ledger for Accounts Receivable, (iii) detailed Inventory
listings segregated by gloves, apparel and promotional items and a reconciliation report fully reconciled to the general ledger
as of the last day of the immediately preceding calendar month, (iv) agings of the Accounts payable as of the last day of the
immediately preceding calendar month fully reconciled to the general ledger, (v) a general ledger trial balance listing, (vi)
a slow-moving Inventory report; (vii) a list of customer deposits and a customer deposit reclassification report; (viii) a rebates
report; (ix) schedules of in transit inventory, inventory located outside of the United States, and private label inventory; and
(x) a reconciliation report of the Accounts Receivable, Accounts payable and Inventory sub-ledger report totals that are not in
direct agreement with the general ledger balances, all in form and substance acceptable to Bank, as of the last day of the immediately
preceding calendar month, and the period of time which has elapsed with respect to such Accounts Receivable since the invoice
date with respect thereto;

 

(g)As soon
as available, and in any event within twenty (20) days following the end of Borrower’s fiscal year, a complete listing of
customers and customer addresses; and

 

(h)Such
other documents, instruments, data, or information of any type reasonably requested by Bank with respect to the customer list,
accounts receivable, collections, remittances, Inventory and any other Collateral.

 

6.2Insurance.
Borrower will (a) have and maintain at all times general liability insurance and workers’ compensation insurance and, with
respect to Collateral, equipment, real estate and other substantial assets of Borrower and all facets of Borrower’s business,
comprehensive and catastrophic insurance, including, without limitation, insurance against risks of fire, theft, windstorm, and
hail, so-called multi-peril extended hazard coverage, and insurance against other risks customarily insured against by companies
engaged in similar business to that of Borrower, containing such terms, and in such form and amount, and for such periods, and
written by such companies as may be reasonably satisfactory to Bank; (b) furnish to Bank, upon request, a statement of the insurance
coverage; (c) obtain other or additional insurance promptly, upon the reasonable request of Bank, to the extent that such insurance
may be available and is customary in Borrower’s line of business and geographic region; and (d) cause Bank, P.O. Box 17200,
Shreveport, Louisiana 71148, to be named as (i) an additional insured on all of Borrower’s liability insurance policies,
and (ii) loss payee as to all property constituting Collateral hereunder, pursuant to a mortgagee or loss payable endorsement
in form acceptable to Bank. All insurance proceeds, payments and other amounts paid to or received by Bank under or in connection
with any and all such policies may be retained by Bank in whole or part as additional Collateral for the Indebtedness and/or,
at Bank’s option, be applied in whole or part to the payment of such of the Indebtedness as will then be due, and/or, at
Bank’s option, be held (in a remittance or other special account in which Borrower has no interest) for application to Indebtedness
not yet due and be applied to such Indebtedness as and when the same will come due, in such order as Bank may determine in its
sole discretion. All insurance policies will provide for a minimum of thirty (30) days’ written cancellation notice to Bank
and, at Bank’s request, all such policies will be delivered to and held by Bank. In the event of failure to provide and
maintain insurance required by this Agreement, Bank may, at its option, provide such insurance and charge the costs and expenses
incurred to Borrower’s Loan Account. Bank is hereby made attorney-in-fact for Borrower to (i) obtain, adjust and
settle, in its sole discretion, such insurance, and (ii) endorse any drafts or checks issued in connection with such insurance.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	18	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

6.3Payment of Taxes
and Other Liabilities. Borrower will pay and discharge (a) all taxes, assessments, and governmental charges or levies imposed
upon it or upon its income or profits, or upon any property belonging to it, before delinquent, (b) all lawful claims (including
claims for labor, materials and supplies), which, if unpaid, might give rise to a Lien upon any of its property, excluding Permitted
Liens, and (c) all of its other Liabilities, except as prohibited under the Security Documents; provided, however, that Borrower
will not be required to pay any such tax, assessment, charge, or levy if and so long as the amount, applicability or validity
thereof is being contested in good faith by appropriate proceedings and appropriate accruals and cash reserves therefor have been
established in accordance with GAAP.

 

6.4Depository Accounts.
Borrower shall establish and maintain with Bank its operating and depository accounts, including treasury management (“Depository
Accounts”), and Bank, at Bank’s option, may make all advances hereunder into Borrower’s Depository Accounts,
and Borrower expressly agrees that Bank may, at Bank’s option, debit against any such Depository Accounts any and all sums,
amounts, charges, and payments due under or in connection with the Loan.

 

6.5Operations and Properties.
Borrower will keep and maintain the Equipment and all other tangible Collateral in good operating condition, ordinary wear
and tear excepted, and Borrower will provide all maintenance, service and repairs necessary for such purposes. Borrower shall
(a) act prudently and in accordance with customary industry standards in managing and operating its assets and properties, and
(b) keep in good working order and condition, ordinary wear and tear excepted, all of its assets and properties which are necessary
to the conduct of its business.

 

6.6Maintenance
of Existence and Rights; Conduct of Business. Borrower and its subsidiaries shall preserve and maintain its corporate existence
and all of its rights, privileges, and franchises necessary or desirable in the normal conduct of its business, and conduct its
business in an orderly and efficient manner consistent with good business practices and in accordance with all Legal Requirements
of any Governmental Authority.

 

6.7Notice of Default;
Other Notices. Borrower shall furnish to Bank, immediately upon becoming aware of the existence of any condition or event
which constitutes a Potential Default or an Event of Default, written notice specifying the nature and period of existence thereof
and the action which Borrower or any Affiliate is taking or proposes to take with respect thereto. Borrower shall promptly notify
Bank of (a) any material adverse change in Borrower’s or any of its Affiliates’ financial condition or business,
(b) any default under any material agreement, contract, or other instrument to which Borrower or any of its Affiliates is
a party or by which any of Borrower’s or any of its Affiliates’ properties are bound, or any acceleration of the maturity
of any Liabilities owing by Borrower or any of its Affiliates, (c) the occurrence of any fact or circumstance which would
reasonably be expected to cause a Material Adverse Effect against or affecting Borrower or any of its Affiliates, or any of their
respective properties, and (d) the commencement of, and any material determination in, any litigation with any third party
or any proceeding before any Governmental Authority affecting Borrower or any of its Affiliates.

