Document:

EX-10.16

 Exhibit 10.16 

EAST BOSTON SAVINGS BANK 

NON-QUALIFIED SUPPLEMENTAL 

EMPLOYEE STOCK OWNERSHIP PLAN 

October 1, 2014 

 EAST BOSTON SAVINGS BANK 

NON-QUALIFIED SUPPLEMENTAL 

EMPLOYEE STOCK OWNERSHIP PLAN 

1. Purpose 
 This
Non-Qualified Supplemental Employee Stock Ownership Plan (“Plan”) is intended to provide Participants (as defined herein) or their Beneficiaries with the economic value of the annual allocations credited to such Participant’s account
under the East Boston Savings Bank Employee Stock Ownership Plan (“ESOP”) which may not be accrued under the ESOP due to the limitations imposed by Section 415 of the Internal Revenue Code (the “Code”) and the limitation on
includible compensation imposed by Section 401(a)(17) of the Code. 
 The benefits provided under this Plan are intended to constitute
deferred compensation for “a select group of management or highly compensated employees” for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). This Plan is intended to comply with
Section 409A of the Code and the regulatory guidance and other guidance issued thereunder. 
 2. Definitions 

Where the following words and phrases appear in the Plan, they shall have the respective meaning as set forth below unless the context clearly
indicates the contrary. Except to the extent otherwise indicated herein, and to the extent inconsistent with the definitions provided below, the definitions contained in the ESOP are applicable under the Plan. 

2.1 “Annual ESOP Credit” means the amount credited to the Participant’s account in the Plan, determined as set forth in
Section 5.1 hereof. 
 2.2 “Applicable Limitations” means one or more of the following, as applicable: (i) the
maximum limitations on annual additions to a tax-qualified defined contribution plan under Section 415(c) of the Code; or (ii) the maximum limitation on the annual amount of compensation that may, under Section 401(a)(17) of the Code,
be taken into account in determining contributions to and benefits under tax-qualified plans. 
 2.3 “Bank” means East
Boston Savings Bank. 
 2.4 “Beneficiary” means the person designated by the Participant under the ESOP to receive the
Supplemental ESOP Benefit in the event of the Participant’s death. 
 2.5 “Board of Directors” means the Board of
Directors of the Bank. 
 2.6 “Change in Control” shall mean (1) a change in ownership of the Bank or the Company
under paragraph (a) below, or (2) a change in effective control of the Bank or the Company under paragraph (b) below, or (3) a change in the ownership of a substantial portion of the assets of the Bank or the Company under
paragraph (c) below: 
  

	 	(a)	 Change in the ownership of the Bank or the Company. A change in the ownership of the Bank or the Company shall occur on the date that any one person,
or more than one person acting as a group (as defined in Treasury 

	 	
Regulation Section 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50% of the total fair
market value or total voting power of the stock of such corporation; or 

  

	 	(b)	Change in the effective control of the Bank or the Company. A change in the effective control of the Bank or the Company shall occur on the date that either (i) any one person, or more than one person acting as a
group (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vi)(D)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Bank or the
Company possessing 30% or more of the total voting power of the stock of the Bank or the Company; or (ii) a majority of members of the Bank’s or the Company’s board of Directors is replaced during any 12-month period by Directors
whose appointment or election is not endorsed by a majority of the members of the corporation’s board of Directors prior to the date of the appointment or election, provided that this sub-section (ii) is inapplicable where a majority
shareholder of the Bank or the Company is another corporation; or 

  

	 	(c)	Change in the ownership of a substantial portion of the Bank’s or the Company’s assets. A change in the ownership of a substantial portion of the Bank’s or the Company’s assets shall occur on the
date that any one person, or more than one person acting as a group (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vii)(C)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets from the Bank or the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or
acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. There is no Change in
Control event under this paragraph (c) when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer; or 

 

	 	(d)	For all purposes hereunder, the definition of Change in Control shall be construed to be consistent with the requirements of Treasury Regulation Section 1.409A-3(i)(5), except to the extent modified herein.

 2.7 “Code” means the Internal Revenue Code of 1986, as amended from time to time. Reference to a specific
provision of the Code shall include such provision, any valid regulation or ruling promulgated thereunder and any comparable provision of future law that amends, supplements or supersedes such provision. 

2.8 “Committee” means the Compensation Committee of the Board of Directors of the Bank. 

2.9 “Company” means Meridian Bancorp, Inc. 

2.10 “Effective Date” means October 1, 2014 

2.11 “Employee” means an employee of the Employer on whose behalf benefits are payable under the ESOP. 

  
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 2.12 “Employer” means the Bank or the Company, as applicable, and any successors
by merger, purchase, reorganization or otherwise. If a subsidiary or affiliate of the Employer adopts the Plan, it shall be deemed the Employer with respect to its employees. 

2.13 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time. Reference to a specific
provision of ERISA shall include such provision, any valid regulation or ruling promulgated thereunder and any comparable provision of future law that amends, supplements or supersedes such provision. 

2.14 “ESOP” means the tax-qualified East Boston Savings Bank Employee Stock Ownership Plan, and any successor thereto. 

2.15 “Fair Market Value” means, with respect to a share of Stock on the Valuation Date: 

 

	 	(a)	the final reported sales price on the date in question (or if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) as reported in the principal consolidated reporting
system with respect to securities listed or admitted to trading on the principal United States securities exchange on which the shares of Stock are listed or admitted to trading, as of the close of the market in New York City and without regard to
after-hours trading activity; or 

  

	 	(b)	if the shares of Stock are not listed or admitted to trading on any such exchange, the closing bid quotation with respect to a share of Stock on such date, as of the close of the market in New York City and without
regard to after-hours trading activity, or, if no such quotation is provided, on another similar system, selected by the Committee, then in use; or 

  

	 	(c)	if (a) and (b) are not applicable, the Fair Market Value of a share of Stock as the Committee may determine in good faith and in accordance with Code Section 422 and the applicable requirements of Code
Section 409A and the regulations promulgated thereunder. 

 2.16 “Participant” means an Employee who has
been designated for participation in this Plan pursuant to Section 3.1. 
 2.17 “Phantom Shares” means the unit of
measurement of a Participant’s Account hereunder denominated in hypothetical shares of Company Stock. On any Valuation Date, one Phantom Share shall have a value equal to the Fair Market Value of one share of Company Stock on such date. 

2.18 “Plan” means East Boston Savings Bank Non-Qualified Supplemental Employee Stock Ownership Plan, as set forth herein and
as may be amended from time to time. 
 2.19 “Plan Year” means the period from January 1 to December 31. 

2.20 “Separation from Service” means the Employee’s death, Retirement or other termination of employment with the Bank
within the meaning of Code Section 409A. A Separation from Service shall not be deemed to occur due to military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six months or, if longer, so long
as the Employee’s right to reemployment is provided by law or contract. If the leave exceeds six months and the Employee’s right to reemployment is not provided by law or by contract, then the Employee shall have a Separation from Service
on the first date immediately following such six-month period. 

