Document:

Stock Purchase Agreement

 Exhibit 10.1 
  
 SYNTROLEUM CORPORATION 
  
 STOCK PURCHASE AGREEMENT 
  
 April 11, 2005 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	SECTION 1. AUTHORIZATION AND SALE OF COMMON STOCK	  	1
	 1.1
	  	Authorization	  	1
	 1.2
	  	Sale of the Shares	  	1
		
	SECTION 2. CLOSING DATE; DELIVERY	  	1
	 2.1
	  	Closing	  	1
	 2.2
	  	Delivery	  	1
		
	SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY	  	1
	 3.1
	  	Organization and Standing; Subsidiaries; Charter and Bylaws	  	1
	 3.2
	  	Capitalization	  	2
	 3.3
	  	Authorization	  	3
	 3.4
	  	SEC Reports	  	3
	 3.5
	  	No Conflicts	  	4
	 3.6
	  	Approvals	  	4
	 3.7
	  	Offering	  	4
	 3.8
	  	Litigation	  	4
	 3.9
	  	Brokers or Finders	  	5
	 3.10
	  	Limitation on Representations	  	5
		
	SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER	  	5
	 4.1
	  	Investment	  	5
	 4.2
	  	Authorization	  	5
	 4.3
	  	Litigation, etc.	  	6
	 4.4
	  	Governmental Consent, etc.	  	6
	 4.5
	  	Brokers or Finders	  	6
		
	SECTION 5. CONDITIONS TO CLOSING BY THE PURCHASER	  	6
	 5.1
	  	Representations and Warranties Correct	  	6
	 5.2
	  	Covenants	  	6
	 5.3
	  	Effectiveness of Registration Statement	  	6
	 5.4
	  	Approval of Inclusion on the Nasdaq National Market	  	6
	 5.5
	  	No Legal Order Pending	  	6
	 5.6
	  	No Law Prohibiting or Restricting Such Sale	  	7
	 5.7
	  	Compliance Certificate	  	7
	 5.8
	  	Opinion of Company’s Counsel	  	7
	 5.9
	  	Good Standing Certificate	  	7
	 5.10
	  	Secretary’s Certificate	  	7
		
	SECTION 6. CONDITIONS TO CLOSING BY THE COMPANY	  	7
	 6.1
	  	Representations	  	7
	 6.2
	  	Covenants	  	7

  

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	 6.3
	  	Compliance Certificate	  	7
	 6.4
	  	Effectiveness of Registration Statement	  	8
	 6.5
	  	No Legal Order Pending	  	8
	 6.6
	  	No Law Prohibiting or Restricting Such Sale	  	8
		
	SECTION 7. COVENANTS	  	8
	 7.1
	  	Fulfillment of Closing Conditions	  	8
	 7.2
	  	Confidentiality	  	8
	 7.3
	  	Publicity	  	9
	 7.4
	  	Restriction on Sale of Securities	  	9
	 7.5
	  	Registration Statement	  	9
		
	SECTION 8. MISCELLANEOUS	  	9
	 8.1
	  	Governing Law	  	9
	 8.2
	  	Survival	  	9
	 8.3
	  	Successors and Assigns	  	10
	 8.4
	  	Entire Agreement; Amendment	  	10
	 8.5
	  	Costs and Expenses	  	10
	 8.6
	  	Notices, etc	  	10
	 8.7
	  	Delays or Omissions	  	10
	 8.8
	  	Severability	  	11
	 8.9
	  	Titles and Subtitles	  	11
	 8.10
	  	Counterparts	  	11
	 8.11
	  	Construction	  	11
	 8.12
	  	Interpretation	  	11
	 8.13
	  	Definitions	  	11
	 8.14
	  	Facsimile Signatures	  	12
	
	EXHIBITS
	
	A    —    Form of Opinion of Baker Botts L.L.P.

  

 ii 

 STOCK PURCHASE AGREEMENT 
  
 This Agreement is entered into effective as of April 11, 2005 by and between Syntroleum Corporation, a Delaware corporation
(the “Company”), and Dorset Group Corporation, a Panama corporation (the “Purchaser”). 
  
 SECTION 1. 
 AUTHORIZATION AND SALE OF COMMON STOCK 
  
 1.1 Authorization. The Company has authorized the sale and
issuance at the Closing (as hereinafter defined) of 1,000,000 shares (the “Shares”) of its common stock, par value $.01 per share (“Common Stock”). 
  
 1.2 Sale of the Shares. Subject to the terms and conditions hereof, the Purchaser will buy from the Company,
and the Company will issue and sell to the Purchaser, the Shares for a purchase price per Share of $10.00 (for an aggregate purchase price of $10,000,000.00 for all of the Shares). 
  
 SECTION 2. 
 CLOSING DATE; DELIVERY 
  
 2.1
Closing. The closing of the purchase and sale of the Shares hereunder shall be held at Syntroleum Corporation, 4322 South 49th West Avenue, Tulsa, Oklahoma 74107, on the first Business Day following the day on which the closing conditions
set forth in Sections 5 and 6 hereof have been fulfilled (the “Closing”), or at such other time and place upon which the Company and the Purchaser mutually agree upon orally or in writing (the date of the Closing is hereinafter referred to
as the “Closing Date”). 
  
 2.2 Delivery.
At the Closing, the Company will deliver to the Purchaser a certificate or certificates, registered in the Purchaser’s name, representing the Shares, against payment of the purchase price therefor, by wire transfer to the Company in accordance
with its instructions. 
  
 SECTION 3. 
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
  
 Except as set forth on the disclosure schedule prepared by the Company and delivered to the Purchaser, dated as of the date hereof (the “Disclosure
Schedule”), the Company represents and warrants to the Purchaser both as of the date hereof and again as of the Closing as follows: 
  
 3.1 Organization and Standing; Subsidiaries; Charter and Bylaws. The Company and each of its Subsidiaries (as hereinafter defined) is a
corporation, partnership or limited liability company duly organized, existing and in good standing under the laws of the jurisdiction of its incorporation or organization. The Company and each of its Subsidiaries has all requisite corporate,
partnership or limited liability company power and authority to own and operate their respective properties and assets, and to carry on their business as presently 
  

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 conducted. The Company and each of its Subsidiaries currently is qualified to do business in each jurisdiction where the
failure to be so qualified has not had and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the assets, liabilities, financial condition, operating results or business of the Company and its
Subsidiaries, taken as a whole (a “Material Adverse Effect”). The Company has made available to the Purchaser a true, correct and complete copy of the Company’s Certificate of Incorporation, as in full force and effect on the date
hereof (the “Charter”), and a true, correct and complete copy of the Company’s Bylaws as in full force and effect on the date hereof (the “Bylaws”). 
  
 3.2 Capitalization. The authorized capital stock of the Company consists of 155,000,000 shares, 150,000,000
shares of which are designated as Common Stock, 250,000 shares of which are designated as Series A Junior Participating Preferred Stock, par value $.01 per share (“Series A Junior Preferred Stock”), and 4,750,000 shares of which is
undesignated preferred stock, par value $.01 per share (“Undesignated Stock”). As of April 6, 2005, there were 54,297,187 shares of Common Stock outstanding and there were no shares of Series A Junior Preferred Stock or Undesignated Stock
outstanding. The outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid and nonassessable. As of the date hereof, (i) an aggregate of 5,000,000 shares are reserved for issuance under
the Company’s 1993 Stock Option and Incentive Plan, and 4,115,249 shares of Common Stock are issuable pursuant to outstanding stock options and restricted stock granted pursuant to the Company’s 1993 Stock Option and Incentive Plan, (ii)
an aggregate of 395,370 shares (one percent of the number of shares of Common Stock outstanding on January 1, 2005) are reserved for issuance under the Company’s Stock Option Plan for Outside Directors, and 160,665 shares of Common Stock are
issuable pursuant to outstanding stock options granted pursuant to the Company’s Stock Option Plan for Outside Directors, (iii) an aggregate of 1,025,198 shares are issuable pursuant to stock options granted to Company consultants and officers
outside of the Company’s 1993 Stock Option and Incentive Plan, (iv) an aggregate of 267,850 shares are reserved for issuance under the SLH Corporation 1997 Stock Incentive Plan, (v) an aggregate of 1,552,000 shares of Common Stock are reserved
for issuance pursuant to the Company’s outstanding publicly traded warrants issued on November 4, 2003, (vi) an aggregate of 887,400 shares of Common Stock are reserved for issuance pursuant to the Company’s outstanding publicly traded
warrants issued on May 26, 2004, (vii) an aggregate of 1,036,250 shares of Common Stock are reserved for issuance pursuant to outstanding warrants issued to Company consultants, (viii) an aggregate of 68,000 shares of Common Stock are issuable
pursuant to outstanding stock options granted to Company employees pursuant to the Company’s 2005 Stock Incentive Plan, which will be submitted for stockholder approval at the Company’s 2005 annual meeting of stockholders (the “2005
Annual Meeting”), (ix) a number of shares of Common Stock equal to 1% of the amount of funds committed by investors to the Company to be used to secure rights to stranded oil and gas fields with associated oil and other hydrocarbons (the
“Stranded Gas Venture”) are issuable in accordance with Amendment No. 4 to the Company’s Letter Agreement dated October 3, 2003 with TI Capital Management (the “Consulting Agreement Amendment”), which will be submitted for
stockholder approval at the 2005 Annual Meeting and (x) an aggregate of 1,000,000 shares of Common Stock, plus a number of shares of Common Stock equal to 1% of the amount of funds committed by investors to the Stranded Gas Venture divided by a
value per warrant to purchase one share determined using a Black-Scholes methodology that takes into account the expected holding period of the warrant, current interest rates, the volatility of the Common Stock over the prior year and the

  

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 market price of the Common Stock on the date of issuance, are issuable pursuant to warrants that may be issued in
accordance with the Consulting Agreement Amendment, which will be submitted for stockholder approval at the 2005 Annual Meeting. Each outstanding share of Common Stock carries a stock purchase right, which rights entitle the holder to buy one
one-hundredth of a share of junior preferred stock at a price of $20.8333 per one one-hundredth of a share pursuant to the provisions of the Company’s Second Amended and Restated Rights Agreement dated as of October 24, 2004. Except as
described in this Agreement or in the Disclosure Schedule, there are no other options, warrants, conversion privileges or other contractual rights presently outstanding to purchase or otherwise acquire any authorized but unissued shares of the
Company’s capital stock or other securities. 
  
 3.3
Authorization. The Company has all requisite corporate power and authority to execute and deliver this Agreement, to sell and issue the Shares hereunder and to carry out and perform its obligations under the terms of this Agreement. All
corporate action on the part of the Company, its directors and its stockholders necessary for the authorization, execution, delivery and performance of this Agreement by the Company, the authorization, sale, issuance and delivery of the Shares and
the performance of all of the Company’s obligations hereunder has been taken or will have been taken prior to the Closing. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms,
except as such enforcement is subject to the effect of (i) any applicable bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors’ rights generally, and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law). Upon issuance in accordance with the provisions of this Agreement, the Shares will be validly issued, fully paid and nonassessable. The issuance and sale of the Shares
contemplated hereby will not give rise to any preemptive rights or rights of first refusal on behalf of any person. 
  
 3.4 SEC Reports. The Company has previously made available to the Purchaser true and complete copies of its (i) Annual Report on Form 10-K
for its fiscal year ended December 31, 2004, (ii) Proxy Statement for the 2005 Annual Meeting of Stockholders filed on March 30, 2005, (iii) Current Reports on Form 8-K filed on January 5, 2005, January 19, 2005, January 28, 2005, February 1, 2005,
February 17, 2005, March 8, 2005, March 21, 2005 and April 1, 2005 and (iv) any other reports or registration statements filed by the Company with the Commission since January 1, 2005, except for preliminary material, which are all the documents
that the Company was required to file since that date (collectively, the “SEC Reports”). As of their respective dates, the SEC Reports complied as to form in all material respects with the requirements of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission thereunder applicable to such SEC Reports. As of their respective dates, the SEC Reports, when read together with previously filed SEC Reports, did not
contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading, except as updated, corrected or superseded
by subsequently filed SEC Reports. Except as may be indicated therein or in the notes thereto, the audited consolidated financial statements and unaudited interim financial statements of the Company included in the SEC Reports comply as to form in
all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto, have been prepared in accordance with generally accepted accounting principles 
  

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 applied on a consistent basis throughout the periods covered thereby and fairly present in all material respects the
financial condition of the Company as of the dates indicated and the results of operations, changes in stockholders’ equity and cash flows of the Company for the period indicated. Since December 31, 2004, there has been no change in the assets,
liabilities, financial condition, operating results or business of the Company and its Subsidiaries, taken as a whole, from that reflected in the audited consolidated financial statements and unaudited interim financial statements of the Company
included in the SEC reports, except as set forth in the Disclosure Schedule or changes in the ordinary course of business that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

  
 3.5 No Conflicts. The execution, delivery and
performance of this Agreement, including the issuance of the Shares, have not resulted and will not (i) result in any violation of or conflict with, or constitute a default under, the Company’s Charter or Bylaws, (ii) result in any violation of
or conflict with, or constitute a material default under, any mortgage, indebtedness, lease, indenture, contract, agreement, license, instrument, judgment, order, decree, statute, law, ordinance, rule or regulation to which the Company or any of its
Subsidiaries is party or otherwise subject to (subject to any required notices or filings with the NNM (as hereinafter defined) and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the issuance by the Company of the Shares and the purchase of the Shares by the Purchaser in the manner contemplated herein and in the Final Prospectus and as have not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect), or (iii) result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or any of its Subsidiaries,
except in the case of clauses (ii) or (iii) as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 
  
 3.6 Approvals. The Securities and Exchange Commission (the “Commission”) has issued an order under
the Securities Act of 1933, as amended (the “Securities Act”), declaring the Registration Statement effective, and no other consent, approval, authorization, order, registration or qualification of or with any Governmental Authority (as
hereinafter defined) is required for the offer and sale of the Shares to the Purchaser, or the consummation by the Company of the transactions contemplated by this Agreement and the Final Prospectus (as hereinafter defined), except such consents,
approvals, authorizations, orders, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the issuance by the Company of the Shares and the purchase of the Shares by the Purchaser in the manner
contemplated herein and in the Final Prospectus and as have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 
  
 3.7 Offering. To the best of the Company’s knowledge, the Commission has not issued any order preventing
or suspending the use of the Base Prospectus (as hereinafter defined). 
  
 3.8 Litigation. There is no action, suit, proceeding or investigation pending or, to the Company’s knowledge, currently threatened against the Company or any Subsidiary of the Company that questions the validity of this
Agreement or the right of the Company to enter 
  

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 into such agreement, or to consummate the transactions contemplated hereby, or that would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or that would reasonably be expected to materially adversely affect the Company’s ability to consummate the transaction contemplated hereby. 
  
 3.9 Brokers or Finders. The Company has not incurred, and will
not incur, directly or indirectly, as a result of any action taken by the Company, any liability for brokerage or finders’ fees or agents’ commissions or any similar charge in connection with this Agreement. 
  
 3.10 Limitation on Representations. The Company shall not be
deemed to have made any representation or warranty to any Purchaser other than as expressly made by the Company in this Section 3. Without limiting the generality of the foregoing, except as expressly made by the Company in this Section 3, the
Company makes no representation or warranty to the Purchaser with respect to (a) any projections, estimates or budgets heretofore delivered or made available to the Purchaser of future revenues, expenses or expenditures or future results of
operations or (b) any other information or documents (financial or otherwise) made available to the Purchaser or its counsel, accountants or advisors. 
  
 SECTION 4. 
 REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER 
  
 The Purchaser represents and
warrants to the Company both as of the date hereof and again as of the Closing as follows: 
  
 4.1 Investment. The Purchaser is acquiring the Shares in the ordinary course of its business and not with the view to, or for resale in connection with, any distribution thereof. The Purchaser has not
offered or sold any portion of the Shares to be acquired by it and has no present intention of reselling or otherwise disposing of any portion of such Shares either currently or after the passage of a fixed or determinable period of time or upon the
occurrence or nonoccurrence of any predetermined event or circumstance. The Purchaser shall not resell the Shares in a manner that results in a requirement to deliver a prospectus under Section 5 of the Securities Act. The Purchaser understands that
no federal or state agency has passed upon the Shares or made any finding or determination as to the fairness of the investment or any recommendation or endorsement of the Shares. In acquiring the Shares, the Purchaser is acting on its own behalf
and is not acting together with any other person or entity for the purpose of acquiring, holding, voting or disposing of the Shares within the meaning of Section 13(d) of the Exchange Act. 
  
 4.2 Authorization. The Purchaser has all requisite power and
authority to execute and deliver this Agreement and to carry out and perform its obligations under the terms of this Agreement. All corporate action on the part of the Purchaser, the Purchaser’s directors and stockholders necessary for the
authorization, execution, delivery and performance of this Agreement by the Purchaser, the purchase of the Shares and the performance of all of the Purchaser’s obligations hereunder has been taken or will be taken prior to the Closing. This
Agreement constitutes the valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, except as such enforcement is subject to the effect of (i) any applicable bankruptcy, insolvency, reorganization or other laws
relating to or affecting creditors’ rights generally, and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 
  

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 4.3 Litigation, etc. There is no action, suit, proceeding or investigation pending or, to
the Purchaser’s knowledge, currently threatened against the Purchaser that questions the validity of this Agreement or the right of the Purchaser to enter into such agreement, or to consummate the transactions contemplated hereby, or that would
reasonably be expected to materially adversely affect the Purchaser’s ability to consummate the transaction contemplated hereby. 
  
 4.4 Governmental Consent, etc. No consent, approval or authorization of or designation, declaration or filing with any Governmental
Authority on the part of the Purchaser is required in connection with the execution, delivery and performance of this Agreement. 
  
 4.5 Brokers or Finders. The Purchaser has not incurred, and will not incur, directly or indirectly, as a result of any action taken by the
Purchaser, any liability for brokerage or finders’ fees or agents’ commissions or any similar charge in connection with this Agreement. 
  
 SECTION 5. 
 CONDITIONS TO CLOSING BY
THE PURCHASER 
  
 The Purchaser’s obligation to purchase
the Shares at the Closing is, at the option of the Purchaser, subject to the fulfillment of the following conditions: 
  
 5.1 Representations and Warranties Correct. The representations and warranties made by the Company in Section 3 hereof shall be true and
correct in all material respects as of the Closing Date with the same effect as though such representations and warranties had been made on the Closing Date except to the extent any such representation specifically references an earlier date.

  
 5.2 Covenants. All covenants, agreements and
conditions contained in this Agreement to be performed by the Company on or prior to the Closing Date shall have been performed or complied with. 
  
 5.3 Effectiveness of Registration Statement. The Registration Statement and all post-effective amendments thereto shall be effective and no
stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall have been instituted or, to the knowledge of the Company, threatened by the Commission. 
  
 5.4 Approval of Inclusion on the Nasdaq National Market. At the
Closing Date, the Shares shall have been approved for inclusion on the NNM, subject only to official notice of issuance. 
  
 5.5 No Legal Order Pending. There shall not then be in effect any legal or other order enjoining or restraining the transactions
contemplated by this Agreement. 
  

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 5.6 No Law Prohibiting or Restricting Such Sale. There shall not be in effect any law, rule
or regulation prohibiting or restricting such purchase or requiring any consent or approval of any person prior to such purchase which shall not have been obtained. 
  
 5.7 Compliance Certificate. The Company shall have delivered to the Purchaser a certificate executed by (x)
the President and Chief Executive Officer and (y) the Senior Vice President, General Counsel and Corporate Secretary of the Company, dated as of the Closing Date, and certifying as to the fulfillment of the conditions specified in Sections 5.1, 5.2
and 5.3 of this Agreement. 
  
 5.8 Opinion of Company’s
Counsel. The Purchaser shall have received from Baker Botts L.L.P., counsel to the Company, an opinion addressed to the Purchaser, dated the Closing Date, substantially in the form of Exhibit A hereto. 
  
 5.9 Good Standing Certificate. The Company shall have delivered
to the Purchaser a Certificate dated as of a recent date issued by the Secretary of State of Delaware to the effect that the Company is legally existing and in good standing. 
  
 5.10 Secretary’s Certificate. The Company shall have delivered to the Purchaser a certificate executed by
the Secretary of the Company, dated as of the Closing Date, and certifying as to (a) the directors resolutions authorizing the transactions contemplated by this Agreement; (b) the Charter of the Company; (c) the Bylaws of the Company; (d) the
incumbency of the President and Chief Executive Officer, the Senior Vice President and Chief Accounting Officer, and the Senior Vice President, General Counsel and Corporate Secretary of the Company; and (e) such other matters as the Purchaser may
reasonably request. 
  
 SECTION 6. 
 CONDITIONS TO CLOSING BY THE COMPANY 
  
 The Company’s obligation to sell and issue the Shares at the Closing is, at the option of the Company, subject to the fulfillment as of the Closing
Date of the following conditions: 
  
 6.1
Representations. The representations made by the Purchaser in Section 4 hereof shall be true and correct in all material respects on the Closing Date with the same effect as though such representations and warranties had been made on the
Closing Date except to the extent any such representation specifically references an earlier date. 
  
 6.2 Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Purchaser on or prior to the
Closing Date shall have been performed or complied with. 
  
 6.3 Compliance Certificate. The Purchaser, or a duly authorized agent, shall have delivered to the Company a duly executed certificate, dated as of the Closing Date, and certifying as to the fulfillment of the conditions
specified in Sections 6.1 and 6.2 of this Agreement. 
  

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 6.4 Effectiveness of Registration Statement. The Registration Statement and all
post-effective amendments thereto shall be effective and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall have been instituted or, to the knowledge of the
Purchaser, threatened by the Commission. 
  
 6.5 No Legal
Order Pending. There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement. 
  
 6.6 No Law Prohibiting or Restricting Such Sale. There shall not be in effect any law, rule or regulation prohibiting or restricting such
sale and issuance or requiring any consent or approval of any person prior to such sale and issuance which shall not have been obtained. 
  
 SECTION 7. 
 COVENANTS 

 
 7.1 Fulfillment of Closing Conditions. Each of the Company
and the Purchaser agrees to use its commercially reasonable efforts to cause the fulfillment of the closing conditions (to the extent, in whole or in part, within its direct or indirect control) set forth in Sections 5 and 6 hereof. 
  
