Document:

Amended and Restated Loan and Security Agreement

 EXHIBIT 10.74 
  
 AMENDED AND RESTATED 
 LOAN AND SECURITY AGREEMENT 
  
 AMONG 
  
 JPS INDUSTRIES, INC., 

JPS ELASTOMERICS CORP. and 
 JPS
CONVERTER AND INDUSTRIAL CORP. 
  
 “BORROWERS”

  
 AND 
  
 WACHOVIA BANK, NATIONAL ASSOCIATION 
  
 “BANK” 
  
 Dated April 5, 2004 

 TABLE OF CONTENTS 
  

							
	 	 	 	 	Page

	1.	 	    Definitions.	 	1
	2.	 	    The Credit Facilities.	 	12
	 	 	2.1.	 	Revolver Commitment.	 	12
	 	 	2.2.	 	Revolver Note.	 	12
	 	 	2.3.	 	Collections Account.	 	12
	 	 	2.4.	 	Manner of Borrowing and Funding Revolver Loans	 	13
	 	 	2.5.	 	Repayment of Revolver Loans.	 	13
	 	 	2.6.	 	Payment of Other Indebtedness	 	14
	 	 	2.7.	 	Additional Payment Provisions	 	14
	 	 	2.8.	 	Default Rate	 	14
	 	 	2.9.	 	Calculation of Interest and Fees.	 	14
	 	 	2.10.	 	Letters of Credit.	 	14
	 	 	2.11.	 	Interest and Fees.	 	15
	 	 	2.12.	 	Statement of Account.	 	15
	 	 	2.13.	 	Termination.	 	15
	 	 	2.14.	 	All Loans to Constitute One Obligation.	 	16
	 	 	2.15.	 	Termination.	 	16
	 	 	2.16.	 	Nature and Extent of Each Borrower’s Liability.	 	16
	3.	 	    Conditions Precedent to Extensions of Credit	 	17
	 	 	3.1.	 	Conditions Precedent to Initial Loans.	 	17
	 	 	3.2.	 	Conditions Precedent to Each Loan or Letter of Credit.	 	18
	4.	 	    Representations and Warranties.	 	19
	 	 	4.1.	 	Valid Existence and Power.	 	19
	 	 	4.2.	 	Authority.	 	19
	 	 	4.3.	 	Financial Condition.	 	19
	 	 	4.4.	 	Litigation.	 	19
	 	 	4.5.	 	Agreements, Etc.	 	19
	 	 	4.6.	 	Authorizations.	 	20
	 	 	4.7.	 	Title.	 	20
	 	 	4.8.	 	Collateral.	 	20
	 	 	4.9.	 	Jurisdiction of Organization; Location.	 	20
	 	 	4.10.	 	Taxes.	 	20
	 	 	4.11.	 	Labor Law Matters.	 	20
	 	 	4.12.	 	Accounts.	 	20
	 	 	4.13.	 	Judgment Liens.	 	21
	 	 	4.14.	 	Subsidiaries.	 	21
	 	 	4.15.	 	Environmental.	 	21
	 	 	4.16.	 	ERISA.	 	21
	 	 	4.17.	 	Investment Company Act.	 	21
	 	 	4.18.	 	Names.	 	21
	 	 	4.19.	 	Insider.	 	21
	 	 	4.20.	 	Compliance with Covenants; No Default.	 	21
	 	 	4.21.	 	Full Disclosure.	 	21
	 	 	4.22.	 	Reserved.	 	22
	 	 	4.23.	 	Corporate Structure.	 	22
	5.	 	    Affirmative Covenants of Borrower.	 	22
	 	 	5.1.	 	Use of Revolver Loan Proceeds.	 	22
	 	 	5.2.	 	Maintenance of Business and Properties.	 	22
	 	 	5.3.	 	Insurance.	 	22

							
	 	 	5.4.	 	Notice of Default.	 	22
	 	 	5.5.	 	Inspections; Field Examinations; Appraisals.	 	23
	 	 	5.6.	 	Financial Information.	 	23
	 	 	5.7.	 	Maintenance of Existence and Rights.	 	24
	 	 	5.8.	 	Payment of Taxes, Etc.	 	24
	 	 	5.9.	 	Subordination.	 	25
	 	 	5.10.	 	Compliance; Hazardous Materials.	 	25
	 	 	5.11.	 	Compliance with Assignment Laws.	 	25
	 	 	5.12.	 	Further Assurances.	 	25
	 	 	5.13.	 	Covenants Regarding Collateral.	 	25
	6.	 	    Negative Covenants of Borrowers.	 	26
	 	 	6.1.	 	Debt.	 	26
	 	 	6.2.	 	Liens.	 	26
	 	 	6.3.	 	Restricted Distributions and Restricted Payments.	 	26
	 	 	6.4.	 	Loans and Other Investments.	 	26
	 	 	6.5.	 	Change in Business.	 	26
	 	 	6.6.	 	Accounts.	 	26
	 	 	6.7.	 	Transactions with Affiliates.	 	26
	 	 	6.8.	 	No Change in Offices; Removal of Collateral.	 	26
	 	 	6.9.	 	No Sale, Leaseback.	 	26
	 	 	6.10.	 	Margin Stock.	 	27
	 	 	6.11.	 	Collateral.	 	27
	 	 	6.12.	 	Subsidiaries.	 	27
	 	 	6.13.	 	Liquidation, Mergers, Consolidations and Dispositions of Assets; Change of Name.	 	27
	 	 	6.14.	 	Change of Fiscal Year or Accounting Methods.	 	27
	7.	 	    Other Covenants of Borrowers.	 	27
	 	 	7.1.	 	Minimum EBITDA.	 	27
	 	 	7.2.	 	Deposit Relationship.	 	27
	 	 	7.3.	 	Fixed Charge Coverage Ratio.	 	27
	 	 	7.4.	 	Capital Expenditures.	 	27
	 	 	7.5.	 	Leases.	 	27
	8.	 	    Default.	 	28
	 	 	8.1.	 	Events of Default.	 	28
	 	 	8.2.	 	Remedies.	 	29
	 	 	8.3.	 	Receiver.	 	29
	 	 	8.4.	 	Deposits; Insurance.	 	29
	9.	 	    Security Agreement.	 	29
	 	 	9.1.	 	Security Interest.	 	29
	 	 	9.2.	 	Financing Statements; Power of Attorney.	 	30
	 	 	9.3.	 	Entry.	 	30
	 	 	9.4.	 	Other Rights.	 	31
	 	 	9.5.	 	Accounts.	 	31
	 	 	9.6.	 	Waiver of Marshaling.	 	31
	 	 	9.7.	 	Control.	 	31
	 	 	9.8.	 	Negative Pledge.	 	31
	10.	 	    Miscellaneous.	 	31
	 	 	10.1.	 	No Waiver, Remedies Cumulative.	 	31
	 	 	10.2.	 	Survival of Representations.	 	31
	 	 	10.3.	 	Indemnity By Borrower; Expenses.	 	31
	 	 	10.4.	 	Notices.	 	32
	 	 	10.5.	 	Governing Law.	 	32
	 	 	10.6.	 	Successors and Assigns.	 	32
	 	 	10.7.	 	Counterparts.	 	33
	 	 	10.8.	 	No Usury.	 	33
	 	 	10.9.	 	Powers.	 	33
	 	 	10.10.	 	Approvals; Amendments.	 	33
	 	 	10.11.	 	Participations and Assignments.	 	33
	 	 	10.12.	 	Multiple Borrowers; Borrowing Agent.	 	33

  

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	 	 	10.13.	 	Waiver of Certain Defenses.	 	33
	 	 	10.14.	 	Integration.	 	34
	 	 	10.15.	 	LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES.	 	34
	 	 	10.16.	 	BINDING ARBITRATION; PRESERVATION OF REMEDIES.	 	34
	 	 	10.17.	 	AMENDMENT AND RESTATEMENT.	 	35

  

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 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
  
 THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
“Agreement”), dated April 5, 2004, is made among JPS INDUSTRIES, INC., a Delaware corporation (individually “JPS”, and, in its capacity as the representative of each Borrower pursuant to Section 10.12 hereof,
“Borrowing Agent”), JPS ELASTOMERICS CORP., a Delaware corporation (“Elastomerics”), and JPS CONVERTER AND INDUSTRIAL CORP., a Delaware corporation (“Converter”; JPS, Elastomerics and Converter are each
hereinafter referred to individually as a “Borrower” and collectively as “Borrowers”), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association (together with its successors and assigns, “Bank”).

  
 W I T N E S S E T H : 
  
 JPS and Bank are parties to a certain Revolving Credit and Security Agreement
dated May 9, 2001 (as at any time amended or modified, the “Original Loan Agreement”), pursuant to which Bank has made certain revolving credit loans and provided other financial accommodations to JPS. 
  
 Borrowers have requested that Bank amend and restate the Original Loan
Agreement in accordance with the terms and conditions contained herein, and make available a revolving credit facility to Borrowers, which facility shall be used by Borrowers to finance their mutual and collective enterprise of manufacturing and
distributing, roofing, fiberglass and various polyurethane products. In order to utilize the financial powers of Borrowers in the most efficient and economical manner, and in order to facilitate the financing of Borrowers’ needs, Bank will, at
the request of any of Borrowers, make loans to Borrowers under the credit facilities on a combined basis and in accordance with the provisions hereinafter set forth. Borrowers’ businesses are a mutual and collective enterprise, and Borrowers
believe that the consolidation of all loans under this Agreement will enhance the aggregate borrowing powers of Borrowers and ease the administration of the loan relationship with Bank, all to the mutual advantage of Borrowers. Bank’s
willingness to amend and restate the Original Loan Agreement and to extend credit to Borrowers and to administer Borrowers’ collateral security therefor, on a combined basis as more fully set forth in this Agreement, is done solely as an
accommodation to Borrowers and at Borrowers’ request in furtherance of Borrowers’ mutual and collective enterprise. 
  
 In consideration of the premises and of the mutual covenants herein contained and to induce Bank to amend and restate the Original Loan Agreement and
extend credit to Borrowers hereunder, the parties agree as follows: 
  

	 	1.	Definitions. 

  

	1.1	Defined Terms: 

  
 “Accession” has the meaning set forth in the Code. 
  
 “Accommodations Payment” has the meaning set forth in Section 2.15.4. 
  
 “Account” has the meaning set forth in the Code, together
with any guaranties, letters of credit, Letter-of-Credit Right, and other security therefor, including Supporting Obligations. 
  
 “Account Debtor” means a Person who is obligated under any Account, Chattel Paper, General Intangible or Instrument. 
  
 “Accounts Formula Amount” means, on any date of
determination thereof, an amount equal to 85% of the total amount of Eligible Accounts. 
  
 “Accounts Receivable Report” has the meaning get forth in Section 5.6(a) 

 “Affiliate” of a Person means (a) any Person directly or indirectly owning 10% or more
of the voting stock or rights of such named Person or of which the named Person owns 10% or more of such voting stock or rights; (b) any Person controlling, controlled by or under common control with such named Person; (c) any officer, director or
employee of such named Person or any Affiliate of the named Person; and (d) any family member of the named Person or any Affiliate of such named Person. 
  
 “Allocable Percentage” has the meaning set forth in Section 2.15.4. 
  
 “Applicable Margin” means (i) as to any Revolver Loan, or portion thereof, that is a Prime Rate Loan, zero,
or (ii) as to any Revolver Loan, or portion thereof, that is a LIBOR Loan, 2.30%; provided that, commencing on February 5, 2005, if there exists no Default or Event of Default, then the Applicable Margin shall be increased or
decreased, with respect to LIBOR Loans, based upon the Fixed Charge Coverage Ratio, as follows: 
  

			
	 Fixed Charge Coverage Ratio

	  	 Applicable Margin for Revolver Loans
 that are LIBOR Loans

	(i) If the Fixed Charge Coverage Ratio is equal to or greater than 1.25 to 1	  	2.00%
		
	(ii) If the Fixed Charge Coverage Ratio is less than 1.25 to 1, but is equal to or greater than 1.20 to 1	  	2.25%
		
	(iii) If the Fixed Charge Coverage Ratio is less than 1.20 to 1, but is equal to or greater than 1.15 to 1	  	2.50%
		
	(iv) If the Fixed Charge Coverage Ratio is less than 1.15 to 1, but is equal to or greater than 1.05 to 1	  	2.75%
		
	(v) If the Fixed Charge Coverage Ratio is less than 1.05 to 1	  	3.00%

  
 The Applicable Margin shall be subject
to reduction or increase, as applicable and as set forth in the table above, on a quarterly basis according to the performance of Borrowers as measured by the Fixed Charge Coverage Ratio for the immediately preceding fiscal quarter of Borrowers.
Except as set forth in the last sentence hereof, any such increase or reduction in the Applicable Margin provided for herein shall be effective 3 Business Days after receipt by Bank of the applicable financial statements and corresponding Compliance
Certificate. If the financial statements and the Compliance Certificate of Borrowers setting forth the Fixed Charge Coverage Ratio are not received by Bank by the date required pursuant to Section 5.6 hereof, the Applicable Margin shall be
determined as if the Fixed Charge Coverage Ratio is less than 1.05 to 1 until such time as such financial statements and Compliance Certificate are received and any Event of Default resulting from a failure timely to deliver such financial
statements or Compliance Certificate is waived in writing by Bank; provided, however, that Bank shall be entitled to accrue and receive interest at the Default Rate to the extent authorized by Section 2.8 hereof and, on each
date that the Default Rate accrues on any Loan, the Applicable Margin on such date for such Loan shall be the Applicable Margin that would apply if the Fixed Charge Coverage Ratio was less than 1.05 to 1 (without regard to the actual Fixed Charge
Coverage Ratio). For the final fiscal quarter of any Fiscal Year of Borrowers, Borrowers may provide the unaudited financial statements of Borrowers, subject only to year-end adjustments, for the purpose of determining the Applicable Margin;
provided, however, that if, upon delivery of the annual audited financial statements required to be submitted by Borrower to Bank pursuant to Section 5.6 hereof, Borrowers have not met the criteria for reduction of the
Applicable Margin pursuant to the terms hereinabove for the final fiscal quarter of the Fiscal Year of Borrowers then ended, then (a) such Applicable Margin reduction shall be terminated and, effective on the first day of the month following receipt
by Bank of such audited financial statements, the 
  

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 Applicable Margin shall be the Applicable Margin that would have been in effect if such reduction had not been
implemented based upon the unaudited financial statements of Borrowers for the final fiscal quarter of the Fiscal Year then ended, and (b) Borrowers shall pay to Bank, on the first day of the month following receipt by Bank of such audited financial
statements, an amount equal to the difference between the amount of interest that would have been paid using the Applicable Margin determined based upon such audited financial statements and the amount of interest actually paid during the period in
which the reduction of the Applicable Margin was in effect based upon the unaudited financial statements for the final fiscal quarter of the Fiscal Year then ended. 
  
 “Arbitration Rules” has the meaning set forth in Section 10.16. 
  
 “Availability” means at any time the excess, if any, of (i)
the lesser of the Borrowing Base or the Revolver Commitment over (ii) the aggregate principal amount of outstanding Revolver Loans and the aggregate face amount of all outstanding letters of credit issued by Bank hereunder at such time. 

 
 “Average Availability” means for any period, an amount
equal to the sum of the actual amounts of Availability on each day during such period, as determined by Bank, divided by the number of days in such period. 
  
 “Bankruptcy Code” means Title 11 of the United States Code. 
  
 “Borrowing Base” means at any time the sum of (i) the Accounts Formula Amount, plus (ii) the Inventory
Formula Amount, plus (iii) the Equipment Formula Amount, minus (iv) any Reserves. 
  
 “Borrowing Base Certificate” means a certificate, in the form of Annex C attached hereto or such other form as may be requested by Bank, by which Borrowers shall certify to Bank, with
such frequency as Bank may request, the amount of the Borrowing Base as of the date of the certificate and the calculation of such amount. 
  
 “Business Day” means a weekday on which Bank is open for business in Atlanta, Georgia and Charlotte, North Carolina. 
  
 “Chattel Paper” has the meaning set forth in the Code,
including Electronic Chattel Paper and Tangible Chattel Paper, together with any guaranties, letters of credit, Letter-of-Credit Right, and other security therefor, including Supporting Obligations. 
  
 “Closing Date” means April 5, 2004. 
  
 “Code” means the Uniform Commercial Code (or any successor
statute) as adopted and in force in State of Georgia or, when the laws of any other state govern the method or manner of the perfection or enforcement of any security interest in any of the Collateral, the Uniform Commercial Code (or any successor
statute) of such state. Any term used in this Agreement and in any financing statement filed in connection herewith which is defined in the Code and not otherwise defined in this Agreement or in any other Loan Document has the meaning given to the
term in the Code. 
  
 “Collateral” means all
property of each Borrower, wherever located and whether now owned by such Borrower or hereafter acquired, including but not limited to: (a) all Inventory; (b) all General Intangibles; (c) all Accounts; (d) all Chattel Paper; (e) all Instruments and
Documents and any other instrument or intangible representing payment for goods or services; (f) all Equipment; (g) all Investment Property; (h) all Deposit Accounts and funds on deposit therein, including but not limited to the Collections Account
or funds otherwise on deposit with or under the control of Bank or its agents or correspondents; (i) all Letter-of-Credit Rights; (j) all Commercial Tort Claims; (k) all Fixtures; and (l) all parts, replacements, substitutions, profits, products,
Accessions and cash and non-cash proceeds and Supporting Obligations of any of the foregoing (including insurance proceeds payable by reason of loss or damage thereto) in any form and wherever located. Collateral shall include all written or
electronically recorded books and records relating to any such Collateral and other rights relating thereto. 
  
 “Collections Account” means the deposit account(s) maintained by Borrowers at Bank to which collections, deposits and other payments on
or with respect to Collateral may be made pursuant to the terms hereof, to which only Bank shall have access. 
  

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 “Commercial Tort Claim” has the meaning set forth in the Code. 
  
 “Commitments” on any date, means the Revolver Commitment on
such date. 
  
 “Compliance Certificate” has the
meaning set forth in Section 5.6(e). 
  
 “Contributing Borrower” has the meaning set forth in Section 2.15.4. 
  
 “Debt” means all liabilities of a Person as determined under GAAP and all obligations which such Person has guaranteed or endorsed or is
otherwise secondarily or jointly liable for, and shall include, without limitation (a) all obligations for borrowed money or purchased assets, (b) obligations secured by assets whether or not any personal liability exists, (c) the capitalized amount
of any capital or finance lease obligations, (d) the unfunded portion of pension or benefit plans or other similar liabilities, (e) obligations as a general partner, (f) contingent obligations pursuant to guaranties, endorsements, letters of credit
and other secondary liabilities, (g) obligations for deposits, and (h) obligations under swap agreements, as defined in 11 U.S. C. §101. 
  