 

6.8Compliance with
Law. Borrower and its subsidiaries shall comply with all applicable Legal Requirements of any Governmental Authority, a breach
of which could have a Material Adverse Effect.

 

6.9             
Authorizations and Approvals. Borrower shall promptly obtain, from time to time at its own expense, all Governmental Authorizations
as may be required to enable it to comply with its obligations hereunder and under the other Security Documents.

 

6.10         
Further Assurances. Borrower shall make, execute, and deliver or file or cause the same to be done, all such notices, additional
agreements, mortgages, assignments, financing statements, or other assurances, and take any and all such other action, as Bank
may, from time to time, deem reasonably necessary or proper in connection with any of the Security Documents.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	19	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

6.11Indemnity by
Borrower. Borrower shall indemnify, defend, and hold harmless Bank and its directors, officers, agents, attorneys, and employees
(individually, an “Indemnitee” and collectively, the “Indemnitees”) from and against any and all loss,
liability, obligation, damage, penalty, judgment, claim, deficiency, and expense (including interest, penalties, attorneys’
fees, and amounts paid in settlement) to which the Indemnitees may become subject arising out of this Agreement and the other
Security Documents, other than those which arise by reason of the gross negligence or willful misconduct of Bank, BUT SPECIFICALLY
INCLUDING ANY LOSS, LIABILITY, OBLIGATION, DAMAGE, PENALTY, JUDGMENT, CLAIM, DEFICIENCY, OR EXPENSE ARISING OUT OF THE SOLE OR
CONCURRENT NEGLIGENCE OF BANK. Borrower shall also indemnify, protect, and hold each Indemnitee harmless from and against
any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, proceedings, costs, expenses
(including without limitation all reasonable attorneys’ fees and legal expenses whether or not suit is brought), and disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred by, or asserted against such Indemnitee, with respect
to or as a direct or indirect result of the violation by Borrower of any Environmental Law; or with respect to or as a direct
or indirect result of Borrower’s use, generation, manufacture, production, storage, release, threatened release, discharge,
disposal, or presence of a Hazardous Material on, under, from, or about real property. The provisions of and undertakings and
indemnifications set forth in this Section 6.11 shall survive (a) the satisfaction and payment of the Indebtedness and
termination of this Agreement, and (b) the release of any Liens held by Bank on real property or the extinguishment of such Liens
by foreclosure or action in lieu thereof.

 

6.12Keepwell. Borrower
and each Guarantor hereby absolutely, unconditionally and irrevocably undertakes that if it is a Qualified ECP Guarantor at the
time the guaranty by a Guarantor or other third party that is not then an “eligible contract participant” under the
Commodity Exchange Act (each, a “Specified Party”), or the grant of a security interest to Bank by any such Specified
Party, in either case, becomes effective with respect to any Hedge Agreement, to provide such funds or other support to such Specified
Party that is a corporation, partnership, proprietorship, organization, trust or other entity as may be needed by such Specified
Party from time to time to honor all of its obligations in respect of such Hedge Agreement. Borrower and each Guarantor intends
this Section 6.12 to constitute, and this Section 6.12 shall be deemed to constitute, a guarantee of the obligations
of, and a “keepwell, support, or other agreement” for the benefit of, each Specified Party for all purposes of the
Commodity Exchange Act.

 

SECTION 7

NEGATIVE COVENANTS

 

Until payment in full
of the Indebtedness, Borrower agrees that (unless Bank otherwise consents in writing):

 

7.1Change
of Location. Borrower will not change (or permit to be changed) any office or location, or move any of the Collateral, except
in the ordinary course of business, without (i) at least thirty (30) days prior written notice to Bank, and (ii) prior to making
any such change, executing and delivering to Bank any additional financing statements or other documents that Bank may request.

 

7.2Disposition
of Assets. Borrower will not sell, transfer, lease, otherwise dispose of, or permit to be sold, transferred, or leased any
of the Accounts, Inventory, Equipment and the other Collateral or any interest therein (or any of the Proceeds thereof, whether
money, checks, money orders, drafts, notes, instruments, documents, chattel paper, Accounts, returns, or repossessions) or of
any other property of Borrower, except for the sale of Inventory in the ordinary course of business and except for obsolete equipment.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	20	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

7.3Limitations
on Liabilities. Borrower will not incur, create, issue, assume, guarantee, endorse or permit to exist any Liabilities except:

 

(a)Indebtedness
to Bank provided for in this Agreement;

 

(b)other
indebtedness not to exceed $[***] (plus normal trade debt); and

 

(c)any Subordinated
Debt to which Bank consents in writing, including without limitation, the Subordinated Debt set forth on Schedule 7.3(b)
attached hereto.

 

7.4Subordinated
Debt. Borrower will not make any payment upon any outstanding Subordinated Debt, except as expressly permitted under the terms
of a written subordination agreement executed by Bank and the holder of the Subordinated Debt. Notwithstanding the forgoing, Borrower
shall not be entitled to make any payment of Subordinated Debt if a Potential Default or an Event of Default is in existence and
is continuing or if the making of any such payment would cause a Potential Default or an Event of Default to exist.

 

7.5Negative Pledge.
Borrower will not create, incur, permit, or suffer to exist any Lien upon their Properties, now owned or hereafter acquired,
except for Permitted Liens.

 

7.6Restrictions
on Distributions. Borrower will not directly or indirectly declare or make, or incur any Liability to make, any Distributions.

 

7.7Limitation on
Investments. Borrower will not have or make any Investments in any Person.

 

7.8Management.
Borrower will not change its present management without prior notice to Bank.