 7.2 Confidentiality. For the purposes of this Section 7.2, the
term “Confidential Information” means information delivered to the Purchaser by or on behalf of the Company or any Subsidiary of the Company in connection with the transactions contemplated by or otherwise pursuant to this Agreement
(including, without limitation, any information regarding the transactions contemplated hereby provided prior to the Closing Date), provided that such term does not include information that (a) was publicly known or otherwise known to the Purchaser
prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by the Purchaser or any person or entity acting on the Purchaser’s behalf, or (c) otherwise becomes known to the Purchaser other than
through disclosure by the Company or any Subsidiary of the Company. The Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by the Purchaser in good faith to protect confidential
information of third parties delivered to the Purchaser, provided that the Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented by the purchased Shares), (ii) its financial advisors and other professional advisors who are made aware of the confidential nature of such information, or (iii) any other person
or entity to which such delivery or disclosure may be necessary or appropriate (x) to effect compliance with any law, rule, regulation or order applicable to the Purchaser, (y) in response to any subpoena or other legal process or (z) in connection
with any litigation to which the Purchaser is a party. The Purchaser agrees to provide the Company with reasonable prior notice of any proposed delivery or disclosure of Confidential Information pursuant to clause (iii) of the foregoing sentence and
to use commercially reasonable best efforts to cause the person or entity to which such delivery or disclosure is made to agree in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 7.2. The
Purchaser hereby acknowledges that it is aware, and that it will advise its 
  

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 representatives who have knowledge of Confidential Information, that the United States securities laws prohibit any
person who has material, non-public information concerning the Company from purchasing or selling securities of the Company or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell such securities, and the Purchaser agrees to comply and cause its representatives to comply with such laws. Notwithstanding any provision of this Agreement to the contrary, this Section 7.2 shall not limit
the effect of any confidentiality agreement between the Company and the Purchaser, which confidentiality agreement shall remain in full force and effect in accordance with its terms. 
  
 7.3 Publicity. The Company and the Purchaser agree not to issue any press release or make any public
announcement with respect to this Agreement or the transactions contemplated hereby unless the prior written consent of the other party has been obtained, which consent shall not be unreasonably withheld; provided however, that the Company may make
any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly traded securities (in which case it will use its best efforts to advise the Purchaser prior to making such
disclosure). 
  
 7.4 Restriction on Sale of
Securities. During a period of 90 days from the Closing Date, the Purchaser agrees that it will not, without the prior written consent of the Company, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any share of Common Stock or any securities convertible into or exercisable or exchangeable for Common
Stock or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, or any securities convertible into or exercisable or
exchangeable for Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. 
  
 7.5 Registration Statement. Between the date hereof and the
Closing Date, the Company will not file any amendment to the Registration Statement or any supplement to the Final Prospectus without first notifying the Purchaser. 
  
 SECTION 8. 
 MISCELLANEOUS 
  
 8.1 Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to any principles of conflicts of law thereof. 
  
 8.2 Survival. The representations, warranties, covenants and agreements made herein shall survive any
investigation made by the Purchaser and the closing of the transactions contemplated hereby for a period of one year. 
  

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 8.3 Successors and Assigns. Except as otherwise provided herein, the provisions hereof
shall inure to the benefit of and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 
  
 8.4 Entire Agreement; Amendment. This Agreement and the other documents delivered pursuant hereto at the Closing constitute the full and
entire understanding and agreement between the parties with regard to the subjects hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set
forth herein or therein. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought. 
  
 8.5
Costs and Expenses. Each party hereto shall pay its own costs and expenses incurred in connection herewith, including the fees of its counsel, auditors and other representatives, whether or not the transactions contemplated hereby are
consummated. 
  
 8.6 Notices, etc. All notices and
other communications required or permitted hereunder shall be in writing (or in the form of a telex or telecopy (confirmed in writing) to be given only during the recipient’s normal business hours unless arrangements have otherwise been made to
receive such notice by telex or telecopy outside of normal business hours) and shall be mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand or by messenger, or telex or telecopy (as provided above) addressed (a)
if to the Purchaser, at such address as the Purchaser shall have furnished to the Company in writing or (b) if to the Company, sent to its principal executive offices and addressed to the attention of the President, or at such other address as the
Company shall have furnished to the Purchaser. 
  
 Each such
notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered personally, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been
deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid or, if by telex or telecopy, when received and confirmed in the manner provided above. 
  
 8.7 Delays or Omissions. Except as expressly provided herein,
no delay or omission to exercise any right, power or remedy accruing to either party, upon any breach or default of the other party under this Agreement shall impair any such right, power or remedy of such party nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of either party of any breach or default under this Agreement, or any waiver on the part of either party of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to either party, shall be cumulative and not alternative.

  

 10 

 8.8 Severability. In the event that any provision of this Agreement becomes or is declared
by a court of competent jurisdiction to be illegal, invalid, unenforceable or void, this Agreement shall continue in full force and effect without said provision. In such event, the parties shall negotiate, in good faith, a legal, valid and
enforceable substitute provision which most nearly effects the intent of the parties in entering into this Agreement. 
  
 8.9 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not considered in construing
or interpreting this Agreement. 
  
 8.10
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

  
 8.11 Construction. Whenever the context so
requires, the singular number includes the plural and vice versa, and a reference to one gender includes the other gender or the neuter. 
  
 8.12 Interpretation. The parties hereto acknowledge and agree that (i) the rule of construction to the effect that any ambiguities are
resolved against the drafting party shall not be employed in the interpretation of this Agreement, and (ii) the terms and provisions of this Agreement shall be construed fairly as to all parties hereto and not in favor of or against any party,
regardless of which party was generally responsible for the preparation of this Agreement. 
  
 8.13 Definitions. The following terms shall have the following meanings: 
  
 “Base Prospectus” means the prospectus contained in the Registration Statement at the time that the Registration Statement was declared
effective or in the form in which it has been most recently filed with the Commission on or prior to the date of this Agreement. 
  
 “Business Day” means a day which in New York, New York is neither a legal holiday nor a day on which banking institutions are authorized
by law or regulation to close. 
  
 “Final
Prospectus” means the prospectus supplement relating to the Shares and the offering thereof that is first filed pursuant to Rule 424(b) under the Securities Act after the date and time this Agreement is executed and delivered by the parties
hereto, together with the Base Prospectus. 
  
 “Governmental Authority” means any (a) nation, state, county, city, town, village, district, or other jurisdiction of any nature, (b) federal, state, local, municipal, foreign, or other government, (c) governmental or
quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), (d) multi-national organization or body, or (e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature. 
  
 “NNM” means Nasdaq National Market. 
  

 11 

 “Registration Statement” means the Company’s registration statement (File No.
333-62290) on Form S-3 filed with the Commission on June 5, 2001, as supplemented or amended prior to the execution of this Agreement. 
  
 “Subsidiary” means any corporation or other organization, whether incorporated or unincorporated, of which the Company directly or
indirectly owns or controls at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or
other organization, or any organization of which the Company is a general partner. 
  
 8.14 Facsimile Signatures. Any signature page delivered by a fax machine or telecopy machine shall be binding to the same extent as an original signature page, with regard to any agreement subject to the
terms hereof or any amendment thereto. Any party who delivers such a signature page agrees to later deliver an original counterpart to any party which requests it. 
  
 [The remainder of this page intentionally left blank.] 
  

 12 

 The foregoing agreement is hereby executed as of the date first above written. 
  
  

			
	SYNTROLEUM CORPORATION
		
	By:	 	 /s/ John B. Holmes, Jr.

	Name:	 	John B. Holmes, Jr.
	Title:	 	President and Chief Executive Officer

  

			
	DORSET GROUP CORPORATION
		
	By:	 	 /s/ Arturo Fasana

	Name:	 	Arturo Fasana
	Title:	 	President

 EXHIBIT A 
  

Form of Opinion of Baker Botts L.L.P. 
  
 April     , 2005 
  
 062754.0313 
  
 Dorset Group Corporation 
 c/o Arturo Fasana 
 2 Bd Georges-Favon 
 1204 Geneva 
 Switzerland 
  
 Ladies and Gentlemen: 
  
 This opinion is being furnished to you at the request of Syntroleum
Corporation, a Delaware corporation (the “Company”), pursuant to Section 5.8 of the Stock Purchase Agreement, dated as of April 11, 2005 (the “Purchase Agreement”), by and between the Company and Dorset Group Corporation, a
Panama corporation (the “Purchaser”), relating to the sale by the Company to the Purchaser of 1,000,000 shares of the Company’s common stock, par value $.01 per share (“Common Stock”). Capitalized terms used but not defined
herein shall have the meaning assigned to such terms in the Purchase Agreement. 
  
 The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Registration No. 333-62290) covering the registration of the Company’s debt
securities, shares of Common Stock, shares of preferred stock, par value $0.01 per share, depositary shares and warrants with an aggregate offering price of up to $250,000,000. Such registration statement, including all documents incorporated by
reference therein, is hereinafter referred to as the “Registration Statement,” and the prospectus supplement dated April 8, 2005, together with the prospectus dated June 6, 2001 relating to the Registration Statement, in the form first
filed with the Commission pursuant to and in accordance with Rule 424(b) under the Securities Act of 1933, as amended (the “1933 Act”), including all material incorporated by reference therein as of the date hereof, is hereinafter referred
to as the “Prospectus.” Unless otherwise defined herein, the terms used in this opinion shall have the respective meanings specified in the Purchase Agreement. 
  
 As counsel to the Company, we have examined the originals, or copies certified or otherwise identified, of the Purchase
Agreement, the Certificate of Incorporation and Bylaws of the Company, each as amended to date, corporate records of the Company, including certain resolutions of the Board of Directors of the Company, certificates of public officials and of
representatives of the Company, statutes and other instruments and documents, as a basis for the opinions hereinafter expressed. In giving such opinions, we have relied upon certificates, statements or other representations of officers of the
Company with respect to the accuracy of the factual matters contained in or covered by such certificates, statements or representations. 
  

 A-1 

 In such examinations, we have assumed (i) the genuineness of all signatures, the authenticity and
completeness of all documents, certificates, instruments and records submitted to us as originals and the conformity to the original instruments of all documents submitted to us as copies, and the authenticity and completeness of the originals of
such copies, (ii) the due authorization, execution and delivery by the parties thereto, other than the Company, of all such documents and instruments examined by us, (iii) that, to the extent that any such documents and instruments purport to
constitute agreements of such other parties, they constitute valid and binding obligations of such other parties and (iv) the truth and accuracy of all representations and warranties in the Purchase Agreement and that each party will comply with all
of their respective covenants therein. We have conducted no independent investigation with respect to the foregoing. 
  
 On the basis of the foregoing, and subject to the limitations and qualifications set forth herein, we are of the opinion that: 
  
 1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware. 
  
 2. The
Company has all requisite corporate power and authority to execute and deliver, and perform its obligations under, the Purchase Agreement. 
  
 3. The Shares have been duly authorized by all necessary corporate action on the part of the Company and, when issued and delivered to the Purchaser upon
payment therefor in accordance with the provisions of the Purchase Agreement, will be validly issued, fully paid and nonassessable. 
  
 4. The Purchase Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, except insofar as the enforceability thereof may be limited by the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or other law relating to or
affecting the enforcement of creditors’ rights generally and to general principles of equity and public policy (regardless of whether such enforceability is considered in a proceeding in equity or at law). 
  
 5. The statements in the Registration Statement and the Prospectus under the
captions “Description of Capital Stock,” and in the Registration Statement under Item 15, insofar as they are descriptions of contracts, agreements or other legal documents, or refer to statements of law or legal conclusions, are accurate
summaries in all material respects. 
  
 6. The Registration
Statement has been declared effective under the 1933 Act and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or
are pending or threatened by the Commission. 
  
 We express no
opinion with respect to the legality, validity, binding nature or enforceability of any provisions (i) purporting to release or exculpate any party from liability for the acts or omissions of such party proximately causing damages or injuries as
result of such party’s negligence, willful misconduct or strict liability, or purporting to impose a duty upon any 
  

 A-2 

 party to indemnify, or make contribution to, any other party when any claimed damages or liability result from the
negligence, strict liability, willful misconduct of, or the violation of federal or state securities or anti-fraud laws by, the party seeking such indemnity or contribution, (ii) relating to severability of invalid terms, the reformation of
contracts and similar terms or (iii) to the effect that failure to exercise or delay in exercising rights or remedies will not operate as a waiver of such rights or remedies. 
  
 In connection with our opinion expressed above in paragraph 6, we have relied upon the oral notification by a member of the
staff of the Commission as to the effectiveness of the Registration Statement under the 1933 Act. 
  
 In the opinions set forth herein, phrases such as “to our knowledge,” “known to us” and those with equivalent wording refer to the
conscious awareness of information by the lawyers of this firm who have prepared this opinion, signed this opinion or been actively involved in assisting and advising the Company in connection with the preparation, execution and delivery of the
Purchase Agreement. 
  
 The opinions set forth herein are based
upon and limited to applicable federal law, the laws of the State of Texas and the general corporation law of the State of Delaware, in each case as in effect on the date hereof. For purposes of the opinions expressed above, we have assumed, with
your permission and without independent inquiry, that the laws of the State of Delaware are identical to the laws of the State of Texas. The opinions given are strictly limited to the matters stated herein, and no implied opinions are to be inferred
from anything stated herein, and without limiting the generality of the foregoing we express no opinion with respect to any bankruptcy or creditors rights laws or any federal or state securities or antifraud law, rule or regulation except as
otherwise specifically stated herein. 
  
 This opinion is intended
to be for the benefit of the Purchaser in connection with the transactions consummated on the date hereof pursuant to the Purchase Agreement and may be relied upon only by the Purchaser and may not be relied upon by any other person or for any other
purpose. No other use or distribution of this opinion may be made without our prior written consent. 
  
 Very truly yours, 
  

 A-3Loan Agreement

 Exhibit 10.97  
  
 LOAN AGREEMENT 
  
 Dated as of December 31, 2004 
  
 between 
  
 RF MONOLITHICS, INC. 
  
 and 
  
 WELLS FARGO BANK, NATIONAL
ASSOCIATION 

 Table of Contents 
  

					
	 	 	 	  	Page

	 ARTICLE I
	 	Definitions	  	1
	     Section 1.1
	 	Definitions	  	1
	     Section 1.2
	 	Accounting Matters	  	13
	     Section 1.3
	 	Other Definitional Provisions	  	13
			
	 ARTICLE II
	 	Advances and Letters of Credit	  	14
	     Section 2.1
	 	Revolving Credit Advances	  	14
	     Section 2.2
	 	General Provisions Regarding Interest; Etc.	  	15
	     Section 2.3
	 	Unused Facility Fee	  	15
	     Section 2.4
	 	Use of Proceeds	  	16
	     Section 2.5
	 	Letters of Credit.	  	16
			
	 ARTICLE III
	 	Payments	  	18
	     Section 3.1
	 	Method of Payment.	  	18
	     Section 3.2
	 	Prepayments	  	19
	     Section 3.3
	 	Additional Costs in Respect of Letters of Credit	  	19
			
	 ARTICLE IV
	 	Security	  	19
	     Section 4.1
	 	Collateral	  	19
	     Section 4.2
	 	Setoff	  	19
			
	 ARTICLE V
	 	Conditions Precedent	  	20
	     Section 5.1
	 	Initial Extension of Credit	  	20
	     Section 5.2
	 	All Extensions of Credit	  	21
			
	 ARTICLE VI
	 	Representations and Warranties	  	22
	     Section 6.1
	 	Corporate Existence	  	22
	     Section 6.2
	 	Financial Statements; Etc	  	22
	     Section 6.3
	 	Action; No Breach	  	22
	     Section 6.4
	 	Operation of Business	  	23
	     Section 6.5
	 	Litigation and Judgments	  	23
	     Section 6.6
	 	Rights in Properties; Liens	  	23
	     Section 6.7
	 	Enforceability	  	23
	     Section 6.8
	 	Approvals	  	23
	     Section 6.9
	 	Debt	  	23
	     Section 6.10
	 	Taxes	  	23
	     Section 6.11
	 	Use of Proceeds; Margin Securities	  	23
	     Section 6.12
	 	ERISA	  	24
	     Section 6.13
	 	Disclosure	  	24
	     Section 6.14
	 	Subsidiaries, Ventures, Etc	  	24
	     Section 6.15
	 	Agreements	  	24
	     Section 6.16
	 	Compliance with Laws	  	24
	     Section 6.17
	 	Inventory	  	24

  

 -i- 

 Table of Contents 
  

					
	 	 	 	  	Page

	    Section 6.18	 	Investment Company Act	  	25
	    Section 6.19	 	Public Utility Holding Company Act	  	25
	    Section 6.20	 	Environmental Matters.	  	25
	    Section 6.21	 	Intellectual Property	  	26
	    Section 6.22	 	Depository Relationship	  	26
	    Section 6.23	 	Subsidiaries	  	26
	    Section 6.24	 	Further Assurances	  	26
			
	ARTICLE VII	 	Affirmative Covenants	  	27
	    Section 7.1	 	Reporting Requirements	  	27
	    Section 7.2	 	Maintenance of Existence; Conduct of Business	  	29
	    Section 7.3	 	Maintenance of Properties	  	30
	    Section 7.4	 	Taxes and Claims	  	30
	    Section 7.5	 	Insurance	  	30
	    Section 7.6	 	Inspection Rights	  	30
	    Section 7.7	 	Keeping Books and Records	  	30
	    Section 7.8	 	Compliance with Laws	  	30
	    Section 7.9	 	Compliance with Agreements	  	31
	    Section 7.10	 	Further Assurances	  	31
	    Section 7.11	 	ERISA	  	31
			
	ARTICLE VIII	 	Negative Covenants	  	31
	    Section 8.1	 	Debt	  	31
	    Section 8.2	 	Limitation on Liens	  	31
	    Section 8.3	 	Mergers, Etc	  	32
	    Section 8.4	 	Restricted Payments	  	32
	    Section 8.5	 	Loans and Investments	  	32
	    Section 8.6	 	Intentionally Omitted.	  	33
	    Section 8.7	 	Transactions With Affiliates	  	33
	    Section 8.8	 	Disposition of Assets	  	33
	    Section 8.9	 	Sale and Leaseback	  	33
	    Section 8.10	 	Prepayment of Debt	  	33
	    Section 8.11	 	Nature of Business	  	33
	    Section 8.12	 	Environmental Protection	  	33
	    Section 8.13	 	Accounting	  	34
	    Section 8.14	 	No Negative Pledge	  	34
	    Section 8.15	 	Guaranties	  	34
			
	ARTICLE IX	 	Financial Covenants	  	34
	    Section 9.1	 	Cash Flow Leverage Ratio	  	34
	    Section 9.2	 	Fixed Charge Coverage Ratio	  	34
	    Section 9.3	 	Consolidated Tangible Net Worth	  	34
	    Section 9.4	 	Consolidated Net Income	  	34
	     Section 9.5
	 	Capital Expenditures	  	34

  

 -ii- 

 Table of Contents 
  

					
	 	  	 	  	Page

	 ARTICLE X
	  	Default	  	34
	     Section 10.1
	  	Events of Default	  	34
	     Section 10.2
	  	Remedies Upon Default	  	37
	     Section 10.3
	  	Performance by the Lender	  	37
	     Section 10.4
	  	Cash Collateral	  	37
			
	 ARTICLE XI
	  	Miscellaneous	  	37
	     Section 11.1
	  	Expenses	  	37
	     Section 11.2
	  	INDEMNIFICATION	  	38
	     Section 11.3
	  	Limitation of Liability	  	39
	     Section 11.4
	  	No Duty	  	39
	     Section 11.5
	  	Lender Not Fiduciary	  	39
	     Section 11.6
	  	Equitable Relief	  	39
	     Section 11.7
	  	No Waiver; Cumulative Remedies	  	39
	     Section 11.8
	  	Successors and Assigns	  	40
	     Section 11.9
	  	Survival	  	40
	     Section 11.10
	  	ENTIRE AGREEMENT; AMENDMENT	  	40
	     Section 11.11
	  	Notices	  	40
	     Section 11.12
	  	Governing Law; Venue; Service of Process	  	40
	     Section 11.13
	  	Counterparts	  	41
	     Section 11.14
	  	Severability	  	41
	     Section 11.15
	  	Headings	  	41
	     Section 11.16
	  	Intentionally Omitted.	  	41
	     Section 11.17
	  	Construction	  	41
	     Section 11.18
	  	Independence of Covenants	  	41
	     Section 11.19
	  	WAIVER OF JURY TRIAL	  	41
	     Section 11.20
	  	Arbitration.	  	41
	     Section 11.21
	  	Additional Interest Provision	  	43
	     Section 11.22
	  	Ceiling Election	  	44

  

 -iii- 

 LOAN AGREEMENT 
  
 THIS LOAN AGREEMENT (the “Agreement”), dated as of December 31, 2004, is between RF MONOLITHICS, INC., a
Delaware corporation (the “Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (the “Lender”). 
  
 R E C I T A L S: 
  
 The Borrower has requested that the Lender extend credit to the Borrower as
described in this Agreement. The Lender is willing to make such credit available to the Borrower upon and subject to the provisions, terms and conditions hereinafter set forth. 
  
 NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as
follows: 
  
 ARTICLE I 
  
 Definitions 
  
 Section 1.1 Definitions. As used in this Agreement, all exhibits, appendices and schedules hereto and in any note,
certificate, report or other Loan Documents made or delivered pursuant to this Agreement, the following terms will have the meanings given such terms in this Section 1 or in the provision, section or recital referred to below: 
  
 “AAA” has the meaning for such term set forth in Section
11.20.B of the Agreement. 
  
 “Acquisition
Consideration” means the consideration given by the Borrower or any of its Subsidiaries for a Permitted Acquisition, including but not limited to the sum of (without duplication) (a) the fair market value of any cash, property (including
any Equity Interests) or services given, plus (b) the amount of any Debt incurred or guaranteed (to the extent the proceeds of such Debt are used to fund such Permitted Acquisition and are not otherwise accounted for under the preceding clause (a))
or assumed in connection with such Permitted Acquisition by the Borrower or any of its Subsidiaries. 
  
 “Advance” means an advance by the Lender to the Borrower pursuant to Article II or any advance made by the Lender to cover any drawing
under any Letters of Credit. 
  
 “Advance Request
Form” means a certificate, in a form approved by the Lender, in substantially the form of Exhibit D, properly completed and signed by the Borrower requesting a Revolving Credit Advance. 
  
 “Affiliate” means, as to any Person, any other Person (a)
that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, such Person; (b) that directly or indirectly beneficially owns or holds fifteen percent (15%) or more of any class of
voting stock of such Person; or (c) fifteen percent (15%) or more of the voting stock of which is directly or indirectly beneficially owned or held by the Person in question. The term “control” means the possession, directly or indirectly,
of the power to direct or cause direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise; provided, however, in no event shall the Lender be deemed an Affiliate of the
Borrower or any of its Subsidiaries or Affiliates. 
  

 LOAN AGREEMENT - Page 1 

 “Agreement” has the meaning set forth in the Introductory Paragraph hereto, as the same
may, from time to time, be amended, modified, restated, renewed, waived, supplemented, or otherwise changed, and includes all schedules, exhibits and appendices attached or otherwise identified therewith. 
  
 “Attributable Debt” means, on any date, (a) in respect of
any Capital Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease Obligation. 
  
 “Availability” means the lesser of (i) the Commitment minus
all outstanding Advances or (ii) the Borrowing Base minus all outstanding Advances. 
  
 “Borrowing Base” means, at any time, an amount equal to the sum of eighty percent (80%) of the value of Eligible Accounts. 
  