 “Default Rate” on any date, means a rate per annum that is equal to (i) in the case of each Loan outstanding on such date, 2.0% in excess
of the rate otherwise applicable to such Loan on such date, and (ii) in the case of any of the other Indebtedness outstanding on such date, 2.0% in excess of the Prime Rate in effect on such date. 
  
 “Deposit Account” has the meaning set forth in the Code.

  
 “Disbursement Account” means a demand deposit
account maintained by Borrowers at Bank and to which proceeds of Revolver Loans will be deposited from time to time. 
  
 “Dispute” has the meaning set forth in Section 10.15. 
  
 “Document” has the meaning set forth in the Code. 
  
 “Dollars and the sign “$”” means lawful money of
the United States of America. 
  
 “EBITDA” means,
for any specified period, on a consolidated basis, net income (excluding any gain arising on the sale of capital assets and any gain arising from extraordinary or non-recurring items), plus provision for interest expense, plus provision for income
taxes, plus depreciation, plus amortization, in each case of Borrowers during such period. 
  
 “Electronic Chattel Paper” has the meaning set forth in the Code. 
  
 “Eligible Accounts” means all Accounts of a Borrower that are evidenced by an invoice (valued at the face amount of such invoice, less
maximum discounts, credits and allowances which may be taken by Account Debtors on such Accounts, and net of any sales tax, finance charges or late payment charges included in the invoiced amount) created or acquired by such Borrower arising from
the sale of Inventory and/or the provision of certain services in such Borrower’s ordinary course of business in which Bank has a first priority, perfected security interest, but excluding (a) Accounts outstanding for longer than ninety (90)
days after the original due date shown on the invoice; (b) Accounts outstanding for more that one hundred twenty (120) days after the original invoice date; (c) all Accounts owed by an Account Debtor if more than fifty percent (50%) of the Accounts
owed by such Account Debtor to such Borrower are deemed ineligible pursuant to clauses (a) or (b) above; (d) Accounts owing from any Affiliate of such Borrower; (e) Accounts owed by a creditor of such Borrower to the extent of the amount of the
indebtedness of Borrower to such creditor; (f) Accounts which are in dispute or subject to any counterclaim, volume rebate, contra-account or offset; (g) Accounts owing by any Account Debtor which is not Solvent; (h) Accounts arising from a sale on
a bill-and-hold, guaranteed sale, progress billing, sale-or-return, sale-on-approval, consignment or similar basis or the Inventory sold which gave rise to such Account has become subject to repurchase, return, rejection, repossession, loss or
damage; (i) Accounts owed by an Account Debtor located outside of the United States of America, unless in Bank’s sole and absolute discretion, such Account is supported by a letter of credit or credit insurance and which is issued
by a financial institution and in an amount which is acceptable to 
  

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 Bank in its sole and absolute discretion; (j) Accounts owed by the United States of America or other governmental or
quasi-governmental unit, agency or subdivision unless such Borrower shall have complied with all applicable federal and state assignment of claims laws; (k) Accounts as to which the goods giving rise to the Account have not been delivered to and
accepted by the Account Debtor or the service giving rise to the Account has not been completely performed or which do not represent a final sale; (l) Accounts for which the total amounts owed thereunder by an Account Debtor (together with its
Affiliates) exceeds a credit limit established by Bank in its sole and absolute discretion (to the extent of such excess); (m) Accounts evidenced by a note or other Instrument or Chattel Paper or reduced to judgment; (n) Accounts for which the total
of all Accounts from an Account Debtor (together with the Affiliates of the Account Debtor) exceed ten percent (10%) (to the extent of such excess); (o) Accounts which, by contract, subrogation, mechanics’ lien laws or otherwise, are subject to
claims by such Borrower’s creditors or other third parties or which are owed by Account Debtors as to whom any creditor of such Borrower (including any bonding company) has lien or retainage rights; (p) any and all other Accounts the validity,
collectibility, or amount of which is determined in good faith by such Borrower or Bank to be doubtful; (q) Accounts owed by an Account Debtor which is located in a jurisdiction where such Borrower is required to qualify to transact business or to
file reports with such jurisdiction, unless such Borrower has so qualified or filed; (r) Accounts owed by an Account Debtor who disputes the liability therefor; (s) Accounts owed by an Account Debtor that shall be the subject of any proceeding of
the type described in Section 8.1(e) or (f); (t) any Account acquired pursuant to a Permitted Acquisition, for which Bank has required a field audit and examination but which field audit and examination is not satisfactory to Bank; and
(u) any other Account which Bank otherwise in its reasonable discretion deems to be ineligible. For purposes of determining the eligibility of Accounts owing from any Account Debtor, the gross amount of Accounts which exceed the aging
limitations set forth above shall not be reduced by any credit due such Account Debtor or any other Account Debtor by such Borrower which is outstanding for longer than ninety (90) days after the original due date shown on the invoice or one hundred
twenty (120) days after the original invoice date. No Account shall be an Eligible Account if any representation, warranty or covenant herein relating thereto shall be untrue, misleading or in default. 
  
 “Eligible Equipment” means new or used Equipment but only to
the extent that such Equipment: (i) is to be used by a Borrower in the ordinary course of its business; (ii) has been purchased by a Borrower; (iii) has been delivered to and accepted by a Borrower and installed at premises owned or leased by a
Borrower; (iv) is subject to Bank’s duly perfected, first priority security interest and no other Lien that is not a Permitted Lien unless the holder of any such Lien agrees in writing with Bank, prior to Bank’s funding of any Loan based
on the Equipment Formula Amount with respect to such Equipment, to disclaim any interest in such Equipment; (v) does not and, after delivery to and installation at a Borrower’s premises, will not constitute a Fixture under applicable law unless
each landlord and mortgagee in respect of such premises has executed in favor of Bank a landlord or mortgagee waiver in form and content acceptable to Bank; and (vi) does not and, after delivery to and installation at a Borrower’s premises,
will not constitute an Accession to other Equipment that is subject to any Lien (whether or not a Permitted Lien) in favor of any Person other than Bank unless the holder of any such Lien agrees in writing to disclaim any interest in the Equipment
that is intended to be Eligible Equipment. 
  
 “Eligible
Inventory” means all Inventory acquired by a Borrower in the ordinary course of its business as presently conducted consisting of finished goods, raw materials or work-in-process in which Bank has a first priority, perfected security
interest, valued at the lower of cost or market, but excluding: damaged, slow-moving, obsolete or unmerchantable Inventory, packaging materials and supplies; capitalized inventory variances; Inventory that is consigned by such Borrower to any
Person; Inventory that has been returned to such Borrower by or repossessed from an Account Debtor; Inventory not owned legally and beneficially by such Borrower; any Inventory reserves; any Inventory with regard to which a representation, warranty
or covenant is untrue, misleading or in default; any Inventory that contains any labels, trademarks, trade names or other identifying characteristics which are the properties of third parties unless the use of same by such Borrower is under a valid
license, royalty or similar agreement with the owner thereof, in form and substance satisfactory to Bank, and which remains in full force and effect, and has not been terminated, and such owner thereof has issued in favor of Bank an agreement, in
form and substance satisfactory to Bank, allowing Bank to dispose of said items of Inventory upon the occurrence of an Event of Default; any Inventory located in a warehouse or other facility leased by such Borrower unless the lessor has delivered
to Bank an agreement, in form and substance satisfactory to Bank, by which the lessor agrees to waive or subordinate any Lien it may have with respect to such Inventory in favor of Bank’s Lien therein and to permit Bank to enter upon the leased
premises and remove such Inventory or to use such premises to store or dispose of such Inventory; Inventory acquired pursuant to a Permitted Acquisition, for which Bank has required a field audit and examination but which field audit and examination
is not satisfactory to Bank; and which Bank otherwise in its sole and absolute discretion deems not to be Eligible Inventory. 
  

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 “Environmental Laws” means, collectively the following acts and laws, as amended: the
Comprehensive Environmental Response, Compensation and Liability Act of 1980; the Superfund Amendments and Reauthorization Act of 1986; the Resource Conservation and Recovery Act; the Toxic Substances Act; the Clean Water Act; the Clean Air Act; the
Oil Pollution and Hazardous Substances Control Act of 1978; and any other “Superfund” or “Superlien” law or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree relating to, or
imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect. 
  
 “Equipment” has the meaning set forth in the Code. 
  
 “Equipment Formula Amount” means, on any date of
determination thereof, the applicable Equipment Sublimit on such date. 
  
 “Equipment Sublimit” means, 
  
 (i)
commencing on the Closing Date and continuing through the end of the then current fiscal quarter of Borrowers, an amount equal to $7,800,000, and 
  
 (ii) commencing on the first day of each subsequent fiscal quarter and continuing through the end of such fiscal quarter, an amount equal to 

 
 (a) the Equipment Sublimit for the previous fiscal
quarter minus 
  
 (b) the sum of $500,000
plus 80% of Borrowers’ capital expenditures approved in writing by Bank and permitted pursuant to Section 7.4 hereof with respect to Eligible Equipment during the then current fiscal quarter of Borrowers; 
  
 provided, that, commencing February 1, 2005 and continuing thereafter, the
Equipment Sublimit shall mean the amount specified in clause (ii) of this definition, minus 5% of Borrowers’ capital expenditures with respect to Eligible Equipment during the immediately preceding Fiscal Year, to the extent such capital
expenditures were previously included in the calculation of the Borrowing Base (the “Reduction), provided, however, that the Reduction shall not apply if capital expenditures do not exceed $1,000,000 in such Fiscal Year.

  
 “ERISA” has the meaning set forth in
Section 4.16. 
  
 “Event of Default” means
any event specified as such in Section 8.1 hereof, provided that there shall have been satisfied any requirement in connection with such event for the giving of notice or the lapse of time, or both; “Default” or
“default” means any of such events, whether or not any such requirement for the giving of notice or the lapse of time or the happening of any further condition, event or act shall have been satisfied. 
  
 “Fiscal Year” means the fiscal year of Borrowers for
accounting and tax purposes ending on the Saturday closest to October 31 of each calendar year and when preceded or followed by the designation of a calendar year (e.g., 2004 Fiscal Year) means the Fiscal Year of Borrowers ending on the
Saturday closest to October 31 of such designated calendar year. 
  
 “Fixed Charge Coverage Ratio” means, on any date of determination, on a consolidated basis the sum of EBITDA for the period of twelve (12) consecutive calendar months then ended, minus all unfinanced capital
expenditures and cash income taxes of Borrowers paid during the same period (but without giving effect to any tax refund) divided by the sum of interest expense paid by Borrowers during the same period, plus all current maturities of
long-term Debt and capital lease obligations of Borrowers as of the date of determination, plus all Required Pension Liability Payments due during such Fiscal Year plus Restricted Distributions and Restricted Payments in cash with
respect to such period; provided, however, that for purposes of calculating this ratio, any payments that are permitted under Section 6.3 of this Agreement shall be excluded from the denominator hereof. 
  

 -6- 

 “Fixtures” has the meaning set forth in the Code. 
  
 “GAAP” means generally accepted accounting principles as in
effect in the Unites States from time to time. 
  
 “General Intangibles” has the meaning set forth in the Code, together with any guaranties, letters of credit, Letter-of-Credit Right, and other security therefor, including Supporting Obligations. 
  
 “Guarantor” means any Person now or hereafter guaranteeing,
endorsing or otherwise becoming liable for any Indebtedness. 
  
 “Guaranty Agreement” means any guaranty instrument now or hereafter executed and delivered by any Guarantor to Bank, as it may be modified. 
  
 “Indebtedness” means all obligations now or hereafter owed to Bank or any Affiliate of Bank by any or all
Borrowers, whether related or unrelated to the Loans, including, without limitation, amounts owed or to be owed under the terms of the Loan Documents, or arising out of the transactions described therein, including, without limitation, the Loans,
any Debt arising out of or relating to demand deposit and operating account relationships between any Borrower and Bank or any Affiliate of Bank or any cash management services provided to any Borrower, hedging agreements with Bank or any Affiliate
of Bank (including, without limitation, any interest rate agreement, interest rate collar agreement, interest rate swap agreement, or other agreement or arrangement at any time entered into by any Borrower with Bank that is designed to protect
against fluctuations in interest rates, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement) and other products provided by Bank or any
Affiliate of Bank to any Borrower, including merchant card services and ACH transfer services, reimbursement obligations for outstanding letters of credit or banker’s acceptances issued for the account of any Borrower or its Subsidiaries,
amounts paid by Bank under letters of credit or drafts accepted by Bank for the account of any Borrower or its Subsidiaries, together with all interest accruing thereon, all existing and future obligations under any swap agreements as defined in 11
U.S.C.§101 between Bank or any Affiliate of Bank and any Borrower whenever executed, all fees, all costs of collection, attorneys’ fees and expenses of or advances by Bank which Bank pays or incurs in discharge of obligations of any
Borrower or to inspect, repossess, protect, preserve, store or dispose of any Collateral, whether such amounts are now due or hereafter become due, direct or indirect and whether such amounts due are from time to time reduced or entirely
extinguished and thereafter re-incurred. 
  
 “Instrument” has the meaning set forth in the Code. 
  
 “Inventory” has the meaning set forth in the Code. 
  
 “Inventory Formula Amount” means, on any date of determination thereof, an amount equal to the sum of (a) 60% of the total
amount of Eligible Inventory consisting of raw materials, plus (b) 30% of the total amount of Eligible Inventory consisting of work-in-process, plus (c) 50% of the total amount of Eligible Inventory consisting of finished goods.

  
 “Inventory Report” has the meaning set forth
in Section 5.6(a). 
  
 “Investment
Property” has the meaning set forth in the Code. 
  
 “Item” means any “item” as defined in Section 4-104 of the Code, and shall also mean and include checks, drafts, money orders or other media of payment. 
  
 “Letter-of-Credit Right” has the meaning set forth in the
Code. 
  

 -7- 

 “Lien” means any mortgage, pledge, statutory lien or other lien arising by operation of
law, security interest, trust arrangement, security deed, financing lease, collateral assignment or other encumbrance, conditional sale or title retention agreement, or any other interest in property designed to secure the repayment of indebtedness,
whether arising by agreement or under any statute or law or otherwise. 
  
 “LIBOR Loan” means a Loan, or portion thereof, during any period in which it bears interest at a rate based upon the LIBOR Rate. 
  
 “LIBOR Rate” means, for any day, the “LIBOR Market Index Rate” which is determined by Bank on the first day of each month based
upon the rate for 1 month Dollar deposits as reported on Telerate page 3750 as of 11:00 a.m., London time, on the first day of the month in which such day occurs, or if such first day is not a London business day, then the immediately preceding
London business day (or if not so reported, then as determined by Bank from another recognized source or interbank quotation). 
  
 “Loan” means any Revolver Loan, as well as all such loans collectively, as the context requires. 
  
 “Loan Documents” means this Agreement, each other Security
Agreement, the Notes, each Guaranty Agreement, the Notices of Borrowing, Borrowing Base Certificates, UCC-1 financing statements and all other documents and instruments now or hereafter evidencing, describing, guaranteeing or securing the
Indebtedness contemplated hereby or delivered in connection herewith, as they may be modified, amended, extended, renewed or substituted from time to time, but does not include swap agreements (as defined in 11 U.S.C. §101). 
  
 “Loan Year” means a period commencing each calendar year on
the same month and day as the date of this Agreement and ending on the same month and day in the immediately succeeding calendar year, with the first such period (i.e., the first Loan Year) to commence on the date of this Agreement. 
  
 “Material Adverse Effect” means any (i) material adverse
effect upon the validity, performance or enforceability of any of the Loan Documents or any of the transactions contemplated hereby or thereby, (ii) material adverse effect upon the properties, business, prospects or condition (financial or
otherwise) of any Borrower, any Guarantor or any other Person obligated under any of the Loan Documents, or (iii) material adverse effect upon the ability of any Borrower, any Guarantor or any other Person to fulfill any obligation under any of the
Loan Documents. 
  
 “Minimum Excess Collateral
Availability Reserve” means, on any date of determination, a reserve in the amount of the lesser of (i) $5,000,000 or (ii) the Required Pension Liability Payments for the then current Fiscal Year. 
  
 “Notes” means the Revolver Note and any other promissory
note now or hereafter evidencing any Indebtedness, and all modifications, extensions and renewals thereof. 
  
 “Notice of Borrowing” has the meaning set forth in Section 2.4(a) hereof. 
  
 “Paying Borrower” has the meaning set forth in Section
2.15.4. 
  
 “Permitted Acquisition” means any
acquisition by a Borrower of the assets or equity interests of a Person in which each of the following conditions is satisfied, as determined by Bank in its reasonable discretion: (a) the business of the Person that is the subject of such
acquisition is related or substantially similar to the business of Borrowers on the Closing Date; (b) in connection with such acquisition there will be no Liens on any of such Borrower’s assets after the acquisition other than Permitted Liens;
(c) immediately before and after giving effect to such acquisition, no Default or Event of Default shall have occurred or would result therefrom; (d) Availability during the 90 day period immediately preceding the closing date of such acquisition
and on such closing date and after giving pro forma effect to such acquisition is not less than $5,000,000; (e) each Borrower is Solvent after giving pro forma effect to the consummation of such acquisition; (f) the aggregate amount of consideration
for such acquisition, when added to the consideration for all other such acquisitions during the immediately preceding 12 month period, shall not exceed $2,500,000; (g) any purchase price amounts payable with respect to earnouts, 
  

 -8- 

 notes payable to the sellers, covenants not to compete, consulting contracts or other affiliated contracts are unsecured
and are and will remain subordinate to the payment in full of the Indebtedness on terms satisfactory to Bank; (h) Bank shall have received, by a date sufficiently in advance of the closing date of such acquisition to allow Bank to review the same,
executed copies of the final purchase documents, including all exhibits and schedules thereto, among the parties to such acquisition, and Bank shall have found the terms thereof reasonably acceptable; (i) Borrowers shall have delivered to Bank, not
less than 3 Business Days prior to the proposed closing date of any such acquisition, written evidence of the pro forma satisfaction of the other conditions set forth above after giving effect to such acquisition; (j) if the acquired
assets are to be included in the Borrowing Base simultaneously with the consummation of the Permitted Acquisition, if required by Bank, Bank’s examiners shall have completed a field exam and audit of the Person or operating assets or line of
business to be acquired, in scope and with results reasonably acceptable to Bank, or if such field exam and audit are not conducted, then any Accounts or Inventory of such Person or operating assets or line of business to be acquired shall not be
included in the Borrowing Base and shall be ineligible for borrowing purposes until such exam and audit are conducted in scope and with results reasonably acceptable to Bank; and (k) Bank contemporaneously with the closing of such acquisition shall
have received (i) such documents and instruments as may be necessary to grant or confirm to Bank a first priority perfected Lien on and security interest in all of the assets so acquired, and (ii) if a Person acquired is not merged into a Borrower,
a joinder agreement executed by such corporation, partnership, limited liability company or other Person, in form and substance satisfactory to Bank, together with such other collateral documents and opinions of counsel as may be reasonably
requested by Bank, each in form and substance satisfactory to Bank; provided, however that if the acquired assets are not to be included in the Borrowing Base as of the date of such acquisition, then Borrowers shall not be required to
deliver the foregoing documentation to Bank until fifteen (15) days after the closing date of such acquisition. 
  