  
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 Whether a termination of employment has occurred is determined based on whether the facts and
circumstances indicate that the Employer and Employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the employee would perform after such date (whether as an employee
or as an independent contractor) would permanently decrease to no more than 50% of the average level of bona fide services performed over the immediately preceding 36 months (or such lesser period of time in which the Participant performed services
for the Bank). The determination of whether a Participant has had a Separation from Service shall be made by applying the presumptions set forth in the Treasury Regulations under Code Section 409A. 

2.21 “Specified Employee” means any Participant who also satisfies the definition of “key employee” as such term is
defined in Code Section 416(i) (without regard to paragraph 5 thereof). In the event a Participant is a Specified Employee, no distribution shall be made to such Participant upon Separation from Service (other than due to death or Disability)
prior to the first day of the seventh month following Separation from Service. 
 2.22 “Stock” means the common stock of
the Company, par value $.01 per share. 
 2.23 “Supplemental ESOP Account” means the bookkeeping account to which a
Participant’s Annual ESOP Credits and earnings thereon are credited. 
 2.24 “Supplemental ESOP Benefit” means the
value of the Participant’s Account as of the most recent Valuation Date. 
 2.25 “Valuation Date” means for so long as
there is a generally recognized market for the Stock each business day. If at any time there shall be no generally recognized market for the Stock, then “Valuation Date” means the last day of each Plan and such other year as determined
from time to time by the Committee. 
 3. Participation and Vesting 

3.1 Designation to Participate. Richard J. Gavegnano, President and Chief Executive Officer of the Company and Bank, shall be a
Participant in the Plan effective as of the Effective Date. Upon the designation of the Committee, and subject to the approval of the Board of Directors, other Employees may become Participants at any time during the Plan Year. Each Employee, other
than Mr. Gavegnano, that is selected by the Committee to participate in the Plan shall be set forth on Exhibit A attached hereto and made a part hereof. 

3.2 Continuation of Participation. An Employee who has become a Participant shall remain a Participant so long as benefits are payable
to or with respect to such Participant under the Plan. 
 3.3 Vesting. Each Participant’s Supplemental ESOP Benefit shall be
100% vested at all times. 
 4. Account  

4.1 Supplemental ESOP Account. The Bank shall maintain for each Participant a Supplemental ESOP Account to which it shall credit all
amounts credited thereto in accordance with Section 5.1 and 5.2 of the Plan. 
 4.2 Unsecured Creditor. The Participant’s
interest in his or her Supplemental ESOP Account is limited to the right to receive payments under the Plan, and the Participant’s position is that of a general unsecured creditor of the Bank. 

  
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 5. Contributions and Investment 

5.1 Annual ESOP Credit. On the date on which shares of Stock are allocated to the Participant’s ESOP account for the relevant ESOP
Plan Year, the Bank shall credit the Participant’s Supplemental ESOP Account with the Annual ESOP Credit. The Annual ESOP Credit is equal to the sum of the difference (denominated in Phantom Shares) between “(a)” and “(b),”
where: 
  

	 	(a)	is the number of shares of Stock that would have been allocated to the ESOP account of the Participant for a Plan Year under the ESOP but for the Applicable Limitations; and 

 

	 	(b)	is the number of shares of Stock actually allocated to the account of the Participant for the relevant ESOP Plan Year. 

5.2 Investment of Annual ESOP Credits. All Annual ESOP Credits allocated to the Participant’s Supplemental ESOP Account shall be
deemed invested in Phantom Shares and all dividends deemed paid on Phantom Shares credited to each Participant’s Supplemental ESOP Account shall be immediately deemed to be reinvested in Phantom Shares. The Employer may establish a rabbi trust
and set aside assets to informally fund the benefit obligations under this Plan, but the Bank is not obligated to do so. 
 5.3 Statement
of Deferred Compensation Account. The Bank shall provide each Participant, within ninety (90) days following the end of the Plan Year, a statement setting forth the balance of the Participant’s Supplemental ESOP Account as of the last
day of the previous Plan Year. 
 6. Distribution of the Supplemental ESOP Benefit 

6.1 Time of Payment of the Supplemental ESOP Benefit. The Supplemental ESOP Benefit shall be payable to the Participant (or the
Participant’s Beneficiary) in a lump sum within thirty (30) days of the first to occur of: 
  

	 	(a)	the Participant’s “Separation from Service,” other than due to death or Disability; 

  

	 	(b)	the Participant’s Disability; 

  

	 	(c)	the Participant’s death; or 

  

	 	(d)	a Change in Control of the Bank or the Company. 

 Notwithstanding anything herein to the
contrary, if the Participant is a Specified Employee and the distribution under this Section is due to the Participants Separation from Service (other than due to death or Disability), then solely to the extent necessary to avoid penalties under
Code Section 409A, the distribution (or any part thereof) shall be delayed and paid on the first day of the seventh month following Separation from Service. 

6.2 Form of Supplemental ESOP Payments. A Participant’s Supplemental ESOP Benefit under Section 4.1 of this Plan shall be a
benefit paid in cash equal to the Fair Market Value of the Participant’s Supplemental ESOP Account as of the most recent Valuation Date. 

  
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 7. Administration of the Plan 

7.1 Committee; Duties. This Plan shall be administered by the Committee. The Committee shall have the authority to make, amend,
interpret and enforce all appropriate rules and regulations for the administration of the Plan and decide or resolve any and all questions, including interpretations of this Plan, that may arise in connection with the administration of the Plan;
provided, however, that any such interpretations, rules and/or regulations shall be consistent with the requirements of Code Section 409A and any Treasury Regulations or other guidance issued thereunder. 

7.2 Agents. The Committee may, from time to time, employ other agents and delegate to them such administrative duties as it sees fit,
and may from time to time consult with counsel who may be counsel to the Employer. 
 7.3 Binding Effect of Decisions. The decision
or action of the Committee regarding of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Plan. 
 7.4 Indemnity of Committee. The Employer shall indemnify and hold harmless the
members of the Committee against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to this Plan, except in the case of gross negligence or willful misconduct. 

8. Claims Procedure 

8.1 Claim. Any person claiming a benefit, requesting an interpretation or ruling under the Plan, or requesting information under the
Plan shall present the request in writing to the Committee which shall respond in writing within thirty (30) days. 
 8.2 Denial of
Claim. If the claim or request is denied, the written notice of denial shall state: 
  

	 	(a)	the reason for denial, with specific reference to the Plan provisions on which the denial is based. 

  

	 	(b)	a description of any additional material or information required and an explanation of why it is necessary. 

  

	 	(c)	an explanation of the Plan‘s claim review procedure. 

 8.3 Review of Claim. Any
person whose claim or request is denied or who has not received a response within thirty (30) days may request review by notice given in writing to the Committee. The claim or request shall be reviewed by the Committee who may, but shall not be
required to, grant the claimant a hearing. On review, the claimant may have representation, examine pertinent documents, and submit issues and comments in writing. 