 “Borrowing Base Report” means, as of any date of preparation, a certificate setting forth the Borrowing
Base (in a form acceptable to the Lender in substantially the form of Exhibit A attached hereto) prepared by and certified by the chief financial officer, controller or assistant controller of the Borrower. 
  
 “Borrower” means the Person identified as such in the
introductory paragraph hereof, and its successors and assigns. 
  
 “Business Day” has the meaning assigned to it in the Notes. 
  
 “Capital Expenditure” shall mean any expenditure by a Person for (a) an asset which will be used in a year or years subsequent to the year in which the expenditure is made and which asset is properly
classified in relevant financial statements of such Person as equipment, real property, a fixed asset or a similar type of capitalized asset in accordance with GAAP or (b) an asset relating to or acquired in connection with an acquired business, and
any and all acquisition costs related to (a) or (b) above. 
  
 “Capital Lease Obligation” shall mean the amount of Debt under a lease of Property by a Person that would be shown as a liability on a balance sheet of such Person prepared for financial reporting purposes in accordance
with GAAP. 
  
 “Cash Collateral” has the meaning
set forth for such term in Section 2.5.D. 
  
 “Cash
Flow Leverage Ratio” means, as of the date of any determination, for the Borrower and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated Senior Funded Debt as of such date to (b) Consolidated EBITDA for the period of
four consecutive Fiscal Quarters ending on such date. 
  
 “Cash Income Taxes” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the aggregate amount of federal and state income taxes paid by them during such period. 
  

 LOAN AGREEMENT - Page 2 

 “Change of Control” means the occurrence of any of the following events: 
  
 (a) any Person or “group” (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a Person will be deemed to have “beneficial
ownership” of all securities that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than twenty percent (20%) of the voting power of all
classes of voting stock of the Borrower. 
  
 (b) During any
consecutive two-year period beginning the day following the date of this Agreement, individuals who at the beginning of such period constituted the board of directors of the Borrower (together with any new directors whose election to such board of
directors, or whose nomination for election by the owners of the Borrower, was approved by a vote of 66-2/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority of the board of directors of the Borrower then in office. 
  
 (c) David Kirk or other senior management of the Borrower as of the date hereof shall cease to actively manage the Borrower’s day-to-day business
activities, and there is not, in the reasonable judgment of the Lender, competent replacement management. 
  
 “Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated and rulings issued thereunder. 
  
 “Collateral” has the meaning for such term set forth in
Section 4.1 of this Agreement. 
  
 “Commitment” means the obligation of the Lender to make Revolving Credit Advances pursuant to Section 2.1 in an aggregate principal amount at any time outstanding up to but not exceeding Ten Million Dollars
($10,000,000), subject, however, to termination pursuant to Section 10.2. 
  
 “Commitment Fee” means $20,000. 
  
 “Compliance Certificate” means a certificate, substantially in the form of Exhibit B attached hereto, prepared by and executed by the chief financial officer of the Borrower. 
  
 “Consolidated EBITDA” means, for any period, for the
Borrower and its Subsidiaries on a consolidated basis, an amount equal to the sum of (a) Consolidated Net Income for such period, (b) Interest Expense deducted in determining such Consolidated Net Income, (c) income tax expenses deducted in
determining such Consolidated Net Income, (d) the amount of depreciation, depletion and amortization expense deducted in determining such Consolidated Net Income, and (e) extraordinary losses computed and calculated in accordance with GAAP reducing
such Consolidated Net Income, minus (i) income tax credits included in calculating such Consolidated Net Income and (ii) extraordinary gains computed and calculated in accordance with GAAP increasing such Consolidated Net Income. 
  
 “Consolidated Interest Charges” means, for any period, for
the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all Interest Expense paid in cash during such period by the Borrower and its Subsidiaries in connection with borrowed money (including 
  

 LOAN AGREEMENT - Page 3 

 capitalized interest) that is treated as interest in accordance with GAAP, and (b) the portion of rent expense of the
Borrower and its Subsidiaries with respect to such period under capital leases that is treated as interest in accordance with GAAP. 
  
 “Consolidated Net Income” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the net income of the
Borrower and its Subsidiaries for that period. 
  
 “Consolidated Senior Funded Debt” means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations, whether current or
long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, but excluding any Subordinated Debt, (b) all purchase money Debt, (c) all
direct obligations arising under letters of credit, bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d) all obligations in respect of the deferred purchase price of property or services (other than trade and
accounts payable in the ordinary course of business), (e) Attributable Debt in respect of Capital Lease Obligations and Synthetic Lease Obligations, (f) without duplication, all Guarantees with respect to outstanding Debt of the types specified in
clauses (a) through (e) above of Persons other than the Borrower or any Subsidiary, and (g) all Debt of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which the Borrower or a Subsidiary is a general partner or joint venturer (other than a joint venturer that is only a limited partner), unless such Debt is expressly made non-recourse to the Borrower or
such Subsidiary. 
  
 “Consolidated Tangible Net
Worth” means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis, Shareholders’ Equity (by way of clarification, and not as an additional deduction, such GAAP calculation would be net of
treasury shares) of the Borrower and its Subsidiaries on that date minus the Intangible Assets of the Borrower and its Subsidiaries on that date plus Subordinated Debt. 
  
 “Constituent Documents” means (i) in the case of a corporation, its articles or certificate of
incorporation and bylaws; (ii) in the case of a general partnership, its partnership agreement; (iii) in the case of a limited partnership, its certificate of limited partnership and partnership agreement; (iv) in the case of a trust, its trust
agreement; (v) in the case of a joint venture, its joint venture agreement; (vi) in the case of a limited liability company, its articles of organization and operating agreement or regulations; and (vii) in the case of any other entity, its
organizational and governance documents and agreements. 
  
 “Debt” means as to any Person at any time (without duplication): (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, notes, debentures, or other similar instruments,
(c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable of such Person arising in the ordinary course of business that are not past due by more than ninety (90) days, (d) all
Capital Lease Obligations of such Person, (e) all Debt or other obligations of others Guaranteed by such Person, (f) all obligations secured by a Lien existing on property owned by such Person, whether or not the obligations secured thereby have
been assumed by such Person or are non-recourse to the credit of such Person, (g) any other obligation for borrowed money or other financial accommodations which in accordance with GAAP would be shown as a liability on the balance sheet of such
Person, (h) any repurchase obligation or liability of a Person with respect 
  

 LOAN AGREEMENT - Page 4 

 to accounts, chattel paper or notes receivable sold by such Person, (i) any liability under a sale and leaseback
transaction that is not a Capital Lease Obligation, (j) any obligation under any so-called “synthetic leases”, (k) any obligation arising with respect to any other transaction that is the functional equivalent of borrowing but which does
not constitute a liability on the balance sheets of a Person, (l) all reimbursement obligations of such Person (whether contingent or otherwise) in respect of letters of credit, bankers’ acceptances, surety or other bonds and similar
instruments, and (m) all liabilities of such Person in respect of unfunded vested benefits under any Plan. 
  
 “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment
for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors
generally. 
  
 “Default” means an Event of
Default or the occurrence of an event or condition which with notice or lapse of time or both would become an Event of Default. 
  
 “Default Interest Rate” has the meaning assigned to it in the Notes. 
  
 “Dispute” means any action, dispute, claim or controversy of any kind, whether in contract or tort,
statutory or common law, legal or equitable, now existing or hereafter arising under or in connection with, or in any way pertaining to any of the Loan Documents and each other document, contract and instrument required hereby or now or hereafter
delivered to Lender in connection herewith, or any past, present or future extensions of credit and other activities, transactions or obligations of any kind related directly or indirectly to any of the foregoing documents, including without
limitation, any of the foregoing arising in connection with the exercise of any self-help, ancillary or other remedies pursuant to any of the foregoing documents. 
  
 “Disclosure Schedule” means the schedule of the same name attached hereto. 
  
 “Dollars” and “$” mean lawful money of the
United States of America. 
  
 “Domestic
Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States. 
  
 “Eligible Accounts” means, at any time, all accounts receivable of the Borrower created in the ordinary course of business that are
acceptable to the Lender and satisfy the following conditions: 
  
 A. The account complies with all applicable laws, rules, and regulations, including, without limitation, usury laws, the Federal Truth in Lending Act, and Regulation Z of the Board of Governors of the Federal Reserve System; 
  
 B. The account has not been outstanding for 60 days or more past the due
date, but not to exceed 120 days after the original date of invoice; 
  
 C. The account does not represent a commission and the account was created in connection with (i) the sale of goods by the Borrower in the ordinary course of business and such sale has been consummated and such goods have been shipped

  

 LOAN AGREEMENT - Page 5 

 and delivered and received by the account debtor, or (ii) the performance of services by the Borrower in
the ordinary course of business and such services have been completed and accepted by the account debtor; 
  
 D. The account arises from an enforceable contract, the performance of which has been completed by the Borrower; 
  
 E. The account does not arise from the sale of any good that is on a
bill-and-hold, guaranteed sale, sale-or-return, sale on approval, consignment, or any other repurchase or return basis, apart from Borrower’s standard product warranties; 
  
 F. The Borrower has good and indefeasible title to the account and the account is not subject to any Lien except Liens in
favor of the Lender; 
  
 G. The account does not arise out of a
contract with or order from, an account debtor that, by its terms, prohibits or makes void or unenforceable the grant of a security interest by the Borrower to the Lender in and to such account; 
  
 H. The account is not subject to any setoff, counterclaim, defense, dispute,
recoupment, or adjustment other than normal discounts for prompt payment; 
  
 I. The account debtor is not insolvent or the subject of any bankruptcy or insolvency proceeding and has not made an assignment for the benefit of creditors, suspended normal business operations, dissolved,
liquidated, terminated its existence, ceased to pay its debts as they become due, or suffered a receiver or trustee to be appointed for any of its assets or affairs; 
  
 J. The account is not evidenced by chattel paper or an instrument (although it may be secured by a letter of credit provided
by the Borrower’s customer); 
  
 K. No default exists under
the account by any party thereto; 
  
 L. The account debtor has
not returned or refused to retain, or otherwise notified the Borrower of any dispute concerning, or claimed nonconformity of, any of the goods from the sale of which the account arose; 
  
 M. The account is not owed by an Affiliate, employee, officer, director or shareholder of the Borrower; 
  
 N. The account is payable in Dollars, Euros, Pounds Sterling or Japanese Yen
by the account debtor; provided, however, that accounts may be payable in any of the aforementioned currencies other than Dollars only to the extent that accounts in any one such currency do not exceed five percent (5%) of all accounts; 

 
 O. The account is not owed by an account debtor whose accounts the Lender
in its reasonable discretion has chosen to exclude from Eligible Accounts; 
  
 P. The account shall be ineligible if the account debtor is domiciled in any country other than the United States of America and Canada other than accounts which are insured under a foreign credit insurance policy
acceptable to Lender in its sole discretion; 
  

 LOAN AGREEMENT - Page 6 

 Q. The account shall be ineligible if more than twenty-five percent (25%) of the aggregate balances then
outstanding on accounts owed by such account debtor and its Affiliates to the Borrower are ineligible by reason of paragraph B of this definition; 
  
 R. The account shall be ineligible if the account debtor is the United States of America or any department, agency, or instrumentality thereof, and the
Federal Assignment of Claims Act of 1940, as amended, shall not have been complied with; 
  
 S. The account shall be ineligible to the extent the aggregate of all accounts owed by the account debtor and its Affiliates to which the account relates exceeds twenty-five percent (25%) of all accounts owed by all
of the Borrower’s account debtors; and 
  
 T. The Account is
otherwise acceptable in the sole discretion of the Lender; provided that the Lender shall have the right to create and adjust eligibility standards and related reserves from time to time in its good faith credit judgment. 
  
 The amount of the Eligible Accounts owed by an account debtor to the Borrower shall be
reduced by the amount of all “contra accounts” and other obligations owed by the Borrower to such account debtor. 
  
 “Environmental Laws” means any and all federal, state, and local laws, regulations, judicial decisions, orders, decrees, plans, rules,
permits, licenses, and other governmental restrictions and requirements pertaining to health, safety, or the environment, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
§ 9601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq., the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Clean Water Act, 33
U.S.C. § 1251 et seq., and the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., as the same may be amended or supplemented from time to time. 
  

“Environmental Liabilities” means, as to any Person, all liabilities, obligations, responsibilities, Remedial Actions, losses,
damages, punitive damages, consequential damages, treble damages, costs, and expenses, (including, without limitation, all reasonable fees, disbursements and expenses of counsel, expert and consulting fees and costs of investigation and feasibility
studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand, by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, including any Environmental
Law, permit, order or agreement with any Governmental Authority or other Person, arising from environmental, health or safety conditions or the Release or threatened Release of a Hazardous Material into the environment, resulting from the past,
present, or future operations of such Person or its Affiliates. 
  
 “Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or
acquisition from such Person of shares of capital stock of (or other ownership 
  

 LOAN AGREEMENT - Page 7 

 or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person
(including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination. 
  
 “ERISA” means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations and published interpretations thereunder. 
  
 “ERISA Affiliate” means any corporation or trade or business which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower or is under common control (within the meaning of Section 414(c) of the Code) with the Borrower. 
  
 “Event of Default” has the meaning specified in Section 10.1. 
  
 “Excess Cash Flow” means, for the Borrower and its Subsidiaries on a consolidated basis for any Fiscal
Year, an amount equal to (a) Consolidated EBITDA for such period, minus (b) the sum of (without duplication) (i) Cash Income Taxes for such period, plus (ii) Capital Expenditures for such period. 
  
 “Fiscal Quarter(s)” means the three-calendar-month periods
ending on November 30, February 28, May 31, and August 31 of each calendar year. 
  
 “Fiscal Year” means the twelve-calendar-month period beginning September 1 of each year and ending August 31 of each year. 
  
 “Fixed Charge Coverage Ratio” means, as of the last day of a Fiscal Quarter that is the applicable date of
determination, for the Borrower and its Subsidiaries on a consolidated basis, the ratio of (a) Excess Cash Flow for the period of four Fiscal Quarters ended on such date of determination to (b) the sum of (i) Consolidated Interest Charges for the
period of four Fiscal Quarters ended on such date of determination, (ii) scheduled principal payments on Consolidated Senior Funded Debt (including Attributable Debt but excluding principal payments due and payable on the Termination Date) during
the period of four Fiscal Quarters following such date of determination, and (iii) an amount equal to twenty percent (20%) of the outstanding amount of all Revolving Credit Advances as of such date. 
  
 “Foreign Subsidiary” means each Subsidiary of the Borrower
which is organized under the laws of a jurisdiction other than the United States of America or any state or commonwealth thereof. 
  
 “GAAP” means generally accepted accounting principles, applied on a consistent basis, as set forth in Opinions of the Accounting
Principles Board of the American Institute of Certified Public Accountants and/or in statements of the Financial Accounting Standards Board and/or their respective successors and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a “consistent basis” when the accounting principles applied in a current period are comparable in all material respects to those accounting principles applied in a preceding period. 
  

 LOAN AGREEMENT - Page 8 

 “Governmental Authority” means any nation or government, any state or political
subdivision thereof and any entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government. 
  
 “Guarantee” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person as well as any obligation or liability, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation
or liability (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to operate Property, to take-or-pay, or to maintain net worth or working capital or other financial
statement conditions or otherwise) or (b) entered into for the purpose of indemnifying or assuring in any other manner the obligee of such Debt or other obligation or liability of the payment thereof or to protect the obligee against loss in respect
thereof (in whole or in part), provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. 
  
 “Guarantor” means any Person who from time to time
guarantees all or any part of the Obligations. 
  
 “Guaranty” means a written guaranty of each Guarantor in favor of the Lender, in form and substance satisfactory to Lender, as the same may be amended, modified, restated, renewed, replaced, extended, supplemented or
otherwise changed from time to time. 
  
 “Hazardous
Material” means any substance, product, waste, pollutant, material, chemical, contaminant, constituent, or other material which is or becomes listed, regulated, or addressed under any Environmental Law, including, without limitation,
asbestos, petroleum, and polychlorinated biphenyls. 
  
 “Intangible Assets” means assets that are considered to be intangible assets under GAAP, including, to the extent specified by GAAP, customer lists, goodwill, computer software, copyrights, trade names, trademarks, patents,
franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs. 
  
 “Interest Expense” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, all expenses treated as interest
in accordance with GAAP. 
  
 “Letter of Credit”
means any standby letter of credit issued by the Lender for the account of or at the direction of the Borrower pursuant to Article II of this Agreement. 
  
 “Letter of Credit Liabilities” means, at any time, the aggregate face amounts of all outstanding Letters of Credit, plus any amounts
drawn under any Letters of Credit for which the Lender has not been fully reimbursed by the Borrower (unless the Lender, in its sole discretion, has cleared the drawn amount by means of an Advance under the Revolving Credit Note, in which case the
drawn amount would not constitute a Letter of Credit Liability). 
  
 “Letter of Credit Request Form or Application” means a certificate or agreement, in a form acceptable to the Lender, properly completed and signed by the Borrower requesting issuance of a Letter of Credit and containing
provisions for fees for the issuance of Letters of Credit, repayment of drawn letters of credit, the interest rate applicable to drawn and unpaid Letters of Credit, and such other matters as the Lender may require. 
  

 LOAN AGREEMENT - Page 9 

 “Leverage Ratio” means, at any particular time, the ratio of Consolidated Liabilities to
Consolidated Tangible Net Worth. 
  
 “Liabilities” means, at any particular time, all amounts which, in conformity with GAAP, would be included as liabilities on a balance sheet of a Person. 
  
 “Lien” means any lien, mortgage, security interest, tax lien, pledge, charge, hypothecation, assignment,
preference, priority, or other encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or title retention agreement), whether arising by contract, operation of law, or otherwise. 
  
 “Loan Assignment Document” means the Assignment of Notes and
Security Interests dated as of December 31, 2004 between Wells Fargo Business Credit, Inc. and the Lender. 
  
 “Loan Documents” means this Agreement, the Security Documents and all promissory notes, security agreements, deeds of trust, assignments,
letters of credit, guaranties, and other instruments, documents, and agreements executed and delivered pursuant to or in connection with this Agreement, as such instruments, documents, and agreements may be amended, modified, renewed, restated,
extended, supplemented, replaced, consolidated, substituted, or otherwise changed from time to time. 
  
 “Maximum Lawful Rate” means, at any time, the maximum rate of interest which may be charged, contracted for, taken, received or reserved
by the Lender in accordance with applicable Texas law (or applicable United States federal law to the extent that such law permits Lender to charge, contract for, receive or reserve a greater amount of interest than under Texas law). The Maximum
Lawful Rate shall be calculated in a manner that takes into account any and all fees, payments, and other charges in respect of the Loan Documents that constitute interest under applicable law. Each change in any interest rate provided for herein
based upon the Maximum Lawful Rate resulting from a change in the Maximum Lawful Rate shall take effect without notice to the Borrower at the time of such change in the Maximum Lawful Rate. 
  
 “Multiemployer Plan” means a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been made by the Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA. 
  
 “Notes” means, collectively, all promissory notes (and “Note” means any of such Notes) executed at any time by the
Borrower and payable to the order of the Lender, as amended, renewed, replaced, extended, supplemented, consolidated, restated, modified, otherwise changed and/or increased from time to time, including the original Note evidencing Borrower’s
obligations hereunder substantially in the form of Exhibit C attached hereto. 
  
 “Obligated Party” means the Guarantor or any other Person who is or becomes party to any agreement that guarantees or secures payment and performance of the Obligations or any part thereof.

  
 “Obligations” means all obligations,
indebtedness, and liabilities of the Borrower, each Guarantor and any other Obligated Party to the Lender or Affiliates of the Lender, or both, now 
  

 LOAN AGREEMENT - Page 10 

 existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated,
joint, several, or joint and several, including, without limitation, the obligations, indebtedness, and liabilities under this Agreement, any Swap Contract, the other Loan Documents (including, without limitation, all Letter of Credit Liabilities),
any cash management or treasury services agreements and all interest accruing thereon (whether a claim for post-filing or post-petition interest is allowed in any insolvency, reorganization or similar proceeding) and all attorneys’ fees and
other expenses incurred in the enforcement or collection thereof. 
  
 “Operating Lease” means any lease (other than a lease constituting a Capital Lease Obligation) of real or personal Property. 
  
 “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to all or any of its functions under ERISA. 
  
 “Permitted Acquisition” means the acquisition of all of the
Equity Interests or (in one transaction or a series of transactions) the assets of another Person that constitute a business unit, provided (i) the Acquisition Consideration required to accomplish such acquisitions does not exceed $5,000,000 in the
aggregate in any Fiscal Year of the Borrower, (ii) at the time of such acquisition, and after giving effect to such proposed acquisition, Borrower shall have Availability under the line of credit in an amount not less than $3,000,000, (iii)
immediately before and after giving effect to such proposed acquisition, the Borrower is in pro forma compliance with all terms of this Agreement and no Event of Default shall have occurred and be continuing, (iv) if such acquisition results in a
Domestic Subsidiary, (A) such Subsidiary shall execute a Guaranty, and a Security Agreement, together with any other collateral documents required by the Lender, (B) 100% of such Subsidiary’s Equity Interests shall be pledged to secure the
Obligations and (C) the Lender shall have received such board resolutions, officer’s certificates, opinions of counsel and Constituent Documents with respect to such Subsidiary as the Lender shall reasonably request in connection with the
actions described in clauses (A) and (B) above, and (iv) if such acquisition results in a Foreign Subsidiary, (A) all of such Subsidiary’s Equity Interests (up to 65%) owned by Borrower or its Domestic Subsidiaries shall be pledged to secure
the Obligations and (B) the Lender shall have received such board resolutions, officer’s certificates, opinions of counsel and Constituent Documents with respect to such Subsidiary as the Lender shall reasonably request. 
  
 “Permitted Investments” means (i) investments in
wholly-owned Domestic Subsidiaries, (ii) travel advances or loans to the Borrower’s officers and employees not exceeding at any one time an aggregate of $50,000, (iii) advances in the form of progress payments for the purchase of Capital
Expenditures permitted pursuant to Section 9.5, prepaid rent not exceeding one month and security deposits maintained in the ordinary course of business, and (iv) capital contributions to or investments in joint ventures and otherwise in the
ordinary course of its business with any Person and Guarantees by the Borrower or any of its Subsidiaries in favor of any Person in the ordinary course of its business (including arrangements with suppliers, customers and customers of its customers)
to the extent that the aggregate amount of all such items does not exceed $2,000,000 at any one time. 
  
 “Person” means any individual, corporation, limited liability company, business trust, association, company, partnership, joint venture,
Governmental Authority, or other entity, and shall include such Person’s heirs, administrators, personal representatives, executors, successors and assigns. 
  

 LOAN AGREEMENT - Page 11 

 “Plan” means any employee benefit or other plan established or maintained by the
Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA. 
  
 “Prime Rate” has the meaning assigned to it in the Notes. 
  
 “Principal Office” means the principal office of the Lender, presently located at 4975 Preston Park Boulevard, Suite 280, Plano, Texas
75093. 
  