 “Permitted Debt” means (a) the Indebtedness; (b) Permitted Purchase Money Debt; and (c) the Debt listed on Exhibit 1.1A
hereto. 
  
 “Permitted Equipment Dispositions”
means (i) dispositions of Equipment which, in the aggregate during any consecutive 12-month period, has a fair market value of $250,000 or less, provided, that, all proceeds thereof are remitted to Bank for application to the
Indebtedness, (ii) replacements of Equipment that is substantially worn, damaged or obsolete with Equipment of like kind, function and value, provided that the replacement Equipment shall be acquired prior to or substantially concurrently
with any disposition of the Equipment that is to be replaced, the replacement Equipment shall be free and clear of Liens other than Permitted Liens, and (iii) dispositions of Equipment by a Borrower to another Borrower. 
  
 “Permitted Liens” means (a) Liens securing the Indebtedness;
(b) statutory Liens (excluding any Lien imposed pursuant to any of the provisions of ERISA) arising in the ordinary course of business of a Borrower, but only if and for so long as (x) payment in respect of any such Lien is not at the time required
or the Debt secured by any such Liens is being Properly Contested and (y) such Liens do not materially detract from the value of the property of such Borrower and do not materially impair the use thereof in the operation of such Borrower’s
business (c) Purchase Money Liens securing Permitted Purchase Money Debt; and (d) Liens described on Exhibit 1.1B hereto (if any), provided, however, that Debt not now secured by such Liens shall not become secured
by such Liens hereafter and such Liens shall not encumber any other assets. 
  
 “Permitted Purchase Money Debt” means Purchase Money Debt of Borrowers which is incurred after the date of the Agreement and that is secured by no Lien or only by a Purchase Money Lien, provided that
the aggregate amount of such Purchase Money Debt outstanding at any time does not exceed $250,000, and the incurrence of such Purchase Money Debt does not violate any limitation in the Loan Documents regarding capital expenditures. 
  
 “Permitted Share Repurchase” means the redemption, purchase,
or other acquisition or retirement for value of any equity interests of Borrowers, provided, that, each of the following conditions has been satisfied at the time of and after giving effect to such repurchase, as determined by Bank in
its reasonable discretion: 
  
 (a) the aggregate
value of all equity interests of Borrowers repurchased during the immediately preceding 12 month period does not exceed $1,000,000; 
  
 (b) no Default or Event of Default exists; 
  

 -9- 

 (c) each Borrower is Solvent; 
  
 (d) the repurchase is consummated in accordance with
applicable law; and 
  
 (e) Availability during
the 90 day period immediately preceding the repurchase date and on such repurchase date and after giving pro forma effect to such repurchase is not less than $5,000,000. 
  
 “Person” means any natural person, corporation, unincorporated organization, trust, joint-stock company,
joint venture, association, company, limited or general partnership, any government or any agency or political subdivision of any government, or any other entity or organization. 
  
 “Prime Rate” means that rate announced by Bank from time to time as its prime rate and is one of several
interest rate bases used by Bank. Bank lends at rates both above and below Bank’s Prime Rate, and Borrowers acknowledge that Bank’s Prime Rate is not represented or intended to be the lowest or most favorable rate of interest offered by
Bank. 
  
 “Prime Rate Loans” means a Loan, or
portion thereof, during any period in which it bears interest at a rate based upon the Prime Rate. 
  
 “Projections” means Borrowers’ forecasted consolidated and consolidating (i) balance sheets, (ii) profit and loss statements, (iii)
cash flow statements, (iv) forecasts of Availability under the Revolver Commitment, and (v) capitalization statements, all prepared on a month by month basis and on a consistent basis with Borrowers’ historical financial statements, together
with appropriate supporting details and a statement of underlying assumptions. 
  
 “Properly Contested” means, in the case of any Debt (including any taxes) that is not paid as and when due or payable by reason of such obligor’s bona fide dispute concerning its liability to pay
same or concerning the amount thereof, (i) such Debt is being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (ii) such obligor has established appropriate reserves as shall be required in
conformity with GAAP; (iii) the non-payment of such Debt will not have a Material Adverse Effect and will not result in a forfeiture of any assets of such obligor; (iv) no Lien is imposed upon any of such obligor’s assets with respect to such
Debt unless such Lien is at all times junior and subordinate in priority to the Liens in favor of Bank (except only with respect to property taxes that have priority as a matter of applicable state law) and enforcement of such Lien is stayed during
the period prior to the final resolution or disposition of such dispute; (v) if the Debt results from, or is determined by the entry, rendition or issuance against an obligor or any of its assets of a judgment, writ, order or decree, enforcement of
such judgment, writ, order or decree is stayed pending a timely appeal or other judicial review; and (vi) if such contest is abandoned, settled or determined adversely (in whole or in part) to such obligor, such obligor forthwith pays such Debt and
all penalties, interest and other amounts due in connection therewith. 
  
 “Purchase Money Debt” means and includes (i) Debt (other than the Indebtedness) for the payment of all or any part of the purchase price of any Equipment or other fixed assets of a Borrower, (ii) any Debt (other than the
Indebtedness) incurred at the time of or within twenty (20) days prior to or after the acquisition of any Equipment or other fixed assets of a Borrower for the purpose of financing all or any part of the purchase price thereof, and (iii) any
renewals, extensions or refinancings (but not any increases in the principal amounts) thereof outstanding at the time. 
  
 “Purchase Money Lien” means a Lien upon Equipment or other fixed assets of a Borrower which secures Purchase Money Debt, but only if such
Lien shall at all times be confined solely to the fixed assets acquired through the incurrence of the Purchase Money Debt secured by such Lien and such Lien constitutes a purchase money security interest under the Code. 
  

 -10- 

 “Real Property” means any and all real property and improvements and buildings thereon
owned by a Borrower or a Subsidiary or in which any Borrower or any Subsidiary has an interest, including Borrowers’ real property located in East Hampton, Massachusetts, Westfield, North Carolina, and Slater, South Carolina. 
  
 “Regulated Materials” means any hazardous, toxic or
dangerous waste, substance or material, the generation, handling, storage, disposal, treatment or emission of which is subject to any Environmental Law. 
  
 “Required Pension Liability Payments” means during any Fiscal Year, in addition to the contributions required to be made by Borrowers to
Borrowers’ Pension Plans, the contributions of additional cash payments to the Underfunded Pension Plans to the extent required by the Pension Benefit Guaranty Corporation. 
  
 “Reserves” means the Minimum Excess Collateral Availability
Reserve and such other reserves that may be established by Bank at any time and from time to time in Bank’s reasonable discretion without prior notice to Borrowers, to reserve against Borrowers’ obligations to Bank or its Affiliates or any
other obligations by Borrowers, whether direct or contingent. 
  
 “Restricted Distribution” by any Person means (i) the retirement, redemption, purchase, or other acquisition or retirement for value of any equity interests (except interests acquired on the conversion thereof into other
equity interests of such Person) issued by such Person, (ii) the declaration or payment of any dividend or distribution in cash or property on or with respect to any such equity interests (other than dividends payable solely in shares of its capital
stock or other equity interests), (iii) any investment by such Person in the holder of any such equity interests, and (iv) any other payment by such Person in respect of such equity interests. 
  
 “Restricted Payment” means (i) any redemption or prepayment
or other retirement, prior to the stated maturity thereof or prior to the due date of any regularly scheduled installment or amortization payment with respect thereto, of any Debt (other than the Loans) or any payment of any subordinated debt other
than in accordance with the terms thereof and hereof, (ii) the payment by any Person of the principal amount of or interest on any Debt (other than trade debt) (other than trade accounts payable and employee compensation in the ordinary course of
business, consistent with past practices) owing to an Affiliate of such Person and (iii) the payment of any management, consulting or similar fee by any Person to any Affiliate of such Person. 
  
 “Revolver Commitment” means the commitment of Bank to make
Revolver Loans in accordance with the provisions of Section 2.1 hereof in an aggregate amount not to exceed $25,000,000 at any one time. 
  
 “Revolver Loan” means a loan made by Bank as provided in Section 2.1 hereof. 
  
 “Revolver Note” has the meaning set forth in Section 2.2
hereof. 
  
 “Security Agreement” means this
Agreement as it relates to a security interest in the Collateral, and any other mortgage instrument, security agreement or similar instrument now or hereafter executed by any Borrower or other Person granting Bank a security interest in any
Collateral to secure the Indebtedness. 
  
 “Solvent” means, as to any Person, that such Person has capital sufficient to carry on its business and transactions in which it is currently engaged and all business and transactions in which it is about to engage, is able
to pay its debts as they mature, and has assets having a fair valuation greater than its liabilities, at fair valuation. 
  
 “Subsidiary” means any corporation, partnership or other entity in which a Borrower, directly or indirectly, owns more than ten percent
(10%) of the stock, capital or income interests, or other beneficial interests, or which is effectively controlled by such Person. 
  
 “Supporting Obligation” has the meaning set forth in the Code. 
  
 “Tangible Chattel Paper” has the meaning set forth in the Code. 
  
 “Term” means the period from and including the Closing Date
to but not including the Termination Date. 
  

 -11- 

 “Termination Date” means the earliest of (i) April 30, 2007, (ii) the date on which
Borrowers terminate this Agreement and the Commitments pursuant to Section 2.13 hereof, and (iii) the date on which Bank terminates the Commitments pursuant to Section 8.2(a) hereof. 
  
 “Underfunded Pension Plans” means the Retirement Pension
Plan for Employees of JPS Industries, Inc. 
  
 1.2.
Financial Terms. All financial terms used herein shall have the meanings assigned to them under GAAP unless another meaning shall be specified. 
  

	 	2.	The Credit Facilities. 

  
 2.1. Revolver Commitment. Bank agrees, on the terms and conditions set forth in this Agreement, to make Revolver Loans to and to issue letters of
credit on behalf of Borrowers from time to time during the Term in amounts such that the aggregate principal amount of Revolver Loans and the face amount of any letters of credit issued by Bank on behalf of Borrowers at any one time outstanding will
not exceed the lesser of (i) the Revolver Commitment and (ii) the Borrowing Base. Notwithstanding the foregoing, the aggregate amount of the Revolver Loans and letters of credit issued by Bank on behalf of Borrowers from time to time shall be
subject to any Reserves that Bank in its reasonable discretion may deem proper and/or necessary under the Borrowing Base. Within the foregoing limit, Borrowers may borrow, prepay and reborrow Revolver Loans at any time during the Term. 

 
 2.2. Revolver Note. Borrowers shall execute and deliver to Bank, on
the Closing Date, a promissory note substantially in the form of Annex A attached hereto and made a part hereof (the “Revolver Note”), which Revolver Note, in addition to the records of Bank, shall evidence the Revolver Loans
and interest accruing thereon. All outstanding principal amounts and accrued interest under the Revolver Note shall be due and payable in accordance with the terms of the Revolver Note and this Agreement. 
  
 2.3. Collections Account. 
  
 (a) All payments on Accounts and other Collateral shall be forwarded on
each Business Day to the Collections Account, and Borrowers shall maintain a lockbox under the control of Bank to which all Account Debtors shall forward payments on the Accounts. Borrowers shall pay all of Bank’s standard fees and charges in
connection with such lockbox arrangement (if any) and Collections Account as such fees and charges may change from time to time. Borrowers shall notify Account Debtors on the Accounts to forward payments on the Accounts to the lockbox;
provided, however, that Bank shall have the right (with the prior permission of Borrowers unless an Event of Default exists) to directly contact Account Debtors at any time to ensure that payments on the Accounts are directed to the
lockbox. All payment items received by Borrowers on Accounts and sale of Inventory and other Collateral shall be held by Borrowers in trust for Bank and not commingled with Borrowers’ funds and shall be deposited promptly by Borrowers to the
Collections Account. All such items shall be the exclusive property of Bank upon the earlier of the receipt thereof by Bank or by Borrowers. Each Borrower hereby grants to Bank a security interest in and lien upon all items and balances held in the
lockbox and the Collections Account as collateral for the Indebtedness. If Borrowers shall maintain any depository accounts at a financial institution other than Bank, then, at the request of Bank, Borrowers shall execute and deliver, and shall
cause such financial institution to execute and deliver, to Bank, a deposit account control agreement, in form and substance satisfactory in all respects to Bank, that provides Bank with exclusive control over such account and that requires such
financial institution to wire transfer to Bank all proceeds of Collateral. 
  
 (b) Each Borrower hereby irrevocably appoints Bank (and any duly authorized Person designated by Bank) as such Borrower’s attorney-in-fact to endorse such Borrower’s name on any checks, drafts, money orders
or other media of payment which come into Bank’s possession or control; this power being coupled with an interest is irrevocable so long as any of the Indebtedness (or Commitment therefor) remains outstanding. Such endorsement by Bank under
power of attorney shall, for all purposes, be deemed to have been made by Borrowers (prior to any subsequent endorsement by Bank) in negotiation of the item. 
  

 -12- 

 (c) Payment items received into the Collections Account shall be applied by Bank on account of the
Revolver Loans the day after deposited by Borrowers, subject to chargebacks for uncollected payment items. No payment item received by Bank shall constitute payment to Bank until such item is actually collected by Bank and credited to the
Collections Account; provided, however, Bank shall have the right to charge back to the Collections Account (or any other account of any Borrower maintained at Bank) any item which is returned for inability to collect, plus accrued
interest during the period of Bank’s provisional credit for such item prior to receiving notice of dishonor. 
  
 2.4. Manner of Borrowing and Funding Revolver Loans. 
  
 (a) Bank, in its discretion, may require from Borrowers a signed written request for a Revolver Loan in the form of Annex B attached hereto
(a “Notice of Borrowing”), which request shall be irrevocable and shall be delivered to Bank no later than 12:00 noon (local time in Atlanta, Georgia) on the date of the requested Revolver Loan, and shall specify the date (which shall be a
Business Day), the amount of the proposed Revolver Loan and whether the proposed Revolver Loan will be a Prime Rate Loan or a LIBOR Loan (and to the extent not specified, it shall be deemed to be a request for a LIBOR Loan) and provide such other
information as Bank may require. Bank’s acceptance of such a request shall be indicated by its making the Revolver Loan requested. Such a Revolver Loan shall be made available to Borrowers in immediately available funds at Bank’s address
referred to in Section 10.4. The Revolver Loans made by Bank on the Closing Date shall each be in excess of $250,000. Borrowers may not request any LIBOR Loans if a Default or Event of Default exists. 
  
 (b) Unless payment is otherwise timely made by Borrowers, the becoming due
of any amount required to be paid with respect to any of the Indebtedness (whether as principal, accrued interest, fees or other charges owed to Bank or any Affiliate of Bank) shall be deemed irrevocably to be a request (without the requirement for
the submission of a Notice of Borrowing) for Revolver Loans on the due date of, and in an aggregate amount required to pay, such Indebtedness, and Bank may disburse the proceeds of such Revolver Loans by way of direct payment of the relevant
Indebtedness and such Revolver Loans shall bear interest as LIBOR Loans. Bank shall have no obligation to Borrowers to honor any deemed request for a Revolver Loan after the Termination Date or when the principal amount of such Revolver Loan, when
added to the aggregate outstanding principal amount of all Revolver Loans and the aggregate face amount of all outstanding letters of credit issued by Bank on behalf of Borrowers, would exceed the lesser of the Revolver Commitment and the Borrowing
Base at such time or when any condition precedent in Section 3.2 hereof is not satisfied, but may do so in its discretion and without regard to the existence of, and without being deemed to have waived, any Default or Event of Default.

  
 (c) If any Borrower elects to establish a Disbursement
Account with Bank or any Affiliate of Bank, then the presentation for payment of any check or other item of payment drawn on the Disbursement Account at a time when there are insufficient funds in such account to cover such item shall be deemed
irrevocably to be a request (without any requirement for the submission of a Notice of Borrowing) for Revolver Loans on the date of such presentation in an amount equal to the aggregate amount of the items presented for payment, and Bank may
disburse the proceeds of such Revolver Loans to the Disbursement Account and such Revolver Loans shall bear interest as LIBOR Loans. Bank shall not have any obligation to honor any deemed request for a Revolver Loan after the Termination Date or
when the principal amount of such Revolver Loan, when added to the aggregate outstanding principal amount of all Revolver Loans and the aggregate face amount of all outstanding letters of credit issued by Bank on behalf of Borrowers, would exceed
the lesser of the Revolver Commitment and the Borrowing Base at such time or when any condition precedent in Section 3.2 hereof is not satisfied, but may do so in its discretion and without regard to the existence of, and without being deemed
to have waived, any Default or Event of Default. 
  
 (d)
Notwithstanding the foregoing, Bank may, in its sole and absolute discretion, make or permit to remain outstanding Revolver Loans in excess of the Borrowing Base, and all such amounts shall (i) be part of the Indebtedness evidenced by the Revolver
Note, (ii) bear interest as provided herein, (iii) be payable upon demand by Bank, and (iv) be entitled to all rights and security as provided under the Loan Documents. 
  

 -13- 

 2.5. Repayment of Revolver Loans. 
  
 (a) Repayment of Principal. The outstanding principal amount of the Revolver Loans shall be repaid immediately upon
(i) each receipt by Bank or Borrowers of any proceeds of any Collateral consisting of Accounts or Inventory, to the extent of such proceeds, and (ii) the Termination Date. Unless otherwise specified by Borrowers, all principal repayments of Revolver
Loans shall be applied by Bank first to outstanding Prime Rate Loans and then to any outstanding LIBOR Loans. 
  
 (b) Payment of Interest. Interest accrued on the Revolver Loans shall be due and payable on (i) the first calendar day of each month (for the
immediately preceding month), computed through the last calendar day of the preceding month, with respect to any Revolver Loan (whether a Prime Rate Loan or LIBOR Loan), and (ii) the Termination Date. 
  
 2.6. Payment of Other Indebtedness. The balance of the Indebtedness
requiring the payment of money shall be repaid by Borrowers to Bank as and when provided in the relevant Loan Documents, or, if no date of payment is otherwise specified in the Loan Documents, on demand; provided, that if any
Indebtedness is evidenced by agreements other than the Loan Documents, then the terms of such other agreements shall govern the payment of such Indebtedness. 
  
 2.7. Additional Payment Provisions. 
  
 (a) Bank may debit the Disbursement Account, the Collections Account or any other account maintained by Borrowers at Bank and/or make Revolver Loans to
Borrowers (whether or not in excess of the lesser of the Revolver Commitment and the Borrowing Base) and apply such amounts to the payment of interest, fees, expenses and other amounts to which Bank may be entitled from time to time and Bank is
hereby irrevocably authorized to do so without the consent of Borrowers. 
  