8.4 Final Decision. The decision on review shall normally be made within sixty (60) days. If an extension of time is required for
a hearing or other special circumstances, the claimant shall be notified and the time limit shall be one hundred twenty (120) days. The decision shall be in writing and shall state the reason and the relevant plan provisions. All decisions on
review shall be final and bind all parties concerned. 
 8.5 Arbitration. If a claimant continues to dispute the benefit denial based
upon completed performance of this Plan or the meaning and effect of the terms and conditions thereof, then the claimant may submit the dispute to mediation, administered by the American Arbitration Association (“AAA”) (or a mediator
selected by the parties) in accordance with the AAA’s Commercial Mediation Rules. If mediation is not successful 

  
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in resolving the dispute, it shall be settled by arbitration administered by the AAA under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered
in any court having jurisdiction thereof. 
 9. Amendment or Termination 

9.1 Amendment of Plan. The Board shall have the right to amend or terminate the Plan, in whole or in part, provided, however, that no
amendment shall reduce any Participant’s vested and accrued benefits. 
 9.2 Plan Termination. Subject to the requirements of
Code Section 409A and the Treasury Regulations, in the event of the termination of this Plan, the Plan shall cease to operate and all benefits shall be immediately payable to the Participant by the Bank as if the Participant had terminated
employment as of the effective date of the complete termination. Such complete termination of the Plan shall occur only under the following circumstances and conditions: 
  

	 	(a)	The Board may terminate the Plan within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided
that the amounts deferred under the Plan are included in the Participant’s gross income in the latest of (i) the calendar year in which the Plan terminates; (ii) the calendar year in which the amount is no longer subject to a
substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable. 

  

	 	(b)	The Board may terminate the Plan by irrevocable action within the thirty (30) days preceding, or twelve (12) months following, a Change in Control, provided that the Plan shall only be treated as terminated if
all substantially similar arrangements sponsored by the Employer are terminated so that the Participant and all participants under substantially similar arrangements are required to receive all amounts of compensation deferred under the terminated
arrangements within twelve (12) months of the date of the termination of the arrangements. 

  

	 	(c)	The Board may terminate the Plan provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Bank or Company; (ii) all arrangements sponsored by the
Bank that would be aggregated with this Plan under Treasury Regulations Section 1.409A-1(c) if the Participant covered by this Plan was also covered by any of those other arrangements are also terminated; (iii) no payments other than
payments that would be payable under the terms of the arrangement if the termination had not occurred are made within twelve (12) months of the termination of the arrangement; (iv) all payments are made within twenty-four (24) months
of the termination of the arrangements; and (v) the Bank does not adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations Section 1.409A-1(c) if the Participant participated in both
arrangements, at any time within three years following the date of termination of the arrangement. 

  
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 10. Miscellaneous 

10.1 Unfunded Plan. This Plan is intended to be an unfunded plan maintained primarily to provide deferred compensation benefits for a
select group of management or highly compensated employees. However, the Employer may elect to fund for the benefits of Participants as described in Section 10.3 below. This Plan will continue to be unfunded for tax purposes and Title I of
ERISA even if benefits are funded by the Employer under Section 10.3 below. 
 10.2 Unsecured General Creditor. The Participant
and his Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interest or claims in any property or assets of the Employer, nor shall they be beneficiaries of, or have any rights, claims or interests in any life
insurance policies, annuity contracts or the proceeds therefrom owned or which may be acquired by the Employer. Such policies or other assets of the Employer shall not be held under any trust for the benefit of Participants, their Beneficiaries,
heirs, successors or assigns, or held in any way as collateral security for the fulfilling of the obligations of Employer under this Plan. Any and all of the Employer‘s assets shall be, and remain, the general, unpledged, unrestricted assets of
the Employer. The Employer‘s obligation under the Plan shall be that of an unfunded and unsecured promise of the Employer to pay money in the future. 

10.3 Trust Fund. The Employer shall be responsible for the payment of all benefits provided under the Plan. At its discretion, the
Employer may establish one (1) or more rabbi trusts, with such trustees as the Board may approve, for the purpose of providing for payment of such benefits. Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the
claims of the Employer‘s creditors. To the extent any benefits provided under the Plan are actually paid from any such rabbi trust, the Employer shall have no further obligation with respect thereto, but to the extent not so paid, such benefits
shall remain the obligation of, and shall be paid by, the Employer. 
 10.4 Nonassignability. Neither the Participant nor any other
person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are,
and all rights to which are, expressly declared to be unassignable and nontransferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant‘s or any other person‘s bankruptcy or insolvency. 

10.5 Expenses of Plan. All expenses of the Plan will be paid by the Employer. 

10.6 Payment of Employment and Code Section 409A Taxes. Any distribution under this Plan shall be reduced by the amount of any
taxes required to be withheld from such distribution. This Plan shall permit the acceleration of the time or schedule of a payment to pay employment related taxes as permitted under Treasury regulation Section 1.409A-3(j) or to pay any taxes
that may become due at any time that the arrangement fails to meet the requirements of Code Section 409A and the regulations and other guidance promulgated thereunder. In the latter case, such payments shall not exceed the amount required to be
included in income as the result of the failure to comply with the requirements of Code Section 409A. 
 10.7 Acceleration of
Payments. Except as specifically permitted herein or in other sections of this Plan, no acceleration of the time or schedule of any payment may be made hereunder. Notwithstanding the foregoing, payments may be accelerated hereunder by the Bank,
in accordance with the provisions of Treasury Regulation Section 1.409A-3(j)(4) and any subsequent guidance issued by the United States Treasury Department. Accordingly, payments may be accelerated, in accordance with requirements and
conditions of the Treasury Regulations (or subsequent guidance) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with ethics agreements with the Federal government; (iii) in
compliance with ethics laws or conflicts of interest laws; (iv) in limited cash-outs (but not in excess of the limit under Code Section 402(g)(1)(B)); (v) in the case of certain distributions to avoid a non-allocation year under Code
Section 409(p); (vi) 

  
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to apply certain offsets in satisfaction of a debt of the Participant to the Bank; (vii) in satisfaction of certain bona fide disputes between the Participant and the Bank; or
(viii) for any other purpose set forth in the Treasury Regulations and subsequent guidance. 
 10.8 Participation by Subsidiaries
and Affiliates. If any employer is now or hereafter becomes a subsidiary or affiliated company of the Employer and its employees participate in the ESOP, the Board of Directors may authorize such subsidiary or affiliated company to participate
in this Plan upon appropriate action by such employer necessary to adopt the Plan. 
 10.9 Delivery of Elections to Committee. All
elections, designation, requests, notices, instructions and other communications required or permitted under the Plan from the Employer, a Participant, Beneficiary or other person to the Committee shall be on the appropriate form, shall be mailed by
first-class mail or delivered to such address as shall be specified by such Committee, and shall be deemed to have been given or delivered only upon actual receipt thereof by such Committee at such location. 

10.10 Delivery of Notice to Participants. All notices, statements, reports and other communications required or permitted under the
Plan from the Employer or the Committee to any Participant, Beneficiary or other person, shall be deemed to have been duly given when delivered to, or when mailed by first-class mail, postage prepaid, and addressed to such person at this address
last appearing on the records of the Committee. 
 10.11 Successors. The provisions of this Plan shall bind and inure to the benefit
of the Employer and its successors and assigns. The term “successors” as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all
of the business and assets of the Employer, and successors of any such corporation or other business entity. 
 11. Construction of
the Plan 
 11.1 Construction of the Plan. The provisions of this Plan shall be construed, regulated, and administered
according to the laws of the State of Massachusetts, to the extent not superseded by Federal law. 
 11.2 Counterparts. This Plan has
been established by the Employer in accordance with the resolutions adopted by the Board of Directors and may be executed in any number of counterparts, each of which shall be deemed to be an original. All the counterparts shall constitute one
instrument, which may be sufficiently evidenced by any one counterpart. 
 11.3 Validity. In case any provision of this Plan shall be
held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein. 