 “Prohibited Transaction” means any
transaction set forth in Section 406 of ERISA or Section 4975 of the Code. 
  
 “Property” of a Person means any and all property, whether real, personal, tangible, intangible or mixed, of such Person, or any other assets owned, operated or leased by such Person. 
  
 “Related Indebtedness” has the meaning set forth in
Section 11.21 of this Agreement. 
  
 “Release” means, as to any Person, any release, spill, emission, leaking, pumping, injection, deposit, disposal, disbursement, leaching, or migration of Hazardous Materials into the indoor or outdoor environment or into or
out of property owned by such Person, including, without limitation, the movement of Hazardous Materials through or in the air, soil, surface water, ground water, or property. 
  
 “Remedial Action” means all actions required to (a) clean up, remove, treat, or otherwise address Hazardous
Materials in the indoor or outdoor environment, (b) prevent the Release or threat of Release or minimize the further Release of Hazardous Materials so that they do not migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, or (c) perform pre-remedial studies and investigations and post-remedial monitoring and care. 
  
 “Reportable Event” means any of the events set forth in Section 4043 of ERISA. 
  
 “Revolving Credit Advance” means any Advance made by the
Lender to the Borrower pursuant to Section 2.1 of this Agreement. 
  
 “Revolving Credit Note” means the Revolving Credit Note of the Borrower payable to the order of the Lender, in substantially the form of Exhibit C hereto, and all amendments, extensions,
renewals, replacements, and modifications thereof. 
  
 “Security Agreement” means the Pledge and Security Agreement of the Borrower in favor of the Lender, in form and substance satisfactory to the Lender, as the same may be amended, restated, supplemented, modified, or changed
from time to time. 
  
 “Security Documents” means
the Security Agreement, the Guaranty, the Loan Assignment Document (and the documents referred to therein), and each and every pledge, mortgage, deed of trust or other collateral security agreement required by or delivered to the Lender from time to
time to secure the Obligations or any portion thereof. 
  

 LOAN AGREEMENT - Page 12 

 “Shareholders’ Equity” means, as of any date of determination, for the Borrower and
its Subsidiaries on a consolidated basis, shareholders’ equity as of such date determined in accordance with GAAP. 
  
 “Subordinated Debt” means any Debt of the Borrower (other than the Obligations) that has been subordinated to the Obligations by written
agreement, in form and content satisfactory to the Lender and which has been approved in writing by the Lender as constituting “Subordinated Debt” for purposes of this Agreement. 
  
 “Subsidiary” means (a) any corporation of which at least a
majority of the outstanding shares of stock having by the terms thereof ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by the Borrower or one or more of the Subsidiaries or by the Borrower and one or more of the
Subsidiaries; and (b) any other entity (i) of which at least a majority of the ownership, equity or voting interest is at the time directly or indirectly owned or controlled by one or more of the Borrower and the Subsidiaries and (ii) which is
treated as a subsidiary in accordance with GAAP. 
  
 “Swap
Contract” means any agreement (including related confirmations and schedules) between the Borrower and the Lender or any Affiliate of the Lender now existing or hereafter entered into which is, or relates to, a rate swap, basis swap,
forward rate transaction, cap transaction, floor transaction, collar transaction or any other similar transactions (including any option with respect to any of these transactions) or any combination thereof. 
  
 “Synthetic Lease Obligation” means the monetary obligation
of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment). 
  
 “Termination Date” means 11:00 A.M. Dallas, Texas time on December 31, 2006, or such earlier date on which the Commitment terminates as
provided in this Agreement. 
  
 “UCC” means the
Chapters 1 through 11 of the Texas Business and Commerce Code, as amended from time to time. 
  
 Section 1.2 Accounting Matters. Any accounting term used in this Agreement or the other Loan Documents shall have, unless otherwise specifically provided therein, the meaning customarily given such term in
accordance with GAAP, and all financial computations thereunder shall be computed, unless otherwise specifically provided therein, in accordance with GAAP consistently applied; provided, that all financial covenants and calculations in the Loan
Documents shall be made in accordance with GAAP as in effect on the date of this Agreement unless the Borrower and the Lender shall otherwise specifically agree in writing. That certain items or computations are explicitly modified by the phrase
“in accordance with GAAP” shall in no way be construed to limit the foregoing. 
  
 Section 1.3 Other Definitional Provisions. All definitions contained in this Agreement are equally applicable to the singular and plural forms of the terms defined. The words “hereof”, 
  

 LOAN AGREEMENT - Page 13 

 “herein”, and “hereunder” and words of similar import referring to this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise specified, all Article and Section references pertain to this Agreement. Terms used herein that are defined in the UCC, unless otherwise defined herein,
shall have the meanings specified in the UCC. 
  
 ARTICLE II

  
 Advances and Letters of Credit 
  
 Section 2.1 Revolving Credit Advances. Subject to the terms and
conditions of this Agreement, the Lender agrees to make Revolving Credit Advances to the Borrower from time to time from the date hereof to and including the Termination Date in an aggregate principal amount at any time outstanding up to but not
exceeding the amount of the Commitment, provided that the aggregate amount of all Revolving Credit Advances at any time outstanding shall not exceed the lesser of (i) the amount of the Commitment minus all outstanding Letter of Credit Liabilities or
(ii) the Borrowing Base minus all outstanding Letter of Credit Liabilities. Subject to the foregoing limitations, and the other terms and provisions of this Agreement, the Borrower may borrow, repay, and reborrow hereunder. 
  
 A. The Revolving Credit Note. The obligation of the Borrower to repay
the Revolving Credit Advances and interest thereon shall be evidenced by the Revolving Credit Note executed by the Borrower, payable to the order of the Lender, in the principal amount of the Commitment as originally in effect, and dated the date
hereof. 
  
 B. Repayment of Revolving Credit Advances. The
Borrower shall repay the unpaid principal amount of all Advances on the Termination Date, unless sooner due by reason of acceleration by the Lender as provided in this Agreement. 
  
 C. Interest. The unpaid principal amount of the Revolving Credit Note shall, subject to the following sentence, bear
interest as provided in the Revolving Credit Note. If at any time the rate of interest specified in the Revolving Credit Note would exceed the Maximum Lawful Rate but for the provisions thereof limiting interest to the Maximum Lawful Rate, then any
subsequent reduction shall not reduce the rate of interest on the Revolving Credit Advances below the Maximum Lawful Rate until the aggregate amount of interest accrued on the Revolving Credit Advances equals the aggregate amount of interest which
would have accrued on the Revolving Credit Advances if the interest rate had not been limited by the Maximum Lawful Rate. Accrued and unpaid interest on the Revolving Credit Advances shall be payable as provided in the Revolving Credit Note and on
the Termination Date. 
  
 D. Borrowing Procedure. Except
with respect to the credit sweep provisions of the Note, the Borrower shall give the Lender notice of each Revolving Credit Advance by means of an Advance Request Form containing the information required therein and delivered (by hand or by
mechanically confirmed facsimile) to the Lender no later than 1:00 p.m. (Texas time) on the Business day prior to the day on which the Revolving Credit Advance is desired to be funded, specifying 
  

 LOAN AGREEMENT - Page 14 

 the requested date of the Advance. The Lender at its option may accept telephonic requests for such
Advances, provided that such acceptance shall not constitute a waiver of the Lender’s right to require delivery of an Advance Request Form in connection with subsequent Advances. Any telephonic request for a Revolving Credit Advance by the
Borrower shall be promptly confirmed by submission of a properly completed Advance Request Form to the Lender, but failure to deliver an Advance Request Form shall not be a defense to payment of the Advance. The Lender shall have no liability to the
Borrower for any loss or damage suffered by the Borrower as a result of the Lender’s honoring of any requests, execution of any instructions, authorizations or agreements or reliance on any reports communicated to it telephonically, by
facsimile or electronically and purporting to have been sent to the Lender by the Borrower and the Lender shall have no duty to verify the origin of any such communication or the identity or authority of the Person sending it. Subject to the terms
and conditions of this Agreement, each Revolving Credit Advance shall be made available to the Borrower by depositing the same, in immediately available funds, in an account of the Borrower designated by the Borrower maintained with the Lender at
the Principal Office. 
  
 Section 2.2 General Provisions
Regarding Interest; Etc. 
  
 A. Any outstanding principal of
any Advance and (to the fullest extent permitted by law) any other amount payable by the Borrower under this Agreement or any other Loan Document that is not paid in full when due (whether at stated maturity, by acceleration, or otherwise) shall
bear interest at the Default Interest Rate for the period from and including the due date thereof to but excluding the date the same is paid in full. Additionally, upon the occurrence of an Event of Default (and from the date of such occurrence) all
outstanding and unpaid principal amounts of all of the Obligations shall, to the extent permitted by law, bear interest at the Default Interest Rate until such time as the Lender shall waive in writing the application of the Default Interest Rate to
such Event of Default situation. Interest payable at the Default Interest Rate shall be payable from time to time on demand. 
  
 B. Computation of Interest. Interest on the Advances and all other amounts payable by the Borrower hereunder shall be computed on the basis of a
year of 360 days and the actual number of days elapsed (including the first day but excluding the last day) unless such calculation would result in a usurious rate, in which case interest shall be calculated on the basis of a year of 365 or 366
days, as the case may be. 
  
 Section 2.3 Unused Facility
Fee. The Borrower agrees to pay to the Lender an unused facility fee on the daily average unused amount of the Commitment for the period from and including the date of this Agreement to and including the Termination Date, at the rate of
one-quarter of one percent (.25%) per annum based on a 360 day year and the actual number of days elapsed. For the purpose of calculating the commitment fee hereunder, the Commitment shall be deemed utilized by the amount of all outstanding Advances
and Letter of Credit Liabilities. Accrued commitment fee shall be payable quarterly in arrears and on the Termination Date. 
  

 LOAN AGREEMENT - Page 15 

 Section 2.4 Use of Proceeds. The proceeds of the Revolving Credit Advances shall be used by the
Borrower (i) to refinance existing indebtedness of the Borrower, (ii) to pay fees and expenses in connection with the transactions contemplated herein, (iii) to make Permitted Acquisitions, (iv) to make Permitted Investments and (v) for working
capital in the ordinary course of business and other general corporate purposes. 
  
 Section 2.5 Letters of Credit. 
  
 A. Standby Letters of Credit. Subject to the terms and conditions of this Agreement, the Lender agrees to issue one or more Letters of Credit for the account of the Borrower from time to time from the date hereof to and including the
Revolving Credit Termination Date; provided, however, that the outstanding Letter of Credit Liabilities shall not at any time exceed the lesser of (a) Five Hundred Thousand Dollars ($500,000), (b) an amount equal to the amount of the Commitment
minus the outstanding Revolving Credit Advances, or (c) the Borrowing Base minus the outstanding Revolving Credit Advances. Each Letter of Credit shall have an expiration date not to exceed 365 days, shall not have an expiration date beyond the
Termination Date, shall be payable in Dollars, must support a transaction that is entered into in the ordinary course of the Borrower’s business, must be satisfactory in form and substance to the Lender, will be subject to the payment of such
Letter of Credit fees as the Lender may require, and shall be issued pursuant to such documents and instruments executed by the Borrower (including, without limitation, the Borrower’s form of letter of credit application as then in effect) as
the Lender may require. 
  
 Each payment by the
Lender pursuant to a drawing under a Letter of Credit is due and payable ON DEMAND, and at the sole option of the Lender, can be charged by the Lender as (and will be deemed to be) a Revolving Credit Advance by the Lender to the Borrower under the
Revolving Credit Note and this Agreement as of the day and time such payment is made by the Lender and in the amount of such payment. 
  
 B. Obligations Absolute. The obligation of the Borrower to reimburse the Lender for each drawing under each Letter of Credit shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following: 
  
 1. any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto; 
  
 2. the existence of any claim, counterclaim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Lender or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; 
  

 LOAN AGREEMENT - Page 16 

 3. any draft, demand, certificate or other document presented under such Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such
Letter of Credit; or 
  
 4. any payment by the Lender under such
Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the Lender under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any
proceeding under any Debtor Relief Law. 
  
     The Borrower shall promptly examine a copy of each Letter of Credit that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower
will immediately notify the Lender. The Borrower shall be conclusively deemed to have waived any such claim against the Lender and its correspondents unless such notice is given as aforesaid. 
  
 C. Role of Lender. The Borrower agrees that, in paying any drawing
under a Letter of Credit, the Lender shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or
accuracy of any such document or the authority of the Person executing or delivering any such document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the Lender,
any of its Affiliates, any of the respective officers, directors, employees, agents or attorneys-in-fact of the Lender and its Affiliates, nor any of the respective correspondents, participants or assignees of the Lender shall be liable or
responsible for any of the matters described in clauses (1) through (4) of Section 2.5.B; provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the Lender, and the Lender may
be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the Lender’s willful misconduct or gross
negligence or the Lender’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, and the Lender shall not be responsible for the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

  

 LOAN AGREEMENT - Page 17 

 D. Cash Collateral. Upon the request of the Lender, (i) if the Lender has honored any full or
partial drawing request under any Letter of Credit and such drawing has not been reimbursed on the applicable honor date or converted to an Advance, or (ii) if, as of the Termination Date, any Letter of Credit may for any reason remain outstanding
and partially or wholly undrawn, the Borrower shall immediately Cash Collateralize the then outstanding amount of all Letter of Credit obligations (in an amount equal to such outstanding amount determined as of the applicable honor date or the
Letter of Credit expiration date, as the case may be). For purposes hereof, “Cash Collateralize” means to pledge and deposit with or deliver to the Lender, as collateral for the Letter of Credit obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the Lender. Derivatives of such term have corresponding meanings. The Borrower hereby grants to the Lender a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in a blocked, non-interest bearing deposit account at the Lender. 
  
 E. Applicability of ISP98. Unless otherwise expressly agreed by the Lender and the Borrower when a Letter of Credit is issued, the rules of the
“International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Letter of Credit . 
  
 F. Standby Letter of Credit Fees. The Borrower shall pay to the
Lender, an amount equal to two point two five percent (2.25%) per annum on the daily average undrawn amount of the Letter of Credit Liability from and including the date of this Agreement to and including the Revolving Credit Termination Date. The
accrued letter of credit fee shall be payable quarterly in arrears and on the Revolving Credit Termination Date. Fronting, amendment, transfer, negotiation and other fees will also be payable by the Borrower on demand for the account of the Lender
as issuing bank as determined in accordance with the Lender’s then current fee policy. 
  
 ARTICLE III 
  
 Payments 
  
 Section 3.1 Method of Payment. All
payments of principal, interest, and other amounts to be made by the Borrower under this Agreement and the other Loan Documents shall be made to the Lender at the Principal Office in Dollars and immediately available funds, without setoff,
deduction, or counterclaim, and free and clear of all taxes at the time and in the manner provided in the Notes. Provided no Event of Default exists, the Lender shall apply such payment first to all accrued unpaid interest, then to outstanding
expenses, and then the remaining amounts, if any, shall be applied to reduce the outstanding principal balance of the Obligations. After an Event of Default, all payments and amounts received on account of the Obligations shall be applied by the
Lender in such order as it elects in its sole discretion. Whenever any payment 
  

 LOAN AGREEMENT - Page 18 

 under this Agreement or any other Loan Document shall be stated to be due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of the payment of interest and unused facility fee, as the case may be. 
  
 Section 3.2 Prepayments. 
  
 A. Voluntary Prepayments. The Borrower may prepay all or any portion
of the Notes to the extent and in the manner provided for therein. 
  
 B. Mandatory Prepayment. The Borrower must pay on DEMAND the amount by which at any time the unpaid principal balance of the Revolving Credit Note, plus the aggregate Letter of Credit Liabilities, exceed the Borrowing Base.

  
 Section 3.3 Additional Costs in Respect of Letters of
Credit. If as a result of any regulatory change there shall be imposed, modified, or deemed applicable any tax, reserve, special deposit, or similar requirement against or with respect to or measured by reference to Letters of Credit issued or
to be issued hereunder or the Lender’s commitment to issue Letters of Credit hereunder, and the result shall be to increase the cost to the Lender of issuing or maintaining any Letter of Credit or its commitment to issue Letters of Credit
hereunder or reduce any amount receivable by the Lender hereunder in respect of any Letter of Credit (which increase in cost, or reduction in amount receivable, shall be the result of the Lender’s reasonable allocation of the aggregate of such
increases or reductions resulting from such event), then, upon demand by the Lender, the Borrower agrees to pay the Lender, from time to time as specified by the Lender, such additional amounts as shall be sufficient to compensate the Lender for
such increased costs or reductions in amount. A statement as to such increased costs or reductions in amount incurred by the Lender, submitted by the Lender to the Borrower, shall be conclusive as to the amount thereof, provided that the
determination thereof is made on a reasonable basis. 
  
 ARTICLE IV

  
 Security 
  
 Section 4.1 Collateral. To secure full and complete payment and
performance of the Obligations, the Borrower shall execute and deliver or cause to be executed and delivered all of the Security Documents required by the Lender covering the Property and collateral described in such Security Documents (which,
together with any other Property and collateral described in the Security Agreement, and any other property which may now or hereafter secure the Obligations or any part thereof, is sometimes herein called the “Collateral”). The
Borrower shall execute and cause to be executed such further documents and instruments, including without limitation, Uniform Commercial Code financing statements, as the Lender, in its sole discretion, deems necessary or desirable to create,
evidence, preserve, and perfect its liens and security interests in the Collateral. 
  
 Section 4.2 Setoff. If an Event of Default shall have occurred and be continuing, the Lender shall have the right to set off and apply against the Obligations in such manner as the Lender may determine, at any
time and without notice to the Borrower, any and all deposits (general or special, time or demand, provisional or final) or other sums at any time credited by or owing from the Lender to the Borrower whether or not the Obligations are then due. As
further 
  

 19 

 security for the Obligations, the Borrower hereby grants to the Lender a security interest in and control of all money,
instruments, and other property of the Borrower now or hereafter held by the Lender, including, without limitation, property held in safekeeping. In addition to the Lender’s right of setoff and as further security for the Obligations, the
Borrower hereby grants to the Lender a security interest in all deposits (general or special, time or demand, provisional or final) and other accounts of the Borrower now or hereafter on deposit with or held by the Lender and all other sums at any
time credited by or owing from the Lender to the Borrower. The rights and remedies of the Lender hereunder are in addition to other rights and remedies (including, without limitation, other rights of setoff) which the Lender may have. 
  
 ARTICLE V 
  
 Conditions Precedent 
  
 Section 5.1 Initial Extension of Credit. The obligation of the Lender to make the initial Advance under any Note or issue the initial Letter of
Credit is subject to the condition precedent that the Lender shall have received on or before the day of such Advance or Letter of Credit all of the following, each dated (unless otherwise indicated or the context otherwise requires) the date
hereof, in form and substance satisfactory to the Lender: 
  
 A.
Resolutions. Resolutions of the Board of Directors (or other governing body) of the Borrower certified by the Secretary or an Assistant Secretary (or other custodian of records) of the Borrower which authorize the execution, delivery, and
performance by the Borrower of this Agreement and the other Loan Documents to which the Borrower is or is to be a party; 
  
 B. Incumbency Certificate. A certificate of incumbency certified by an authorized officer or representative certifying the names of the individuals
or other Persons authorized to sign this Agreement and each of the other Loan Documents to which the Borrower is or is to be a party (including the certificates contemplated herein) on behalf of the Borrower together with specimen signatures of such
Persons; 
  
 C. Constituent Documents. The Constituent
Documents for the Borrower as of a date acceptable to the Lender; 
  
 D. Governmental Certificates. Certificates of the appropriate government officials of the state of incorporation or organization of the Borrower as to the existence and good standing of the Borrower, each dated within ten (10) days
prior to the date of the initial Advance or Letter of Credit; 
  
 E. Notes. The Notes executed by the Borrower; 
  
 F. Security Documents. The Security Documents executed by the Borrower and other Obligated Parties; 
  
 G. Financing Statements. Uniform Commercial Code financing statements executed by the Borrower and covering such Collateral as the Lender may
request; 
  

 LOAN AGREEMENT - Page 20 

 H. Insurance Matters. Copies of insurance certificates describing all insurance policies required
by Section 7.5, together with loss payable and lender endorsements in favor of the Lender with respect to all insurance policies covering Collateral; 
  
 I. Foreign Insurance. Foreign credit insurance policies relating to accounts which shall be satisfactory to Lender in its sole discretion;

  
 J. UCC Search. The results of a Uniform Commercial
Code search showing all financing statements and other documents or instruments on file against the Borrower in the office of the Secretary of State of Texas, such search to be as of a date no more than ten (10) days prior to the date of the initial
Advance or the Letter of Credit; 
  
 K. Opinion of
Counsel. A favorable opinion of Morton PLLC, Dallas, Texas, legal counsel to the Borrower, as to such other matters as the Lender may reasonably request; 
  

L. Attorneys’ Fees and Expenses. Evidence that the costs and expenses (including reasonable attorneys’ fees) referred to in Section
11.1, to the extent incurred, shall have been paid in full by the Borrower; 
  
 M. Purchase of Existing Debt. Evidence of payment of existing indebtedness owed to Wells Fargo Business Credit, Inc. and assignment of liens to lender relating thereto; and 
  
 N. Additional Items. The additional items set forth on Schedule
5.1(n). 
  
 Section 5.2 All Extensions of Credit. The
obligation of the Lender to make any Advance or issue any Letter of Credit (including the initial Advance and the initial Letter of Credit) is subject to the following additional conditions precedent: 
  
 A. Request for Advance or Letter of Credit. The Lender shall have
received in accordance with this Agreement, as the case may be, an Advance Request Form or Letter of Credit Request Form pursuant to the Lender’s requirements dated the date of such Advance or Letter of Credit and executed by an authorized
officer of the Borrower; 
  
 B. No Default, Etc. No
Default or Event of Default shall have occurred and be continuing, or would result from or after giving effect to such Advance or Letter of Credit; 
  
 C. Representations and Warranties. All of the representations and warranties contained in Article VI hereof and in the other Loan Documents shall
be true and correct on and as of the date of such Advance with the same force and effect as if such representations and warranties had been made on and as of such date, except to the extent that any such representation and warranty relates solely to
an earlier date and was true and correct on such earlier date; and 
  

 LOAN AGREEMENT - Page 21 

 D. Additional Documentation. The Lender shall have received such additional approvals, opinions,
or documents as the Lender or its legal counsel may reasonably request. 
  
 ARTICLE VI 
  
 Representations and Warranties 

 
 To induce the Lender to enter into this Agreement, and except as set forth
on the Disclosure Schedule, the Borrower represents and warrants to the Lender that: 
  
 Section 6.1 Corporate Existence. The Borrower and each of its Subsidiaries (a) is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation;
(b) has all requisite power and authority to own its assets and carry on its business as now being or as proposed to be conducted; and (c) is qualified to do business in all jurisdictions in which the nature of its business makes such qualification
necessary and where failure to so qualify would be reasonably likely to have a material adverse effect on its business, condition (financial or otherwise), operations, prospects, or properties. The Borrower has the power and authority to execute,
deliver, and perform its obligations under this Agreement and the other Loan Documents to which it is or may become a party. 
  