 (b) Borrowers shall make each payment of principal of and interest on the Loans and fees hereunder not later than 12:00 noon (local time in Atlanta, Georgia) on the date when due, without set off, counterclaim or
other deduction, in immediately available funds to Bank at its address referred to in Section 10.4. Whenever any payment of principal of, or interest on, the Loans or of fees shall be due on a day which is not a Business Day, the date for
payment thereof shall be extended to the next succeeding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time. 
  
 (c) Any prepayment shall not affect Borrowers’ obligation to continue
making payments under any swap agreement (as defined in 11 U.S.C. § 101), which shall remain in full force and effect notwithstanding such prepayment, subject to the terms of such swap agreement. 
  
 2.8. Default Rate. Any payments due hereunder or under any of the
other Loan Documents that are not made as and when due shall bear interest from the date due until paid at the Default Rate. 
  
 2.9. Calculation of Interest and Fees. All fees and other charges provided for in this Agreement that are calculated as a per annum percentage of
any amount and all interest shall be calculated daily and shall be computed on the actual number of days elapsed over a year of 360 days. 
  
 2.10. Letters of Credit. 
  
 (a) At its discretion Bank may from time to time issue, extend or renew letters of credit for the account of Borrowers or their Subsidiaries;
provided, that, the aggregate face amount of letters of credit issued by Bank which are outstanding at any one time shall not exceed $1,000,000. The availability of Revolver Loans under the Revolver Commitment shall be reduced by
outstanding obligations of Bank under any letters of credit. All payments made by Bank under any such letters of credit (whether or not a Borrower is the account party or drawer) and all fees, commissions, discounts and other amounts owed or to be
owed to Bank in connection therewith, shall be deemed to be Revolver Loans under the Revolver Note, shall be secured by the Collateral, and shall be repaid on demand. Borrowers shall complete and sign such applications and supplemental
agreements and provide such other documentation as Bank may require. The form and substance of all letters of credit, including expiration dates, shall be subject to Bank’s approval. Bank may charge its standard fee or commission for issuance,

  

 -14- 

 renewal or extension of a letter of credit. Each Borrower unconditionally guarantees all obligations of any Subsidiary
with respect to letters of credit issued by Bank for the account of such Subsidiary. Upon a Default, Borrowers shall, on demand, deliver to Bank good funds equal to 105% of Bank’s maximum liability under all outstanding letters of
credit, to be held as cash Collateral for Borrowers’ reimbursement obligations and other Indebtedness. Each letter of credit issued by Bank on the Closing Date shall be for an amount in Dollars that is greater than $250,000. 
  
 (b) Any letter of credit issued hereunder shall be governed, as applicable,
by the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (“ICC”), Publication No. 500 or any subsequent revision or restatement thereof adopted by the ICC and in use by Bank or the International
Standby Practices, ICC Publication No. 590 or any subsequent revision or restatement thereof adopted by the ICC and in use by Bank, except to the extent that the terms of such publication would limit or diminish rights granted to Bank hereunder or
in any other Loan Document. 
  
 2.11. Interest and Fees.

  
 (a) Borrowers jointly and severally agree to pay interest in
respect of all unpaid principal amounts of the Loans from the respective dates such principal amounts are advanced until paid (whether at stated maturity, on acceleration or otherwise) at a rate per annum equal to the applicable rate indicated
below: 
  
 (i) for Loans made or outstanding as
Prime Rate Loans, the Applicable Margin in effect from time to time for such Prime Rate Loans plus the Prime Rate in effect from time to time; or 
  
 (ii) for Loans made or outstanding as LIBOR Loans, the Applicable Margin in effect from time to time for such LIBOR Loans plus the
LIBOR Rate in effect from time to time. 
  
 The Prime Rate on the
date hereof is 4% per annum and, therefore, the rate of interest in effect hereunder on the date hereof, expressed in simple interest terms, is 4% per annum with respect to any Revolver Loan that constitutes a Prime Rate Loan.

  
 (c) Borrowers jointly and severally shall pay to Bank a
commitment fee for each day at a rate per annum equal to the product of (i) 0.125% multiplied by (ii) the difference between (A) the Revolver Commitment and (B) the aggregate outstanding amount of Revolver Loans on such day, payable monthly on the
first day of each calendar month with respect to the immediately preceding calendar month. 
  
 (d) Borrowers jointly and severally shall pay to Bank, at such times as Bank shall require, Bank’s standard fees in connections with standby and documentary letters of credit, as in effect from time to time, and
with respect to standby and documentary letters of credit, at the time of issuance of each standby and documentary letter of credit, a fee equal to 0.75% per annum on the face amount of the standby or documentary letter of credit for the period of
time the standby or documentary letter of credit will be outstanding. 
  
 2.12. Statement of Account. If Bank provides Borrowers with a statement of account on a periodic basis, such statement will be presumed complete and accurate and will be definitive and binding on Borrowers, unless objected to with
specificity by Borrowers in writing within forty-five (45) days after receipt. 
  
 2.13. Termination. Upon at least thirty (30) days’ prior written notice to Bank, Borrowers may, at their option, terminate this Agreement and the Commitments; provided, however, no such
termination by Borrowers shall be effective until the full, final and indefeasible payment of the Indebtedness in cash or immediately available funds which, in the case of any Indebtedness consisting of contingent obligations under letters of credit
issued by Bank for the account of Borrowers, shall not be deemed to have occurred unless and until Bank has received either cash or a direct pay letter of credit naming Bank as beneficiary and in form and substance, and from an issuing bank,
acceptable to Bank, in an amount not less than 105% of the aggregate amount of all such contingent obligations. Any notice of termination given by Borrowers shall be irrevocable unless Bank otherwise agrees in 
  

 -15- 

 writing. Borrowers may elect to terminate the Commitments in their entirety only. No section of this Agreement or type of
Loan available hereunder may be terminated by Borrowers singly. Bank may terminate this Agreement and the Commitments at any time, without notice, upon or after the occurrence of a Default or Event of Default. 
  
 2.14. All Loans to Constitute One Obligation. The Loans shall
constitute one general obligation of Borrowers and (unless otherwise expressly provided in any Loan Document) shall be secured by Bank’s Lien upon all of the Collateral. 
  
 2.15. Termination. Nature and Extent of Each Borrower’s Liability. 
  
 2.15.1. Joint and Several Liability. Each Borrower shall be liable
for, on a joint and several basis, and hereby guarantees the timely payment by Borrowers of, all of the Loans and other Indebtedness, regardless of which Borrower actually may have received the proceeds of any Loans or other extensions of credit
hereunder or the amount of such Loans received or the manner in which Bank accounts for such Loans or other extensions of credit on its books and records, it being acknowledged and agreed that Loans to any Borrower inure to the mutual benefit of all
Borrowers and that Bank is relying on the joint and several liability of Borrowers in extending the Loans and other financial accommodations hereunder. Each Borrower hereby unconditionally and irrevocably agrees that upon default in the payment when
due (whether at stated maturity, by acceleration or otherwise) of any principal of, or interest owed on, any of the Loans or other Indebtedness, such Borrower shall forthwith pay the same, without notice or demand. 
  
 2.15.2. Unconditional Nature of Liability. Each Borrower’s joint
and several liability hereunder with respect to, and guaranty of, the Loans and other Indebtedness shall, to the fullest extent permitted by applicable law, be unconditional irrespective of (i) the validity, enforceability, avoidance or
subordination of any of the Indebtedness or of any promissory note or other document evidencing all or any part of the Indebtedness, (ii) the absence of any attempt to collect any of the Indebtedness from any other obligor or any Collateral or other
security therefor, or the absence of any other action to enforce the same, (iii) the waiver, consent, extension, forbearance or granting of any indulgence by Bank with respect to any of the Indebtedness or any Instrument or agreement evidencing or
securing the payment of any of the Indebtedness, or any other agreement now or hereafter executed by any other Borrower and delivered to Bank, (iv) the failure by Bank to take any steps to perfect or maintain the perfected status of its security
interest in or Lien upon, or to preserve its rights to, any of the Collateral or other security for the payment or performance of any of the Indebtedness, or Bank’s release of any Collateral or of its Liens upon any Collateral, (v) Bank’s
election, in any proceeding instituted under the Bankruptcy Code, for the application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or grant of a security interest by any other Borrower, as debtor-in-possession under Section 364
of the Bankruptcy Code, (vii) the release or compromise, in whole or in part, of the liability of any Borrower, any Guarantor or any other obligor for the payment of any of the Indebtedness, (viii) any amendment or modification of any of the Loan
Documents or waiver of any Default or Event of Default thereunder, (ix) any increase in the amount of the Indebtedness beyond any limits imposed herein or in the amount of any interest, fees or other charges payable in connection therewith, or any
decrease in the same, (x) the disallowance of all or any portion of Bank’s claims for the repayment of any of the Indebtedness under Section 502 of the Bankruptcy Code, or (xi) any other circumstance that might constitute a legal or equitable
discharge or defense of any Borrower, any Guarantor or any other obligor. At any time an Event of Default exists, Bank may proceed directly and at once, without notice to any Borrower, any Guarantor or any other obligor, against any Borrower, any
Guarantor or any other obligor to collect and recover all or any part of the Indebtedness, without first proceeding against any other Borrower, Guarantor or other obligor or against any Collateral or other security for the payment or performance of
any of the Indebtedness, and each Borrower waives any provision that might otherwise require any Bank under applicable law to pursue or exhaust its remedies against any Collateral or any Borrower, any Guarantor or any other obligor before pursuing
such Borrower, such Guarantor or such other obligor. Each Borrower consents and agrees that Bank shall be under no obligation to marshal any assets in favor of any Borrower, any Guarantor or any other obligor or against or in payment of any or all
of the Indebtedness. 
  
 2.15.3. No Reduction in Liability for
Indebtedness. No payment or payments made by a Borrower, Guarantor or other obligor or received or collected by Bank from a Borrower or any other Person by virtue of any action or proceeding or any setoff or appropriation or application at any
time or from time to time in reduction of or in payment of the Indebtedness shall be deemed to modify, reduce, release or otherwise affect the liability of any Borrower under this Agreement, each of which shall remain jointly and severally liable
for the payment and performance of all Loans and other Indebtedness until the Indebtedness is paid in full and the Commitments are terminated. 
  

 -16- 

 2.15.4. Contribution. Each Borrower is unconditionally obligated to repay the Indebtedness as a
joint and several obligor under this Agreement. If, as of any date, the aggregate amount of payments made by a Borrower on account of the Indebtedness and proceeds of such Borrower’s Collateral that are applied to the Indebtedness exceeds the
aggregate amount of Loan proceeds actually used by such Borrower in its business (such excess amount being referred to as an “Accommodation Payment”), then each other Borrower (each such Borrower being referred to as a “Contributing
Borrower”) shall be obligated to make contribution to such Borrower (the “Paying Borrower”) in an amount equal to (A) the product derived by multiplying the sum of each Accommodation Payment of each Borrower by the Allocable
Percentage of the Borrower from whom contribution is sought less (B) the amount, if any, of the then outstanding Accommodation Payment of such Contributing Borrower (such last mentioned amount which is to be subtracted from the aforesaid product to
be increased by any amounts theretofore paid by such Contributing Borrower by way of contribution hereunder, and to be decreased by any amounts theretofore received by such Contributing Borrower by way of contribution hereunder); provided,
however, that a Paying Borrower’s recovery of contribution hereunder from each other Borrower shall be limited to that amount paid by the Paying Borrower in excess of its Allocable Percentage of all Accommodation Payments then
outstanding of Borrowers. As used herein, the term “Allocable Percentage” shall mean, on any date of determinations thereof, a fraction the denominator of which shall be equal to the number of Borrowers who are parties to this Agreement on
such date and the numerator of which shall be 1; provided, however, that such percentages shall be modified in the event that contribution from a Borrower is not possible by reason of insolvency, bankruptcy or otherwise by reducing such
Borrower’s Allocable Percentage equitably and by adjusting the Allocable Percentage of each other Borrower proportionately so that the Allocable Percentages of Borrowers at all times equals 100%. 
  
 2.15.5. Subordination. Each Borrower hereby subordinates any claims,
including any right of payment, subrogation, contribution and indemnity, that it may have from or against any Borrower, any Guarantor or any other obligor, and any successor or assign of any other Borrower, any Guarantor or other obligor, including
any trustee, receiver or debtor-in-possession, howsoever arising, due or owing or whether heretofore, now or hereafter existing, to the payment in full of all of the Indebtedness. 
  

	 	3.	Conditions Precedent to Extensions of Credit. 

  
 3.1. Conditions Precedent to Initial Loans. In addition to any other requirement set forth in this Agreement, Bank shall not be required to fund
any Loan or make any other extension of credit hereunder unless and until the following conditions shall have been satisfied, in the sole opinion of Bank and its counsel: 
  
 (a) Loan Documents. Each Borrower and each other party to any Loan Document, as applicable, shall have executed and
delivered this Agreement, the Notes, and other required Loan Documents, all in form and substance satisfactory to Bank. 
  
 (b) Supporting Documents. Each Borrower shall cause to be delivered to Bank the following documents: 
  
 (i) A copy of the governing instruments of each Borrower
and good standing certificates of each Borrower, certified by the appropriate official of their respective states of incorporation and each state in which such Borrower or is qualified to do business; 
  
 (ii) Incumbency certificate and certified resolutions of
the board of directors (or other appropriate governing body) of each Borrower executing any Loan Documents, signed by the Secretary or another authorized officer of each Borrower or such other Person, authorizing the execution, delivery and
performance of the Loan Documents; 
  
 (iii) The
legal opinion of Borrowers’ and any Guarantor’s legal counsel addressed to Bank regarding such matters as Bank and its counsel may request; 
  

 -17- 

 (iv) A satisfactory Borrowing Base Certificate duly completed by Borrowers, together
with all supporting statements, schedules and reconciliations as required by Bank; 
  
 (v) UCC-11 searches and other Lien searches showing no existing security interests in or Liens on the Collateral other than Permitted
Liens; and 
  
 (vi) Any lien waivers requested
by Bank pursuant to Section 5.13(c) hereof. 
  
 (c)
Insurance. Borrowers shall have delivered to Bank satisfactory evidence of insurance meeting the requirements of Section 5.3. 
  
 (d) Perfection of Liens. UCC-1 financing statements and, if applicable, certificates of title covering the Collateral shall duly have been
recorded or filed in the manner and places required by law to establish, preserve, protect and perfect the interests and rights created or intended to be created by the Security Agreement; and all taxes, fees and other charges in connection with the
execution, delivery and filing of the Security Agreement and the financing statements shall duly have been paid. 
  
 (e) Subordinations. Bank shall have received subordinations satisfactory to it from (i) all lessors that might have landlord’s Liens on any
Collateral and (ii) all Guarantors and Affiliates as required by Section 5.9. 
  
 (f) Additional Documents. Borrowers shall have delivered to Bank all additional opinions, documents, certificates and other assurances that Bank or its counsel may require. 
  
 (g) Payment of Fees. Borrowers shall have paid all fees, costs and
expenses which are required by the Loan Documents to be paid on or prior to the Closing Date. 
  
 3.2. Conditions Precedent to Each Loan or Letter of Credit. In addition to any other requirement set forth in this Agreement, Bank shall not be required to fund any Loan or make any other extension of credit
hereunder unless and until the following conditions shall have been satisfied, in the sole opinion of Bank and its counsel, and each request or deemed request by Borrowers for any Loan or other extension of credit shall be deemed to be a
representation that all such conditions have been satisfied: 
  
 (a) No Default. No Default shall have occurred and be continuing or could occur upon the making of the Revolver Loan in question and, if Borrowers are required to deliver a written Notice of Borrowing, Borrowers shall have delivered
to Bank an officer’s certificate to such effect, which may be incorporated in the Notice of Borrowing. 
  
 (b) Correctness of Representations. All representations and warranties made by any Borrower and any Guarantor herein or otherwise in writing in
connection herewith shall be true and correct in all material respects with the same effect as though the representations and warranties had been made on and as of the date of the proposed Revolver Loan, and, if Borrowers are required to deliver a
written Notice of Borrowing, Borrowers shall have delivered to Bank an officer’s certificate to such effect, which may be incorporated in the Notice of Borrowing. 
  
 (c) No Adverse Change. There shall have been no change which could have a Material Adverse Effect on any Borrower,
any Subsidiary or any Guarantor since the date of the most recent financial statements of such Person delivered to Bank from time to time. 
  
 (d) Limitations Not Exceeded. No proposed Revolver Loan or letter of credit will cause the aggregate outstanding principal balance of Revolver
Loans and the aggregate face amount of all outstanding letters of credit to exceed the lesser of the Revolver Commitment and the Borrowing Base. 
  

 -18- 

 (e) No Termination. Bank shall (i) have timely received all financial information from all
Guarantors as required under the Loan Documents, and (ii) not have received notice from any Guarantor or any surety terminating or repudiating such Person’s guaranty of the Indebtedness incurred by Borrowers. 
  
 (f) Further Assurances. Borrowers shall have delivered such further
documentation or assurances as Bank may reasonably require. 
  
 4. Representations and Warranties. In order to induce Bank to enter into this Agreement and to make the Loans and other extensions of credit provided for herein, each Borrower makes the following representations and
warranties, all of which shall survive the execution and delivery of the Loan Documents. Unless otherwise specified, such representations and warranties shall be deemed made as of the date hereof and as of the date of any Loan or other extension of
credit by Bank to Borrowers: 
  
 4.1. Valid Existence and
Power. Each Borrower and each Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is duly qualified or licensed to transact business in all places where the
failure to be so qualified would have a Material Adverse Effect on it. Each Borrower and each other Person which is a party to any Loan Document (other than Bank) has the power to make and perform the Loan Documents executed by it and all such
instruments will constitute the legal, valid and binding obligations of such Person, enforceable in accordance with their respective terms, subject only to bankruptcy and similar laws affecting creditors’ rights generally. Each Borrower is
organized under the laws of the State of Delaware and has not changed the jurisdiction of its organization within the five years preceding the date hereof except as previously reported to Bank. 
  
 4.2. Authority. The execution, delivery and performance of each Loan
Document by each Borrower and each other Person (other than Bank) executing any Loan Document have been duly authorized by all necessary action of such Person, and do not and will not violate any provision of law or regulation, or any writ, order or
decree of any court or governmental or regulatory authority or agency or any provision of the governing instruments of such Person, and do not and will not, with the passage of time or the giving of notice, result in a breach of, or constitute a
default or require any consent under, or result in the creation of any Lien upon any property or assets of such Person pursuant to, any law, regulation, instrument or agreement to which any such Person is a party or by which any such Person or its
respective properties may be subject, bound or affected. 
  