[signature page follows] 

  
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 IN WITNESS WHEREOF, the Bank, acting through its authorized officer, has adopted this
Plan. 
  

					
		 	EAST BOSTON SAVINGS BANK
			
	September 29, 2014	 	By:	 	 /s/ Domenic A. Gambardella

	Date	 		 	Chairperson, Compensation Committee

  
 10 

 EAST BOSTON SAVINGS BANK 

Exhibit A 
  

			
	Participant	  	Date of Participation

  
 A-1 

 EAST BOSTON SAVINGS BANK 

NONQUALIFIED SUPPLEMENTAL 

EMPLOYEE STOCK OWNERSHIP PLAN 

BENEFICIARY DESIGNATION FORM 

Name:                         
                                         
                                         
                                         
                                         
                                         
               
 I hereby designate the following Beneficiary(ies) to receive any
guaranteed payments or death benefits under the Plan following my death: 
 PRIMARY BENEFICIARY: 

 

					
	Name:                                     
                                         
                               	 		 	% of Benefit:
                                    
			
	Name:                                     
                                         
                               	 		 	% of Benefit:
                                    
			
	Name:                                     
                                         
                               	 		 	% of Benefit:
                                    
	
	SECONDARY BENEFICIARY (if all Primary Beneficiaries pre-decease me):
			
	Name:                                     
                                         
                               	 		 	% of Benefit:
                                    
			
	Name:                                     
                                         
                               	 		 	% of Benefit:
                                    
			
	Name:                                     
                                         
                               	 		 	% of Benefit:
                                    

 This Beneficiary Designation hereby revokes any prior Beneficiary Designation which may have been in effect and this
Beneficiary Designation is revocable. 
  

							
	                                      
                                         
                       	 		 	                                   
                                         
                                         
 
	Date	 		 	Participant
			
		 		 	RECEIPT ACKNOWLEDGED:
				
	                                      
                                         
                       	 		 	By:	 	  

	Date	 		 		 	

  
 A-2EX 09.30.2014 10.1

AMENDMENT NO. 2 TO CREDIT AGREEMENT
This AMENDMENT NO. 2 TO CREDIT AGREEMENT ("Amendment") is dated as of November 4, 2014, and is entered into by and among PERFORMANT BUSINESS SERVICES, INC. (formerly known as DCS Business Services, Inc.), a Nevada corporation ("Borrower"), the Lenders (as defined in the Credit Agreement as hereafter defined) party hereto, and MADISON CAPITAL FUNDING LLC, as Agent for all Lenders.
W I T N E S S E T H:
WHEREAS, Borrower, Agent and the Lenders from time to time party thereto are parties to that certain Credit Agreement dated as of March 19, 2012 (as the same has been or may be from time to time amended, restated, supplemented or otherwise modified, the "Credit Agreement"; capitalized terms not otherwise defined herein have the definitions provided therefor in the Credit Agreement); and
WHEREAS, Borrower, Agent and Required Lenders have agreed to amend the Credit Agreement in certain respects;
NOW THEREFORE, in consideration of the mutual conditions and agreements set forth in the Credit Agreement and this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1.Amendments.  Subject to the satisfaction of the conditions set forth in Section 2 below, and in reliance on the representations and warranties set forth in Section 3 below, the Credit Agreement is hereby amended as follows:
(a)    Section 1.1 of the Credit Agreement is amended by amending the definition of the term "Applicable Margin" set forth therein as follows:  
Applicable Margin means the applicable rate per annum corresponding to the applicable Total Debt to EBITDA Ratio, all as set forth in the following table:
	
					
	Total Debt to EBITDA Ratio
	Revolving Loans 
and Term A Loan
	Term B Loan (including the incremental Term B Loan funded prior to the Second Amendment Closing Date)