 Section 6.2 Financial Statements; Etc. The Borrower has delivered to the Lender audited consolidated financial statements of the Borrower and its
Subsidiaries as at and for the fiscal year ended August 31, 2004. Such financial statements have been prepared in accordance with GAAP, and fairly present, on a consolidated basis, the financial condition of the Borrower and its Subsidiaries as of
the respective dates indicated therein and the results of operations for the respective periods indicated therein. Neither the Borrower nor any of its Subsidiaries has any material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments, or unrealized or anticipated losses from any unfavorable commitments except as referred to or reflected in such financial statements. There has been no material adverse change in the business, condition (financial or
otherwise), operations, prospects, or properties of the Borrower or any of its Subsidiaries since the effective date of the most recent financial statements referred to in this Section. All projections delivered by the Borrower to the Lender have
been prepared in good faith, with care and diligence and use assumptions that are reasonable under the circumstances at the time such projections were prepared and delivered to the Lender and all such assumptions are disclosed in the projections.

  
 Section 6.3 Action; No Breach. The execution, delivery,
and performance by the Borrower of this Agreement and the other Loan Documents to which the Borrower is or may become a party and compliance with the terms and provisions hereof and thereof have been duly authorized by all requisite action on the
part of the Borrower and do not and will not (a) violate or conflict with, or result in a breach of, or require any consent under (i) Constituent Documents of the Borrower or any of its Subsidiaries, (ii) any applicable law, rule, or regulation or
any order, writ, injunction, or decree of any Governmental Authority or arbitrator, or (iii) any agreement or instrument to which the Borrower or any of its Subsidiaries is a party or by which any of them or any of their Properties is bound or
subject, or (b) constitute a default under any such agreement or instrument, or result in the creation or imposition of any Lien upon any of the revenues or assets of the Borrower or any Subsidiary. 
  

 LOAN AGREEMENT - Page 22 

 Section 6.4 Operation of Business. The Borrower and each of its Subsidiaries possess all licenses,
permits, franchises, patents, copyrights, trademarks, and trade names, or rights thereto, necessary to conduct their respective businesses substantially as now conducted and as presently proposed to be conducted, and the Borrower and each of its
Subsidiaries are not in violation of any valid rights of others with respect to any of the foregoing. 
  
 Section 6.5 Litigation and Judgments. There is no action, suit, investigation, or proceeding before or by any Governmental Authority or arbitrator
pending, or to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries, that would, if adversely determined, be reasonably likely to have a material adverse effect on the business, condition (financial
or otherwise), operations, prospects, or properties of the Borrower or any of its Subsidiaries or the ability of the Borrower to pay and perform the Obligations. There are no outstanding judgments against the Borrower or any Subsidiary of the
Borrower. 
  
 Section 6.6 Rights in Properties; Liens. The
Borrower and each of its Subsidiaries have good and indefeasible title to or valid leasehold interests in their respective Properties, including the Properties reflected in the financial statements described in Section 6.2, and none of the
Properties of the Borrower or any Subsidiary is subject to any Lien, except as permitted by Section 8.2. 
  
 Section 6.7 Enforceability. This Agreement constitutes, and the other Loan Documents to which the Borrower is party, when delivered, shall
constitute legal, valid, and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, except as limited by bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditors’ rights. 
  
 Section 6.8
Approvals. No authorization, approval, or consent of, and no filing or registration with, any Governmental Authority or third party is or will be necessary for the execution, delivery, or performance by the Borrower of this Agreement and the
other Loan Documents to which the Borrower is or may become a party or the validity or enforceability thereof. 
  
 Section 6.9 Debt. Except as disclosed in the Disclosure Schedule, the Borrower and its Subsidiaries have no Debt. 
  
 Section 6.10 Taxes. The Borrower and each Subsidiary have filed all
tax returns (federal, state, and local) required to be filed, including all income, franchise, employment, property, and sales tax returns, and have paid all of their respective liabilities for taxes, assessments, governmental charges, and other
levies that are due and payable. The Borrower knows of no pending investigation of the Borrower or any Subsidiary by any taxing authority or of any pending but unassessed tax liability of the Borrower or any Subsidiary. 
  
 Section 6.11 Use of Proceeds; Margin Securities. Neither the Borrower
nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations G, T, U, or X of the Board of Governors
of the Federal Reserve System), and no part of the proceeds of any Advance will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock. 
  

 LOAN AGREEMENT - Page 23 

 Section 6.12 ERISA. The Borrower and each Subsidiary are in compliance in all material respects
with all applicable provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction has occurred and is continuing with respect to any Plan. No notice of intent to terminate a Plan has been filed, nor has any Plan been terminated. No
circumstances exist which constitute grounds entitling the PBGC to institute proceedings to terminate, or appoint a trustee to administer, a Plan, nor has the PBGC instituted any such proceedings. Neither the Borrower nor any ERISA Affiliate has
completely or partially withdrawn from a Multiemployer Plan. The Borrower and each ERISA Affiliate have met their minimum funding requirements under ERISA with respect to all of their Plans, and the present value of all vested benefits under each
Plan do not exceed the fair market value of all Plan assets allocable to such benefits, as determined on the most recent valuation date of the Plan and in accordance with ERISA. Neither the Borrower nor any ERISA Affiliate has incurred any liability
to the PBGC under ERISA. 
  
 Section 6.13 Disclosure. No
statement, information, report, representation, or warranty made by the Borrower in this Agreement or in any other Loan Document or furnished to the Lender in connection with this Agreement or any of the transactions contemplated hereby contains any
untrue statement of a material fact or omits to state any material fact necessary to make the statements herein or therein not misleading. There is no fact known to the Borrower which has a material adverse effect, or would be reasonably likely to
have a material adverse effect, on the business, condition (financial or otherwise), operations, prospects, or properties of the Borrower or any Subsidiary that has not been disclosed in writing to the Lender. 
  
 Section 6.14 Subsidiaries, Ventures, Etc. The Borrower has no
Subsidiaries, Affiliates or joint ventures or partnerships other than those listed on the Disclosure Schedule and the Disclosure Schedule sets forth the jurisdiction of incorporation or organization of each such Person and the percentage of the
Borrower’s ownership interest in such Person. All of the outstanding capital stock or other ownership interest of Person described in the Disclosure Schedule has been validly issued, is fully paid, and is nonassessable. 
  
 Section 6.15 Agreements. Neither the Borrower nor any Subsidiary is a
party to any indenture, loan, or credit agreement, or to any lease or other agreement or instrument, or subject to any charter or corporate or other organizational restriction which would be reasonably likely to have a material adverse effect on the
business, condition (financial or otherwise), operations, prospects, or properties of the Borrower or any Subsidiary, or the ability of the Borrower to pay and perform its obligations under the Loan Documents to which it is a party. Neither the
Borrower nor any Subsidiary is in default in any respect in the performance, observance, or fulfillment of any of the obligations, covenants, or conditions contained in any agreement or instrument material to its business to which it is a party.

  
 Section 6.16 Compliance with Laws. Neither the Borrower
nor any Subsidiary is in violation in any material respect of any law, rule, regulation, order, or decree of any Governmental Authority or arbitrator. 
  
 Section 6.17 Inventory. All inventory of the Borrower has been and will hereafter be produced in compliance with all applicable laws, rules,
regulations, and governmental standards, including, without limitation, and to the extent applicable, the minimum wage and overtime provisions of the Fair Labor Standards Act, as amended (29 U.S.C. §§ 201-219), and the regulations
promulgated thereunder. 
  

 LOAN AGREEMENT - Page 24 

 Section 6.18 Investment Company Act. Neither the Borrower nor any Subsidiary is an
“investment company” within the meaning of the Investment Company Act of 1940, as amended. 
  
 Section 6.19 Public Utility Holding Company Act. Neither the Borrower nor any Subsidiary is a “holding company” or a “subsidiary
company” of a “holding company” or an “affiliate” of a “holding company” or a “public utility” within the meaning of the Public Utility Holding Company Act of 1935, as amended. 
  
 Section 6.20 Environmental Matters. 
  
 A. The Borrower, each Subsidiary, and all of their respective properties,
assets, and operations are in compliance in all material respects with all Environmental Laws. The Borrower is not aware of, nor has the 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 the Borrower and the Subsidiaries with all Environmental Laws; 
  
 B. The Borrower and each Subsidiary have obtained all permits, licenses, and authorizations that are required under applicable Environmental Laws, and all
such permits are in good standing and the Borrower and its Subsidiaries are in compliance in all material respects with all of the terms and conditions of such permits; 
  
 C. Except to the extent set forth in the Disclosure Schedule, 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 the Borrower or any Subsidiary. Except to the extent set forth in the Disclosure Schedule, the use which the Borrower and the Subsidiaries make
and intend to make of their respective 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 their properties or assets; 

 
 D. Neither the Borrower nor any of its Subsidiaries nor any of their
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 Environmental Liabilities arising from a Release or threatened Release; 
  
 E. There are no conditions or circumstances associated with the currently or previously owned or leased properties or
operations of the Borrower or any of its Subsidiaries that could reasonably be expected to give rise to any Environmental Liabilities; 
  
 F. Neither the Borrower nor any of its Subsidiaries is 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. The Borrower and its Subsidiaries are in compliance with all applicable financial responsibility requirements of all Environmental Laws;

  

 LOAN AGREEMENT - Page 25 

 G. Neither the Borrower nor any of its Subsidiaries has 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 the Borrower or its Subsidiaries. 
  
 Section 6.21 Intellectual Property. All material Intellectual Property owned or used by the Borrower, any Subsidiary or any Obligated Party is
listed, together with application or registration numbers, where applicable, in the Disclosure Schedule. Each Person identified on the Disclosure Schedule 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 on the Company and its Subsidiaries, taken as a whole. To the extent
consistent with prudent practices as determined by the Borrower using reasonable business judgment, each Person identified on the Disclosure Schedule 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 and will promptly patent or register, as the case may be, all new Intellectual Property and notify the Lender in writing within a reasonable
period of time thereafter of any such new patent or registration. 
  
 Section 6.22 Depository Relationship. To induce the Lender to establish the interest rates provided for in the Notes, the Borrower will use the Lender as its principal depository bank and the Borrower covenants and agrees to maintain
the Lender as its principal depository bank, including for the maintenance of business, cash management, operating and administrative deposit accounts. 
  
 Section 6.23 Subsidiaries. Within 30 days after the time that any Person becomes a Domestic Subsidiary as a result of the creation of such
Subsidiary or a Permitted Acquisition or otherwise, then, unless such Domestic Subsidiary is merged into the Borrower or a Guarantor (with the Borrower or such Guarantor being the surviving Person) prior to the expiration of such thirty-day period,
(a) such Subsidiary shall execute a Guaranty of the Obligations, a Security Agreement, and if applicable, a deed of trust, and any related collateral documents reasonably required by the Lender, to secure the Obligations, and (b) 100% of such
Subsidiary’s Equity Interest shall be pledged to secure the Obligations, and (c) the Lender shall receive such board resolutions, officer’s certificates, corporate and other documents and opinions of counsel as the Lender shall reasonably
request in connection with the actions described in subsections (a) and (b) above. Within thirty days after the time that any Person becomes a Foreign Subsidiary as a result of the creation of such Subsidiary or a Permitted Acquisition or otherwise,
(a) all of such Subsidiary’s Equity Interest (up to 65%) owned by Borrower or a Domestic Subsidiary shall be pledged to secure the Obligations and (b) the Lender shall receive such board resolutions, officer’s certificates, corporate and
other documents and opinions of counsel as the Lender shall reasonably request in connection with such pledge. 
  
 Section 6.24 Further Assurances. At any time or from time to time upon reasonable request by the Lender, the Borrower shall, or shall cause any of
the Borrower’s Subsidiaries to, promptly execute and deliver such further documents and to promptly, to the extent the same can 
  

 LOAN AGREEMENT - Page 26 

 be accomplished with the exercise of commercially reasonable efforts, do such other acts and things as the Lender may
reasonably request in order to effect fully the validity or enforceability of this Agreement and the other Loan Documents or to protect the priority or perfection of the Liens granted under this Agreement and the other Loan Documents, to ensure that
the Lender has all of the rights, powers and privileges bargained-for in the Loan Documents, and to provide for payment of the Obligations in accordance with the terms of this Agreement and the other Loan Documents. 
  
 ARTICLE VII 
  
 Affirmative Covenants 
  
 The Borrower covenants and agrees that, as long as the Obligations or any part thereof are outstanding or the Lender has any Commitment hereunder, the
Borrower will perform and observe the following positive covenants, unless the Lender shall otherwise consent in writing: 
  
 Section 7.1 Reporting Requirements. The Borrower will furnish to the Lender: 
  
 A. Annual Financial Statements. As soon as available, and in any event within the later of (i) seventy-five (75) days
after the end of each Fiscal Year of the Borrower, and (ii) the last date on which it may be deemed timely filed under regulations of the SEC then applicable to the Borrower, beginning with the Fiscal Year ending August 31, 2005, a copy of the
annual audit report of the Borrower and the Subsidiaries for such Fiscal Year containing, on a consolidated basis, balance sheets and statements of operations, stockholder’s equity and comprehensive income (loss), and cash flows as at the end
of such Fiscal Year and for the 12-month period then ended, in each case setting forth in comparative form the figures for the preceding Fiscal Year, all in reasonable detail and audited and certified by independent certified public accountants of
recognized standing acceptable to the Lender, to the effect that such report has been prepared in accordance with GAAP and containing no material qualifications or limitations on scope; 
  
 B. Quarterly Financial Statements. As soon as available, and in any event within the later of (i) forty-five (45)
days after the end of each of the quarters of each Fiscal Year of the Borrower, and (ii) the last date on which it may be deemed timely filed under regulations of the SEC then applicable to the Borrower, a copy of an unaudited financial report of
the Borrower and its Subsidiaries as of the end of such Fiscal Quarter and for the portion of the Fiscal Year then ended, containing, on a consolidated basis, balance sheets and statements of operations, and cash flows, in each case setting forth in
comparative form the figures for the corresponding period of the preceding fiscal year, all in reasonable detail certified by a senior financial officer of the Borrower to have been prepared in accordance with GAAP and to fairly and accurately
present (subject to year-end audit adjustments) the financial condition and results of operations of the Borrower and its Subsidiaries, on a consolidated and consolidating basis, at the date and for the periods indicated therein; 
  

 LOAN AGREEMENT - Page 27 

 C. Annual Projections. As soon as practicable and in any event prior to August 31 of each Fiscal
Year, a business plan of the Borrower and its Subsidiaries for the ensuing four fiscal quarters, such plans to be prepared in accordance with sound financial and managerial practices and to include, on a quarterly basis, the following: a quarterly
operating and capital budget, a projected income statement, statement of cash flows and balance sheet and a report containing management’s discussion and analysis of such projections, to the best of such officer’s knowledge, such
projections are good faith estimates of the financial condition and operations of the Borrower and its Subsidiaries for such period. 
  
 D. Borrowing Base Report. As soon as available, and in any event within thirty (30) days after the end of each calendar month, a Borrowing Base
Report, in a form acceptable to the Lender, certified by the chief financial officer, controller or assistant controller of the Borrower; 
  
 E. Compliance Certificate. Concurrently with the delivery of each of the financial statements referred to in subsections 7.1.A and
7.1.B, a certificate of a senior financial officer of the Borrower (i) stating that to the best of such officer’s knowledge, no Default has occurred and is continuing, or if a Default has occurred and is continuing, a statement as to the
nature thereof and the action which is proposed to be taken with respect thereto, and (ii) showing in reasonable detail the calculations demonstrating compliance with Article IX; 
  
 F. Management Letters. Promptly upon receipt thereof, a copy of any management letter or written report submitted to
the Borrower or any Subsidiary by independent certified public accountants with respect to the business, condition (financial or otherwise), operations, prospects, or properties of the Borrower or any Subsidiary; 
  
 G. Notice of Litigation. Promptly after the commencement thereof,
notice of all actions, suits, and proceedings before any Governmental Authority or arbitrator affecting the Borrower or any Subsidiary which, if determined adversely to the Borrower or such Subsidiary, could have a material adverse effect on the
business, condition (financial or otherwise), operations, prospects, or properties of the Borrower or such Subsidiary; 
  
 H. Notice of Default. As promptly as practicable (but in any event not later than five Business Days) after an officer of the Borrower obtains
knowledge of the occurrence of a Default or Event of Default, a written notice of such Default or Event of Default, together with a detailed statement by a responsible officer of the Borrower of the steps being taken by the Borrower to cure the
effect of such Default or Event of Default; 
  
 I. ERISA
Reports. Promptly after the filing or receipt thereof, copies of all reports, including annual reports, and notices which the Borrower or any Subsidiary files with or receives from the PBGC or the U.S. Department of Labor under ERISA; and as
soon as possible and in any event within five (5) days after the Borrower or any Subsidiary knows or has reason to know that any Reportable 
  

 LOAN AGREEMENT - Page 28 

 Event or Prohibited Transaction has occurred with respect to any Plan or that the PBGC or the Borrower or
any Subsidiary has instituted or will institute proceedings under Title IV of ERISA to terminate any Plan, a certificate of the chief financial officer of the Borrower setting forth the details as to such Reportable Event or Prohibited Transaction
or Plan termination and the action that the Borrower proposes to take with respect thereto; 
  
 J. Reports to Other Creditors. Promptly after the furnishing thereof, copies of any statement or report furnished to any other party pursuant to the terms of any indenture, loan, or credit or similar agreement
and not otherwise required to be furnished to the Lender pursuant to any other clause of this Section; 
  
 K. Notice of Material Adverse Change. As soon as possible and in any event within five (5) days after the occurrence thereof, written notice of any
matter that has, or reasonably could have a material adverse effect on the business, condition (financial or otherwise), operations, prospects, or properties of the Borrower or any Subsidiary on a consolidated basis and taken as a whole (each a
“Material Adverse Effect”); 
  
 L. Accounts
Receivable and Accounts Payable Aging. As soon as available, and in any event within thirty (30) days after the end of each calendar month, an account receivable aging, classifying the Borrower’s domestic and export accounts receivable in
categories of 0-30, 31-60, 61-90 and over 90 days from date of invoice, and in such form and detail as the Lender shall require, and account payable aging by categories of 0-30, 31-60 and over 60, from date of invoice, also in such detail as the
Lender shall reasonably require, and in each case certified by the chief financial officer of the Borrower; 
  
 M. Guarantor Financial Statement. The Borrower shall cause the Guarantor to provide an annual financial statement, in such form and detail as the
Lender shall reasonably require, within ninety (90) days after the end of each Fiscal Year and a copy of the Guarantor’s filed tax return, within thirty (30) days of the day it is filed with the Internal Revenue Service; 
  
 N. Proxy Statements, Etc. As soon as available, one copy of each
financial statement, report, notice or proxy statement sent by the Borrower or any Subsidiary to its stockholders generally and one copy of each regular, periodic or special report, registration statement, or prospectus filed by the Borrower or any
Subsidiary with any securities exchange or the Securities and Exchange Commission or any successor agency; and 
  
 O. General Information. Promptly, such other information concerning the Borrower or any Subsidiary as the Lender may from time to time request.

  
 Section 7.2 Maintenance of Existence; Conduct of
Business. The Borrower will preserve and maintain, and will cause each Subsidiary to preserve and maintain, its existence and all of its leases, privileges, licenses, permits, franchises, qualifications, and rights that are necessary or
desirable in the ordinary conduct of its business. The Borrower will conduct, and will cause each Subsidiary to conduct, its business in an orderly and efficient manner in 
  

 LOAN AGREEMENT - Page 29 

 accordance with good business practices. Without limitation, the Borrower will not make (and will not permit any of its
Subsidiaries to make) any material change in its credit collection policies if such change would materially impair the collectibility of any Account, nor will it rescind, cancel or modify any Account except in the ordinary course of business.

  
 Section 7.3 Maintenance of Properties. The Borrower
will maintain, keep, and preserve, and cause each Subsidiary to maintain, keep, and preserve, all of its Properties (tangible and intangible) necessary or useful in the proper conduct of its business in good working order and condition. 

 
 Section 7.4 Taxes and Claims. The Borrower will pay or discharge,
and will cause each Subsidiary to pay or discharge, at or before maturity or before becoming delinquent (a) all taxes, levies, assessments, and governmental charges imposed on it or its income or profits or any of its property, and (b) all lawful
claims for labor, material, and supplies, which, if unpaid, might become a Lien upon any of its property; provided, however, that neither the Borrower nor any Subsidiary shall be required to pay or discharge any tax, levy, assessment, or
governmental charge which is being contested in good faith by appropriate proceedings diligently pursued, and for which adequate reserves have been established. 
  

Section 7.5 Insurance. The Borrower will maintain, and will cause each of the Subsidiaries to maintain, insurance with financially sound and
reputable insurance companies in such amounts and covering such risks as is usually carried by corporations engaged in similar businesses and owning similar properties in the same general areas in which the Borrower and the Subsidiaries operate,
provided that in any event the Borrower will maintain and cause each Subsidiary to maintain workmen’s compensation insurance (or similar program), property insurance, comprehensive general liability insurance, reasonably satisfactory to the
Lender. Each insurance policy covering Collateral shall name the Lender as loss payee and shall provide that such policy will not be cancelled or reduced without thirty (30) days prior written notice to the Lender. 
  
 Section 7.6 Inspection Rights. At any reasonable time and from time to
time, the Borrower will permit, and will cause each Subsidiary to permit, representatives of the Lender to examine the Collateral and conduct Collateral audits (such audits to be limited to no more than one annually at Borrower’s expense, which
shall not exceed an amount equal to $7,500, so long as no Default or Event of Default has occurred and is continuing), to examine, copy, and make extracts from its books and records, to visit and inspect its properties, and to discuss its business,
operations, and financial condition with its officers, employees, and independent certified public accountants. 
  
 Section 7.7 Keeping Books and Records. The Borrower will maintain, and will cause each Subsidiary to maintain, proper books of record and account
in conformity with GAAP and applicable SEC rules shall be made of all dealings and transactions in relation to its business and activities. 
  
 Section 7.8 Compliance with Laws. The Borrower will comply, and will cause each Subsidiary to comply, in all material respects with all applicable
laws, rules, regulations, orders, and decrees of any Governmental Authority or arbitrator. 
  

 LOAN AGREEMENT - Page 30 

 Section 7.9 Compliance with Agreements. The Borrower will comply, and will cause each Subsidiary
to comply, in all material respects with all agreements, contracts, and instruments binding on it or affecting its properties or business to the extent required so as not to cause a Material Adverse Effect. 
  
 Section 7.10 Further Assurances. The Borrower will, and will cause
each Subsidiary to, execute and deliver such further agreements and instruments and take such further action as may be requested by the Lender to carry out the provisions and purposes of this Agreement and the other Loan Documents and to create,
preserve, and perfect the Liens of the Lender in the Collateral. 
  