 4.3.
Financial Condition. Other than as disclosed or reserved for in financial statements delivered on or prior to the date hereof to Bank, no Borrower nor any Subsidiary nor (to the knowledge of any Borrower) any Guarantor has any direct or
contingent obligations or liabilities (including any guarantees or leases) or any material unrealized or anticipated losses from any commitments of such Person except with respect to (i) the Underfunded Pension Plans and (ii) as described on
Exhibit 4.3 (if any). All such financial statements have been prepared in accordance with GAAP and fairly present the financial condition of Borrowers, Subsidiaries or Guarantors, as the case may be, as of the date thereof. No Borrower
is aware of any material adverse fact concerning the conditions or future prospects of any Borrower or any Subsidiary or any Guarantor which has not been fully disclosed to Bank, including any adverse change in the operations or financial condition
of such Person since the date of the most recent financial statements delivered to Bank. Each Borrower is Solvent, and after consummation of the transactions set forth in this Agreement and the other Loan Documents, each Borrower will be Solvent.

  
 4.4. Litigation. Except as disclosed on Exhibit
4.4 (if any), there are no suits or proceedings pending, or to the knowledge of any Borrower threatened in writing, before any court or by or before any governmental or regulatory authority, commission, bureau or agency or public regulatory
body against or affecting any Borrower, any Subsidiary or (to any Borrower’s knowledge) any Guarantor, or their assets, which if adversely determined would have a Material Adverse Effect on the financial condition or business of such Borrower,
such Subsidiary or such Guarantor. 
  
 4.5. Agreements,
Etc. No Borrower nor any Subsidiary is a party to any agreement or instrument or subject to any court order, governmental decree or any charter or other corporate restriction, adversely affecting its business, assets, operations or condition
(financial or otherwise), nor is any such Person in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which it is a party, or any law, regulation,
decree, order or the like. 
  

 -19- 

 4.6. Authorizations. All authorizations, consents, approvals and licenses required under
applicable law or regulation for the ownership or operation of the property owned or operated by any Borrower or any Subsidiary or for the conduct of any business in which it is engaged have been duly issued and are in full force and effect, and it
is not in default, nor has any event occurred which with the passage of time or the giving of notice, or both, would constitute a default, under any of the terms or provisions of any part thereof, or under any order, decree, ruling, regulation,
closing agreement or other decision or instrument of any governmental commission, bureau or other administrative agency or public regulatory body having jurisdiction over such Person, which default would have a Material Adverse Effect on such
Person. Except as noted herein, no approval, consent or authorization of, or filing or registration with, any governmental commission, bureau or other regulatory authority or agency is required with respect to the execution, delivery or performance
of any Loan Document. 
  
 4.7. Title. Each Borrower and
each Subsidiary has good title to all of the assets shown in its financial statements free and clear of all Liens, except Permitted Liens. Each Borrower has full ownership rights in all of its Collateral. 
  
 4.8. Collateral. The security interests granted to Bank herein and
pursuant to any other Security Agreement (a) constitute and, as to subsequently acquired property included in the Collateral covered by the Security Agreement, will constitute, security interests under the Code entitled to all of the rights,
benefits and priorities (subject only to Permitted Liens) provided by the Code and (b) are, and as to such subsequently acquired Collateral will be, fully perfected, superior and prior to the rights of all third persons, now existing or hereafter
arising, subject only to Permitted Liens. All of the Collateral is intended for use solely in Borrowers’ business. 
  
 4.9. Jurisdiction of Organization; Location. The jurisdictions in which Borrowers are organized, existing and in good standing, the chief executive
office of each Borrower where such Borrower’s business records are located, all of Borrowers’ other places of business and any other places where any Collateral is kept, are all correctly and completely indicated on Exhibit
4.9. The Collateral is located and shall at all times be kept and maintained only at Borrowers’ location or locations as described on Exhibit 4.9 herein, with the exception of Inventory which has been sold in the ordinary
course of business. No such Collateral is attached or affixed to any real property so as to be classified as a fixture unless Bank has otherwise agreed in writing. No Borrower has changed its legal status or the jurisdiction in which it is organized
or moved its chief executive office within the five (5) years preceding the date hereof. 
  
 4.10. Taxes. Each Borrower and each Subsidiary have filed all federal and state income and other tax returns which are required to be filed, and except to the extent being Properly Contested or in an amount of
less than $10,000 in the aggregate, have paid all taxes as shown on said returns and all taxes, including withholding, FICA and ad valorem taxes, shown on all assessments received by it to the extent that such taxes have become due. No Borrower nor
any Subsidiary is subject to any federal, state or local tax Liens nor has such Person received any notice of deficiency or other official notice to pay any taxes. Each Borrower and each Subsidiary have paid all sales and excise taxes payable by it.

  
 4.11. Labor Law Matters. No goods or services have been
or will be produced by any Borrower or any Subsidiary in violation of any applicable labor laws or regulations or any collective bargaining agreement or other labor agreements or in violation of any minimum wage, wage-and-hour or other similar laws
or regulations, except where such violations would not have a Material Adverse Effect. 
  
 4.12. Accounts. Each Account, Instrument, Chattel Paper and other writing constituting any portion of the Collateral (a) is genuine and enforceable in accordance with its terms; (b) is not subject to any
deduction or discount (other than as stated in the invoice and disclosed to Bank in writing), defense, set off, claim or counterclaim of a material nature against any Borrower except as to which such Borrower has notified Bank in writing; (c) is not
subject to any other circumstances that would impair the validity, enforceability or amount of such Collateral except as to which such Borrower has notified Bank in writing; (d) arises from a bona fide sale of goods or delivery of services in the
ordinary course and in accordance with the terms and conditions of any applicable purchase order, contract or agreement; (e) is free of all Liens other than Permitted Liens; and (f) is for a liquidated 
  

 -20- 

 amount maturing as stated in the invoice therefor. Each Account included in any Borrowing Base Certificate, report or
other document as an Eligible Account meets all the requirements of an Eligible Account set forth herein. 
  
 4.13. Judgment Liens. Except as set forth on Exhibit 4.13 hereof, no Borrower nor any Subsidiary, nor any of their assets, are
subject to any unpaid judgments (whether or not stayed) or any judgment liens in any jurisdiction. 
  
 4.14. Subsidiaries. If any Borrower has any Subsidiaries, they are listed on Exhibit 4.14. 
  
 4.15. Environmental. Except (i) for minimal amounts of Regulated
Materials used by a Borrower in the ordinary course of business, and (ii) as disclosed on Exhibit 4.15, no Borrower, nor to any Borrower’s knowledge any other previous owner or operator of any real property currently owned or
operated by any Borrower, has generated, stored or disposed of any Regulated Material on any portion of such property, or transferred any Regulated Material from such property to any other location in violation of any applicable Environmental Laws.
Except as disclosed on Exhibit 4.15, no Regulated Material has been generated, stored or disposed of on any portion of the real property currently owned or operated by any Borrower by any other Person, or is now located on such
property. Except as disclosed on Exhibit 4.15, each Borrower is in full compliance with all applicable Environmental Laws and no Borrower has been notified of any action, suit, proceeding or investigation which calls into question
compliance by any Borrower with any Environmental Laws or which seeks to suspend, revoke or terminate any license, permit or approval necessary for the generation, handling, storage, treatment or disposal of any Regulated Material. 
  
 4.16. ERISA. Except as disclosed on Exhibit 4.16, no
Borrower nor any Subsidiary has any pension, profit-sharing or other benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Each Borrower has furnished to Bank true and complete copies of the
latest annual report required to be filed pursuant to Section 104 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), with respect to each employee benefit plan or other plan maintained for employees of Borrower
or any Subsidiary and covered by Title IV of ERISA (a “Plan”), and no Termination Event (as hereinafter defined) with respect to any Plan has occurred and is continuing. For the purposes of this Agreement, a “Termination Event”
means a “reportable event” as defined in Section 4043(b) of ERISA, or the filing of a notice of intent to terminate under Section 4041 of ERISA. Except as disclosed on Exhibit 4.16, no Borrower nor any Subsidiary has any
unfunded liability with respect to any such Plan. 
  
 4.17.
Investment Company Act. No Borrower nor any Subsidiary is an “investment company” as defined in the Investment Company Act of 1940, as amended. 
  

4.18. Names. Each Borrower currently conducts all business only under its legal name as set forth above in the introductory section of this
Agreement. Except as disclosed on Exhibit 4.18, during the preceding five (5) years no Borrower has (i) been known as or used any other corporate, fictitious or trade name, (ii) been the surviving entity of a merger or consolidation or
(iii) acquired all or substantially all of the assets of any Person. 
  
 4.19. Insider. No Borrower is, and no Person having “control” (as that term is defined in 12 U.S.C. § 375(b)(5) or in regulations promulgated pursuant thereto) of a Borrower is, an “executive officer,”
“director,” or “principal shareholder” (as those terms are defined in 12 U.S.C. § 375(b) or in regulations promulgated pursuant thereto) of Bank, of a bank holding company of which Bank is a subsidiary, or of any subsidiary
of a bank holding company of which Bank is a subsidiary. 
  
 4.20.
Compliance with Covenants; No Default. Each Borrower is, and upon funding of the initial Loans on the Closing Date will be, in compliance with all of the covenants hereof. No Default has occurred, and the execution, delivery and performance
of the Loan Documents and the funding of the initial Loans on the Closing Date will not cause a Default. 
  
 4.21. Full Disclosure. There is no material fact which is known or which should be known by any senior officer of any Borrower which could have a
Material Adverse Effect. No Loan Document, nor any 
  

 -21- 

 agreement, document, certificate or statement delivered by any Borrower to Bank, contains any untrue statement of a
material fact or omits to state any material fact which is known or which should be known by any Borrower necessary to keep the other statements from being misleading. 
  
 4.22. Reserved. 
  
 4.23. Corporate Structure. As of the date hereof, Exhibit 4.23 hereto sets forth (i) the correct name of each Subsidiary, its
jurisdiction of organization and the percentage of its equity interests having voting powers owned by each Person, (ii) the name of each Borrowers’ corporate or joint venture Affiliates and the nature of the affiliation, (iii) the number,
nature and record holder of all outstanding equity interests of each Borrower and each of its Subsidiaries and (iv) the number of authorized and issued equity interests (and treasury shares) of Borrower and each Subsidiary. Each Borrower has good
title to all of the shares it purports to own of the equity interests of each of its Subsidiaries, free and clear in each case of any Lien other than Permitted Liens. All such equity interests have been duly issued and are fully paid and
non-assessable. Since the date of the last audited financial statements of Borrowers delivered to Bank, except as permitted by Section 6.3, no Borrower has made, or obligated itself to make, any dividends (other than stock dividends) or other
distribution on or with respect to, or any purchase, redemption, retirement or other acquisition of, any equity interests of any Borrower. There are no outstanding options to purchase, or any rights or warrants to subscribe for, or any commitments
or agreements to issue or sell, or any equity interests or obligations convertible into, or any powers of attorney relating to, equity interests of any Borrower or any of its Subsidiaries except stock options or grants provided by Borrowers to their
officers, directors and employees from time to time in the ordinary course of business. Except as set forth on Exhibit 4.23 hereto, there are no outstanding agreements or instruments binding upon the holders of any Borrower’s
equity interests relating to the ownership of its equity interests. 
  
 5. Affirmative Covenants of Borrower. Each Borrower covenants and agrees that from the date hereof and until payment in full of the Indebtedness and the formal termination of this Agreement, each Borrower and each Subsidiary:

  
 5.1. Use of Revolver Loan Proceeds. Shall use the
proceeds of Revolver Loans solely for one of the following purposes: (i) to pay any of the Indebtedness, and (ii) to make expenditures for other lawful corporate purposes of Borrowers to the extent such expenditures are not prohibited by this
Agreement or applicable law, and upon demand by Bank, shall furnish Bank all evidence that it may reasonably require with respect to such uses. 
  
 5.2. Maintenance of Business and Properties. Shall at all times maintain, preserve and protect all Collateral and all the remainder of its material
property used or useful in the conduct of its business, and keep the same in good repair, working order and condition (ordinary wear and tear excepted), and from time to time make, or cause to be made, all material needful and proper repairs,
renewals, replacements, betterments and improvements thereto so that the business carried on in connection therewith may be conducted properly and in accordance with standards generally accepted in businesses of a similar type and size at all times,
and maintain and keep in full force and effect all licenses and permits necessary to the proper conduct of its business. 
  
 5.3. Insurance. Shall maintain such liability insurance, workers’ compensation insurance, business interruption insurance and casualty
insurance as may be required by law, customary and usual for prudent businesses in its industry or as may be reasonably required by Bank and shall insure and keep insured all Collateral and other properties in good and responsible insurance
companies reasonably satisfactory to Bank. All hazard insurance covering Collateral shall be in amounts and shall contain co-insurance and deductible provisions reasonably acceptable to Bank, shall name and directly insure Bank as secured party,
additional insured and lender’s loss payee, and shall not be terminable except upon thirty (30) days’ written notice to Bank. Borrowers shall furnish to Bank copies of all such policies. 
  
 5.4. Notice of Default. Shall provide to Bank immediate notice of (a)
the occurrence of a Default and what action (if any) Borrowers are taking to correct the same, (b) any material litigation or material adverse changes in existing litigation or any judgment against it or its assets, (c) any material damage or loss
to property, (d) any notice from taxing authorities as to claimed deficiencies or any tax lien or any notice relating to alleged ERISA violations, (e) any Reportable Event, as defined in ERISA, (f) any rejection, return, offset, dispute, 

 

 -22- 

 loss or other circumstance having a Material Adverse Effect on any Collateral, (g) the cancellation or termination of, or
any default under, any material agreement to which any Borrower is a party or by which any of its properties are bound, or any acceleration of the maturity of any Debt of any Borrower; and (h) any loss or threatened loss of material licenses or
permits. 
  
 5.5. Inspections; Field Examinations;
Appraisals. Shall permit inspections of the Collateral and the records pertaining thereto and verification of the Accounts by Bank or its agents or designees, during normal business hours and, so long as no Event of Default exists, following
prior notice to Borrowers, and in such manner as may be reasonably required by Bank and shall further permit such inspections, reviews and field examinations of its other records and its properties (with such reasonable frequency and at such
reasonable times as Bank may desire) by Bank or its agents or designees as Bank may deem necessary or desirable from time to time, but in no event fewer than two field examinations in any Loan Year. Additionally, if during any sixty (60) day period,
the average amount of outstanding Revolver Loans during such period exceeds 120% of the average sum of the Accounts Formula Amount and the Inventory Formula Amount during such period, an appraisal of Borrowers’ Equipment, prepared by an
appraiser satisfactory to Bank and engaged by and on behalf of Bank shall be required by Bank, and Borrowers shall reimburse Bank for the cost of such appraisal and any and all expenses in connection therewith. The cost of such field examinations,
reviews, verifications, inspections and appraisals, including, without limitation, Bank’s per diem fees of $750 per person per day and reasonable out-of-pocket expenses shall be borne by Borrowers.; provided, however, that
Borrowers shall be obligated to reimburse Bank for no more than two (2) field examinations per Fiscal Year unless (i) an Event of Default exists, in which event Borrowers shall reimburse Bank for the costs and expenses of all field examinations or
(ii) Average Availability is less than $5,000,000 for a consecutive 180 day period, in which event Borrowers shall reimburse Bank for up to four (4) field examinations per Fiscal Year. Nothing contained herein shall prohibit Bank from conducting
field examinations from time to time at its own expense. 
  
 5.6.
Financial Information. Shall maintain books and records in accordance with GAAP and shall furnish to Bank the following periodic financial information: 
  

(a) Periodic Borrowing Base Information. Not later than fifteen (15) days after the end of each month (or more frequently if required by Bank),
a completed Borrowing Base Certificate prepared as of the last Business Day of the preceding month. All Borrowing Base Certificates shall be certified by the chief financial officer or president of Borrowing Agent to be accurate and complete and in
compliance with the terms of the Loan Documents. Borrowers shall attach the following to each Borrowing Base Certificate prepared as of the last day of each month or more frequently at Bank’s request: (i) a report listing all Accounts and all
Eligible Accounts of Borrowers as of such last day (an “Accounts Receivable Report”) which shall include the amount and age of each Account, the name and mailing address of each Account Debtor, and such other information as Bank may
require in order to verify the Eligible Accounts, all in reasonable detail and in form acceptable to Bank, (ii) a report listing all Inventory and all Eligible Inventory of Borrowers as of such last day, the cost thereof, specifying raw materials,
work-in-process, finished goods and all Inventory which has not been timely sold by Borrowers in the ordinary course of business, and such other information as Bank may require relating thereto, all in form acceptable to Bank (an “Inventory
Report”), and (iii) a report reconciling (x) the Accounts and Inventory of Borrowers as set forth on the Accounts Receivable Report and the Inventory Report attached to the Borrowing Base Certificate to (y) the aggregate Accounts and Inventory
set forth in the financial statements delivered to Bank pursuant to Section 5.6(b) (which shall be based upon Borrowers’ general ledger and verified by a physical Inventory count conducted no less frequently than annually and periodic
cycle counts). 
  
 (b) Monthly Statements. Within thirty
(30) days after the end of each month, a consolidated and consolidating balance sheet of Borrowers and their Subsidiaries at the end of that period, a consolidated and consolidating income statement for that period (and for the portion of the Fiscal
Year ending with such period) and, if that period is the last month in any fiscal quarter of Borrowers, a consolidated and consolidating statement of cash flows for that period (and for the portion of the Fiscal Year ending with such period),
together with all supporting schedules, setting forth in comparative form the figures for the same period of the preceding Fiscal Year, and certified by the chief financial officer of each Borrower as true and correct and fairly representing the
financial condition of Borrowers and their Subsidiaries and that such statements are prepared in accordance with GAAP in all material respects, except without footnotes and subject to normal year-end audit adjustments; 
  

 -23- 

 (c) Quarterly Statements. Within forty-five (45) days after the end of each fiscal quarter, a
consolidated and consolidating balance sheet of Borrowers and their Subsidiaries at the end of that period, a consolidated and consolidating income statement for that period (and for the portion of the Fiscal Year ending with such period) and, if
that period is the last fiscal quarter in any fiscal year of Borrowers, a consolidated and consolidating statement of cash flows for that period (and for the portion of the Fiscal Year ending with such period), together with all supporting
schedules, setting forth in comparative form the figures for the same period of the preceding Fiscal Year, and certified by the chief financial officer of each Borrower as true and correct and fairly representing the financial condition of Borrowers
and their Subsidiaries and that such statements are prepared in accordance with GAAP in all material respects, except without footnotes and subject to normal year-end audit adjustments; 
  
 (d) Annual Statements. Within one hundred twenty (120) days after the end of each Fiscal Year, a detailed reviewed
financial report of Borrower and its Subsidiaries containing a consolidated balance sheet at the end of that period and a consolidated income statement and statement of cash flows for that period, setting forth in comparative form the figures for
the preceding Fiscal Year, together with all supporting schedules and footnotes, and containing a review opinion of independent certified public accountants acceptable to Bank that the financial statements were prepared in accordance with GAAP in
all material respects. Any document accompanying the report will also be provided to Bank. In addition, promptly upon receipt, one copy of each written report submitted to Borrowers by independent accountants for any other annual, quarterly or
special audit will be provided to Bank; 
  
 (e) No Default
Certificates. Together with each report required by Subsections (c) and (d), a compliance certificate in the form annexed hereto as Exhibit 5.6 (each a “Compliance Certificate) and a certificate of its president or chief
financial officer that no Default or Event of Default then exists or if a Default or Event of Default exists, the nature and duration thereof and Borrowers’ intention with respect thereto, and in addition, shall cause Borrowers’
independent auditors (if applicable) to submit to Bank, together with its audit report, a statement that, in the course of such audit, it discovered no circumstances which it believes would result in a Default or Event of Default under any of
Sections 7.1, 7.2, 7.3, 7.4 or 7.5, or if it discovered any such circumstances, the nature and duration thereof; 
  
 (f) Auditor’s Management Letters. Promptly upon receipt thereof, copies of each report submitted to Borrowers by independent public
accountants in connection with any annual, interim or special audit made by them of the books of Borrowers including, without limitation, each report submitted to Borrowers concerning their accounting practices and systems and any final comment
letter submitted by such accountants to management in connection with the annual audit of Borrowers; provided, however, that, nothing contained herein shall require any Borrower to request or require the preparation of a management
letter by its auditors; 
  
 (g) Payables Report. If
requested by Bank, within fifteen (15) days of the end of each month (or more frequently if required by Bank), a schedule of all accounts payable of Borrowers setting forth for each such account the number of days which have elapsed since the
original date of invoice and containing the name and address of each vendor and such other detail requested by Bank; 
  
 (h) Other Information. Such other information reasonably requested by Bank from time to time concerning the business, properties or financial
condition of any Borrower, any Guarantor and any of their respective Subsidiaries; and 
  
 (i) Projections. Not later than the forty-five (45th) day after the commencement of each Fiscal Year, deliver Projections to Bank for Borrowers for such Fiscal Year on a quarter to quarter basis. 
  