	Base Rate
	LIBOR Rate
	Base Rate
	LIBOR Rate

	> 4.00:1.00
	4.75%
	5.75%
	5.25%
	6.25%

	≤ 4.00:1.00
	4.25%
	5.25%
	4.75%
	5.75%

The Applicable Margin shall be adjusted quarterly, to the extent applicable, as of the first day of the month following the date on which financial statements are required to be delivered pursuant to Section 6.1.2 (including with respect to the last Fiscal Quarter of each Fiscal Year) after the end of each related Fiscal Quarter based on the Total Debt to EBITDA Ratio as of the last day of such Fiscal Quarter.  Notwithstanding the foregoing (a) from the Second Amendment Closing Date until the first day of the month following the date on which financial statements for the Fiscal Quarter ending December 31, 2014 are required to be delivered pursuant to Section 6.1.2, the Applicable Margin shall be the rates corresponding to the Total Debt to EBITDA Ratio of ≤ 4.00:1.00 in the foregoing table, (b) if Borrower fails to deliver the financial statements required by Section 6.1.2, and the related Compliance Certificate required by Section 6.1.3, by the respective date required thereunder after the end of any related Fiscal Quarter, the Applicable Margin shall be the rates corresponding to the Total Debt to EBITDA Ratio of > 4.00:1.00 in the foregoing table until such financial statements and Compliance Certificate are delivered, and (c) no reduction to the Applicable Margin shall become effective at any time when an Event of Default has occurred and is continuing.
If, as a result of any restatement of or other adjustment to the financial statements of the Loan Parties or for any other reason, Agent determines that (a) the Total Debt to EBITDA Ratio as calculated by Borrower as of any applicable date was inaccurate and (b) a proper calculation of the Total Debt to EBITDA Ratio would have resulted in different pricing for any period, then (i) if the proper calculation of the Total Debt to EBITDA Ratio would have resulted in higher pricing for such period, Borrower shall automatically and retroactively be obligated to pay to Agent, for the benefit of the applicable Lenders, promptly on demand by Agent, an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period; and (ii) if the proper calculation of the Total Debt to EBITDA Ratio would have resulted in lower pricing for such period, neither Agent nor any Lender shall have any obligation to repay any interest or fees to Borrower; provided that if, as a result of any restatement or other event a proper calculation of the Total Debt to EBITDA Ratio would have resulted in higher pricing for one or more periods and lower pricing for one or more other periods (due to the shifting of income or expenses from one period to another period or any similar reason), then the amount payable by Borrower pursuant to clause (i) above shall be based upon the excess, if any, of the amount of interest and fees that should have been paid for all applicable periods over the amount of interest and fees paid for all such periods.
With respect to the Incremental Term Loans funded after the Second Amendment Closing Date, the Applicable Margin shall be a percent per annum set forth in the applicable Incremental Amendment.
(b)    Section 1.1 of the Credit Agreement is amended by amending the definition of the term "EBITDA" set forth therein by (i)  deleting the "and" following clause (xv) thereof, (ii) replacing the "." at the end of clause (xvi) thereof with ", and", and (iii) inserting new clauses (xvii), and (xviii) and (xix) immediately after clause (xvi) thereof as follows:
(xvii) losses or like charges associated with the settlement of provider appeals in respect of audits performed by the Loan Parties for the Centers for Medicare and Medicaid Services prior to September 30, 2014, in an aggregate amount in respect of all such losses or increases in reserves occurring after September 30, 2014 not to exceed $3,000,000 during the term of this Agreement, (xviii) documented severance expenses and service provider contract breakage fees incurred following the Second Amendment Closing Date approved by Agent in its discretion in an aggregate amount not to exceed $3,000,000 during the term of this Agreement, and (xix) costs, fees or expenses incurred in connection with the Amendment No. 2 to Credit Agreement dated as of the Second Amendment Closing Date.
(c)    Section 1.1 of the Credit Agreement is amended by adding a new defined term "Adjusted Cash" in its appropriate alphabetical order as follows:
Adjusted Cash means, as of any date of determination, the sum of (i) cash and Cash Equivalents of Borrower and its Subsidiaries that are Guarantors maintained in bank accounts that are subject to a tri-party control agreement satisfactory to Agent in favor of Agent, plus (ii) the lesser of (x) all voluntary prepayments of the Term Loans made following the Second Amendment Closing Date that are elected by the Borrower to be applied to installments of the Term Loans in the inverse order of maturity and (y) $10,000,000, plus (iii) 80% of the net Accounts of Borrower and the other Loan Parties in excess of $25,000,000 as reflected on the consolidated financial statements of the Borrower and the other Loan Parties as of the last day of the month for which financial statements were most recently delivered pursuant to Section 6.1, minus (iv) the Revolving Outstandings as of such date of determination, minus (v) the aggregate amount of all liabilities (including liabilities reflected as reserves on the consolidated financial statements of the Loan Parties) of Borrower and the Loan Parties as of such date of determination in respect of provider appeals in respect of audits performed by the Loan Parties at any time for the Centers for Medicare and Medicaid Services.
(d)    Section 1.1 of the Credit Agreement is amended by inserting a new defined term "December 2016 Compliance Date" in its appropriate alphabetical order as follows:
December 2016 Compliance Date means the date (if any) upon which the Borrower delivers to Agent financial statements in respect of the Fiscal Quarter ending December 31, 2016 pursuant to Section 6.1.2 together with a Compliance Certificate in respect of such period pursuant to Section 6.1.3 that demonstrates compliance with each of the financial ratios and restrictions set forth in Sections 7.14.2, 7.14.4, 7.14.5 and 7.14.6 for such period and certifies that no other Default or Event of Default has occurred and is continuing as of the date of delivery of such Compliance Certificate.  
(e)    Section 1.1 of the Credit Agreement is amended by adding a new defined term "Interest Coverage Ratio" in its appropriate alphabetical order as follows:
Interest Coverage Ratio means, for any Computation Period, the ratio of (a) EBITDA for such Computation Period to (b) Interest Expense paid in cash by Borrower and the other Loan Parties (but excluding prepayment and other fees and expenses with regard to the consummation of this Agreement, and Legal Costs paid during such Computation Period to the extent such amounts are classified as interest expense for GAAP purposes).  
(f)    Section 1.1 of the Credit Agreement is amended by adding a new defined term "Required Adjusted Cash Amount" in its appropriate alphabetical order as follows:
Required Adjusted Cash Amount means, (a) at all times from the Second Amendment Closing Date until December 31, 2015, $35,000,000, and (b) at all times from and after January 1, 2016 through the December 2016 Compliance Date, $30,000,000.
(g)    Section 1.1 of the Credit Agreement is amended by adding a new defined term "Second Amendment Closing Date" in its appropriate alphabetical order as follows:
Second Amendment Closing Date means November 4, 2014.
(h)    Section 2.10.2(a)(ii) of the Credit Agreement is amended and restated in its entirety as follows:
(ii)    within 150 days after the end of each Fiscal Year, in an amount equal to (A) the ECF Percentage times Excess Cash Flow for such Fiscal Year minus (B) voluntary prepayments of the Term Loans pursuant to Section 2.10.1 during such period; provided, that the first $10,000,000 of voluntary prepayments of the Term Loans made from and after the Second Amendment Closing Date shall not, to the extent elected by the Borrower to be applied to installments of the Term Loans in the inverse order of maturity, be subtracted pursuant to this clause (b) for any applicable Fiscal Year; and
(i)    Section 4.2 of the Credit Agreement is amended and restated in its entirety as follows:
4.2.    All Credit Extensions.
If, either before or immediately after giving effect to (i) any borrowing, or (ii) the issuance of any Letter of Credit, (a) the representations and warranties of Borrower or any other Loan Party set forth in this Agreement and the other Loan Documents are not true and correct in all material respects with the same effect as if then made (except to the extent stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), (b) any Event of Default or Default shall have then occurred and be continuing, or (c) the Total Debt to EBITDA Ratio (with Total Debt calculated as of the date of such requested Loan or Letter of Credit after giving effect to the making of such Loan or issuance of such Letter of Credit and EBITDA calculated for the most recently ended 12 month period for which Agent has received financial statements pursuant to Section 6.1.2) exceeds the lesser of (x) the maximum Total Debt to EBITDA Ratio permitted under Section 7.14.2 for the most recently ended Computation Period, and (y) 3.25:1.0, then the obligation of each Lender to make a Loan and of Issuing Lender to issue a Letter of Credit shall be suspended (but only if Agent has, or Required Lenders have, directed Lenders or Issuing Lender, as applicable, not to make such requested Loan or issue such requested Letter of Credit).  Each request by Borrower for the making of a Loan or the issuance of a Letter of Credit shall be deemed to constitute a representation and warranty by Borrower that the conditions precedent set forth in Section 4.2 will be satisfied or waived at the time of the making of such Loan or the issuance of such Letter of Credit and giving effect thereto.
(j)    Section 6.1.3 of the Credit Agreement is amended and restated in its entirety as follows:
		