 Section 7.11 ERISA. The Borrower will comply, and will cause each Subsidiary to comply, with all minimum funding requirements, and all other material requirements, of ERISA, if applicable, so as not to give rise to any liability
thereunder. 
  
 ARTICLE VIII 
  
 Negative Covenants 
  
 The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or the Lender has any Commitment hereunder, the Borrower will perform and observe the following negative covenants, unless the Lender shall otherwise consent in writing: 
  
 Section 8.1 Debt. The Borrower will not incur, create, assume, or
permit to exist, and will not permit any Subsidiary to incur, create, assume, or permit to exist, any Debt, except: 
  
 A. Debt to the Lender; 
  
 B. Existing Debt described on the Disclosure Schedule hereto; 
  
 C. Subordinated Debt; 
  
 D. Purchase money Debt not to exceed $2,000,000 in the aggregate; and 
  
 E. Guarantees permitted under clause (iv) of the definition of “Permitted Investments.” 
  
 Section 8.2 Limitation on Liens. The Borrower will not incur, create,
assume, or permit to exist, and will not permit any Subsidiary to incur, create, assume, or permit to exist, any Lien upon any of its Property, assets, or revenues, whether now owned or hereafter acquired, except: 
  
 A. Liens disclosed on the Disclosure Schedule hereto; 
  
 B. Liens in favor of the Lender; 
  
 C. Encumbrances consisting of minor easements, zoning restrictions, or other
restrictions on the use of real property that do not (individually or in the aggregate) materially affect the value of the assets encumbered thereby or materially impair the ability of the Borrower or the Subsidiaries to use such assets in their
respective businesses, and none of which is violated in any material respect by existing or proposed structures or land use; 
  

 LOAN AGREEMENT - Page 31 

 D. Liens for taxes, assessments, or other governmental charges which are not delinquent or which are
being contested in good faith and for which adequate reserves have been established; 
  
 E. Liens of mechanics, materialmen, warehousemen, carriers, or other similar statutory Liens securing obligations that are not yet due and are incurred in the ordinary course of business; 
  
 F. Liens resulting from good faith deposits to secure payments of
workmen’s compensation or other social security programs or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, or contracts (other than for payment of Debt), or leases made in the ordinary course of
business; and 
  
 G. Purchase money Liens on specific property to
secure Debt used to acquire such property to the extent permitted in Section 8.1.D. 
  
 Section 8.3 Mergers, Etc. The Borrower will not, and will not permit any Subsidiary to, become a party to a merger or consolidation, or purchase or otherwise acquire all or any part of the assets of any Person
or any shares or other evidence of beneficial ownership of any Person, or wind-up, dissolve, or liquidate, except for Permitted Acquisitions. 
  
 Section 8.4 Restricted Payments. The Borrower will not declare or pay any dividends or make any other payment or distribution (in cash, property,
or obligations) on account of its equity interests, or redeem, purchase, retire, or otherwise acquire any of its equity interests, or permit any of its Subsidiaries to purchase or otherwise acquire any equity interest of the Borrower or another
Subsidiary, or set apart any money for a sinking or other analogous fund for any dividend or other distribution on its equity interests or for any redemption, purchase, retirement, or other acquisition of any of its equity interests, provided that,
the Borrower may make such payments in an amount not to exceed $1,000,000 in the aggregate in any Fiscal Year so long as before and after giving effect to any such payment, the Borrower is in pro forma compliance with all terms of this Agreement and
no Default or Event of Default shall have occurred and be continuing.  
  
 Section 8.5 Loans and Investments. The Borrower will not make, and will not permit any Subsidiary to make, any advance, loan, extension of credit, or capital contribution to or investment in, or purchase, or
permit any Subsidiary to purchase, any stock, bonds, notes, debentures, or other securities of, any Person, except: 
  
 A. readily marketable direct obligations of the United States of America or any agency or instrumentality thereof whose obligations constitute full faith
and credit obligations of the United States of America having maturities of one year or less from the date of acquisition; 
  
 B. fully insured certificates of deposit or bankers’ acceptances having maturities of one year or less from the date of acquisition issued by members
of the Federal Reserve System having deposits in excess of $100,000,000; 
  

 LOAN AGREEMENT - Page 32 

 C. commercial paper of a domestic issuer if at the time of purchase such paper is rated in one of the two
highest rating categories of Standard and Poor’s Corporation or Moody’s Investors Service; and 
  
 D. Permitted Investments. 
  
 Section 8.6 Intentionally Omitted. 
  
 Section 8.7 Transactions With Affiliates. The Borrower will not enter into, and will not permit any Subsidiary to enter into, any transaction,
including, without limitation, the purchase, sale, or exchange of property or the rendering of any service, with any Affiliate of the Borrower or such Subsidiary, except in the ordinary course of and pursuant to the reasonable requirements of the
Borrower’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary than would be obtained in a comparable arm’s-length transaction with a Person not an Affiliate of the
Borrower or such Subsidiary. 
  
 Section 8.8 Disposition of
Assets. The Borrower will not sell, lease, assign, transfer, or otherwise dispose of any of its assets, or permit any Subsidiary to do so with any of its assets, except (a) dispositions of inventory in the ordinary course of business or (b)
dispositions, for fair value, of worn-out and obsolete equipment not necessary or useful to the conduct of business or (c) collections of Receivables (as defined in the Security Documents) or (d) other arms-length dispositions in the ordinary course
of business provided that (i) at the time of disposition no Default exists or would result therefrom, (ii) such disposition is for fair value, (iii) such disposition would not reasonably be likely to have a material adverse effect on the Borrower or
its Subsidiaries taken as a whole, and (iv) the proceeds of such disposition are either (A) properly reinvested in the business of the Borrower or a Subsidiary or (B) delivered to the Lender as Cash Collateral. 
  
 Section 8.9 Sale and Leaseback. The Borrower will not enter into, and
will not permit any Subsidiary to enter into, any arrangement with any Person pursuant to which it leases from such Person real or personal property that has been or is to be sold or transferred, directly or indirectly, by it to such Person.

  
 Section 8.10 Prepayment of Debt. The Borrower will not
prepay, and will not permit any Subsidiary to prepay, any Debt, except the Obligations and Debt reflected on the Borrower’s balance sheet as of August 31, 2004. 
  
 Section 8.11 Nature of Business. The Borrower will not, and will not permit any Subsidiary to, engage in any business
other than the businesses in which they are engaged as of the date hereof and businesses substantially related thereto. 
  
 Section 8.12 Environmental Protection. Except for those uses set forth in the Disclosure Schedule, the Borrower will not, and will not permit any
of its Subsidiaries to, (a) use (or permit any tenant to use) any of their respective properties or assets for the handling, processing, storage, transportation, or disposal of any Hazardous Material, (b) generate any Hazardous Material, (c) conduct
any activity that is likely to cause a Release or threatened Release of any Hazardous Material, or (d) otherwise conduct any activity or use any of their respective properties or assets in any manner that is likely to violate any Environmental Law
or create any Environmental Liabilities for which the Borrower or any of its Subsidiaries would be responsible. 
  

 LOAN AGREEMENT - Page 33 

 Section 8.13 Accounting. The Borrower will not, and will not permit any of its Subsidiaries to,
change its fiscal year or make any change (a) in accounting treatment or reporting practices, except as required by GAAP and disclosed to the Lender, or (b) in tax reporting treatment, except as required by law and disclosed to the Lender.

  
 Section 8.14 No Negative Pledge. The Borrower will not,
and will not permit any Subsidiary to, enter into or permit to exist any arrangement or agreement, other than pursuant to this Agreement or any Loan Document, which directly or indirectly prohibits the Borrower or any Subsidiary from creating or
incurring a Lien on any of its assets. 
  
 Section 8.15
Guaranties. Except as otherwise permitted herein, the Borrower will not assume, Guarantee, endorse, or otherwise become directly or contingently liable in connection with any obligations of any other Person. 
  
 ARTICLE IX 
  
 Financial Covenants 
  
 The Borrower covenants and agrees that, as long as the Obligations or any part thereof are outstanding or the Lender has any Commitment hereunder, the
Borrower will, at all times, observe and perform the following financial covenants, unless the Lender shall otherwise consent in writing. 
  
 Section 9.1 Cash Flow Leverage Ratio. The Borrower will not permit the Cash Flow Leverage Ratio as of the end of any Fiscal Quarter to be greater
than 2.00 to 1.00. 
  
 Section 9.2 Fixed Charge Coverage
Ratio. The Borrower will not permit the Fixed Charge Coverage Ratio as of the end of any Fiscal Quarter to be less than 1.25 to 1.00. 
  
 Section 9.3 Consolidated Tangible Net Worth. The Borrower will not permit on a consolidated basis Consolidated Tangible Net Worth measured on a
quarterly basis to be less than $18,652,000 plus 75% of Borrower’s cumulative Consolidated Net Income (excluding any periods in which Borrower’s Consolidated Net Income is zero or negative) commencing December 1, 2004. 
  
 Section 9.4 Consolidated Net Income. The Borrower will not permit its
Consolidated Net Income, after taxes, measured as of the end of each quarter, to be negative for two (2) consecutive quarters or for four consecutive quarters on a trailing four quarter basis. 
  
 Section 9.5 Capital Expenditures. The Borrower will not permit the
aggregate Capital Expenditures of the Borrower and the Subsidiaries to exceed $2,500,000 during any fiscal year, commencing with the Borrower’s Fiscal Year commencing September 1, 2004. 
  
 ARTICLE X 
  
 Default 
  
 Section 10.1 Events of Default. Each of the following shall be deemed an “Event of Default”: 
  
 A. The Borrower shall fail to pay the Obligations or any part thereof shall
not be paid when due or declared due. 
  

 LOAN AGREEMENT - Page 34 

 B. The Borrower shall breach Section 7.1.H. of this Agreement or any provision of Article VIII
or Article IX of this Agreement. 
  
 C. Any
representation or warranty made or deemed made by the Borrower or any Obligated Party (or any of their respective officers) in any Loan Document or in any certificate, report, notice, or financial statement furnished at any time in connection with
this Agreement shall be false, misleading, or erroneous in any material respect when made or deemed to have been made. 
  
 D. The Borrower or any Obligated Party shall fail to perform, observe, or comply with any covenant, agreement, or term contained in this Agreement or any
other Loan Document (other than as covered by Section 10.1.A and B above), and such failure continues for more than 15 days following the date any of the President, chief financial officer, controller or assistant controller has
knowledge of such failure. 
  
 E. The Borrower, any Subsidiary,
or any Obligated Party shall commence a voluntary proceeding seeking liquidation, reorganization, or other relief with respect to itself or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian, or other similar official of it or a substantial part of its property or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it or shall make a general assignment for the benefit of creditors or shall generally fail to pay its debts as they become due or shall take any corporate action to authorize any of the foregoing.

  
 F. The Borrower, any Subsidiary, or any Obligated Party shall
fail to pay when due any principal of or interest on any Debt (other than the Obligations), or the maturity of any such Debt shall have been accelerated, or any such Debt shall have been required to be prepaid prior to the stated maturity thereof,
or any event shall have occurred that permits (or, with the giving of notice or lapse of time or both, would permit) any holder or holders of such Debt or any Person acting on behalf of such holder or holders to accelerate the maturity thereof or
require any such prepayment. 
  
 G. This Agreement or any other
Loan Document shall cease to be in full force and effect or shall be declared null and void or the validity or enforceability thereof shall be contested or challenged by the Borrower, any Subsidiary, any Obligated Party or any of their respective
shareholders, or the Borrower or any Obligated Party shall deny that it has any further liability or obligation under any of the Loan Documents, or any lien or security interest created by the Loan Documents shall for any reason cease to be a valid,
first priority perfected security interest in and lien upon any of the Collateral purported to be covered thereby. 
  

 LOAN AGREEMENT - Page 35 

 H. Any of the following events shall occur or exist with respect to the Borrower or any ERISA Affiliate:
(i) any Prohibited Transaction involving any Plan; (ii) any Reportable Event with respect to any Plan; (iii) the filing under Section 4041 of ERISA of a notice of intent to terminate any Plan or the termination of any Plan; (iv) any event or
circumstance that might constitute grounds entitling the PBGC to institute proceedings under Section 4042 of ERISA for the termination of, or for the appointment of a trustee to administer, any Plan, or the institution by the PBGC of any such
proceedings; or (v) complete or partial withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the reorganization, insolvency, or termination of any Multiemployer Plan; and in each case above, such event or condition, together
with all other events or conditions, if any, have subjected or could in the reasonable opinion of the Lender subject the Borrower to any tax, penalty, or other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any combination
thereof) which in the aggregate exceed or could reasonably be expected to exceed One Hundred Thousand Dollars ($100,000). 
  
 I. The Guarantor or any other Obligated Party shall have died or have been declared incompetent by a court of proper jurisdiction; or if the Guarantor or
any other Obligated Party is a corporation, partnership or other entity, such Person shall be the subject of a bankruptcy or receivership proceeding or shall have dissolved, liquidated or otherwise ceased doing business. 
  
 J. David Kirk shall cease to be active in the management of the Borrower.

  
 K. The Borrower, any of its Subsidiaries, or any Obligated
Party, or any of their properties, revenues, or assets, shall become subject to an order of forfeiture, seizure, or divestiture (whether under RICO or otherwise) and the same shall not have been discharged within thirty (30) days from the date of
entry thereof. 
  
 L. An involuntary proceeding shall be
commenced against the Borrower, any Subsidiary, or any Obligated Party seeking liquidation, reorganization, or other relief with respect to it or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian, or other similar official for it or a substantial part of its property, and such involuntary proceeding shall remain undismissed and unstayed for a period of thirty (30) days.

  
 M. The Borrower, any Subsidiary or any Obligated Party shall
fail to discharge within a period of thirty (30) days after the commencement thereof any attachment, sequestration, or similar proceeding or proceedings involving an aggregate amount in excess of One Hundred Thousand Dollars ($100,000) against any
of its assets or properties. 
  
 N. A final judgment or judgments
for the payment of money in excess of One Hundred Thousand Dollars ($100,000) in the aggregate shall be rendered by a court or courts against the Borrower, any of its Subsidiaries, or any Obligated Party and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution thereof shall not be procured, within thirty 
  

 LOAN AGREEMENT - Page 36 

 (30) days from the date of entry thereof and the Borrower or the relevant Subsidiary or Obligated Party
shall not, within said period of thirty (30) days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal. 
  
 O. A Change in Control shall occur. 
  
 P. A material adverse change in the business, condition (financial or
otherwise), operations, prospects, or Properties of the Borrower or any Subsidiary shall have occurred. 
  
 Section 10.2 Remedies Upon Default. If any Event of Default shall occur and be continuing, the Lender may without notice terminate the Commitment
and declare the Obligations or any part thereof to be immediately due and payable, and the same shall thereupon become immediately due and payable, without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that upon the occurrence of an Event of Default under Section 10.1.E or Section
10.1.K, the Commitment shall automatically terminate, and the Obligations shall become immediately due and payable without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent
to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by the Borrower. If any Event of Default shall occur and be continuing, the Lender may exercise all rights and remedies available to it in law or in
equity, under the Loan Documents, or otherwise. 
  
 Section 10.3
Performance by the Lender. If the Borrower shall fail to perform any covenant or agreement contained in any of the Loan Documents, the Lender may perform or attempt to perform such covenant or agreement on behalf of the Borrower. In such
event, the Borrower shall, at the request of the Lender, promptly pay any amount expended by the Lender in connection with such performance or attempted performance to the Lender, together with interest thereon at the Default Rate from and including
the date of such expenditure to but excluding the date such expenditure is paid in full. Notwithstanding the foregoing, it is expressly agreed that the Lender shall not have any liability or responsibility for the performance of any obligation of
the Borrower under this Agreement or any other Loan Document. 
  
 Section 10.4 Cash Collateral. If any Event of Default shall occur and be continuing on the Termination Date or if any obligations are outstanding as of the Termination Date, including obligations related to Swap Contracts, the
Borrower shall, if requested by the Lender, immediately deposit with and pledge to the Lender cash or cash equivalent investments in an amount equal to the outstanding Letter of Credit Liabilities, any obligations under any Swap Contracts, and any
other obligations due to Lender, as security for the Obligations. 
  
 ARTICLE XI 
  
 Miscellaneous 
  
 Section 11.1 Expenses. The Borrower hereby agrees to pay on demand:
(a) all costs and expenses of the Lender in connection with the preparation, negotiation, execution, and delivery of this Agreement and the other Loan Documents and any and all amendments, 
  

 LOAN AGREEMENT - Page 37 

 modifications, renewals, extensions, and supplements thereof and thereto, including, without limitation, the reasonable
fees and expenses of legal counsel, advisors, consultants, and auditors for the Lender, (b) all costs and expenses of the Lender in connection with any Default and the enforcement of this Agreement or any other Loan Document, including, without
limitation, the reasonable fees and expenses of legal counsel, advisors, consultants, and auditors for the Lender, (c) all transfer, stamp, documentary, or other similar taxes, assessments, or charges levied by any Governmental Authority in respect
of this Agreement or any of the other Loan Documents, (d) all costs, expenses, assessments, and other charges incurred in connection with any filing, registration, recording, or perfection of any security interest or Lien contemplated by this
Agreement or any other Loan Document, and (e) all other costs and expenses incurred by the Lender in connection with this Agreement or any other Loan Document, any litigation, dispute, suit, proceeding or action; the enforcement of its rights and
remedies, protection of its interests in bankruptcy, insolvency or other legal proceedings, including, without limitation, all costs, expenses, and other charges (including the Lender’s internal charges) incurred in connection with evaluating,
observing, collecting, examining, auditing, appraising, selling, liquidating, or otherwise disposing of the Collateral or other assets of the Borrower. Anything herein to the contrary notwithstanding, the obligation of the Borrower to reimburse
professional fees hereunder shall be conditioned upon the provision to the Borrower of a reasonably detailed statement of services rendered to the Lender by the professional for whom reimbursement is sought; provided, however, that such detail shall
in no event be required to reveal confidential communications between the Lender and such professional that are subject to the attorney-client privilege. 
  
 Section 11.2 INDEMNIFICATION. THE BORROWER SHALL INDEMNIFY THE LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) TO WHICH ANY OF
THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS, (C) ANY BREACH BY THE BORROWER OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL
LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWER OR ANY SUBSIDIARY, (E) THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT, (F) ANY AND ALL TAXES, LEVIES, DEDUCTIONS, AND CHARGES IMPOSED ON THE LENDER OR ANY OF
THE LENDER’S CORRESPONDENTS IN RESPECT OF ANY LETTER OF CREDIT, OR (G) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, RELATING TO ANY OF THE
FOREGOING. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST
ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, 
  

 LOAN AGREEMENT - Page 38 

 DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS’ FEES) ARISING OUT OF OR RESULTING FROM THE SOLE
CONTRIBUTORY OR ORDINARY NEGLIGENCE OF SUCH PERSON. ANYTHING HEREIN TO THE CONTRARY NOTWITHSTANDING, THE LENDER SHALL NOT BE INDEMNIFIED OR HELD HARMLESS FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. 
  
 Section 11.3 Limitation of Liability. Neither the Lender nor any
Affiliate, officer, director, employee, attorney, or agent of the Lender shall have any liability with respect to, and the Borrower hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or
consequential damages suffered or incurred by the Borrower in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other
Loan Documents. The Borrower hereby waives, releases, and agrees not to sue the Lender or any of the Lender’s Affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with,
arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents. 
  
 Section 11.4 No Duty. All attorneys, accountants, appraisers, and other professional Persons and consultants retained
by the Lender shall have the right to act exclusively in the interest of the Lender and shall have no duty of disclosure, duty of loyalty, duty of care, or other duty or obligation of any type or nature whatsoever to the Borrower or any of the
Borrower’s shareholders or any other Person other than Lender. 
  
 Section 11.5 Lender Not Fiduciary. The relationship between the Borrower and the Lender is solely that of debtor and creditor, and the Lender has no fiduciary or other special relationship with the Borrower, and no term or condition
of any of the Loan Documents shall be construed so as to deem the relationship between the Borrower and the Lender to be other than that of debtor and creditor. The Lender shall in good faith hold in confidence all information, memoranda, or
extracts furnished to the Lender by the Borrower hereunder or in connection with the negotiation hereof; provided that the Lender may disclose such information (i) to its Affiliates, accountants or counsel; (ii) to any regulatory agency having the
authority to examine the Lender, as required by any legal or governmental process or otherwise by law, and (iv) to the extent that such information shall be publicly available or shall have been known to the Lender independently of any disclosure by
the Borrower hereunder or in connection herewith. 
  
 Section 11.6
Equitable Relief. The Borrower recognizes that in the event the Borrower fails to pay, perform, observe, or discharge any or all of the Obligations, any remedy at law may prove to be inadequate relief to the Lender. The Borrower therefore
agrees that the Lender, if the Lender so requests, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages. 
  
 Section 11.7 No Waiver; Cumulative Remedies. No failure on the part of the Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege under this Agreement preclude any
other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided for in this Agreement and the other Loan Documents are cumulative and not exclusive of any rights and remedies provided by
law. 
  

 LOAN AGREEMENT - Page 39 

 Section 11.8 Successors and Assigns. This Agreement is binding upon and shall inure to the benefit
of the Lender and the Borrower and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Lender. 
  
 Section 11.9 Survival. All representations and warranties made in this
Agreement or any other Loan Document or in any document, statement, or certificate furnished in connection with this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents, and no investigation by the
Lender or any closing shall affect the representations and warranties or the right of the Lender to rely upon them. Without prejudice to the survival of any other obligation of the Borrower hereunder, the obligations of the Borrower under
Sections 11.1 and 11.2 shall survive repayment of the Note and termination of the Commitment and the Letters of Credit. 
  
 Section 11.10 ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT, THE NOTE, AND THE OTHER LOAN 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 Loan Documents to which the Borrower is a party may be
amended or waived only by an instrument in writing signed by the parties hereto. 
  
 Section 11.11 Notices. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission) and mailed, faxed or
delivered, to the address, facsimile number or subject to the last sentence hereof electronic mail address specified for notices below the signatures hereon or to such other address as shall be designated by such party in a notice to the other
parties. All such other notices and other communications shall be deemed to have been given or made upon the earliest to occur of (i) actual receipt by the intended recipient or (ii) (A) if delivered by hand or courier, (B) if delivered by mail,
four business days after deposit in the mail, postage prepaid; (C) if delivered by facsimile when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of the
last sentence below) when delivered; provided, however, that notices and other communications pursuant to Article II shall not be effective until actually received by the Lender. Electronic mail and intranet websites may be used only to
distribute only routine communications, such as financial statements and other information, and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other purpose. 
  