 

7.9Issuance of
Stock. Borrower will not issue, sell, or otherwise dispose of, any of its Stock, or rights, warrants, or options to purchase
or acquire any of its Stock, except that Borrower may issue options to employees and consultants under its existing stock option
plan, as the same may be amended from time to time, and may issue stock in private placements under Section 4(2) of the Securities
Act of 1933 and the regulations thereunder.

 

7.10Liquidation,
Mergers, Consolidations and Dispositions of Substantial Assets. Borrower will not dissolve or liquidate, or become a party
to any merger or consolidation, other than a merger of its subsidiaries into Borrower or acquire by purchase, lease, or otherwise
all or substantially all of the Property or Stock of any Person, or sell, transfer, lease, or otherwise dispose of all or any
substantial part of its Properties or business, without the prior consent of Bank.

 

7.11Constituent
Documents. Borrower will not (a) violate the provisions of its Constituent Documents, or (b) modify, repeal, replace,
or amend any provision of its Constituent Documents except for non-substantive changes or changes made to comply with applicable
laws.

 

7.12Accounting
Practices.  Borrower will not materially change accounting practices, methods or standards or the reporting format
for any information furnished Bank under the terms and provisions of this Agreement, which accounting practices shall conform
with GAAP throughout the term of this Agreement.

 

7.13Prepayment of Debt. Borrower
will not prepay any Liabilities except the Indebtedness.

 

7.14Nature of Business. Borrower
will not engage in any business other than the business in which it is engaged as of the date hereof.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	21	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

7.15Financial Covenants. Borrower,
on a consolidated basis, will not, as of the last day of each calendar quarter, have:

 

(a)a Debt
Service Coverage Ratio of less than [***] to [***], calculated on a trailing twelve (12) months basis; and

 

(b)a Tangible
Net Worth of less than $[***], to be increased annually as of the last day of each calendar year, beginning December 31, 2015,
by an amount equal to [***] of Borrower’s positive net income, if any, for such calendar year, with no regard to losses.

 

7.16Future Subsidiaries.
With respect to each Person that becomes a domestic Subsidiary of Borrower (directly or indirectly) subsequent to the Effective
Date, Borrower will cause such new Subsidiary to execute and deliver to Bank, within thirty (30) days after the date such Person
becomes a Subsidiary of Borrower:

 

(a)a Guaranty,
in form and substance acceptable to Bank, pursuant to which such Subsidiary will guarantee in full the payment of the Indebtedness;
and

 

(b)a Security
Agreement, in form and substance acceptable to Bank, pursuant to which such Subsidiary will grant Bank a valid first priority
perfected Lien over its Collateral (as defined herein).

 

SECTION 8

FIELD AUDITS

 

Borrower shall, as reasonably
requested by Bank thereafter (but not more than two times in any twelve-month period unless there is a continuing Event of Default),
allow Bank, by or through any of its officers, agents, employees, attorneys, or accountants (i) to examine, copy, or make
extracts from Borrower’s books, records and documents in the possession of Borrower; (ii) to analyze financial statements;
(iii) to arrange for verification of Accounts and other Collateral under reasonable procedures, directly with Account Debtors
or by other methods; and (iv) visit each of Borrower’s places of business (all the foregoing collectively referred to as
“Audits”). Borrower shall maintain complete and accurate books and records of its transactions in accordance
with good accounting practices. Audits by Bank may be at any time during normal business hours. Borrower shall pay Bank reasonable
Audit fees and expenses to compensate Bank for its costs associated with Bank’s Audits.

 

SECTION 9

COLLECTION OF ACCOUNTS

 

9.1Lockbox.

 

(a)Borrower
will, at the request of Bank, execute a Wholesale Lockbox Service Addendum Agreement (“Lockbox Agreement”)
in form and substance acceptable to Bank and such other documentation as Bank may reasonably require to establish and maintain
the lockbox (“Lockbox”) and the remittances account and all other cash management services of Bank and its
affiliates provided in connection with this Agreement.

 

(b)Upon
the occurrence of an Event of Default:

 

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    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

(i)Borrower
will (a) maintain in full force and effect, and comply in all respects with the Lockbox Agreement; (ii) direct all of its Account
Debtors to make remittance to the Lockbox; and (iii) deposit directly into the remittances account all Proceeds received by Borrower
from Account Debtors and otherwise. Funds received in any Lockbox will be transferred daily by Bank to the applicable Demand Deposit
Dominion Account in the name of Borrower (the “Dominion Account”) and thereafter credited by Bank first to
the Borrower’s Loan Account and any other unpaid Indebtedness in such manner as Bank desires. Bank will not be required
to credit Borrower’s Loan Account with the amount of any check or other instrument constituting provisional payment until
the Bank has received final payment thereof at its office in cash or solvent credits accepted by the Bank.

 

(ii)Borrower
will notify the Bank of such collections as are received directly by Borrower and will hold the proceeds received from such collections
in trust for the Bank without commingling the same with other funds of the Borrower and will turn the same over to the Bank immediately
upon receipt in the identical form received. Proceeds so transmitted to the Bank may be handled and administered in and through
the remittances account.

 

(iii)Bank
may apply against the outstanding balance of Borrower’s Loan Account from time to time any collections on and Proceeds from
Accounts Receivable forwarded to Bank and/or in Bank’s possession (including, without limitation, any such collections and
Proceeds in any Lockbox, remittances account or any operating or other account maintained or to be maintained by or for Borrower
at Bank).

 

(iv)Borrower
will, at the request of the Bank, notify the Account Debtors of the security interest of the Bank in any Account and will instruct
Account Debtors to remit payments directly to Bank, and the Bank may itself, at any time, so notify Account Debtors.

 

(c)Borrower
acknowledges Bank’s right of offset and the security interest in Borrower’s accounts including the Dominion Account
granted to Bank hereunder. Upon the occurrence of an Event of Default, Borrower will relinquish its control of the Dominion Account
and in addition to all other rights and remedies available to Bank, Bank will immediately have sole dominion and control over
the Lockbox and the Dominion Account.