	6.1.3
	Compliance Certificate.

(a) Contemporaneously with the furnishing of a copy of each annual audit report pursuant to Section 6.1.1 and each set of financial statements pursuant to Section 6.1.2 that correspond to the last month of a Fiscal Quarter (provided that Compliance Certificates shall also be required to be delivered contemporaneously with each set of financial statements pursuant to Section 6.1.2 for months that do not correspond to the last month of a Fiscal Quarter with respect to the financial statements for all months ending from November 30, 2014 through and including December 31, 2016), including the fourth Fiscal Quarter of each Fiscal Year, (and as required by Annex III pursuant to Section 7.11) a duly completed Compliance Certificate, with appropriate insertions, dated the date of such annual report or such quarterly (or monthly) statements, and signed by an Authorized Officer of Borrower, containing (i) a computation of each of the financial ratios and restrictions set forth in Section 7.14 (provided, that with respect to Compliance Certificates delivered pursuant to the proviso set forth in the parenthetical above with respect to months that do not correspond to the last month of a fiscal quarter, such Compliance Certificates shall only be required to contain computations of the financial ratios and restrictions set forth in Sections 7.14.5 and 7.14.6), and (ii) a statement to the effect that such officer has not become aware of any Event of Default or Default that has occurred and is continuing or, if there is any such event, describing it and the steps, if any, being taken to cure it; and (b) contemporaneously with the furnishing of each set of financial statements pursuant to Section 6.1.2 that corresponds to the last month of a Fiscal Quarter, a written statement of Borrower's management setting forth a discussion of Borrower's financial condition, changes in financial condition and results of operations.
(k)    A new Section 6.10 is added to the end of Section 6 of the Credit Agreement as follows:
6.10.    Maintenance of Minimum Cash Balance.
At all times (other than a period of not more than three consecutive Business Days) through and including the December 2016 Compliance Date, Borrower and its Subsidiaries that are Guarantors shall maintain Adjusted Cash equal to at least the then applicable Required Adjusted Cash Amount; provided, however, that the three (3) Business Day cure period set forth above may not be utilized by Borrower more than two (2) times in any Fiscal Quarter.  Borrower shall certify to Agent that it has been in compliance with this covenant at all times during the relevant period with each set of financial statements delivered by Borrower pursuant to Section 6.1.2, and shall provide certification and, to the extent requested by Agent, calculations and evidence demonstrating the same, of compliance with this covenant at such additional times that Agent may request such calculations in its discretion.
(l)    Section 7.4 of the Credit Agreement is amended by amending and restating clauses (ix), (x), (xi) and (xii) thereof in their entirety as follows:
(ix)    [reserved];
(x)    [reserved];
(xi)    [reserved];
(xii)    [reserved];
(m)    Section 7.5(a) of the Credit Agreement is amended and restated in its entirety as follows:
(a)    Not, and not permit any other Loan Party to, be a party to any merger or consolidation or liquidation, except for (i) any such merger or consolidation or liquidation of any Subsidiary into Borrower or any Wholly-Owned Domestic Subsidiary of Borrower and (ii) Permitted Acquisitions (provided, however, that no Permitted Acquisitions may be consummated prior to the December 2016 Compliance Date absent the written consent of Agent and Required Lenders), and (iii) any Consolidation Transaction.
(n)    Section 7.14.1 of the Credit Agreement is amended and restated in its entirety as follows:
7.14.1.    Fixed Charge Coverage Ratio.
Not permit the Fixed Charge Coverage Ratio as calculated on the last day of the Computation Period ending September 30, 2014, to be less than 1.20:1.0.  Not permit the Fixed Charge Coverage Ratio, as calculated day of the Computation Period ending March 31, 2017 and the last day of each Computation Period ending thereafter, to be less than 1.20:1.0.
(o)    Section 7.14.2 of the Credit Agreement is amended and restated in its entirety as follows:
7.14.2.    Total Debt to EBITDA Ratio.
Not permit the Total Debt to EBITDA Ratio as of the last day of any Computation Period to exceed the applicable ratio set forth below for such Computation Period:
	
		
	Computation 
Period Ending
	Total Debt to 
EBITDA Ratio

	September 30, 2014
	3.25:1.0

	December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015 and December 31, 2015
	5.00:1.0

	March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016
	4.75:1.0

	March 31, 2017 and each Computation Period ending thereafter

	3.25:1.0

(p)    Section 7.14.3 of the Credit Agreement is amended by inserting the following clause (d) at the end thereof:
(d)    Notwithstanding anything to the contrary set forth in this Agreement, Borrower may not utilize the equity cure right set forth in this Section 7.14.3 at any time prior to the December 2016 Compliance Date (it being understood that this Section 7.14.3 may not be utilized in order to allow Borrower to comply with the covenant set forth in Section 7.14.2 as of December 31, 2016 for purposes of determining whether the December 2016 Compliance Date has occurred).
(q)    A new Section 7.14.4 is added to the end of Section 7.14 of the Credit Agreement as follows:
7.14.4.    Interest Coverage Ratio.
Not permit the Interest Coverage Ratio for any Computation Period set forth below to be less than the applicable ratio set forth below for such Computation Period:
	
		
	Computation 
Period Ending
	Interest 
Coverage Ratio

	December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015 and December 31, 2015
	2.25:1.0

	March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016
	2.50:1.0

(r)    A new Section 7.14.5 is added to the end of Section 7.14 of the Credit Agreement as follows:
7.14.5    EBITDA.
Not Permit EBITDA for any trailing twelve month period ending on the last day of any month from and after the month ending November 30, 2014 through and including the month ending on December 31, 2016 to be less than $20,000,000.  
(s)    A new Section 7.14.6 is added to the end of Section 7.14 of the Credit Agreement as follows:
7.14.6.    Capital Expenditures.
Not permit the aggregate amount of all Capital Expenditures made by Holdings and its Subsidiaries in the Fiscal Years ending December 31, 2014, December 31, 2015 and December 31, 2016 to exceed $12,500,000.
(t)    Section 8.1.4 of the Credit Agreement is amended by inserting ", 6.10" immediately after the reference to "6.9" and prior to the reference to "and Section 7" set forth therein.
(u)    Exhibit B to the Credit Agreement is amended and restated in its entirety in the form attached as Exhibit B hereto.
2.    Conditions to Effectiveness.  The effectiveness of this Amendment is subject to satisfaction of the following conditions precedent (unless specifically waived in writing by Agent):
(a)    Agent shall have received a copy of this Amendment (including the Consent and Reaffirmation attached hereto), executed by Borrower, each Loan Party and Required Lenders;
(b)    After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing; 
(c)    Agent shall have received the Amendment Fee (as defined below) for the benefit of Lenders, and Borrower shall have paid all other fees and expenses (including fees and expenses of counsel to the extent invoiced) due and payable as of the date hereof in connection with this Amendment, the Credit Agreement and the other Loan Documents; and
(d)    Agent shall have received such documents, instruments and agreements as are reasonably required by Agent in connection with this Amendment, in form and substance reasonably satisfactory to Agent.
3.    Representations and Warranties.  To induce Agent and the Required Lenders to enter into this Amendment, Borrower represents and warrants to Agent and Lenders that:
(a)    the execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate action on the part of Borrower and each other Loan Party and that this Amendment has been duly executed and delivered by Borrower and each other Loan Party; 
(b)    this Amendment and the Borrower's obligations under the Credit Agreement as amended hereby constitute the legal, valid and binding obligation of Borrower and are enforceable against Borrower in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditor's rights generally and to general principles of equity;
(c)    the execution and delivery by Borrower and the other Loan Parties of this Amendment does not require the consent or approval of any Person, except such consents and approvals as have been obtained; 
(d)    after giving effect to this Amendment, the representations and warranties of Borrower and each other Loan Party set forth in the Credit Agreement and the other Loan Documents are true and correct in all material respects with the same effect as if made on the date hereof (except to the extent such representations and warranties are stated to relate to a specific earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date); and
(e)    no Default or Event of Default has occurred and is continuing. 
4.    Severability.  Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. 
5.    References.  Any reference to the Credit Agreement contained in any document, instrument or Credit Agreement executed in connection with the Credit Agreement shall be deemed to be a reference to the Credit Agreement as modified by this Amendment.
6.    Amendment Fee.  In consideration of the agreements set forth herein, Borrower agrees to pay to Agent, for the ratable benefit of the respective Lenders that execute, deliver and release signature pages to this Amendment to the Agent on or before 4:00 p.m. (Chicago time) on November 3, 2014 (such Lenders, the "Consenting Lenders"), an amendment fee equal to 0.25% of the sum of the Revolving Loan Commitments and outstanding principal amount of the Term Loans of the Consenting Lenders as of the date hereof, which amendment fee shall be fully earned and due and payable on the date hereof.
7.    Counterparts; Electronic Transmission.  This Amendment may be executed in one or more counterparts, each of which shall constitute an original, but all of which taken together shall be one and the same instrument.  Facsimile signatures and other electronic signatures shall also constitute originals.
8.    Release.
(a)    In consideration of the agreements of Agent and Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of Borrower and each other Loan Party (by such other Loan Party's execution and delivery of the attached Consent and Reaffirmation), on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and Lenders, and their successors and assigns, and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, each Lender and all such other Persons being hereinafter referred to collectively as the "Releasees" and individually as a "Releasee"), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set‐off, demands and liabilities whatsoever (individually, a "Claim" and collectively, "Claims") of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, Borrower or such Loan Party or any of their successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, including, without limitation, for or on account of, or in relation to, or in any way in connection with any of the Credit Agreement, or any of the other Loan Documents or transactions thereunder or related thereto.
(b)    Each of Borrower and each other Loan Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.
(c)    Each of Borrower and each other Loan Party agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth herein.
9.    Ratification.  The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions of the Credit Agreement and shall not be deemed to be a consent to the modification or waiver of any other term or condition of the Credit Agreement.  Except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement and each of the other Loan Documents are ratified and confirmed and shall continue in full force and effect.
10.    Governing Law.  THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed under seal and delivered by their respective duly authorized officers on the date first written above.
	