 5.7. Maintenance of Existence and Rights. Shall preserve and maintain
its corporate existence, authorities to transact business, rights and franchises, trade names, patents, trademarks and permits necessary to the conduct of its business. 
  
 5.8. Payment of Taxes, Etc. Shall pay before delinquent all of its debts and taxes, except to the extent being
Properly Contested. 
  

 -24- 

 5.9. Subordination. Shall cause all debt and other obligations now or hereafter owed by a Borrower
to any Guarantor or Affiliate to be subordinated in right of payment and security to the Indebtedness in accordance with subordination agreements satisfactory in all respects to Bank. 
  
 5.10. Compliance; Hazardous Materials. Shall strictly comply with all laws, regulations, ordinances and other legal
requirements, specifically including, without limitation, ERISA, all securities laws and all Environmental Laws. No Borrower nor any Subsidiary shall engage in the storage, manufacture, disposition, processing, handling, use or transportation of any
Regulated Materials except (i) for minimal amounts of Regulated Materials used by a Borrower in the ordinary course of business and (ii) as disclosed on Exhibit 4.15. 
  
 5.11. Compliance with Assignment Laws. Shall if required by Bank comply with the Federal Assignment of Claims Act and
any other applicable law relating to assignment of government contracts. 
  
 5.12. Further Assurances. Shall take such further action and provide to Bank such further assurances as may be reasonably requested to ensure compliance with the intent of this Agreement and the other Loan
Documents. 
  
 5.13. Covenants Regarding Collateral. Each
Borrower makes the following covenants with Bank regarding the Collateral for itself and each Subsidiary. Each Borrower and each Subsidiary: 
  
 (a) will use the Collateral only in the ordinary course of its business and will not permit the Collateral to be used in violation of any applicable law
or policy of insurance; 
  
 (b) as agent for Bank, will defend
the Collateral against all claims and demands of all Persons, except for Permitted Liens; 
  
 (c) will, at Bank’s request, obtain and deliver to Bank such waivers as Bank may require waiving the landlord’s, warehouseman’s, mortgagee’s or other lienholder’s enforcement rights against
the Collateral and assuring Bank’s access to the Collateral in exercise of its rights hereunder; 
  
 (d) will promptly deliver to Bank all promissory notes, drafts, trade acceptances, chattel paper, Instruments or documents of title which are Collateral
in tangible form, appropriately endorsed to Bank’s order, and no Borrower will create or permit any Subsidiary to create any Electronic Chattel Paper without taking all steps deemed necessary by Bank to confer control of the Electronic Chattel
Paper upon Bank in accordance with the Code; 
  
 (e) except for
sales of Inventory in the ordinary course of business, Permitted Equipment Dispositions, or as otherwise expressly permitted in this Agreement, will not sell, assign, lease, transfer, pledge, hypothecate or otherwise dispose of or encumber any
Collateral or any of its other property or any interest therein; 
  
 (f) shall promptly notify Bank of any future patents, trademarks or copyrights owned by any Borrower or any Subsidiary and any license agreements entered into by any Borrower or any Subsidiary authorizing said Person to use any patents,
trademarks or copyrights owned by third parties; and 
  
 (g)
shall give Bank at least thirty (30) days prior written notice of any new trade or fictitious name. Each Borrower’s and each Subsidiary’s use of any trade or fictitious name shall be in compliance with all laws regarding the use of such
names. 
  
 5.14. Landlord Waivers. Within ninety (90) days
after the Closing Date, shall deliver to Bank landlord waivers, in form and substance satisfactory to Bank, for each leased location of Borrowers. 
  

 -25- 

 6. Negative Covenants of Borrowers. Each Borrower covenants and agrees that from the date
hereof and until payment in full of the Indebtedness and the termination of this Agreement and the Commitments, each Borrower and each Subsidiary: 
  
 6.1. Debt. Shall not create or permit to exist any Debt, including any guaranties or other contingent obligations, except Permitted Debt.

  
 6.2. Liens. Shall not create or permit any Liens on any
of its property except Permitted Liens. 
  
 6.3. Restricted
Distributions and Restricted Payments. Shall not declare or make any Restricted Distribution or Restricted Payment unless otherwise consented to in writing by Bank; provided, however, that so long as no Event of Default exists or would result
therefrom, Borrowers may (a) make Permitted Share Repurchases, (b) pay management, consulting or similar fees to any of their Affiliates in the ordinary course of business, not to exceed $150,000 in the aggregate per Fiscal Year, and (c) payoff up
to $1,500,000 of capitalized leases that are existing on the Closing Date and that are owing by Borrowers to BancBoston (now known as Fleet National Bank). 
  
 6.4. Loans and Other Investments. Shall not make or permit to exist any advances or loans to, or guarantee or become
contingently liable, directly or indirectly, in connection with the obligations, leases, stock or dividends of, or own, purchase or make any commitment to purchase any stock, bonds, notes, debentures or other securities of, or any interest in, or
make any capital contributions to (all of which are sometimes collectively referred to herein as “Investments”) any Person except for (a) purchases of direct obligations of the federal government, (b) deposits in commercial banks, (c)
commercial paper of any U.S. corporation having the highest ratings then given by the Moody’s Investors Services, Inc. or Standard & Poor’s Corporation, (d) existing investments in Subsidiaries, (e) endorsement of negotiable
instruments for collection in the ordinary course of business, and (f) advances to employees for business travel and other expenses incurred in the ordinary course of business which do not at any time exceed $250,000 in the aggregate. 
  
 6.5. Change in Business. Shall not enter into any business which is
substantially different from the business in which it is engaged on the Closing Date. 
  
 6.6. Accounts. (a) Shall not sell, assign or discount any of its Accounts, Chattel Paper or any promissory notes held by it other than the discount of such notes in the ordinary course of business for
collection; and (b) shall notify Bank promptly in writing of any discount, offset or other deductions not shown on the face of an Account invoice and any dispute over an Account, and any information relating to a material adverse change in any
Account Debtor’s financial condition or ability to pay its obligations. 
  
 6.7. Transactions with Affiliates. Shall not directly or indirectly purchase, acquire or lease any property from, or sell, transfer or lease any property to, pay any management fees to or otherwise deal with,
in the ordinary course of business or otherwise, any Affiliate or Subsidiary other than (a) transfers of property among Borrowers, (b) payments permitted under Section 6.3 hereof, and (c) transactions with Affiliates in the ordinary course of
business and pursuant to the reasonable requirements of Borrowers’ business and upon fair and reasonable terms that are fully disclosed in writing to Bank and are no less favorable to Borrowers than Borrowers would obtain in a comparable
arm’s length transaction with a Person not an Affiliate of a Borrower. 
  
 6.8. No Change in Offices; Removal of Collateral. Shall not, unless it shall have given sixty (60) days’ advance written notice thereof to Bank, (a) change the location of its chief executive office or
other office where books or records are kept, or (b) permit any Inventory (until the sale thereof in the ordinary course of business) or other tangible Collateral (other than Equipment sold pursuant to Permitted Equipment Dispositions) to be located
at any location other than as specified in Section 4.9. 
  
 6.9. No Sale, Leaseback. Shall not enter into any sale-and-leaseback or similar transaction. 
  

 -26- 

 6.10. Margin Stock. Shall not use any proceeds of any Loan to purchase or carry any margin stock
(within the meaning of Regulation U of the Board of Governors of Federal Reserve System) or extend credit to others for the purpose of purchasing or carrying any margin stock. 
  
 6.11. Collateral. Shall not, except as otherwise provided herein, allow any Collateral to be commingled with, or
become an Accession to or part of, any property of any other Person so long as such property is Collateral; nor allow any Collateral to become a fixture unless Bank shall have given its prior written authorization. 
  
 6.12. Subsidiaries. Shall not acquire or form (except in connection
with a Permitted Acquisition), any Subsidiaries or permit any Subsidiary to issue capital stock except to its parent. 
  
 6.13. Liquidation, Mergers, Consolidations and Dispositions of Assets; Change of Name. Shall not (a) merge, reorganize, consolidate or amalgamate
with any Person, (b) liquidate, wind up its affairs or dissolve itself, (c) acquire by purchase, lease or otherwise any of the assets of any Person other than in the ordinary course of business or to the extent such acquisition constitutes a
Permitted Acquisition, (d) sell, transfer, lease or otherwise dispose any of its property or assets, except for the sale of Inventory in the ordinary course of business and Permitted Equipment Dispositions, (e) sell or dispose of any equity
ownership interests in any Subsidiary, in each case whether in a single transaction or in a series of related transactions; (f) change its name or conduct business under any new fictitious name; (g) change its state of organization, Federal Employer
Identification Number or organizational identification number; or (h) fail to remain in good standing and qualified to transact business as a foreign entity in any state or other jurisdiction in which it is required to be qualified to transact
business as a foreign entity and in which the failure to be so qualified could reasonably be expected to have a Material Adverse Effect. 
  
 6.14. Change of Fiscal Year or Accounting Methods. Shall not change its Fiscal Year or its accounting methods. 
  
 7. Other Covenants of Borrowers. Each Borrower covenants and
agrees that from the date hereof and until payment in full of the Indebtedness and the termination of this Agreement and the Commitments, each Borrower and each Subsidiary shall comply with the following additional covenants: 
  
 7.1. Minimum EBITDA. Borrowers shall maintain a consolidated EBITDA,
measured as of the last day of each fiscal quarter of Borrowers for the period of twelve (12) consecutive calendar months then ended, of not less than $6,800,000. 
  
 7.2. Deposit Relationship. Borrowers shall maintain their primary depository accounts with Bank. 
  
 7.3. Fixed Charge Coverage Ratio. Borrowers shall maintain a
consolidated Fixed Charge Coverage Ratio, measured as of the last day of each fiscal quarter of Borrowers for the period of twelve (12) consecutive calendar months then ended, (i) on or after the Closing Date and prior to April 30, 2005, of not less
than 0.75 to 1.00, and (ii) on April 30, 2005 and thereafter, of not less than 1.00 to 1.00. 
  
 7.4. Capital Expenditures. Borrowers shall not expend on gross fixed assets (including gross leases to be capitalized under GAAP and leasehold improvements) an aggregate amount exceeding $1,500,000 during any
Fiscal Year; provided, that, if any amount of capital expenditures permitted to be made by Borrowers during any Fiscal Year, is not made by Borrowers during such Fiscal Year, then the amount of permitted capital expenditures for the
immediately following Fiscal Year (but only for such Fiscal Year) shall be increased by fifty percent (50%) of the remaining amount of the permitted capital expenditures from the previous Fiscal Year. 
  
 7.5. Leases. Borrowers shall not incur, create, or assume any direct
or indirect liability for the payment of rent or otherwise, under any lease or rental arrangement (excluding capitalized leases) if immediately thereafter the sum of such lease or rental payments to be made by Borrowers during any 12-month period is
increased by $1,000,000 in the aggregate. 
  

 -27- 

	 	8.	Default. 

  
 8.1. Events of Default. Each of the following shall constitute an Event of Default: 
  
 (a) There shall occur any default by any Borrower in the payment, when due, of any principal of or interest on any Note,
any amounts due hereunder or any other Loan Document, or any other Indebtedness; or 
  
 (b) There shall occur any default by any Borrower or any other party to any Loan Document (other than Bank) in the performance of any agreement, covenant or obligation contained (i) in Sections 5.4, 5.5, 5.6
and 5.13, Section 6 or Section 7 of this Agreement or (ii) in any other sections of this Agreement or any other Loan Document not provided for elsewhere in this Section 8 and the same is not cured to Lender’s
satisfaction within 15 days after the sooner to occur of (i) Bank’s delivery of written notice to Borrowers of such default or (ii) the date on which such default becomes known to any senior officer of a Borrower; provided, that,
such notice and opportunity to cure shall not apply in the case of any failure to perform, keep, or observe any covenant which is not capable of being cured with such 15 day period or which results from a willful and knowing breach by a Borrower; or

  
 (c) Any representation or warranty made by any Borrower or
any other party to any Loan Document (other than Bank) herein or therein or in any certificate or report furnished in connection herewith or therewith shall prove to have been untrue or incorrect in any material respect when made; or 
  
 (d) Any other obligation now or hereafter owed by any Borrower, any
Subsidiary or any Guarantor to Bank or any Affiliate of Bank shall be in default, or any Borrower, any Subsidiary or any Guarantor shall be in default of any Debt in excess of $250,000 or any material agreement with any Person (other than Bank or an
Affiliate of Bank); or 
  
 (e) Any Borrower, any Subsidiary or
Guarantor shall (i) voluntarily dissolve, liquidate or terminate operations or apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of such Person or of all or of a substantial part
of its assets, (ii) admit in writing its inability, or be generally unable, to pay its debts as the debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Bankruptcy Code (as now
or hereafter in effect), (v) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, (vi) fail to controvert in a timely manner (i.e., within
60 days after the date of the filing thereof), or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code, or (vii) take any corporate action for the purpose of effecting any of the foregoing; or

  
 (f) An involuntary petition or complaint shall be filed
against Borrower, any Subsidiary or any Guarantor seeking bankruptcy relief or reorganization or the appointment of a receiver, custodian, trustee, intervenor or liquidator of any Borrower, any Subsidiary or any Guarantor, of all or substantially
all of its assets, and such petition or complaint shall not have been dismissed within sixty (60) days of the filing thereof; or an order, order for relief, judgment or decree shall be entered by any court of competent jurisdiction or other
competent authority approving or ordering any of the foregoing actions; or 
  
 (g) A judgment in excess of $100,000 shall be rendered against any Borrower, any Subsidiary or any Guarantor and shall remain undischarged, undismissed and unstayed for more than twenty (20) days (except
judgments validly covered by insurance with a deductible of not more than $100,000) or there shall occur any levy upon, or attachment, garnishment or other seizure of, any portion of the Collateral or other assets of any Borrower, any Subsidiary or
any Guarantor by reason of the issuance of any tax levy, judicial attachment or garnishment or levy of execution; or 
  
 (h) Any Guarantor shall repudiate or revoke in writing any Guaranty Agreement; or 
  

 -28- 

 (i) Loss, theft, damage or destruction of any portion of the Collateral in an amount of more than
twenty-five percent (25%) of the then current Availability for which there is either no insurance coverage or for which, in the reasonable opinion of Bank, there is insufficient insurance coverage; or 
  
 (j) There shall occur any change in the condition (financial or otherwise)
of any Borrower, any Subsidiary or any Guarantor which, in the reasonable opinion of Bank, could have a Material Adverse Effect. 
  
 8.2. Remedies. If any Default shall occur and be continuing, Bank may, without notice to Borrowers, at its option, withhold further Loans to
Borrowers. If an Event of Default shall have occurred and be continuing, Bank may at its option take any or all of the following actions: 
  
 (a) Bank may declare any or all Indebtedness (other than Indebtedness under any swap agreements, as defined in 11 U.S.C §101, between any Borrower
and Bank or any Affiliate of Bank, which shall be governed by the default and termination provisions of said swap agreements) to be immediately due and payable (if not earlier demanded), terminate its obligation to make Loans and other extensions of
credit to Borrowers, bring suit against Borrowers to collect the Indebtedness, exercise any remedy available to Bank hereunder or at law and take any action or exercise any remedy provided herein or in any other Loan Document or under applicable
law. No remedy shall be exclusive of other remedies or impair the right of Bank to exercise any other remedies. 
  
 (b) Without waiving any of its other rights hereunder or under any other Loan Document, Bank shall have all rights and remedies of a secured party under
the Code (and the Uniform Commercial Code of any other applicable jurisdiction) and such other rights and remedies as may be available hereunder, under other applicable law or pursuant to contract. If requested by Bank, Borrowers will promptly
assemble the Collateral and make it available to Bank at a place to be designated by Bank. Each Borrower agrees that any notice by Bank of the sale or disposition of the Collateral or any other intended action hereunder, whether required by the Code
or otherwise, shall constitute reasonable notice to such Borrower if the notice is mailed to such Borrower by regular or certified mail, postage prepaid, at least ten (10) days before the action to be taken. Borrowers shall be jointly and severally
liable for any deficiencies in the event the proceeds of the disposition of the Collateral do not satisfy the Indebtedness in full. 
  
 (c) Bank may demand, collect and sue for all amounts owed pursuant to Accounts, General Intangibles, Chattel Paper, Instruments, Documents or for
proceeds of any Collateral (either in a Borrower’s name or Bank’s name at the latter’s option), with the right to enforce, compromise, settle or discharge any such amounts. 
  
 8.3. Receiver. In addition to any other remedy available to it, Bank shall have the absolute right, upon the
occurrence of an Event of Default, to seek and obtain the appointment of a receiver to take possession of and operate and/or dispose of the business and assets of Borrowers and any costs and expenses incurred by Bank in connection with such
receivership shall bear interest at the Default Rate, at Bank’s option, and shall be secured by all Collateral. 
  