 

9.2Collection of Accounts by
Borrower. Borrower agrees that no court action or other legal proceeding or garnishment, attachment,
repossession of property, or any other attempt to repossess any merchandise covered by an Account will be attempted by the Borrower
except by or under the direction of competent legal counsel. BORROWER HEREBY AGREES TO INDEMNIFY AND HOLD THE BANK HARMLESS FOR
ANY LOSS OR LIABILITY OF ANY KIND OR CHARACTER WHICH MAY BE ASSERTED AGAINST THE BANK BY VIRTUE OF ANY SUIT FILED, PROCESS ISSUED,
OR ANY REPOSSESSION OR ATTEMPTED REPOSSESSION DONE OR ATTEMPTED BY BORROWER OR BY VIRTUE OF ANY OTHER ENDEAVORS WHICH BORROWER
MAY MAKE TO COLLECT ANY ACCOUNTS OR REPOSSESS ANY SUCH MERCHANDISE.

 

SECTION 10

EVENTS OF DEFAULT

 

An “Event of
Default” will exist if any one or more of the following events occurs and is continuing:

 

(a)Borrower
fails to pay within five days of the date when due the Indebtedness or any part thereof; or

 

(b)any representation
or warranty made under this Agreement, or any of the other Security Documents, proves to be untrue or inaccurate in any material
respect as of the date on which such representation or warranty is made or deemed to have been made; or

 

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    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

(c)Borrower
fails to perform any of the covenants or agreements of Borrower contained herein or in any of the other Security Documents and
such failure continues for 30 days of the date when such performance was required; or

 

(d)Borrower
fails to maintain any insurance required hereunder or pay any premium on (i) any insurance policy assigned to Bank, or (ii) any
insurance covering any Collateral; or

 

(e)INTENTIONALLY
DELETED; or

 

(f)any of
the Security Documents ceases to be a legal, valid, and binding agreement enforceable against the Person executing the same in
accordance with its terms, is terminated, becomes or is declared ineffective or inoperative or ceases to provide the respective
liens, rights, remedies, powers, or privileges intended to be provided thereby; or any Person denies that such Person has any
further Liability or obligation under any of the Security Documents; or

 

(g)Borrower
(i) applies for or consents to the appointment of a receiver, trustee, custodian, intervenor, or liquidator of itself or of all
or a substantial part of its assets, (ii) files a voluntary petition in bankruptcy, admits in writing that it is unable to pay
its debts as they become due, or generally not pay its debts as they become due, (iii) makes a general assignment for the benefit
of creditors, (iv) files a petition or answer seeking reorganization of an arrangement with creditors or to take advantage of
any bankruptcy or insolvency laws, (v) files an answer admitting the material allegations of, or consent to, or default in answering,
a petition filed against it in any bankruptcy, reorganization, or insolvency proceeding, or (vi) takes corporate action for the
purpose of effecting any of the foregoing; or

 

(h)an involuntary
proceeding is commenced against Borrower seeking bankruptcy or reorganization of Borrower or the appointment of a receiver, custodian,
trustee, liquidator, or other similar official of Borrower, or all or substantially all of Borrower’s assets, and such proceeding
shall not have been dismissed within sixty (60) days of the filing thereof; or an order, order for relief, judgment, or decree
is entered by any court of competent jurisdiction or other competent authority approving a petition or complaint seeking reorganization
of Borrower, or appointing a receiver, custodian, trustee, liquidator, or other similar official of Borrower, or of all or substantially
all of Borrower’s assets; or

 

(i)any final
judgment(s) for the payment of money not paid or fully covered by insurance in excess of the sum of $100,000.00 in the aggregate
is rendered against Borrower and such judgment(s) is not satisfied or discharged at least ten (10) days prior to the date on which
any of Borrower’s assets could be lawfully sold to satisfy such judgment; or

 

 (j) a Change in Control of Borrower occurs.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	24	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

SECTION 11

REMEDIES

 

11.1Remedies Upon
Event of Default. If any Event of Default occurs and is continuing, then Bank may, without notice, exercise any one or more
of the following rights and remedies, and any other remedies provided in any of the Security Documents, as Bank in its sole discretion
may deem necessary or appropriate: (a) declare the Indebtedness or any part thereof to be forthwith due and payable, whereupon
the same will become due and payable without presentment, demand, protest, notice of default, notice of acceleration or of intention
to accelerate, or other notice of any kind, all of which Borrower hereby expressly waives, anything contained herein to the contrary
notwithstanding, (b) reduce any claim to judgment, or (c) without notice of default or demand, pursue and enforce any
of Bank’s rights and remedies under the Security Documents, or otherwise provided under or pursuant to any applicable law
or agreement; provided, however, if any Event of Default specified in Sections 10(g) or (h) shall occur, then the
Indebtedness will become due and payable concurrently therewith, and Bank’s obligation to lend will immediately terminate
hereunder, without any further action by Bank and without presentment, demand, protest, notice of default, notice of acceleration
or of intention to accelerate, or other notice of any kind, all of which Borrower hereby expressly waives.

 

11.2Remedies. Upon the
occurrence and continuation of any one or more of the above Events of Default and at any time thereafter:

 

(a)Bank
has, in addition to all other rights and remedies, the remedies of a secured party under the UCC, including, without limitation,
the right to take possession of the Collateral, and for that purpose Bank may, so far as Borrower can give authority therefor,
enter upon any premises on which the Collateral may be situated and remove the same therefrom or take possession of same and store
same on such premises pending disposition under the terms of this Agreement or applicable law. 

 

(b)Bank
may require Borrower to assemble the Collateral and make it available to Bank at a place designated by Bank which is reasonably
convenient to both parties. Unless the Collateral is perishable or threatens to decline speedily in value or is to a type customarily
sold on a recognized market, Bank shall give to Borrower at least ten (10) days’ written notice of the time and place of
any public sale of Collateral or of the time after which any private sale or any other intended disposition is to be made, which
time period shall be deemed for all purposes to be commercially reasonable.