	
	PERFORMANT BUSINESS SERVICES, INC. 
(formerly known as DCS Business Services, Inc.) 
 
 
By:  /s/ Hakan Orvell    
Name:  Hakan Orvell 
Title:  CFO

	
	
	MADISON CAPITAL FUNDING LLC, 
as Agent and a Lender 
 
 
By:  /s/ Michael Nativi    
Name: Michael Nativi    
Title:  Director

	
	
	LMF WF PORTFOLIO I, LLC
By: MCF Capital Management LLC,  
       as collateral manager 

 
By: /s/ Justin Bentley       
Name: Justin Bentley 
Title:  Vice President

	
	
	MCF CLO I LLC
By: MCF Capital Management LLC,  
       as collateral manager
 
 
By:  /s/ Justin Bentley          
Name: Justin Bentley 
Title:  Vice President

	
	
	MCF CLO II LLC
By: MCF Capital Management LLC,  
       as collateral manager
 
 
By:  /s/ Justin Bentley       
Name: Justin Bentley 
Title:  Vice President

	
	
	Amalgamated Bank, 
as a Lender 
 
 
By:  /s/ Michael LaManes    
Name: Michael LaManes 
Title:  First Vice President

	
	
	Bank of the West, 
as a Lender 
 
 
By:  /s/ Joel Harvill    
Name: Joel Harvill 
Title:  Vice President

	
	
	Saratoga Investment Corp CLO 2013-1, Ltd., 
as a Lender 
 
 
By:  /s/ Pavel Antonov    
Name: Pavel Antonov 
Title:  Attorney In Fact

	
	
	AUDAX SENIOR DEBT (WCTPT) SPV, LLC, 
as a Lender 
 
 
By:  /s/ Michael P. McGonigle    
Name: Michael P. McGonigle 
Title:  Authorized Signatory

	
	
	AUDAX CREDIT OPPORTUNITIES OFFSHORE LTD., 
as a Lender 
 
 
By:  /s/ Michael P. McGonigle    
Name: Michael P. McGonigle 
Title:  Authorized Signatory

	
	
	CMFG LIFE INSURANCE COMPANY, 
as a Lender
Audax Management Company (NY), LLC, 
its subadviser, 
 
 
By:  /s/ Michael P. McGonigle    
Name: Michael P. McGonigle 
Title:  Authorized Signatory

	
	
	AUDAX CREDIT OPPORTUNITIES (SBA), LLC., 
as a Lender 
 
 
By:  /s/ Michael P. McGonigle    
Name: Michael P. McGonigle 
Title:  Authorized Signatory

	
	
	BancAlliance Inc. 
By: AP Commercial LLC, its attorney-in-fact, 
as a Lender 
 
 
By:  /s/ John Gray    
Name: John Gray 
Title:  Managing Director

	
	
	MC Funding, Ltd, 
By: Monroe Capital Management, LLC, 
as Collateral Manager, 
as a Lender 
 
 
By:  /s/ Seth Friedman    
Name: Seth Friedman 
Title:  Vice President

	
	
	NEWSTAR COMMERCIAL LOAN FUNDING 2012-2 LLC 
By: NewStar Financial, Inc., 
its Designated Manager 
 
 
By:  /s/ Walter J. Marullo    
Name: Walter J. Marullo 
Title:  Managing Director

	
	
	NEWSTAR COMMERCIAL LOAN FUNDING 2013-1 LLC 
By: NewStar Financial, Inc., 
its Designated Manager 
 
 
By:  /s/ Walter J. Marullo    
Name: Walter J. Marullo 
Title:  Managing Director

	
	
	NEWSTAR COMMERCIAL LOAN FUNDING 2014-1 LLC 
NewStar Financial, Inc., 
its Designated Manager 
 
 
By:  /s/ Walter J. Marullo    
Name: Walter J. Marullo 
Title:  Managing Director

CONSENT AND REAFFIRMATION
Each of Performant Financial Corporation, Performant Recovery, Inc. (formerly known as Diversified Collection Services, Inc.) and Performant Technologies, Inc. (formerly known as Vista Financial, Inc.) (collectively, the "Companies") hereby (i) acknowledges receipt of a copy of the foregoing Amendment No. 2 to Credit Agreement dated as of November 4, 2014 (the "Amendment"); (ii) consents to Borrower's execution and delivery of the Amendment and the consummation of the transactions contemplated thereby; (iii) agrees to be bound by the Amendment (including by Section 8 of the Amendment); (iv) affirms that nothing contained in the Amendment shall modify in any respect whatsoever any Loan Document to which it is a party; and (v) reaffirms that such Loan Documents shall continue to remain in full force and effect and that its guaranty of the Obligations and grant of security interests in its assets to secure such guaranty of the Obligations shall remain in effect in all respects.  Although the Companies have been informed of the matters set forth herein and has acknowledged and agreed to same, each of the Companies understands that Agent and Lenders have no obligation to inform either Company of such matters in the future or to seek acknowledgment of either Company or agreement to future amendments, waivers or consents, and nothing herein shall create such a duty.
IN WITNESS WHEREOF, the parties hereto have caused this Consent and Reaffirmation to be duly executed under seal and delivered by their respective duly authorized officers on and as of the date of the Amendment.
[Signature Page Follows]

	
	
	PERFORMANT FINANCIAL CORPORATION 
 
 
By:  /s/ Hakan Orvell    
Title:  CFO

	
	
	PERFORMANT RECOVERY, INC. 
(formerly known as Diversified Collection Services, Inc.) 
 