 Section 11.12 Governing Law; Venue; Service of Process. This Agreement
shall be governed by and construed in accordance with the laws of the State of Texas and the applicable laws of the United States of America. This Agreement has been entered into in Dallas County, Texas, and it shall be performable for all purposes
in Dallas County, Texas. Any action or proceeding against the Borrower under or in connection with any of the Loan Documents may be brought in any state or federal court in Dallas County, Texas. The Borrower hereby irrevocably (a) submits to the
nonexclusive jurisdiction of such courts, and (b) waives any objection it may 
  

 LOAN AGREEMENT - Page 40 

 now or hereafter have as to the venue of any such action or proceeding brought in any such court or that any such court
is an inconvenient forum. The Borrower agrees that service of process upon it may be made by certified or registered mail, return receipt requested, at its address specified or determined in accordance with the provisions of Section 11.12.
Nothing herein or in any of the other Loan Documents shall affect the right of the Lender to serve process in any other manner permitted by law or shall limit the right of the Lender to bring any action or proceeding against the Borrower or with
respect to any of its property in courts in other jurisdictions. Any action or proceeding by the Borrower against the Lender shall be brought only in a court located in Dallas County, Texas. 
  
 Section 11.13 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  
 Section 11.14 Severability. Any provision of this Agreement held by a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Agreement and the effect thereof shall be confined to the provision held to be invalid or illegal. 
  
 Section 11.15 Headings. The headings, captions, and arrangements used in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement. 
  
 Section 11.16
Intentionally Omitted. 
  
 Section 11.17
Construction. The Borrower and the Lender acknowledge that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement and the other Loan Documents with its legal counsel
and that this Agreement and the other Loan Documents shall be construed as if jointly drafted by the Borrower and the Lender. 
  
 Section 11.18 Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of a Default if such action is taken or such condition exists.

  
 Section 11.19 WAIVER OF JURY TRIAL. TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, BORROWER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF. 
  
 Section 11.20 Arbitration.  
  
 A. Upon the demand of any party, any dispute under this Agreement or the Loan Documents shall be resolved by binding arbitration (except as set forth in
Section 11.20.E. below) in accordance with the terms of this Agreement or the 
  

 LOAN AGREEMENT - Page 41 

 other Loan Documents. Any party may by summary proceedings bring an action in court to compel arbitration
of a Dispute. Any party who fails or refuses to submit to arbitration following a lawful demand by any other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any Dispute. 
  
 B. Arbitration proceedings shall be administered by the American Arbitration
Association (“AAA”) or such other administrator as the parties shall mutually agree upon in accordance with the AAA Commercial Arbitration Rules. All Disputes submitted to arbitration shall be resolved in accordance with the Federal
Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any of the foregoing documents. The arbitration shall be conducted at a location in Dallas County, Texas selected by the AAA or other
administrator. If there is any inconsistency between the terms hereof and any such rules, the terms and procedures set forth herein shall control.. All statutes of limitation applicable to any Dispute shall apply to any arbitration proceeding. All
discovery activities shall be expressly limited to matters directly relevant to the Dispute being arbitrated. Judgment upon any award rendered in an arbitration may be entered in any court having jurisdiction; provided however, that nothing
contained herein shall be deemed to be a waiver by any party that is a bank of the protections afforded to it under Section 91 of Title 12 of the United States Code or any similar applicable state law. 
  
 C. No provision hereof shall limit the right of any party to exercise
self-help remedies such as setoff, foreclosure against or sale of any real or personal property collateral or security, or to obtain provisional or ancillary remedies, including without limitation, injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver from a court of competent jurisdiction before, after or during the pendency of any arbitration or other proceeding. The exercise of any such remedy shall not waive the right of any party to compel
arbitration hereunder. 
  
 D. Arbitrators must be active members
of the Texas State Bar with expertise in the substantive law applicable to the subject matter of the Dispute. Arbitrators are empowered to resolve Disputes by summary rulings in response to motions filed prior to the final arbitration hearing.
Arbitrators (i) shall resolve all Disputes in accordance with the substantive law of the State of Texas, (ii) may grant any remedy or relief that a court of the State of Texas could order or grant within the scope hereof and such ancillary relief as
is necessary to make effective any award, and (iii) shall have the power to award recovery of all costs and fees, to impose sanctions and to take such other actions as they deem necessary to the same extent a judge could pursuant to the Federal
Rules of Civil Procedure, the Texas Rules of Civil Procedure or other applicable law. Any Dispute in which the amount in controversy is $5,000,000 or less shall be decided by a single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a single arbitrator, each party expressly waives any right or claim to recover more than $5,000,000. Any Dispute in which the amount in controversy exceeds $5,000,000 shall
be decided by majority vote of a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings and deliberations. 
  

 LOAN AGREEMENT - Page 42 

 E. Notwithstanding anything herein to the contrary, in any arbitration in which the amount in controversy
exceeds $25,000,000, the arbitrators shall be required to make specific, written findings of fact and conclusions of law. In such arbitrations (i) the arbitrators shall not have the power to make any award which is not supported by substantial
evidence or which is based on legal error, (ii) an award shall not be binding upon the parties unless the findings of fact are supported by substantial evidence and the conclusions of law are not erroneous under the substantive law of the State of
Texas, and (iii) the parties shall have in addition to the grounds referred to in the Federal Arbitration Act for vacating, modifying or correcting an award the right to judicial review of (1) whether the findings of fact rendered by the arbitrators
are supported by substantial evidence, and (2) whether the conclusions of law are erroneous under the substantive law of the State of Texas. Judgment confirming an award in such a proceeding may be entered only if a court determines the award is
supported by substantial evidence and not based on legal error under the substantive law of the State of Texas. 
  
 F. To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all action required to conclude any arbitration proceeding
within 180 days of the filing of the Dispute with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by a party required in the ordinary
course of its business, by applicable law or regulation, or to the extent necessary to exercise any judicial review rights set forth herein. If more than one agreement for arbitration by or between the parties potentially applies to a Dispute, the
arbitration provision most directly related to the foregoing documents or the subject matter of the Dispute shall control. If any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or any remaining provisions of this Agreement. This arbitration provision shall survive termination, amendment or expiration of
any of the foregoing documents or any relationship between the parties. 
  
 G. Lender and Borrower hereby agree to keep all Disputes and arbitration proceedings strictly confidential, provided, however, that Lender and Borrower may disclose such confidential information as is necessary in any
litigation between Lender and Borrower or as required by applicable law and, on a confidential basis, to accountants, attorneys and other consultants in the ordinary course of business. 
  
 Section 11.21 Additional Interest Provision. It is expressly stipulated and agreed to be the intent of the Borrower
and the Lender at all times to comply strictly with the applicable Texas law governing the maximum rate or amount of interest payable on the indebtedness evidenced by any Note, any Loan Document, and the Related Indebtedness (or applicable United
States federal law to the extent that it permits the Lender to contract for, charge, take, reserve or receive a greater amount of interest than under Texas law). If the applicable law is ever 
  

 LOAN AGREEMENT - Page 43 

 judicially interpreted so as to render usurious any amount (i) contracted for, charged, taken, reserved or received
pursuant to any Note, any of the other Loan Documents or any other communication or writing by or between the Borrower and the Lender related to the transaction or transactions that are the subject matter of the Loan Documents, (ii) contracted for,
charged, taken, reserved or received by reason of the Lender’s exercise of the option to accelerate the maturity of any Note and/or any and all indebtedness paid or payable by the Borrower to the Lender pursuant to any Loan Document other than
any Note (such other indebtedness being referred to in this Section as the “Related Indebtedness”), or (iii) the Borrower will have paid or the Lender will have received by reason of any voluntary prepayment by the Borrower of any
Note and/or the Related Indebtedness, then it is the Borrower’s and the Lender’s express intent that all amounts charged in excess of the Maximum Lawful Rate shall be automatically canceled, ab initio, and all amounts in excess of
the Maximum Lawful Rate theretofore collected by the Lender shall be credited on the principal balance of any Note and/or the Related Indebtedness (or, if any Note and all Related Indebtedness have been or would thereby be paid in full, refunded to
the Borrower), and the provisions of any Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so
as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder; provided, however, if any Note has been paid in full before the end of the stated term of any such Note, then
the Borrower and the Lender agree that the Lender shall, with reasonable promptness after the Lender discovers or is advised by the Borrower that interest was received in an amount in excess of the Maximum Lawful Rate, either refund such excess
interest to the Borrower and/or credit such excess interest against such Note and/or any Related Indebtedness then owing by the Borrower to the Lender. The Borrower hereby agrees that as a condition precedent to any claim seeking usury penalties
against the Lender, the Borrower will provide written notice to the Lender, advising the Lender in reasonable detail of the nature and amount of the violation, and the Lender shall have sixty (60) days after receipt of such notice in which to
correct such usury violation, if any, by either refunding such excess interest to the Borrower or crediting such excess interest against the Note to which the alleged violation relates and/or the Related Indebtedness then owing by the Borrower to
the Lender. All sums contracted for, charged, taken, reserved or received by the Lender for the use, forbearance or detention of any debt evidenced by any Note and/or the Related Indebtedness shall, to the extent permitted by applicable law, be
amortized or spread, using the actuarial method, throughout the stated term of such Note and/or the Related Indebtedness (including any and all renewal and extension periods) until payment in full so that the rate or amount of interest on account of
any Note and/or the Related Indebtedness does not exceed the Maximum Lawful Rate from time to time in effect and applicable to such Note and/or the Related Indebtedness for so long as debt is outstanding. In no event shall the provisions of Chapter
346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving triparty accounts) apply to this Note and/or any of the Related Indebtedness. Notwithstanding anything to the contrary contained herein or in any of
the other Loan Documents, it is not the intention of the Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration. 
  
 Section 11.22 Ceiling Election. To the extent that Lender is relying
on Chapter 303 of the Texas Finance Code to determine the Maximum Lawful Rate payable on any such Note and/or any other portion of the Indebtedness, the Lender will utilize the weekly ceiling from time to time in effect as provided in such Chapter
303, as amended. To the extent United States federal law permits the Lender to contract for, charge, take, receive or reserve a greater amount 
  

 LOAN AGREEMENT - Page 44 

 of interest than under Texas law, Lender will rely on United States federal law instead of such Chapter 303 for the
purpose of determining the Maximum Lawful Rate. Additionally, to the extent permitted by applicable law now or hereafter in effect, the Lender may, at its option and from time to time, utilize any other method of establishing the Maximum Lawful Rate
under such Chapter 303 or under other applicable law by giving notice, if required, to the Borrower as provided by applicable law now or hereafter in effect. 
  

 LOAN AGREEMENT - Page 45 

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

			
	BORROWER:
	
	RF MONOLITHICS, INC.
		
	By:	 	 /s/ Harley E. Barnes III

	 	 	Harley E. Barnes III
	 	 	Chief Financial Officer
	
	Address for Notices:
	4441 Sigma Road
	Dallas, Texas 75244
	Fax No.: (972) 404-9476
	Telephone No.: (972) 448-3789
	Attention: Chief Financial Officer
	e-mail: bbarnes@rfm.com
	
	LENDER:
	
	WELLS FARGO BANK,
	NATIONAL ASSOCIATION
		
	By:	 	 /s/ Thomas J. Krueger

	 	 	Thomas J. Krueger
	 	 	Vice President
	
	Address for Notices:
	4975 Preston Park Blvd.
	Suite 280
	Plano, Texas 75093
	Fax No.: (972) 867 - 5674
	Telephone No.: (972) 599-5330
	Attention: Thomas J. Krueger
	e-mail: thomas.j.krueger@wellsfargo.com

  

 LOAN AGREEMENT - Page 46 

 INDEX TO EXHIBITS 
  

					
	Exhibit

	  	 Description of Exhibit

	  	Section

	A	  	Borrowing Base Report	  	1.1
	B	  	Compliance Certificate	  	1.1
	C	  	Revolving Credit Note	  	1.1 and 2.1
	D	  	Advance Request Form	  	1.1
	
	INDEX TO SCHEDULES
			
	 	  	 Description of Schedules

	  	Article/Section

	 	  	Conditions Precedent	  	5.1(n)
	 	  	Disclosure Schedule	  	1.1, VI and VIII

  

 LOAN AGREEMENT - Page 47 

 EXHIBIT A 
  
 BORROWING BASE REPORT 
  

FOR MONTH ENDED
                                 (THE “SUBJECT MONTH”)

  

			
	LENDER:	  	Wells Fargo Bank, National Association
		
	BORROWER:	  	RF MONOLITHICS, INC.

  
 This certificate is
delivered under the Loan Agreement (the “Agreement”) dated as of December 31, 2004, between Borrower and Lender. Capitalized terms used in this certificate shall, unless otherwise indicated, have the meanings set forth in the
Agreement. On behalf of Borrower, the undersigned certifies to Lender on the date hereof that (a) no Default or Event of Default has occurred and is continuing, (b) a review of the activities of Borrower during the Subject Month has been made under
my supervision with a view to determining the amount of the current Borrowing Base, (c) the accounts receivable included in the Borrowing Base below meet all conditions to qualify for inclusion therein as set forth in the Agreement, and all
representations and warranties set forth in the Agreement with respect thereto are true and correct in all material respects, and (d) the information set forth below hereto is true and correct as of the last day of the Subject Month. 
  

											
	 LINE

	  	 	  	 	  	 	  	 AT END OF
 SUBJECT MONTH

	 1.
	  	Total Accounts Receivable (less discounts)	  	 	 	  	$	__________
				
	 2.
	  	Ineligible Accounts	  	 	 	  	 	 
					
	 (a)
	  	 	  	Accounts outstanding 60 days or more past the due date, but not to exceed 120 days after the original invoice date	  	$	__________	  	 	 
					
	 (b)
	  	 	  	Accounts not in compliance with applicable laws, rules, and regulations	  	$	__________	  	 	 
					
	 (c)
	  	 	  	Accounts for consignments and non-final sales (apart from Borrower’s standard product warranties)	  	$	__________	  	 	 
					
	 (d)
	  	 	  	Accounts evidenced by chattel paper or an instrument (unless secured by a letter of credit provided by Borrower’s customer)	  	$	__________	  	 	 

  

 LOAN AGREEMENT - Page 1 

							
	(e)	  	Foreign accounts (other than accounts which are insured under a foreign credit insurance policy acceptable to Lender in its sole discretion)	  	$__________	  	 
				
	(f)	  	 Accounts due from the U.S. Government
 or subdivision
thereof (with respect to which the Federal Assignment of Claims Act of 1940 has not been complied with)
	  	$__________	  	 
				
	(g)	  	Accounts subject to specific assignment restrictions	  	$__________	  	 
				
	(h)	  	Accounts owed by account debtor with more than 25% of Accounts of such account debtor ineligible by reason of 2(a)	  	$__________	  	 
				
	(i)	  	Amounts excluded due to 25% concentration restriction on any single account debtor (25% concentration limit)	  	$__________	  	 
				
	(j)	  	Accounts representing commissions or not created in the ordinary course of business or not arising from an enforceable contract, the performance of which has been completed by the
Borrower	  	$__________	  	 
				
	(k)	  	Accounts to which the Borrower does not have good and indefeasible title or which are subject to any Lien except Liens in favor of the Lender and Permitted Liens	  	$__________	  	 
				
	(l)	  	Accounts subject to setoff, counterclaim, defense, dispute, recoupment, or adjustment other than normal discounts for prompt payment	  	$__________	  	 
				
	(m)	  	Accounts with respect to which the account debtor is insolvent or the subject of any bankruptcy or insolvency proceeding or has made an assignment for the benefit of creditors, suspended
normal business operations, dissolved, liquidated, terminated its existence, ceased to pay its debts as they become due, or suffered a receiver or trustee to be appointed for any of its assets or affairs	  	$__________	  	 

  

 LOAN AGREEMENT - Page 2 

											
	 (n)
	  	 	  	Accounts with respect to which any default exists	  	$	__________	  	 	 
					
	 (o)
	  	 	  	Accounts with respect to which the account debtor has returned or refused to retain, or otherwise notified the Borrower of any dispute concerning, or claimed nonconformity of, any of the
goods from the sale of which the account arose	  	$	__________	  	 	 
					
	 (p)
	  	 	  	Accounts owed by an Affiliate, employee, officer, director or shareholder of the Borrower	  	$	__________	  	 	 
					
	 (q)
	  	 	  	Accounts not payable in Dollars, Euros, Pounds Sterling or Japanese Yen by the account debtor; and accounts payable in any of the aforementioned currencies, other than Dollars, that exceed
five percent (5%) of all accounts	  	$	__________	  	 	 
					
	 (r)
	  	 	  	The account is owed by an account debtor whose accounts the Lender in its reasonable discretion has chosen to exclude	  	$	__________	  	 	 
					
	 (s)
	  	 	  	The amount of all “contra accounts” and other obligations owed by the Borrower to account debtors	  	$	__________	  	 	 
					
	 (t)
	  	 	  	Other Ineligible Accounts disallowed by Lender in its good faith discretion	  	$	__________	  	 	 
				
	 3.
	  	Total Ineligible Accounts
add Lines 2(a) through 2(t)	  	 	 	  	$	__________
				
	 4.
	  	Total Eligible Accounts
Line 1 minus Line 3	  	 	 	  	$	__________
				
	 5.
	  	Multiplied by: Borrowing Base factor	  	 	 	  	 	80%
				
	 6.
	  	Total Accounts Component of Borrowing Base
Line 4 x Line 5	  	 	 	  	$	__________
				
	 7.
	  	Borrowing Base
Line 6	  	 	 	  	$	__________
				
	 8.
	  	Amount of Commitment	  	 	 	  	$	__________

  

 LOAN AGREEMENT - Page 3 

							
	9.	  	 Sum of (a) principal balance of Revolving Credit Advances plus (b) Letter of Credit Liabilities
 (not to exceed $500,000)
	  	 	  	$__________
				
	10.	  	Lesser of Line 7 or Line 8	  	 	  	$__________
				
	11.	  	 Amount available for Revolving Credit Advances, if positive, or amount to be repaid, if negative
 Line 10 minus Line 9
	  	 	  	$__________

  

			
	RF MONOLITHICS, INC.
		
	By:	 	  

	Name:	 	 
	Title:	 	 

  

 LOAN AGREEMENT - Page 4 

 EXHIBIT B 
  
 COMPLIANCE CERTIFICATE 
  

FOR QUARTER/YEAR (Circle one) ENDED _____________________ (THE “SUBJECT PERIOD”) 
  

			
	LENDER:	 	Wells Fargo Bank, National Association
		
	BORROWER:	 	RF MONOLITHICS, INC.

  
 This certificate is
delivered under the Loan Agreement (as amended, restated, modified or renewed from time to time, the “Agreement”) dated as of December 31, 2004, between Borrower and Lender. Capitalized terms when used in this certificate shall,
unless otherwise indicated, have the meanings set forth in the Agreement. I certify to Lender 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 Default or Event of Default currently exists or has occurred which has not been cured or waived by Lender, or if a
Default has occurred and is continuing, a statement as to the nature thereof and the action which is proposed to be taken with respect thereto is attached hereto, (c) attached hereto is a statement showing in reasonable detail the calculations
demonstrating compliance with Article IX of the Agreement, and (d) the status of compliance by Borrower with certain covenants of the Agreement at the end of the Subject Period is as set forth below: 
  

									
	 	  	 	  	 	  	 In Compliance as of
End of Subject Period
 (Please Indicate)

	1.	  	Financial Statements and Reports	  	 	  	 
					
	 	  	(a)	  	Provide annual audited FYE financial statements of Borrower within the period prescribed in Section 7.1.A. of the Agreement.	  	Yes	  	No
					
	 	  	(b)	  	Provide quarterly financial statements of Borrower within the period prescribed in Section 7.1.B. of the Agreement.	  	Yes	  	No
					
	 	  	(c)	  	Provide a quarterly Compliance Certificate within the period prescribed in Section 7.1. E of the Agreement.	  	Yes	  	No
					
	 	  	(d)	  	Provide financial statements of Guarantor within 90 days after the last day of each year.	  	Yes	  	No
					
	 	  	(e)	  	Provide a copy of Guarantor’s tax return within 30 days after it is filed with the Internal Revenue Service.	  	Yes	  	No
					
	 	  	(f)	  	Provide annual projections prior to August 31 of each fiscal year.	  	Yes	  	No
					
	 	  	(g)	  	Provide a monthly summary accounts receivable aging and accounts payable aging, within 30 days after the last day of each month.	  	Yes	  	No
					
	 	  	(h)	  	Provide other required reporting and other information concerning Borrower or Guarantor as Lender may from time to time request timely.	  	Yes	  	No

  

 1 

							
	2.	  	 Subsidiaries.
 None except as listed on
Disclosure Schedule
	  	Yes	  	No
				
	3.	  	 Additional Indebtedness.
 None, except
Indebtedness permitted by Section 8.1 of the Agreement.
	  	Yes	  	No
				
	4.	  	 Liens and Encumbrances; Negative Pledge Agreements.
 None at any time, except Liens permitted by Section 8.2 of the Agreement.
	  	Yes	  	No
				
	5.	  	 Limitation of Acquisitions and Mergers.
 None
except those permitted by Section 8.3 of the Agreement.
	  	Yes	  	No
				
	6.	  	 Dividends and Stock Repurchase.
 None, except
as permitted by Section 8.4 of the Agreement.
	  	Yes	  	No
				
	7.	  	 Loans and Investments.
 None, except those
permitted by Section 8.5 of the Agreement.
	  	Yes	  	No
				
	9.	  	 Affiliate Transactions.
 None, except issuances
permitted by Section 8.7 of the Agreement.
	  	Yes	  	No
				
	10.	  	 Disposal of Assets other than in the Ordinary Course of Business.
 None at any time without prior written consent of Lender except as permitted by Section 8.8 of the Agreement.
	  	Yes	  	No
				
	11.	  	 Sale and Leaseback Transactions (Section 8.9 of the Agreement).
 None any time without prior written consent of Lender.
	  	Yes	  	No
				
	12.	  	 Prepayment of Debt (Section 8.10 of the Agreement).
 None except Debt permitted by Section 8.10 of the Agreement.
	  	Yes	  	No
				
	13.	  	 Changes in Nature of Business (Section 8.11 of the Agreement).
 None at any time without prior written consent of Lender.
	  	Yes	  	No
				
	14.	  	 Environmental Laws (Section 8.12 of the Agreement).
 No activity likely to cause violations.
	  	Yes	  	No
				
	15.	  	 Changes in Fiscal Year; Accounting Practices (Section 8.13 of the Agreement).
 None at any time without prior written consent of Lender.
	  	Yes	  	No
				
	16.	  	 No Negative Pledge (Section 8.14 of the Agreement).
 None.
	  	Yes	  	No
				
	17.	  	 No Contingent Obligations (Section 8.15 of the Agreement).
 None.
	  	Yes	  	No
				
	18.	  	 Cash Flow Leverage Ratio (CFL).
  
 Maximum of 2.00 to 1.00. (Defined as, for any period of determination, the ratio of (a) Consolidated Senior Funded Debt to (b) Consolidated EBITDA).
  