 

(c)Bank
may, at any time in its discretion, transfer any securities or other property constituting Collateral into its own name or that
of its nominee, and receive the income thereon and hold the same as security for the Indebtedness or apply it on principal or
interest due on Indebtedness.

 

(d)Insofar
as Collateral shall consist of Accounts, insurance policies, instruments, chattel paper, choses in action, or the like, Bank may
demand, collect, receipt for, settle, compromise, adjust, sue for, release, extend the time of payment, make allowances and adjustments,
foreclose, or realize upon Collateral as Bank may determine, whether or not Indebtedness or Collateral are then due, and for the
purpose of realizing Bank’s rights therein, Bank may receive, open, and dispose of mail addressed to Borrower and endorse
notes, checks, drafts, money orders, documents of title, or other evidences of payment, shipment, or storage or any form of Collateral
on behalf of and in the name of Borrower.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	25	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

11.3Rights
Not Exclusive. No right, power, or remedy conferred in this Agreement, the Revolving Note, or any other agreement executed
in connection herewith or any other document or agreement to which Borrower and Bank are parties, or now or hereafter existing
at law, in equity, or admiralty, by statute or otherwise, shall be exclusive, and each such right, power, or remedy, shall, to
the full extent permitted by law, be cumulative and in addition to every other such right, power, or remedy. Bank may resort to
any security given by this Agreement or to any other security now existing or hereafter given to secure the payment of Borrower’s
Indebtedness, in whole or in part, and in such portions and in such order as may seem best to Bank in its sole discretion, and
any such action shall not in any way be considered as a waiver of any of the rights, benefits, or security interests evidenced
by this Agreement. Bank may, at all times, proceed directly against Borrower to enforce payment of Borrower’s Indebtedness
and shall not be required first to enforce its rights in the Collateral or any other security granted to it. Bank shall not be
required to take any action of any kind to preserve, collect, or protect Borrower’s rights in the Collateral or any other
security granted to it.

 

11.4Sales of Collateral.
The sale by Bank of less than the whole of the Collateral shall not exhaust the rights of Bank hereunder, and Bank is specifically
empowered to make successive sales hereunder until the whole of the Collateral shall be sold. If the Proceeds of any sale of less
than the whole of the Collateral shall be less than the aggregate of the Indebtedness, this Agreement and the security interests
created hereby shall remain in full force and effect as to the unsold portion of the Collateral just as though no sale had been
made; provided however, that Borrower shall never have any right to require sale of less than the whole of the Collateral but
Bank has the right, at its sole election, to sell less than the whole of the Collateral.

 

11.5Performance
by Bank. If Borrower fails to perform any covenant, duty, or agreement contained in any of the Security Documents, then Bank
may perform or attempt to perform such covenant, duty, or agreement on behalf of Borrower. In such event, Borrower shall, at the
request of Bank, promptly pay any amount expended by Bank in such performance or attempted performance to Bank at its principal
office in Dallas, Texas together with interest thereon at the Maximum Rate from the date of such expenditure until paid. Notwithstanding
the foregoing, it is expressly understood that Bank shall not assume any Liability or responsibility for the performance of any
duties of Borrower hereunder or under any of the Security Documents and none of the covenants or other provisions contained in
this Agreement shall, or shall be deemed to, give Bank the right or power to exercise control over the management and affairs
of Borrower.

 

11.6Administrative
Fees. Upon the violation by Borrower of any material representation, warranty or covenant set forth in this Agreement or in
any of the Security Documents, Borrower agrees to pay to Bank, upon demand, an administrative fee in an amount determined by Bank
from time to time to cover the extra labor and expense involved in addressing and monitoring any such violation; provided however,
that should such administrative fee constitute interest under any applicable law, such fee shall not, together with other interest
to be paid, charged, contracted for, received, reserved against, or taken on the Indebtedness arising under any of the Security
Documents, exceed the Maximum Rate. Borrower acknowledges that any fee due under this Section is a bona fide administrative fee
and is intended as reasonable compensation to Bank for labor and expense as described above and for no other purpose. No demand
for or acceptance of an administrative fee under this Section by Bank shall be construed as a waiver by Bank of any right or remedy
of Bank or of any obligation of Borrower under this Agreement or any of the Security Documents. Bank shall not be deemed to have
waived any of its rights or remedies unless such waiver be in writing and signed by Bank.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	26	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

SECTION 12

DEPOSITS

 

Bank, any participant,
and any other holder of all or any part of the Indebtedness are hereby given a continuing lien as additional security for all
Indebtedness hereunder upon any and all moneys, securities, and other property of Borrower, and the Proceeds thereof, now or hereafter
held or received by or in transit to Bank, such participant, or such holder from or for Borrower, whether for safekeeping, custody,
pledge, transmission, collection, or otherwise, and also upon any and all deposit balances (general or special) and credits of
Borrower with, and any and all claims of Borrower against Bank, such participant, or such holder at any time existing. Upon the
occurrence and continuation of an Event of Default, such participant, or such holder may apply or set off the same against the
Indebtedness and indebtedness hereby secured, without notice and without liability. Borrower agrees that any other person or entity
purchasing participation from Bank in the Indebtedness may exercise all its rights of payment (including the right of set-off)
with respect to such participation as fully as if such person or entity was the direct creditor of Borrower in the amount of such
participation.

 

SECTION 13

MISCELLANEOUS

 

13.1Accounting
Reports. All financial reports or projections furnished by any Person to Bank pursuant to this Agreement shall be prepared
in such form and such detail as shall be reasonably satisfactory to Bank, shall be prepared on the same basis as those prepared
by such Person in prior years, and, where applicable, shall be the same financial reports and projections as those furnished to
such Person’s officers and directors.

 

13.2Waiver. No
failure to exercise, and no delay in exercising, on the part of Bank, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right.
The rights of Bank under the Security Documents shall be in addition to all other rights provided by law. No modification or waiver
of any provision of any Security Document, nor consent to departure therefrom, shall be effective unless in writing and no such
consent or waiver shall extend beyond the particular case and purpose involved. No notice or demand given in any case shall constitute
a waiver of the right to take other action in the same, similar, or other instances without such notice or demand.