 
By:  /s/ Hakan Orvell    
Title:  CFO

	
	
	PERFORMANT TECHNOLOGIES, INC. (formerly known as Vista Financial, Inc.)  
 
 
By:  /s/ Hakan Orvell    
Title:  CFO

Exhibit B
Form of Compliance Certificate

Please refer to the Credit Agreement dated as of March 19, 2012 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the "Credit Agreement"), by and among the undersigned ("Borrower"), the lenders party thereto from time to time, as Lenders, and Madison Capital Funding LLC, as administrative agent ("Agent").  This certificate (this "Certificate"), together with supporting calculations attached hereto, is delivered to Agent and Lenders pursuant to the terms of the Credit Agreement.  Terms used but not otherwise defined herein are used herein as defined in the Credit Agreement.
[Enclosed herewith is a copy of the [annual audited/quarterly/monthly] report of Borrower as at ________________ (the "Computation Date"), which report fairly presents in all material respects the financial condition and results of operations [(subject to the absence of footnotes and to normal year-end adjustments)] of Borrower as of the Computation Date and has been prepared in accordance with GAAP consistently applied.]
Borrower hereby certifies and warrants that the computations set forth on the schedule attached hereto correspond to the ratios contained in the Credit Agreement and such computations are true and correct as at the [Computation Date] [date hereof, after giving pro forma effect to the Acquisition (and related Loans) pursuant to which this certificate is delivered].
Borrower further certifies that no Event of Default or Default has occurred and is continuing as of the date hereof [except as described on the Schedule attached hereto].
	
	
	PERFORMANT BUSINESS SERVICES, INC. 
(formerly known as DCS Business Services, Inc.) 
 
 
By:    
Title:   

Schedule to Compliance Certificate 
Dated as of _________________

	
					
	A.   Section 7.14.1 - Minimum Fixed Charge Coverage Ratio
	 

	1.   Consolidated Net Income
	$________
	 

	2.   Plus:   Losses from Dispositions, extraordinary items, discontinued operations, reappraisal, revaluation or write-down of assets 
   interest expense and the Agent's fee 
   income tax expense 
   depreciation 
   amortization 
   charges for impairment of goodwill and 
     other intangibles 
   management fees and reimbursable expenses 
   amortization of debt discounts and    commissions
	$________ 
$________ 
$________ 
$________ 
$________ 
 
$________ 
$________ 
 
$________
	 

	3.   Plus:   Transaction fees and expenses in    connection with this agreement 
   Non-cash expenses in connection with 
   options, deferred compensation and    stock options
	$________ 
 
 
$________
	 

	Transaction Fees in connection with Permitted Acquisitions and Investments permitted under Sections 7.11(q) and 7.11(s)
	$________
	 

	Transaction fees and expenses in connection with a successful Qualified IPO
	$________
	 

	Transaction fees and expenses in connection with an unsuccessful Qualified IPO
	$________
	 

	Costs and expenses related to Permitted Debt or equity issuances
	$________
	 

	Non-cash expenses in the form of options granted to Borrower or Holdings and other non-cash expense with respect to deferred compensation and stock options
	$________
	 

	severance expenses approved by the Agent
	$________
	 

	business interruption insurance proceeds
	$________
	 

	Non-cash adjustment to the valuation of earnout payments or other consideration relating to Investments permitted hereunder
	$________
	 

	cash restructuring charges approved by the Agent in connection with Permitted Acquisitions and Investments permitted under Sections 7.11(q) and 7.11(s)
	$________
	 

	non-cash restructuring charges from Permitted Acquisitions or Investments permitted under Sections 7.11(q) and 7.11(s)
	$________
	 

	non-cash charges (or minus non-cash gains) relating to various accounting charges
	$________
	 

	other extraordinary costs and expenses satisfactory to Agent
	$________
	 

	non-cash adjustments relating to earn-outs and other investment consideration
	$________
	 

	any Cure Amount contributed pursuant to Section 7.14.3 (solely for purpose of determining compliance with Section 7.14.1 and 7.14.2)
	$________
	 

	the result of (a) the amount collected during such period from the Department of Education for services performed and invoiced, but for which revenue has not yet been recognized in Consolidated Net Income, minus (b) revenue from the Department of Education recognized in Consolidated Net Income during such period for which cash was received in a prior period and where revenue was not previously recognized, all subject to the review and reasonable approval of Agent
	$________
	 

	CMS Settlement Addback up to $3,000,000 during term of Agreement
	$_________
	 

	Fees, costs and expenses re Amendment No. 2
	$_________
	 

	4.   Minus: Gains from Dispositions, extraordinary items, discontinued operations, reappraisal, revaluation or write-up of assets
	$________
	 

	5.   Total (EBITDA)
	$________
	 

	6.   Income taxes paid in cash (net of refunds) and tax distributions paid in cash
	$________
	 

	7.   other restricted payments made pursuant to Section 7.4 (other than restricted payments funded from an Increase Request, Additional Subordinated Debt or a Qualified IPO, and transaction expenses distributed pursuant to Section 7.4(iv))
	$________
	 

	8.   Unfinanced Capital Expenditures paid in cash
	$________
	 

	9.   Sum of (6), (7) and (8)
	$________
	 

	10.   Remainder of (5) minus (9)
	$________
	 

	11.   Interest Expense paid in cash
	$________
	 

	12.   Required payments of principal of Debt (including Term Loans but excluding Revolving Loans)
	$________
	 

	13.   Scheduled installments for the purchase of licenses of software paid in cash
	$________
	 

	14.   Sum of (11), (12) and (13)
	$________
	 

	15.   Ratio of (10) to (14)
	___:1.00
	 

	B.   Section 7.14.2 - Maximum Total Debt to [Adjusted] EBITDA Ratio
	 

	1.   Total Debt
	$________
	 

	2.   [Adjusted] EBITDA 
(from Item A(5) above[, plus Pro Forma EBITDA totaling $______ in the aggregate for all applicable Permitted Acquisitions in such period (comprising of Pro Forma Adjusted EBITDA in the following individual amounts with respect to the following individual Permitted Acquisitions (x) _______, $________, (y) _______, $________ and (z) _______, $________)])
	$________
	 

	3.   Ratio of (1) to (2)
	____ to 1
	 

	4.   Maximum allowed
	____ to 1
	 

	C.   Section 7.14.4 – Minimum Interest Coverage Ratio
	 

	1.   EBITDA (from Item [__] above)
	$________
	 

	2.   Interest Expense paid in cash
	$________
	 

	3.   Ratio of (1) to (2)
	____ to 1
	 

	4.   Minimum required
	____ to 1
	 

	D.   Section 7.15.5 – Minimum EBITDA.
	 
	 

	1.   EBITDA (from Item [__] above)
	$________

	2.   Minimum required
	$20,000,000

	E.   Section 7.14.6 - Capital Expenditures
	 
	 

	1.   Capital Expenditures for the Fiscal Year
	$________
	 
	 

	2.   Maximum Permitted Capital Expenditures
	$12,500,000

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