 8.4. Deposits; Insurance. After the occurrence and during the continuance of an Event of Default, each Borrower authorizes Bank to collect and
apply against the Indebtedness when due any cash or deposit accounts in its possession, and any refund of insurance premiums or any insurance proceeds payable on account of the loss or damage to any of the Collateral and irrevocably appoints Bank as
its attorney-in-fact to endorse any check or draft or take other action necessary to obtain such funds. 
  

	 	9.	Security Agreement. 

  
 9.1. Security Interest. 
  
 (a) As security for the payment and performance of any and all Indebtedness and the performance of all obligations and covenants of Borrowers to Bank and
each of Bank’s Affiliates, whether hereunder and under the 
  

 -29- 

 other Loan Documents or otherwise, certain or contingent, now existing or hereafter arising, which are now, or may at any
time or times hereafter be owing by Borrowers to Bank or any of Bank’s Affiliates, each Borrower hereby grants to Bank (for itself and each of its Affiliates) a continuing security interest in and general lien upon and right of set-off against,
all right, title and interest of such Borrower in and to the Collateral, whether now owned or hereafter acquired by such Borrower. Notwithstanding the foregoing, if the existing capital leases between Borrowers and BancBoston (now known as Fleet
National Bank) (“Lessor”) with respect to the specific leased equipment listed therein (the “Specific Equipment”), restricts the ability of Borrowers to grant a Lien in such Specific Equipment to Bank, then such Specific
Equipment shall not be deemed to be a part of the Collateral until such time as the Debt owing by Borrowers to Lessor is paid in full. In addition, upon payment in full of the Debt evidenced by such lease, Borrowers and Bank agree to cause such
Specific Equipment to be appraised and so long as such appraisal is satisfactory in all respects to Bank and no Event of Default exists, Borrowers and Bank agree to add up to eighty percent (80%) of the net orderly liquidation value of such Specific
Equipment to the Equipment Sublimit. 
  
 (b) Except as herein or
by applicable law otherwise expressly provided, Bank shall not be obligated to exercise any degree of care in connection with any Collateral in its possession, to take any steps necessary to preserve any rights in any of the Collateral or to
preserve any rights therein against prior parties, and each Borrower agrees to take such steps. In any case Bank shall be deemed to have exercised reasonable care if it shall have taken such steps for the care and preservation of the Collateral or
rights therein as Borrowers may have reasonably requested Bank to take and Bank’s omission to take any action not requested by Borrowers shall not be deemed a failure to exercise reasonable care. No segregation or specific allocation by Bank of
specified items of Collateral against any liability of Borrowers shall waive or affect any security interest in or Lien against other items of Collateral or any of Bank’s options, powers or rights under this Agreement or otherwise arising.

  
 (c) Bank may at any time an Event of Default exists, with or
without notice to Borrowers, (i) transfer into the name of Bank or the name of Bank’s nominee any of the Collateral, (ii) notify any Account Debtor or other obligor of any Collateral to make payment thereon direct to Bank of any amounts due or
to become due thereon and (iii) receive and direct the disposition of any proceeds of any Collateral. 
  
 9.2. Financing Statements; Power of Attorney. Each Borrower authorizes Bank at Borrowers’ expense to file any financing statements and/or
amendments thereto relating to the Collateral (without any Borrower’s signature thereon) which Bank deems appropriate that (a) indicate the Collateral (i) as “all assets” of such Borrower or words of similar effect, if appropriate,
regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the Code, or (ii) by specific Collateral category, and (b) provide any other information required by part 5 of Article 9 of the Code for
the sufficiency or filing office acceptance of any financing statement or amendment. Each Borrower irrevocably appoints Bank as its attorney-in-fact to execute any such financing statements and/or control agreements in such Borrower’s name and
to perform all other acts, at Borrowers’ expense, which Bank deems appropriate to perfect and to continue perfection of the security interest of Bank. Each Borrower hereby appoints Bank as such Borrower’s attorney-in-fact to endorse,
present and collect on behalf of such Borrower and in such Borrower’s name any draft, checks or other documents necessary or desirable to collect any amounts which such Borrower may be owed. Bank is hereby granted a license or other right to
use, without charge, such Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in advertising
for sale and selling any Collateral, and such Borrower’s rights under all licenses and all franchise agreements shall inure to Bank’s benefit. The proceeds realized from the sale or other disposition of any Collateral may be applied, after
allowing two (2) Business Days for collection, first to the reasonable costs, expenses and attorneys’ fees and expenses incurred by Bank for collection and for acquisition, completion, protection, removal, storage, sale and delivering of the
Collateral; secondly, to interest due upon any of the Indebtedness; and thirdly, to the principal amount of the Indebtedness. If any deficiency shall arise, Borrower and each Guarantor shall remain jointly and severally liable to Bank therefor.

  
 9.3. Entry. Each Borrower hereby irrevocably consents
to any act by Bank or its agents in entering upon any premises for the purposes of either (i) inspecting the Collateral or (ii) if an Event of Default exists and is continuing, taking possession of the Collateral, and each Borrower hereby waives its
right to assert against Bank or its agents any claim based upon trespass or any similar cause of action for entering upon any premises for the purposes of this Section 9.3 where the Collateral may be located. 
  

 -30- 

 9.4. Other Rights. Borrower authorizes Bank without affecting any Borrower’s obligations
hereunder or under any other Loan Document from time to time (i) to take from any party and hold additional Collateral or guaranties for the payment of the Indebtedness or any part thereof, and to exchange, enforce or release such collateral or
guaranty of payment of the Indebtedness or any part thereof and to release or substitute any endorser or guarantor or any party who has given any security interest in any collateral as security for the payment of the Indebtedness or any part thereof
or any party in any way obligated to pay the Indebtedness or any part thereof; and (ii) if an Event of Default exists and is continuing, to direct the manner of the disposition of the Collateral and the enforcement of any endorsements, guaranties,
letters of credit or other security relating to the Indebtedness or any part thereof as Bank in its sole discretion may determine. 
  
 9.5. Accounts. Before or after the occurrence of any Event of Default, Bank may notify any Account Debtor of Bank’s security interest and, if
an Event of Default exists and is continuing, may direct such Account Debtor to make payment directly to Bank for application against the Indebtedness. Any such payments received by or on behalf of any Borrower at any time, whether before or after
Default, shall be the property of Bank, shall be held in trust for Bank and not commingled with any other assets of any Person (except to the extent they may be commingled with other assets of Borrowers in an account with Bank) and shall be
immediately delivered to Bank in the form received. Bank shall have the right to apply any proceeds of Collateral to such of the Indebtedness as it may determine. 
  
 9.6. Waiver of Marshaling. Each Borrower hereby waives any right it may have to require marshaling of its assets.

  
 9.7. Control. Each Borrower will cooperate with Bank in
obtaining control of, or control agreements with respect to, Collateral for which control or a control agreement is required for perfection or priority of the Bank’s security interest under the Code. 
  
 9.8. Negative Pledge. No Borrower nor any Subsidiary shall sell,
transfer, grant or permit any Lien to exist on, or otherwise encumber any of the Real Property of any Borrower or any Subsidiary or enter into any other agreement that restricts any Borrower’s or any Subsidiary’s ownership or rights with
respect to the Real Property. In furtherance of the foregoing, each Borrower agrees to execute, and cause each Subsidiary to execute, and deliver to Bank any agreement, instrument or other document and to take such further action, including without
limitation, record such agreement, instrument or other document in the real estate records of the county and state in which the Real Property is located, in order to evidence Borrowers’ and Subsidiaries’ negative pledge with respect to the
Real Property. 
  

	 	10.	Miscellaneous. 

  
 10.1. No Waiver, Remedies Cumulative. No failure on the part of Bank to exercise, and no delay in exercising, any right hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and
are in addition to any other remedies provided by law, any Loan Document or otherwise. 
  
 10.2. Survival of Representations. All representations and warranties made herein shall survive the making of the Loans hereunder and the delivery of the Notes, and shall continue in full force and effect so
long as any Indebtedness is outstanding, there exists any commitment by Bank to Borrowers, and until this Agreement is formally terminated in writing. 
  
 10.3. Indemnity By Borrower; Expenses. In addition to all other Indebtedness, Borrowers jointly and severally agree to defend, protect, indemnify
and hold harmless Bank and its Affiliates and all of their respective officers, directors, employees, attorneys, consultants and agents from and against any and all losses, damages, liabilities, obligations, penalties, fees, costs and expenses
(including, without limitation, reasonable attorneys’ and paralegals’ fees, costs and expenses) incurred by such indemnitees, whether prior to or from and after the date hereof, as a result of or arising from or relating to (i) the due
diligence effort (including, without limitation, public record search, recording fees, examinations and investigations of the properties of Borrowers and Borrowers’ operations), negotiation, preparation, execution and/or performance of any of
the Loan Documents or of any 
  

 -31- 

 document executed in connection with the transactions contemplated thereby and the perfection of Bank’s Liens in the
Collateral, maintenance of the Loans by Bank, and any and all amendments, modifications, and supplements of any of the Loan Documents or restructuring of the Indebtedness, (ii) any suit, investigation, action or proceeding by any Person (other than
Borrower), whether threatened or initiated, asserting a claim for any legal or equitable remedy against any Person under any statute, regulation or common law principle, arising from or in connection with Bank’s furnishing of funds to Borrowers
under this Agreement, (iii) Bank’s preservation, administration and enforcement of its rights under the Loan Documents and applicable law, including reasonable attorneys fees actually incurred by Bank if collected by or through an attorney at
law and disbursements of counsel for Bank in connection therewith, whether suit be brought or not and whether incurred at trial or on appeal, the costs and expenses of lien searches (including real estate title searches) and all costs of
repossession, storage, disposition, protection and collection of Collateral, (iv) periodic field exams, audits and appraisals performed by Bank; and (v) any matter relating to the financing transactions contemplated by the Loan Documents or by any
document execution in connection with the transactions contemplated thereby. If any Borrower should fail to pay any tax or other amount required by this Agreement to be paid or which may be reasonably necessary to protect or preserve any Collateral
or any Borrower’s or Bank’s interests therein, Bank may make such payment and the amount thereof shall be payable on demand, shall bear interest at the Default Rate from the date of demand until paid and shall be deemed to be
Indebtedness entitled to the benefit and security of the Loan Documents. In addition, Borrowers jointly and severally agree to pay and save Bank harmless against any liability for payment of any state documentary stamp taxes, intangible taxes or
similar taxes (including interest or penalties, if any) which may now or hereafter be determined to be payable in respect to the execution, delivery or recording of any Loan Document or the making of any Revolver Loan, whether originally thought to
be due or not, and regardless of any mistake of fact or law on the part of Bank or any Borrower with respect to the applicability of such tax. Each Borrower’s obligation for indemnification for all of the foregoing losses, damages, liabilities,
obligations, penalties, fees, costs and expenses of Bank shall be part of the Indebtedness, secured by the Collateral, chargeable against Borrowers’ loan account, and shall survive termination of this Agreement. 
  
 10.4. Notices. Any notice or other communication hereunder or under
the Notes to any party hereto or thereto shall be by hand delivery, overnight delivery via nationally recognized overnight delivery service, facsimile with receipt confirmed, telegram, telex or registered or certified United States mail and unless
otherwise provided herein shall be deemed to have been given or made when delivered, telegraphed, telexed, faxed or three (3) Business Days after having been deposited in the United States mail, postage prepaid, addressed to the party at its address
specified below (or at any other address that the party may hereafter specify to the other parties in writing): 
  

			
	 Bank:
	 	 Wachovia Bank, National Association

	 	 	 191 Peachtree Street, N.E.

	 	 	 30th
Floor

	 	 	 MC-GA 8056

	 	 	 Atlanta, Georgia 30303

	 	 	 Attn: Asset Based Lending Group

	 	 	 Telecopier No.: (404) 332-6920

		
	 Borrowers:
	 	 JPS Industries, Inc.

	 	 	 555 North Pleasantburg Drive, Suite 202

	 	 	 Greenville, South Carolina 29607

	 	 	 Attn: Mr. Chuck Tutterow

	 	 	 Telecopier No.: (864) 271-9939

  
 10.5. Governing
Law. This Agreement and the Loan Documents shall be deemed contracts made under the laws of the State of Georgia and shall be governed by and construed in accordance with the laws of said state (excluding its conflict of laws provisions if such
provisions would require application of the laws of another jurisdiction) except insofar as the laws of another jurisdiction may, by reason of mandatory provisions of law, govern the perfection, priority and enforcement of security interests in the
Collateral. 
  
 10.6. Successors and Assigns. This
Agreement shall be binding upon and shall inure to the benefit of Borrower and Bank, and their respective successors and assigns; provided, that no Borrower may assign any of its rights hereunder without the prior written consent of Bank, and any
such assignment made without such consent will be void. 
  

 -32- 

 10.7. Counterparts. This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which when taken together shall constitute but one and the same instrument. 
  
 10.8. No Usury. Regardless of any other provision of this Agreement,
any Note or in any other Loan Document, if for any reason the effective interest should exceed the maximum lawful interest, the effective interest shall be deemed reduced to, and shall be, such maximum lawful interest, and (i) the amount which would
be excessive interest shall be deemed applied to the reduction of the principal balance of the applicable Note and not to the payment of interest, and (ii) if the loan evidenced by such Note has been or is thereby paid in full, the excess shall be
returned to the party paying same, such application to the principal balance of such Note or the refunding of excess to be a complete settlement and acquittance thereof. 
  
 10.9. Powers. All powers of attorney granted to Bank are coupled with an interest and are irrevocable. 
  
 10.10. Approvals; Amendments. If this Agreement calls for the approval
or consent of Bank, such approval or consent may be given or withheld in the discretion of Bank unless otherwise specified herein. This Agreement may not be modified, altered or amended, except by an agreement in writing signed by Borrowers and
Bank. 
  
 10.11. Participations and Assignments. Bank shall
have the right to enter into one or more participation with other lenders with respect to the Indebtedness and to sell, transfer or assign the Loans and the Loan Documents to another Person without the consent of Borrowers; provided,
that, so long as no Event of Default exists and is continuing, Bank agrees not to sell, transfer or assign the Loans and the Loan Documents without the prior written consent of Borrowers. Upon prior notice to Borrowers, Borrowers shall
thereafter furnish to such participant or assignee any information furnished by Borrowers to Bank pursuant to the terms of the Loan Documents. Nothing in this Agreement or any other Loan Document shall prohibit Bank from pledging or assigning this
Agreement and Bank’s rights under any of the other Loan Documents to another Person. 
  
 10.12. Multiple Borrowers; Borrowing Agent. All Indebtedness, representations, warranties, covenants and indemnities of Borrowers set forth in the Loan Documents shall be joint and several. Each Borrower hereby
irrevocably appoints Borrowing Agent as, and Borrowing Agent shall act under this Agreement as, the agent and representative of itself and each other Borrower for all purposes under this Agreement, including requesting borrowings, selecting whether
any Loan or portion thereof is to bear interest as a Prime Rate Loan or a LIBOR Loan, and receiving account statements and other notices and communications to Borrowers from Bank. Bank may rely, and shall be fully protected in relying, on any Notice
of Borrowing, disbursement instructions, reports, information or any other notice or communication made or given by Borrowing Agent, whether in its own name, on behalf of any individual Borrower or on behalf of “the Borrowers,” and Bank
shall have no obligation to make any inquiry or request any confirmation from or on behalf of any other Borrower as to the binding effect on such Borrower of any such request, instruction, report, information, notice or communication, nor shall the
joint and several character of Borrowers’ liability for the Indebtedness be affected, provided that the provisions of this Section 10.12 shall not be construed so as to preclude any Borrower from directly requesting borrowings or taking
other actions permitted to be taken by “Borrower” hereunder. Bank may maintain a single Collections Account in the name of “JPS Industries, Inc.” hereunder, and each Borrower expressly agrees to such arrangement and confirms that
such arrangement shall have no effect on the joint and several character of Borrowers’ liability for the Indebtedness. The foregoing is a material inducement to the agreement of Bank to enter into the terms hereof and to consummate the
transactions contemplated hereby. 
  
 10.13. Waiver of Certain
Defenses. To the fullest extent permitted by applicable law, upon the occurrence of any Event of Default, no Borrower nor anyone claiming by or under a Borrower will claim or seek to take advantage of any law requiring Bank to attempt to realize
upon any Collateral or collateral of any surety or guarantor, or any appraisement, evaluation, stay, extension, homestead, redemption or exemption laws now or hereafter in force in order to prevent or hinder the enforcement of this Agreement. Each
Borrower, for itself and all 
  

 -33- 

 who may at any time claim through or under such Borrower, hereby expressly waives to the fullest extent permitted by law
the benefit of all such laws. All rights of Bank and all obligations of Borrowers hereunder shall be absolute and unconditional irrespective of (i) any change in the time, manner or place of payment of, or any other term of, all or any of the
Indebtedness, or any other amendment or waiver of or any consent to any departure from any provision of the Loan Documents, (ii) any exchange, release or non-perfection of any other collateral given as security for the Indebtedness, or any release
or amendment or waiver of or consent to departure from any guaranty for all or any of the Indebtedness, or (iii) any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Borrower or any third party,
other than payment and performance in full of the Indebtedness. 
  
 10.14. Integration. This Agreement and the other Loan Documents constitute the sole agreement of the parties with respect to the subject matter hereof and thereof and supersede all oral negotiations and prior writings with respect to
the subject matter hereof and thereof. 
  
 10.15. LIMITATION
ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM (A
“DISPUTE”) THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE INDEBTEDNESS AND OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO
EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY
DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY DISPUTE, WHETHER THE DISPUTE IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE. 
  
 10.16. BINDING ARBITRATION; PRESERVATION OF REMEDIES. 
  
 (a) Binding Arbitration. Upon demand of any party hereto, whether
made before or after institution of any judicial proceeding, any claim or controversy between parties hereto arising out of or relating to this Agreement or any other Loan Documents shall be resolved by binding arbitration conducted under and
governed by the Commercial Financial Disputes Arbitration Rules (the “Arbitration Rules”) of the American Arbitration Association (the “AAA”) and the Federal Arbitration Act. Disputes may include, without limitation, tort claims,
counterclaims, a dispute as to whether a matter is subject to arbitration, claims brought as class actions, or claims arising from documents executed in the future. A judgment upon the award may be entered in any court having jurisdiction.
Notwithstanding the foregoing, this arbitration provision does not apply to disputes under or related to swap agreements. 
  
 (b) Special Rules. All arbitration hearings shall be conducted in the city named in the address of Bank first stated above. A hearing shall begin
within ninety (90) days of demand for arbitration and all hearings shall conclude within one hundred twenty (120) days of demand for arbitration. These time limitations may not be extended unless a party shows cause for extension and then for no
more than a total of sixty (60) days. The expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules shall be applicable to claims of less than $1,000,000.00. Arbitrators shall be licensed attorneys selected from the Commercial
Financial Dispute Arbitration Panel of the AAA. The parties do not waive applicable Federal or state substantive law except as provided herein. 
  