 

13.3Payment of
Expenses. Borrower agrees to pay Bank on demand all reasonable costs and expenses of Bank, incurred in connection with the
preservation and enforcement of Bank’s rights under the Security Documents, and all reasonable costs and expenses of Bank
(including without limitation the reasonable fees and expenses of Bank’s counsel) in connection with the negotiation, preparation,
execution, delivery, and administration of the Security Documents. Following notice, Bank may, at its option, debit Borrower’s
Loan Account or any Depository Account to pay such expenses. Borrower agrees to pay interest on amounts which Borrower fails or
refuses to pay, at the Maximum Rate from the date of such expenditure until paid.

 

13.4Notices. Any
communications required or permitted to be given by any of the Security Documents must be (a) in writing and personally delivered
or mailed by prepaid certified or registered mail, or (b) made by electronic or facsimile transmission delivered or transmitted,
to the party to whom such notice of communication is directed, to the address of such party shown opposite its name on the signature
pages hereof. Any such communication shall be deemed to have been given (whether actually received or not) on the day it is personally
delivered or three (3) days after deposit if sent by certified or registered mail or, if transmitted by electronic or facsimile
transmission, on the day that such communication is transmitted as aforesaid subject to telephone confirmation of receipt, provided
that if such notice is delivered or deemed to have been delivered on a day that is not a Business Day or after 5:00 p.m. Central
Time, such notice shall be deemed to have been delivered on the following Business Day. Any party may change its address for purposes
of this Agreement by giving notice of such change to the other parties pursuant to this Section.

 

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    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

13.5Governing Law.
This Agreement has been prepared, is being executed and delivered, and is intended to be performed in the State of Texas and
the substantive laws of such state and the applicable federal laws of the United States of America shall govern the validity,
construction, enforcement, and interpretation of this Agreement and all of the other Security Documents.

 

13.6Choice of Forum;
Consent to Service of Process and Jurisdiction. Any suit, action, or proceeding against Borrower with respect to this Agreement,
the Revolving Note, or other Security Documents, or any judgment entered by any court in respect thereof, may be brought in the
courts of the State of Texas, County of Dallas, or in the United States courts located in the State of Texas as Bank in its sole
discretion may elect, and Borrower hereby irrevocably submits to the nonexclusive jurisdiction of such courts for the purpose
of any such suit, action, or proceeding. Borrower hereby irrevocably consents to the service of process in any suit, action, or
proceeding in said court by the mailing thereof by Bank by registered or certified mail, postage prepaid, to Borrower’s
address shown opposite its name on the signature pages hereof. Nothing herein or in any of the other Security Documents shall
affect the right of Bank to serve process in any other manner permitted by law or shall limit the right of Bank to bring any action
or proceeding against Borrower or with respect to any of its property in courts in other jurisdiction. Borrower hereby irrevocably
waives any objections which it may now or hereafter have to the laying of venue of any suit, action, or proceeding arising out
of or relating to this Agreement, the Revolving Note, or any other Security Documents brought in the courts located in the State
of Texas, County of Dallas, and hereby further irrevocably waives any claim that any such suit, action, or proceeding brought
in any such court has been brought in any inconvenient forum. Any action or proceeding by Borrower against Bank shall be brought
only in a court located in Dallas County, Texas.

 

13.7Invalid Provisions.
Any provision of any Security Document held by a court of competent jurisdiction to be illegal, invalid or unenforceable shall
not invalidate the remaining provisions of such Security Document which shall remain in full force and the effect thereof shall
be confined to the provision held invalid or illegal.

 

13.8Maximum Interest
Rate. Regardless of any provision contained in any of the Security Documents, Bank shall never be entitled to receive, collect,
or apply as interest (whether termed interest herein or deemed to be interest by operation of law or judicial determination) on
the Revolving Note any amount in excess of interest calculated at the Maximum Rate, and, in the event that Bank ever receives,
collects, or applies as interest any such excess, then the amount which would be excessive interest shall be deemed to be a partial
prepayment of principal and treated hereunder as such; and, if the principal amount of the Indebtedness is paid in full, then
any remaining excess shall forthwith be paid to Borrower. In determining whether or not the interest paid or payable under any
specific contingency exceeds interest calculated at the Maximum Rate, Borrower and Bank shall, to the maximum extent permitted
under applicable law: (a) characterize any non-principal payment as an expense, fee, or premium rather than as interest;
(b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate, and spread, in equal parts,
the total amount of interest throughout the entire contemplated term of the Revolving Note; provided that, if the Revolving Note
is paid and performed in full prior to the end of the full contemplated term thereof, and if the interest received for the actual
period of existence thereof exceeds interest calculated at the Maximum Rate, then Bank shall refund to Borrower the amount of
such excess or credit the amount of such excess against the principal amount of the Revolving Note and, in such event, Bank shall
not be subject to any penalties provided by any laws for contracting for, charging, taking, reserving, or receiving interest in
excess of interest calculated at the Maximum Rate.

 

13.9Non-Liability
of Bank. The relationship between Borrower and Bank is, and shall at all times remain, solely that of borrower and Bank, and
Bank has no fiduciary or other special relationship with Borrower.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	28	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

13.10Successors
and Assigns. The Security Documents shall be binding upon and inure to the benefit of Borrower and Bank and their respective
successors, assigns, and legal representatives; provided, however, that Borrower may not, without the prior written consent of
Bank, assign any rights, powers, duties, or obligations thereunder. Bank reserves the right to sell all or a portion of its interest
in the Revolving Loan and Bank has the right to disclose any information in its possession regarding Borrower or any assets pledged
to Bank in connection herewith to any potential transferee of the Loan or any part thereof.

 

13.11Headings.
Section headings are for convenience of reference only and shall in no way affect the interpretation of this Agreement.