                     CFL Ratio:
                                        
                                        
                                        
                    .
	  	Yes	  	No

  

 2 

							
	 19.
	  	 Fixed Charge Coverage Ratio (FCC).
  
 Minimum of 1.25 to 1.00. (Defined as, for any period of determination, the ratio of (a) Excess Cash Flow to (b) the sum of (i) Consolidated Interest Charges, (ii)
scheduled principal payments on Consolidated Senior Funded Debt, and (iii) an amount equal to twenty percent (20%) of the outstanding amount of all Revolving Credit Advances).
  
                     FCC
Ratio:                                       
                                        
                                        
                         .
	  	Yes	  	No
				
	 20.
	  	 Consolidated Tangible Net Worth (Defined as Shareholders’ Equity (net of treasury shares) of the Borrower and its Subsidiaries on that
date minus the Intangible Assets of the Borrower and its Subsidiaries on that date plus Subordinated Debt).
  
 Consolidated Net
Income:                                       
                                        
                                        
                   
  
 Required: $18,652,000 + 75% of Consolidated Net
Income                                       
                                        
       
  
 Consolidated Tangible Net
Worth:                                       
                                        
                                        
       
	  	Yes	  	No
				
	 21.
	  	 Profitability.
  
 Net Income has been positive for preceding two quarters and four consecutive quarters. (Consolidated Net Income is defined as for any period, the consolidated net income
(or loss) determined in conformity with GAAP of the Borrower and its Subsidiaries).
  
 Net Income for preceding quarter= _______________________________.
 Net Income for current quarter= _______________________________.
 Net Income for preceding four consecutive quarters = ________________________.
	  	  
 Yes
	  	  
 Yes

				
	 22.
	  	 Capital Expenditures.
 Borrower has not made
any Capital Expenditures during fiscal year in excess of an aggregate of $2,500,000.
  
 Year-to-Date Capital Expenditures =
                                        
                                .
	  	  
 Yes
	  	  
 No

  

			
	RF MONOLITHICS, INC.
		
	By:	 	  

	Name:	 	 
	Title:	 	 

  

 3 

 Exhibit C 
  

			
	WELLS FARGO BANK	 	REVOLVING CREDIT NOTE

  
 $10,000,000.00 
  
 Dallas, Texas 
 December 31, 2004 
  
 FOR VALUE RECEIVED, the undersigned RF MONOLITHICS, INC. (“Borrower”) promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at North Dallas RCBO, 4975 Preston Park Blvd.,
Suite 280, Plano, TX 75093, or at such other place as the holder hereof may designate, in lawful money of the United States of America and in immediately available funds, the principal sum of Ten Million Dollars ($10,000,000.00), or so
much thereof as may be advanced and be outstanding, with interest thereon, to be computed on each advance from the date of its disbursement as set forth herein. 
  

	1.	DEFINITIONS: 

  
 As used herein, the following terms shall have the meanings set forth after each, and any other term defined in this Note shall have the meaning set forth
at the place defined; all terms used herein but not defined herein shall have the meaning given to such terms in the Loan Agreement (as hereinafter defined): 
  
 “Base Rate” means for any day, a rate of interest equal to the higher of (i) the Prime Rate in effect for such day and (ii) the sum of the
Federal Funds Rate in effect for such day plus one half of one percent (1/2 of 1%). 
  
 “Base Rate Loan” means a Revolving Credit Advance that bears interest at the Base Rate. 
  
 “Business Day” means any day except a Saturday, Sunday or any other day on which commercial banks in Texas are authorized or required by law to
close. 
  
 “Federal Funds Rate” means for any day an
interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day that is a Business Day, the average of the quotations at approximately 10:00 a.m. (Dallas, Texas time)
on such day on such transactions received by Bank from three Federal funds brokers of recognized standing selected by Bank in its sole discretion. 
  
 “Fixed Rate Term” means a period commencing on a Business Day and continuing for 1, 2 or 3 months, as designated by Borrower, during which all
or a portion of the outstanding principal balance of this Note bears interest determined in relation to LIBOR; provided however, that no Fixed Rate Term may be selected for a principal amount less than $500,000.00; and provided further, that
no Fixed Rate Term shall extend beyond the scheduled maturity date hereof. If any Fixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term shall be extended to the next succeeding Business Day. 
  

 1 

 “Interest Payment Date” means (i) with respect to any Base Rate Loan, on the first day of each
month commencing on February 1, 2005 and on the Termination Date and (ii) with respect to a LIBOR Loan, on the last day of the applicable Fixed Rate Term and on the Termination Date. 
  
 “LIBOR” means the rate per annum (rounded upward, if necessary, to the nearest whole 1/16 of 1%) determined by
dividing Base LIBOR by a percentage equal to 100% less any LIBOR Reserve Percentage. 
  
 (i) “Base LIBOR” means the rate per annum for United States dollar deposits quoted by Bank as the Inter-Bank Market Offered
Rate, with the understanding that such rate is quoted by Bank for the purpose of calculating effective rates of interest for loans making reference thereto, on the first day of a Fixed Rate Term for delivery of funds on said date for a period of
time approximately equal to the number of days in such Fixed Rate Term and in an amount approximately equal to the principal amount to which such Fixed Rate Term applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Bank in its discretion deems appropriate including, but not limited to, the rate offered for U.S. dollar deposits on the London Inter-Bank Market.

  
 (ii) “LIBOR Reserve Percentage”
means the reserve percentage prescribed by the Board of Governors of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities” (as defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for
expected changes in such reserve percentage during the applicable Fixed Rate Term. 
  
 “LIBOR Loan” means a Revolving Credit Advance that bears interest at LIBOR. 
  
 “Prime Rate” means, on any day, (a) at any time the rate of interest most recently announced by Wells Fargo Bank, N.A. at its principal office
in San Francisco, California as its prime rate, whether or not the Borrowers have notice thereof, with the understanding that the Prime Rate is one of Wells Fargo Bank, N.A.’s base rates and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as Wells Fargo Bank, N.A. may designate, which change in the Prime Rate
shall be effective on the day the change is announced within Wells Fargo Bank, N.A. 
  

	2.	INTEREST: 

  
 Section 2.1 Interest. The outstanding principal balance of this Note shall bear interest (computed on the basis of a 360-day year, actual days
elapsed, except with respect to Base Rate Loans, in which case interest shall be computed on the basis of a 365/366-day year, as the case may be, actual days elapsed) at the lesser of (i) either (A) at a fluctuating rate per annum equal to the Base
Rate in effect from time to time, or (B) at a fixed rate per annum determined by Bank to be 2.25% above LIBOR in effect on the first day of the applicable Fixed Rate Term, or (ii) the 
  

 2 

 Maximum Rate. When interest is determined in relation to the Prime Rate, each change in the rate of interest hereunder
shall become effective on the date each Prime Rate change is announced within Bank. With respect to each LIBOR selection option selected hereunder, Bank is hereby authorized to note the date, principal amount, interest rate and Fixed Rate Term
applicable thereto and any payments made thereon on Bank’s books and records (either manually or by electronic entry) and/or on, any schedule attached to this Note, which notations shall be prima facie evidence of the accuracy of the
information noted. 
  
 Section 2.2 Selection of Interest Rate
Options. At any time any portion of this Note bears interest determined in relation to LIBOR, it may be continued by Borrower at the end of the Fixed Rate Term applicable thereto so that all or a portion thereof bears interest determined in
relation to the Base Rate or to LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion of this Note bears interest determined in relation to the Base Rate, Borrower may convert all or a portion thereof so that it bears
interest determined in relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as Borrower requests an advance hereunder or wishes to select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at
the end of each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the interest rate option selected by Borrower; (ii) the principal amount subject thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed Rate
Term. Any such notice may be given by telephone (or such other electronic method as Bank may permit) so long as, with respect to each LIBOR selection, (A) if requested by Bank, Borrower provides to Bank written confirmation thereof not later than
three (3) Business Days after such notice is given, and (B) such notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during any Business Day if Bank, at its sole option but without obligation to do
so, accepts Borrower’s notice and quotes a fixed rate to Borrower. If Borrower does not immediately accept a fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request from Borrower shall be subject to a
redetermination by Bank of the applicable fixed rate. If no specific designation of interest is made at the time any advance is requested hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to have made a Base Rate interest
selection for such advance or the principal amount to which such Fixed Rate Term applied. 
  
 Section 2.3 Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in addition to any other amounts due or to become due hereunder, any and all (i) withholdings, interest equalization
taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or foreign governmental authority and related in any manner to LIBOR, and (ii) future, supplemental, emergency or other changes in the LIBOR Reserve
Percentage, assessment rates imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by any domestic or foreign governmental authority or resulting from compliance by Bank with any request or directive (whether
or not having the force of law) from any central bank or other governmental authority and related in any manner to LIBOR to the extent they are not included in the calculation of LIBOR. In determining which of the foregoing are attributable to any
LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank among its operations shall be conclusive and binding upon Borrower. 
  
 Section 2.4 Payment of Interest. Interest accrued on this Note shall be payable on the Interest Payment Date. 
  

 3 

 Section 2.5 Default Interest. From and after the maturity date of this Note, or such earlier date
as all principal owing hereunder becomes due and payable by acceleration or otherwise, the outstanding principal balance of this Note shall bear interest until paid in full at an increased rate per annum (computed on the basis of a 360-day year,
actual days elapsed, except with respect to Base Rate Loans, in which case interest shall be computed on the basis of a 365/366-day year, as the case may be, actual days elapsed) equal to 4% above the rate of interest from time to time applicable to
this Note, but in no event at a rate greater than the Maximum Rate. 
  
 3.
BORROWING AND REPAYMENT: 
  
 Section 3.1 Borrowing and
Repayment. Borrower may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions of this Note and of the Loan Agreement
between Borrower and Bank defined below; provided however, that the total outstanding borrowings under this Note shall not at any time exceed the principal amount stated above. Each borrowing, conversion to or continuation of LIBOR Loans shall be in
a principal amount of $500,000 or a whole multiple of $250,000 in excess thereof. The unpaid principal balance of this obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments
made hereon by or for any Borrower, which balance may be endorsed hereon from time to time by the holder. The outstanding principal balance of this Note and all outstanding accrued interest thereon shall be due and payable in full on the Termination
Date. 
  
 Section 3.2 Advances. Advances hereunder,
to the total amount of the principal sum available hereunder, may be made by the holder at the oral or written request of (i) David Kirk, any one acting alone, who are authorized to request advances and direct the disposition of any advances until
written notice of the revocation of such authority is received by the holder at the office designated above, or (ii) any person, with respect to advances deposited to the credit of any deposit account of any Borrower, which advances, when so
deposited, shall be conclusively presumed to have been made to or for the benefit of each Borrower regardless of the fact that persons other than those authorized to request advances may have authority to draw against such account. The holder shall
have no obligation to determine whether any person requesting an advance is or has been authorized by any Borrower. 
  
 Section 3.3 Application of Payments. Each payment made on this Note shall be credited first, to any interest then due and second, to the
outstanding principal balance hereof. All payments credited to principal shall be applied first, to the outstanding principal balance of this Note which bears interest determined in relation to the Base Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to LIBOR, with such payments applied to the oldest Fixed Rate Term first. 
  
 Section 3.4 Credit Sweep. Borrower’s operating account will be linked to this Note, so upon the last transaction of each Business Day, any
shortfall in the operating account will be funded by a drawdown of a Base Rate Loan. Paydown on this Note is similar in that any positive collected balance in the operating account at the end of each Business Day will reduce any Base Rate Loans as
contemplated by Section 4.1. For amounts greater than the terms outlined above, Borrower will give the Bank one Business Day advance notice of its intent to borrow hereunder as contemplated in Section 2.1.D of the Loan Agreement. 
  

 4 

 4. PREPAYMENT: 
  
 Section 4.1 Base Rate Loan. Positive credit balances in the Borrower’s operating account at the end of each Business Day will reduce any Base
Rate Loans. In addition, Borrower may prepay principal (which shall include all accrued interest thereon) upon one Business Day’s prior notice to Bank, in any amount and without penalty. 
  
 Section 4.2 LIBOR Loan. Borrower may prepay principal (which shall
include all accrued interest thereon) on any LIBOR Loan upon three Business Day’s prior notice to Bank and in the minimum amount of $1,000,000.00, or a whole multiple of $500,000 in excess thereof; provided however, that if the
outstanding principal balance of such portion of this Note is less than said amount, the minimum prepayment amount shall be the entire outstanding principal balance thereof. In consideration of Bank providing this prepayment option to Borrower, or
if any such portion of this Note shall become due and payable at any time prior to the last day of the Fixed Rate Term applicable thereto, Borrower shall pay to Bank immediately upon demand a fee which is the sum of the discounted monthly
differences for each month from the month of prepayment through the month in which such Fixed Rate Term matures, calculated as follows for each such month: 
  
 Determine the amount of interest which would have accrued each month on the amount prepaid at the interest rate applicable to such amount
had it remained outstanding until the last day of the Fixed Rate Term applicable thereto. 
  
 Subtract from the amount determined in (a) above the amount of interest which would have accrued for the same month on the amount prepaid
for the remaining term of such Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made for such term and in a principal amount equal to the amount prepaid. 
  
 If the result obtained in (b) for any month is greater than zero, discount that difference by LIBOR used in
(b) above. 
  
 Borrower acknowledges that prepayment of such amount may result in
Bank incurring additional costs, expenses and/or liabilities, and that it is difficult to ascertain the full extent of such costs, expenses and/or liabilities. Borrower, therefore, agrees to pay the above-described prepayment fee and agrees that
said amount represents a reasonable estimate of the prepayment costs, expenses and/or liabilities of Bank. 
  
 5. EVENTS OF DEFAULT: 
  
 This Note is
made pursuant to and is subject to the terms and conditions of that certain Loan Agreement between Borrower and Bank dated as of December 31, 2004 (as amended, restated or modified from time to time, the “Loan Agreement”). Any default in
the payment or performance of any obligation under this Note, or any defined event of default under the Loan Agreement, shall constitute an “Event of Default” under this Note. 
  

 5 

 6. MISCELLANEOUS: 
  
 Section 6.1 Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at the holder’s option, may declare all sums of
principal and accrued and unpaid interest outstanding hereunder to be immediately due and payable without presentment, demand, or any notices of any kind, including without limitation notice of nonperformance, notice of protest, protest, notice of
dishonor, notice of intention to accelerate or notice of acceleration, all of which are expressly waived by each Borrower, and the obligation, if any, of the holder to extend any further credit hereunder shall immediately cease and terminate. Each
Borrower shall pay to the holder immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys’ fees (to include outside counsel fees and all allocated costs of the holder’s
in-house counsel to the extent permissible), expended or incurred by the holder in connection with the enforcement of the holder’s rights and/or the collection of any amounts which become due to the holder under this Note, and the prosecution
or defense of any action in any way related to this Note, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the
foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to any Borrower or any other person or entity.

  
 Section 6.2 Obligations Joint and Several. Should more
than one person or entity sign this Note as a Borrower, the obligations of each such Borrower shall be joint and several. 
  
 Section 6.3 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Texas. 
  
 Section 6.4 Savings Clause. It is the intention of the parties to
comply strictly with applicable usury laws. 
  
 Accordingly, notwithstanding any
provision to the contrary in this Note, or in any contract, instrument or document evidencing or securing the payment hereof or otherwise relating hereto (each, a “Related Document”), in no event shall this Note or any Related Document
require the payment or permit the payment, taking, reserving, receiving, collection or charging of any sums constituting interest under applicable laws that exceed the maximum amount permitted by such laws, as the same may be amended or modified
from time to time (the “Maximum Rate”). If any such excess interest is called for, contracted for, charged, taken, reserved or received in connection with this Note or any Related Document, or in any communication by Bank or any other
person to Borrower or any other person, or in the event that all or part of the principal or interest hereof or thereof shall be prepaid or accelerated, so that under any of such circumstances or under any other circumstance whatsoever the amount of
interest contracted for, charged, taken, reserved or received on the amount of principal actually outstanding from time to time under this Note shall exceed the Maximum Rate, then in such event it is agreed that: (i) the provisions of this paragraph
shall govern and control; (ii) neither Borrower nor any other person or entity now or hereafter liable for the payment of this Note or any Related Document shall be obligated to pay the amount of such interest to the extent it is in excess of the
Maximum Rate; (iii) any such excess interest which is or has been received by Bank, notwithstanding this paragraph, shall be credited against the then unpaid principal balance hereof or thereof, or if this Note or any Related Document has been or
would be paid in full by such credit, refunded to 
  

 6 

 Borrower; and (iv) the provisions of this Note and each Related Document, and any other communication to Borrower, shall
immediately be deemed reformed and such excess interest reduced, without the necessity of executing any other document, to the Maximum Rate. The right to accelerate the maturity of this Note or any Related Document does not include the right to
accelerate, collect or charge unearned interest, but only such interest that has otherwise accrued as of the date of acceleration. Without limiting the foregoing, all calculations of the rate of interest contracted for, charged, taken, reserved or
received in connection with this Note and any Related Document which are made for the purpose of determining whether such rate exceeds the Maximum Rate shall be made to the extent permitted by applicable laws by amortizing, prorating, allocating and
spreading during the period of the full term of this Note or such Related Document, including all prior and subsequent renewals and extensions hereof or thereof, all interest at any time contracted for, charged, taken, reserved or received. The
terms of this paragraph shall be deemed to be incorporated into each Related Document. 
  
 To the extent that Chapter 303 of the Texas Finance Code is relevant to Bank for the purpose of determining the Maximum Rate, Bank hereby elects to determine the applicable rate ceiling under such Article by the weekly rate ceiling from
time to time in effect, subject to Bank’s right subsequently to change such method in accordance with applicable law, as the same may be amended or modified from time to time. 
  
 Section 6.5 Right of Setoff; Deposit Accounts. Upon and after the occurrence of an Event of Default, (i) Borrower
hereby authorizes Bank, at any time and from time to time, without notice, which is hereby expressly waived by Borrower, and whether or not Bank shall have declared this Note to be due and payable in accordance with the terms hereof, to set off
against, and to appropriate and apply to the payment of, Borrower’s obligations and liabilities under this Note (whether matured or unmatured, fixed or contingent, liquidated or unliquidated), any and all amounts owing by Bank to Borrower
(whether payable in U.S. dollars or any other currency, whether matured or unmatured, and in the case of deposits, whether general or special (except trust and escrow accounts), time or demand and however evidenced), and (ii) pending any such
action, to the extent necessary, to hold such amounts as collateral to secure such obligations and liabilities and to return as unpaid for insufficient funds any and all checks and other items drawn against any deposits so held as Bank, in its sole
discretion, may elect. Borrower hereby grants to Bank a security interest in all deposits and accounts maintained with Bank and with any other financial institution to secure the payment of all obligations and liabilities of Borrower to Bank under
this Note. 
  
 Section 6.6 Business Purpose. Borrower
represents and warrants that all loans evidenced by this Note are for a business, commercial, investment, agricultural or other similar purpose and not primarily for a personal, family or household use. 
  
 Section 6.7 Certain Tri-Party Accounts. Borrower and Bank agree that
Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving tri-party accounts) shall not apply to any revolving loan accounts created under this Note or maintained in connection herewith. 

 
 NOTICE: THIS NOTE AND ALL OTHER DOCUMENTS RELATING TO THE INDEBTEDNESS EVIDENCED HEREBY
CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE 
  

 7 

 PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING TO THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY. 
  

 8 

 IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above.

  

			
	RF MONOLITHICS, INC.
		
	By:	 	 /s/ Harley E. Barnes III

	 	 	Harley E. Barnes III
	 	 	Chief Financial Officer

  

 1 

 EXHIBIT D 
  
 ADVANCE REQUEST FORM 
  

					
	TO:	  	Wells Fargo Bank, National Association
	 	  	4975 Preston Park Blvd., Suite 280
	 	  	Plano, TX 75093
	 	  	Attention:	  	Thomas J. Krueger
	 	  	 	  	Vice President

  
 Gentlemen: 
  
 The undersigned is an officer of RF MONOLITHICS, INC. (the
“Borrower”), and is authorized to make and deliver this certificate pursuant to that certain Loan Agreement dated as of December 31, 2004 between the Borrower and Wells Fargo Bank, National Association, (the “Lender”) (as
the same may be amended, restated, modified, or supplemented from time to time, the “Loan Agreement”), whereby such indebtedness under the Loan Agreement is evidenced by that certain Revolving Credit Note dated December 31, 2004,
executed by Borrower in favor of the Lender (as amended, restated or modified from time to time the “Revolving Credit Note”). Except as otherwise set forth herein, all terms defined in the Loan Agreement shall have the same meaning
herein. In accordance with the Loan Agreement, the Borrower hereby (check whichever is applicable): 
  
          1. Requests that the Lender make a Base Rate Loan (as defined in the Revolving Credit Note) in the
amount set forth in item (I)(d) below on the date set forth in item (I)(e) below. 
  
          2. Requests that the Lender make a LIBOR Loan (as defined in the Revolving Credit Note) in the
amount set forth in item (I)(d) below on the date set forth in item (I)(e) below with an Interest Period of: 
  
 one month 
 two months 
 three months 
  
 In connection with the foregoing and pursuant to the terms and provisions of the Loan Agreement, the undersigned hereby certifies to the Lender that the
following statements are true and correct: 
  
 (i) The
representations and warranties contained in Article VI of the Loan Agreement and in each of the other Loan Documents are true and correct on and as of the date hereof with the same force and effect as if made on and as of such date except to the
extent any such representation and warranty relates solely to an earlier date, and was true and correct on such earlier date. 
  
 (ii) No Default or Event of Default has occurred and is continuing or would result from the Revolving Credit Advance requested hereunder. 
  
 (iii) The amount of the Revolving Credit Advance requested hereunder, when
added to the aggregate outstanding principal amount of Revolving Credit Advances, will not exceed the lesser of (x) the amount of the Commitment minus all outstanding Letter of Credit Liabilities, or (y) the Borrowing Base minus all outstanding
Letter of Credit Liabilities. 
  

 1 

 (iv) All information supplied below is true, correct, and complete as of the date hereof. 
  
 I. Advance Request Information for Revolving Credit Advances

  

						
	(a)	  	Aggregate amount of Commitment	  	$	10,000,000.00
			
	(b)	  	 (1)      Outstanding principal amount of Revolving Credit Advances
	  	$	____________
			
	 	  	 (2)      Outstanding Letter of Credit Liabilities
	  	$	____________
			
	 	  	 (3)      Line (b)(1) plus Line (b)(2)
	  	$	____________
			
	 	  	 (4)      Borrowing Base
	  	$	____________
			
	(c)	  	 Net availability of credit under the aggregate Revolving Credit Commitments:
  
 ([lesser of Line (a) or Line (b)(4)], minus Line (b)(3))
	  	$	____________
			
	(d)	  	Amount of requested Revolving Credit Advance	  	$	____________
			
	(e)	  	Date of requested Revolving Credit Advance	  	 	_______, 200__

  

			
	BORROWER:
	
	RF MONOLITHICS, INC.
		
	By:	 	  

	Name:	 	 
	Title:	 	 

  

			
	 Dated as of:
	 	  

	 	 	[insert date of requested Advance]

  

 2

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