 

13.12Survival.
All representations and warranties made by Borrower herein shall survive delivery of the Revolving Note and the making of
the Revolving Loan.

 

13.13Participations.
Bank has the right to enter into participation agreements with other banks with respect to the Revolving Note, and grant participations
ratably in the other loan documents, but such participation shall not affect the rights and duties of Bank hereunder vis-à-vis
Borrower. Each actual or proposed participant shall be entitled to receive all information received by Bank regarding the creditworthiness
of Borrower, including, without limitation, information required to be disclosed to a participant pursuant to Banking Circular
181 (Rev., August 2, 1984), issued by the Comptroller of the Currency (whether the actual or proposed participant is subject to
the circular or not).

 

13.14No Third Party
Beneficiary. The parties do not intend the benefits of this Agreement to inure to any third party, nor shall any Security
Document or any course of conduct by any party hereto be construed to make or render Bank or any of its officers, directors, agents,
or employees liable (a) to any materialman, supplier, contractor, subcontractor, purchaser, or lessee of any property owned by
Borrower, or (b) for debts or claims accruing to any such Persons against Borrower.

 

13.15Multiple Counterparts.
This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same
agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart.

 

13.16Cross Pledge and Cross Default.
Borrower hereby acknowledges, confirms and ratifies that all Collateral and /or continuing guaranties being granted or pledged
to Bank or in which Bank was granted a security interest to secure any one of or all of Borrower’s other obligations to
Bank also secures the Indebtedness. Borrower further acknowledges and agrees that any Event of Default under any other note or
loan agreement, by Borrower in favor of Bank shall constitute an Event of Default under the Security Documents and any Event of
Default hereunder shall constitute an Event of Default under any loan agreement or note by Borrower in favor of Bank.

 

13.17USA Patriot Act. Bank
hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the “Patriot Act”); it is required to obtain, verify and record information that identifies
Borrower, which information includes the name and address of Borrower and other information that will allow Bank to identify Borrower
in accordance with the Patriot Act, and Borrower hereby agrees to take any action necessary to enable Bank to comply with the
requirements of the Patriot Act.

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	29	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

13.18Entirety.
THIS AGREEMENT, THE NOTE, AND THE OTHER SECURITY DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE PROVISIONS OF
THIS AGREEMENT AND THE OTHER SECURITY DOCUMENTS TO WHICH BORROWER IS A PARTY MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT IN
WRITING SIGNED BY THE PARTIES HERETO.

 

13.19Waiver of Jury Trial.
BORROWER, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY KNOWINGLY, INTENTIONALLY, IRREVOCABLY, UNCONDITIONALLY AND
VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVE, RELINQUISH AND FOREVER FORGO THE RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS AGREEMENT OR ANY CONDUCT, ACT OR OMISSION
OF LENDER, BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS
AFFILIATED WITH LENDER OR BORROWER, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTACT, TORT OR OTHERWISE.

 

13.20Errors and Omissions.
If requested by Bank, Borrower shall fully cooperate in the correction of any Security Document so that all Security Documents
accurately describe the Loan. In the event that Borrower fails to comply with Bank’s requests within thirty (30) days, Borrower
agrees to pay all costs and expenses incurred by or on behalf of Bank (including attorneys’ fees) in connection with any
such correction.

 

Signature Pages Follow

    	REVOLVING LOAN AND SECURITY AGREEMENT	30	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

IN WITNESS WHEREOF, the undersigned have executed
this Agreement as of the day and year first above written.

 

	Address for Notice: 
  
1920 Hutton Court, Suite 300
 Farmers Branch, Texas 75234 
Attn: William M. Aisenberg 
E-mail: Bill.Aisenberg@ironclad.com 
  
  
  
  
  
1920 Hutton Court, Suite 300
 Farmers Branch, Texas 75234 
Attn: William M. Aisenberg 
E-mail: Bill.Aisenberg@ironclad.com	 	BORROWER:
  
 IRONCLAD PERFORMANCE WEAR CORPORATION, a California corporation
  
  
 By: /s/ William M. Aisenberg
 William M. Aisenberg, Executive Vice President & CFO
  
  
 IRONCLAD PERFORMANCE WEAR CORPORATION, a Nevada corporation
  
  
 By: /s/ William M. Aisenberg
 William M. Aisenberg, Executive Vice President & CFO
  

 

	Address for Notice: 
  
600 North Pearl Street 
Suite 2500 
Dallas, Texas 75201 
Attn: Rick Rodman 
E-mail: rick.rodman@capitalone.com	 	BANK:
  
 CAPITAL ONE, N.A. 
  
  
 By: /s/ Rick Rodman
 Rick Rodman, Senior Vice President
  

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	31	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

EXHIBITS

 

Exhibit “A” – Compliance Certificate

Exhibit “B” – Borrowing Base Report

Exhibit “C” – Closing Documents

 

SCHEDULES

 

Schedule 5.6 – Offices

Schedule 5.9 – Litigation

Schedule 5.13 – Subsidiaries and Affiliates

Schedule 5.18 – Intellectual Property

Schedule 7.3(b) – Subordinated Debt

Schedule 7.5 – Liens

 

    	REVOLVING LOAN AND SECURITY AGREEMENT	32	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

EXHIBIT “A”

 

Compliance
Certificate

 

COMPLIANCE CERTIFICATE

 

FOR THE QUARTER ENDED __________________ (THE “SUBJECT
PERIOD”)

 

BANK:CAPITAL ONE, N.A.

 

BORROWER:IRONCLAD
PERFORMANCE WEAR CORPORATION, a California corporation and IRONCLAD PERFORMANCE WEAR CORPORATION, a Nevada
corporation

 

This certificate is delivered
under the Loan and Security Agreement (the “Agreement”) dated as November 28, 2014, between Borrower, Bank
and the guarantors named therein. Capitalized terms when used in this certificate shall, unless otherwise indicated, have the
meanings set forth in the Agreement. I certify to Bank that, on the date of this certificate, (a) the Financial Statements of
Borrower attached to this certificate were prepared in accordance with GAAP, and present fairly the financial condition and results
of operations of Borrower as of the end of and for the Subject Period, (b) no Potential Default or Event of Default currently
exists or has occurred which has not been cured or waived by Bank, and (c) the status of compliance by Borrower with certain covenants
of the Agreement at the end of the Subject Period is set forth below:

 

In Compliance as of

End of Subject Period?

(Please Indicate)

		1.	Financial Statements and Reports

 

		(a)	Provide audited annual financial statements of Borrower within

120 days after the last day of
each fiscal year.Yes No

 

		(b)	Provide annual budget (to include CapEx schedule) of Borrower
                                         within

120 days after the last day of
each fiscal year.Yes No

 

		(c)	Provide quarterly financial statements of Borrower within

45 days after the last day of
each fiscal quarter.Yes No

 

		(d)	Provide a Compliance Certificate within 45 days after the last
                                         day

of each fiscal quarterYes
No

 

		(e)	Provide a Borrowing Base Certificate within 30 days after

the last day of each month.Yes
No

 

(f)Provide such reports required
in accordance with 6.1(f)Yes No

 

		(g)	Provide customer listing and customer addresses within

20 days after the last day of
each fiscal year.Yes No

 

    	EXHIBIT "A TO REVOLVING LOAN AND SECURITY AGREEMENT	33	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

 

		2.	Financial Covenants

 

(a)Minimum Debt
Service Coverage Ratio, calculated as of the last day of the calendar quarter in accordance with Section 7.15(a) of
the Agreement.

 

This calculation is for the preceding twelve month period:

(a)               
EBITDAS$_______

(b)              
Interest Expense $_______

(c)               
Principal Payments of Debt$_______

(d)              
Lease Payments$_______

(e)               
Distributions$_______

(f)               
[(b) + (c) + (d) + (e)]$_______

(g)               
Debt Service Coverage Ratio [(a) / (f)] $_______

 

Line (g) must be equal to or greater than [***] to [***].

 

(b)Tangible Net Worth*,
calculated as of the last day of the calendar quarter in accordance with Section 7.15(b) of the Agreement.$_______

 

			[Total Assets – Intangibles – Total Liabilities + Subordinated
                                         Debt]

 

Date: _______ ___, 201__

 

IRONCLAD PERFORMANCE WEAR CORPORATION, a
California corporation

 

 

By:___________________________________

_______________, _________________

 

IRONCLAD PERFORMANCE WEAR CORPORATION, a
Nevada corporation

 

 

By:___________________________________

_______________, _________________

 

 

*“Tangible
Net Worth” means, with respect to any Person, net worth plus all Subordinated Debt, less (i) any and all loans
and other advances to Affiliates, subsidiaries, parent, employees, officers, stockholders, directors, or other related entities;
(ii) notes, notes receivable, accounts, accounts receivable, inter-company receivable, and other amounts owing from Affiliates,
subsidiaries, parent, employees, officers, stockholders, directors, or other related entities; (iii) treasury stock, good will,
trademarks, trade names, patents, and deferred charges; and (iv) any and all other intangible assets, calculated in accordance
with GAAP.

    	EXHIBIT "A" TO REVOLVING LOAN AND SECURITY AGREEMENT	34	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

EXHIBIT “B”

 

Borrowing
Base Certificate

 

[see attached]

 

    	EXHIBIT "B" TO REVOLVING LOAN AND SECURITY AGREEMENT	35	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

EXHIBIT “C”

 

Closing
Documents

 

		1.	Revolving
                                         Line of Credit Note in the original principal amount of $6,000,000.00, executed by Borrower;

 

		2.	Revolving
                                         Loan and Security Agreement, executed by Borrower;

 

		3	Notice of Final
                                         Agreement;

 

		4.	Resolutions
                                         and Consents for Borrower;

 

		5.	UCC-1 Financing
                                         Statement;

 

		6.	Articles of
                                         Incorporation and Bylaws of Borrower;

 

		7.	Certificate
                                         of Existence and Good Standing issued by applicable governmental authorities;

 

		8.	UCC search;

 

		9.	Post-Closing
                                         Letter; and

 

		10.	Landlord’s
                                         Waivers.

 

    	EXHIBIT "C" TO REVOLVING LOAN AND SECURITY AGREEMENT	36	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

SCHEDULE 5.6

 

Offices

 

1.1920 Hutton Court, Suite 300

Farmers Branch, Texas 75234 (executive office)

 

2.29010 Commerce Center Drive

Valencia, California, 91355 (location of inventory, pursuant
to agreement to provide warehousing, assembly, packaging and fulfillment services with AMS Fulfillment, Inc.)

    	SCHEDULE 5.6 TO REVOLVING LOAN AND SECURITY AGREEMENT	37	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

SCHEDULE 5.9

 

Litigation

 

NONE

    	SCHEDULE 5.9 TO REVOLVING LOAN AND SECURITY AGREEMENT	38	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

SCHEDULE 5.13

 

Subsidiaries and Affiliates

 

NONE

    	SCHEDULE 5.13 TO REVOLVING LOAN AND SECURITY AGREEMENT	39	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

SCHEDULE 5.18

 

Intellectual Property

 

[TO BE PROVIDED WITHIN 30 DAYS OF CLOSING BY
BORROWER]

    	SCHEDLUE 5.18 TO REVOLVING LOAN AND SECURITY AGREEMENT	40	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

 

 

SCHEDULE 7.3(b)

 

Subordinated Debt

 

NONE

    	SCHEDULE 7.3 TO REVOLVING LOAN AND SECURITY AGREEMENT	41	 

    	CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24B-2 FOR PORTIONS OF THIS DOCUMENT MARKED AS FOLLOWS: [***]. CONFIDENTIAL INFORMATION FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

    

 

 

SCHEDULE 7.5

 

Liens

 

NONE

    	SCHEDULE 7.5 TO REVOLVING LOAN AND SECURITY AGREEMENT	42

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