 (c) Preservation and Limitation of Remedies. Notwithstanding the preceding binding arbitration provisions, the parties agree to preserve, without
diminution, certain remedies that any party may exercise before or after an arbitration proceeding is brought. The parties shall have the right to proceed in any court of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any real or personal property or other security by exercising a power of sale or under applicable law by judicial foreclosure including a proceeding to confirm the sale; (ii) all rights of
self-help including peaceful occupation of real property and collection of rents, set-off, and peaceful possession of personal property; (iii) obtaining provisional or ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by confession of judgment. Any claim or controversy with regard to any party’s entitlement to such remedies is a Dispute.

  

 -34- 

 (d) Waiver of Jury Trial. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY
HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A DISPUTE. 
  
 10.17. AMENDMENT AND RESTATEMENT. 
  
 This Agreement amends and restates the Original Loan Agreement, and is not intended to be or operate as a novation or an accord and satisfaction of the Original Loan Agreement or the Indebtedness evidenced or secured
thereby or provided for thereunder. 
  
 IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed under seal on the day and year first above written. 
  

			
	JPS INDUSTRIES, INC.
		
	 By:
	 	 /s/ Charles R. Tutterow

	 	 	 Charles R. Tutterow, Executive Vice President,

	 	 	 Chief Financial Officer and Secretary

	
	 [CORPORATE SEAL]

	
	JPS ELASTOMERICS CORP.
		
	 By:
	 	 /s/ Charles R. Tutterow

	 	 	 Charles R. Tutterow, Secretary

	
	 [CORPORATE SEAL]

	
	JPS CONVERTER AND INDUSTRIAL CORP.
		
	 By:
	 	 /s/ Charles R. Tutterow

	 	 	 Charles R. Tutterow, Secretary

	
	 [CORPORATE SEAL]

	
	 Accepted in Atlanta, Georgia:

	
	WACHOVIA BANK, NATIONAL ASSOCIATION
		
	 By:
	 	  

	 Title:
	 	  

  

 -35- 

 ANNEX A 
  
 AMENDED AND RESTATED REVOLVER NOTE 
  

			
	 	 	April     , 2004
	 U.S. $25,000,000.00
	 	Atlanta, Georgia

  
 FOR VALUE RECEIVED,
the undersigned, JPS INDUSTRIES., INC., a Delaware corporation, JPS ELASTOMERICS CORP., a Delaware corporation, and JPS CONVERTER AND INDUSTRIAL CORP., a Delaware corporation (each a “Borrower” and collectively,
“Borrowers”), hereby unconditionally and jointly and severally promise to pay to the order of WACHOVIA BANK, NATIONAL ASSOCIATION (herein, together with any subsequent holder hereof, called “Bank”) the principal sum of
$25,000,000 or such lesser sum as may constitute the outstanding principal amount of all Revolver Loans made to Borrowers by Bank pursuant to Section 2.1 of the Loan Agreement (as defined below) on the dates on which such outstanding
principal amounts become due and payable pursuant to Section 2.5 of the Loan Agreement, in strict accordance with the terms thereof. Borrowers likewise unconditionally and jointly and severally promise to pay to Bank interest from and after
the date hereof on the outstanding principal amount of Revolver Loans at such interest rates, payable at such times and computed in such manner as are specified in Sections 2.5, 2.9 and 2.11 of the Loan Agreement, in strict accordance
with the terms thereof. 
  
 This Revolver Note (“Note”)
is issued pursuant to, and is the “Revolver Note” referred to in, the Revolving Credit and Security Agreement dated May 9, 2001, as amended and restated by that certain Amended and Restated Loan and Security Agreement dated the date hereof
(as the same may be amended from time to time, the “Loan Agreement”), among Borrowers and Bank, and Bank is and shall be entitled to all benefits thereof and of all Loan Documents executed and delivered in connection therewith. All
capitalized terms used herein, unless otherwise defined herein, shall have the meanings ascribed to such terms in the Loan Agreement. 
  
 The repayment of the principal balance of this Note is subject to the provisions of Section 2.5 of the Loan Agreement. Notwithstanding anything to
the contrary contained herein, the entire unpaid principal balance of and accrued interest on this Note shall be due and payable immediately upon the Termination Date. 
  
 All payments of principal and interest shall be made in Dollars in immediately available funds as specified in the Loan
Agreement. 
  
 Upon or after the occurrence of an Event of Default
and for so long as such Event of Default exists, the principal balance and all accrued interest of this Note may be declared (or shall become) due and payable in the manner and with the effect provided in the Loan Agreement, and the unpaid principal
balance hereof shall bear interest at the Default Rate as and when provided in Section 2.8 of the Loan Agreement. Borrowers jointly and severally agree to pay, and save Bank harmless against any liability for the payment of, all costs and
expenses, including, but not limited to, reasonable attorneys’ fees, if this Note is collected by or through an attorney-at-law. 
  
 All principal amounts of Revolver Loans made by Bank to Borrowers pursuant to the Loan Agreement, and all accrued and unpaid interest thereon, shall be
deemed outstanding under this Note and shall continue to be owing by Borrowers until paid in accordance with the terms of this Note and the Loan Agreement. 
  
 In no contingency or event whatsoever, whether by reason of advancement of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid to
Bank for the use, forbearance or detention of money advanced hereunder exceed the highest lawful rate permissible under any law which a court of competent jurisdiction may deem applicable hereto; and, in the event of any such payment inadvertently
paid by Borrowers or inadvertently received by Bank, such excess sum shall be, at Borrowers’ option, returned to Borrowers forthwith or credited as a payment of principal, but shall not be applied to the payment of interest. It is the intent
hereof that Borrowers not pay or contract to pay, and that Bank not receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by Borrowers under applicable law. 
  
 Time is of the essence of this Note. To the fullest extent permitted by
applicable law, each Borrower, for itself and its legal representatives, successors and assigns, expressly waives presentment, demand, protest, notice of dishonor, notice of non-payment, notice of maturity, notice of protest, presentment for the
purpose of accelerating maturity, diligence in collection, and the benefit of any exemption or insolvency laws. 

 Wherever possible each provision of this Note shall be interpreted in such a manner as to be effective
and valid under applicable law, but if any provision of this Note shall be prohibited or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such
provision or remaining provisions of this Note. No delay or failure on the part of Bank in the exercise of any right or remedy hereunder shall operate as a waiver thereof, nor as an acquiescence in any default, nor shall any single or partial
exercise by Bank of any right or remedy preclude any other right or remedy. Bank, at its option, may enforce its rights against any Collateral securing this Note without Bank enforcing its rights against any Borrower, any Guarantor of the
indebtedness evidenced hereby or any other property or indebtedness due or to become due to any Borrower. Each Borrower agrees that, without releasing or impairing any Borrower’s liability hereunder, Bank may at any time release, surrender,
substitute or exchange any Collateral securing this Note and may at any time release any party primarily or secondarily liable for the indebtedness evidenced by this Note. 
  
 The rights of Bank and obligations of Borrowers hereunder shall be construed in accordance with and governed by the laws
(without giving effect to the conflict of law principles thereof) of the State of Georgia. This Note is intended to take effect as an instrument under seal under Georgia law. 
  
 This Note amends and restates that certain Promissory Note dated May 9, 2001, in the original principal amount of
$35,000,000 (the “Prior Note”). Nothing contained herein is intended to constitute a novation or an accord and satisfaction of the Prior Note. 
  
 IN WITNESS WHEREOF, Borrowers have caused this Note to be executed under seal and delivered by their duly authorized officers on the date first above
written. 
  

			
	 JPS INDUSTRIES, INC.,
 a Delaware corporation
 (“Borrower”)

		
	 By:
	 	 /s/ Charles R. Tutterow

	 	 	 Charles R. Tutterow, Executive Vice President,

	 	 	 Chief Financial Officer and Secretary

	
	 [CORPORATE SEAL]

	
	 JPS ELASTOMERICS CORP.,
 a Delaware corporation
 (“Borrower”)

		
	 By:
	 	 /s/ Charles R. Tutterow

	 	 	 Charles R. Tutterow, Secretary

	
	 [CORPORATE SEAL]

	
	 JPS CONVERTER AND INDUSTRIAL CORP.,
 a Delaware corporation

	 (“Borrower”)

		
	 By:
	 	 /s/ Charles R. Tutterow

	 	 	 Charles R. Tutterow, Secretary

	
	 [CORPORATE SEAL]

  

 -2- 

 ANNEX B 
  
 NOTICE OF BORROWING 
  
 Date                     ,
20     
  
 Wachovia Bank, National Association

 191 Peachtree Street, N.E. 
 30th Floor 
 MC-GA 8056 
 Atlanta, Georgia 30303 
 Attention: Asset Based Lending 
  

	 	Re:	Amended and Restated Loan and Security Agreement dated April     , 2004, by and among JPS Industries, Inc., JPS Elastomerics Corp., JPS Converter and
Industrial Corp., and Wachovia Bank, National Association (as at any time amended, the “Loan Agreement”) 

  
 Ladies and Gentlemen: 
  
 This Notice of Borrowing is delivered to you pursuant to Section 2.4 of the Loan Agreement. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings attributable thereto in the Loan Agreement. Borrowers hereby request a Revolver Loan in the aggregate principal amount of $            , to be made
on                    ,         , and to consist of: 
  

			
	 Check as applicable:
	 	          Prime Rate Loans in the aggregate principal amount of
$            

		
	 	 	          LIBOR Loans in the aggregate principal amount of
$            .

  
 Each Borrower hereby
ratify and reaffirms all liabilities and obligations under the Loan Documents and hereby certifies that no Default or Event of Default exists on the date hereof. 
  
 Borrowing Agent has caused this Notice of Borrowing to be executed and delivered by its duly authorized representative, this
day of                    , 20    . 
  

			
	JPS INDUSTRIES, INC.
	 (“Borrowing Agent”)

		
	 By:
	 	  

	 Title:
	 	  

 ANNEX C 
  
 FORM OF BORROWING BASE CERTIFICATE 

 EXHIBIT 1.1A 
  
 Permitted Debt 
  
 Capitalized leases that are existing on the Closing Date in an aggregate amount not to exceed $2,500,000. 

 EXHIBIT 1.1B 
  
 Permitted Liens 
  

									
	 Secured Party

	 	 Jurisdiction

	 	 File No.

	  	Date Filed

	  	 Collateral/ Filing History

	Fleet Capital Corporation, successor-by-merger to, BancBoston Leasing Inc.	 	Delaware Secretary of State	 	22921686	  	11/07/2002	  	 -Equipment generally described as, various Grobam Drop Wires, Loom Beam, Creel Motorized Leaser, as further described in the attached Extension
Sheet.
 In lieu for:
 SC S/S #101305A, 8/6/98
 SC S/S #101014A, 9/18/98
 SC S/S #121659A, 1/11/99

					
	IBM Credit LLC	 	Delaware Secretary of State	 	30642622	  	02/19/2003	  	-All of the following equipment together with all related software whether now owned or hereafter acquired and wherever located (all as more fully described on IBM Credit LLC supplement(s)
#137431): IBM Equipment Type 9406. All additions, attachments, accessories, accessions and upgrades thereto and any and all substitutions, replacements or exchanges for any such item of equipment or software and any and all proceeds of any of the
foregoing, including, without limitations, payments under insurance or any indemnity or warranty relating to loss or damage to such equipment and software.
					
	SouthEast Industrial Equipment, Inc., Toyota Motor Credit Company	 	South Carolina Secretary of State	 	980825-104758A	  	08/25/1998	  	-(1) One new Toyota M/N 52-638CU35 S/N 60424
					
	Dougherty Equipment Company, Inc., NMHG Financial Services, Inc.	 	South Carolina Secretary of State	 	990701-094203A	  	07/01/1999	  	-New Yale motorized Hand Truck MFB040 with industrial battery, and all accessions, additions, replacements and substitutions thereto and therefor and all proceeds, including insurance proceeds
thereof.
					
	Southeast Industrial Equipment, Inc., Toyota Motor Credit Corporation	 	South Carolina Secretary of State	 	990720-131604A	  	07/20/1999	  	-One new Toyota M/N 42-6FGCU25, S/N 80554
					
	Crown Credit Company	 	South Carolina Secretary of State	 	991231-132752A	  	12/31/1999	  	-(1) Crown Lift Truck, model 20 MT. SN: 1A218876
					
	Southeast Industrial Equipment, Inc., Toyota Motor Credit Corporation	 	South Carolina Secretary of State	 	000119-150224A	  	01/19/2000	  	 -(1) One used Toyota M/N SFCC20 S/N 50211
 (1) One used
Toyota M/N SFCC15, S/N 11107

					
	Southeast Industrial Equipment, Inc., Toyota Motor Credit Corporation	 	South Carolina Secretary of State	 	000726-101934A	  	07/26/2000	  	-(1) One new Toyota M/N AZFGU20, S/N 61917.
					
	Southeast Industrial Equipment, Inc., Toyota Motor Credit Corporation	 	South Carolina Secretary of State	 	000816-091914A	  	08/16/2000	  	-(1) One new MX19, S/N 14757.
					
	BSFS Equipment Leasing	 	South Carolina Secretary of State	 	010628-143812A	  	06/28/2001	  	-All of the equipment and associated items and any license and/or sublicense to use any computer programs and related documentation (collectively, “System”) that

									
	 	 	 	 	 	  	 	  	are the subject of, and described in that certain lease agreement between Lessor and Lessee bearing or referencing the lease agreement number set forth above, as such agreement is amended from
time to time (collectively the “Lease”). The system includes, but is not limited to all modifications, accessions, and all replacements therefor. The UCC filing covers all proceeds of the foregoing including, without limitation, insurance
proceeds.
					
	De Lage Landen Financial Services, Inc.	 	South Carolina Secretary of State	 	021104-1335083	  	11/04/2002	  	-1 Toyota GFGCU70 70491, 2 Toyota GFGDU1G60697, 3 Toyota 6FGCU90 G8801, 4 Toyota 6FGGU18 53875, 5 Toyota 6FGCU1S 63814 including all components additions, upgrades attachments, accessions,
substitutions, replacements and proceeds of the foregoing.
					
	BancBoston Leasing Inc., amended to Fleet Capital Corporation, successor by merger to BancBoston Leasing, Inc.	 	Greenville County, South Carolina	 	002656	  	10/05/1998	  	 -Specified leased equipment listed on extension sheet to financing statement, as amended by that UCC amendment on 11/11/2002, file #19581.

-Amended on 11/11/2002, #10581 to change Secured Party’s name to Fleet Capital Corporation, successor by merger to BancBoston Leasing, Inc.
 -Continued on 04/23/2003, #000182.

  

 -2- 

 EXHIBIT 4.3 
  
 Contingent Liabilities 
  
 Borrowers are exposed to a number of asserted and unasserted potential claims encountered in the normal course of business including certain asbestos-based claims.
Borrowers believe they have meritorious defenses in all lawsuits in which Borrowers or their subsidiaries are defendants. Except as discussed in Exhibit 4.4 with respect to the Sears litigation matter, management believes that none of this
litigation, if determined unfavorable to Borrowers, would have a material adverse effect on the financial condition or results of operations of Borrowers. 
  
 On certain of their products, Borrowers provide a warranty against defects in materials and workmanship under separately priced extended warranty contracts generally for
a period of 10 years. Revenue from such extended warranty contracts is deferred and recognized as income on a straight-line basis over the contract period. The cost of servicing such product warranties is charged to expense when claims become
estimable. 

 EXHIBIT 4.4 
 Litigation 
  
 In June 1997, Sears Roebuck and Co.
(“Sears”) filed a multi-count complaint against JPS Elastomerics Corp. (“Elastomerics”) and two other defendants alleging an unspecified amount of damages in connection with the alleged premature deterioration of
Elastomerics’ Hypalon roofing membrane installed during the 1980’s on approximately 140 Sears stores. Also as previously reported, in July, 2002, Elastomerics’ insurance carrier, Liberty Mutual Insurance Company (“Liberty”),
informed Elastomerics that it no longer believed it had an obligation to contribute to settlement or defense of this matter. Elastomerics subsequently filed a lawsuit for declaratory, injunctive, and monetary relief against Liberty Mutual. In
January, 2003, the court found that Liberty does have a duty to defend Elastomerics based on the counts remaining in the case. Further, in January, 2003, the court granted Elastomerics’ summary judgment motion on Sears’ breach of contract
claim. These orders are not final and may be subject to reconsideration or appeal. To the extent these rulings remain in effect, the number of roofs involved in the case will be substantially reduced, and Borrowers believe that an unfavorable
resolution of the remaining actions would not have a material adverse effect on the business, results of operations or financial condition of Borrowers. 
  

 -2- 

 EXHIBIT 4.9 
  
 Offices of Borrowers 
  

			
	Jurisdiction of Organization:	 	 
		
	JPS Industries, Inc.	 	Delaware
		
	JPS Elastomerics Corp.	 	Delaware
		
	JPS Converter and Industrial Corp.	 	Delaware
		
	Chief Executive Office:	 	 
		
	JPS Industries, Inc.	 	555 North Pleasantburg Drive, Suite 202
	 	 	Greenville, South Carolina 29607 *
		
	 	 	* Commencing on April 26, 2004, the
	 	 	chief executive office of JPS Industries, Inc.
	 	 	shall be located at:
		
	 	 	One Liberty Square
	 	 	55 Beattie Place, Suite 1502
	 	 	Greenville, South Carolina 29601
		
	JPS Elastomerics Corp.	 	9 Sullivan Road
	 	 	Holyoke, Massachusetts 01040
		
	JPS Converter and Industrial Corp.	 	101 Slater Road
	 	 	Slater, South Carolina 29638
		
	Other Locations of Collateral:	 	 
	 	 	1535 Elastic Plant Road
	 	 	Westfield, North Carolina 27053
		
	 	 	ALTO Transportation & Distribution Systems, Inc.
	 	 	2867 Surveyor Street, Pomona, California
		
	 	 	DMX Transportation, Inc.
	 	 	960 and 962B Berry Shoals Road, Building #3, Duncan,
	 	 	South Carolina
		
	 	 	Sulco Warehouse and Logistics
	 	 	122 Pleasant Street, East Hampton, Massachusetts 01027
		
	 	 	Stevens Urethane
	 	 	412 Main Street, East Hampton, Massachusetts 01027
		
	 	 	BHA Group
	 	 	432 West Lincoln, Warehouse 405, Slater, Missouri 65349
		
	 	 	Park Electrochemical Corporation
	 	 	New England Laminates
	 	 	40 Governor Drive, Warehouse 150, Newburgh, New York 12550

  

 -3- 

 EXHIBIT 4.13 
  
 Judgments 
  
 [An arbitration award of specific performance was entered against JPS Elastomerics Corp. on December 22, 2003, in the Matter of the Arbitration between Fairlawn
Industries Limited and JPS Elastomerics Corp., pursuant to which JPS Elastomerics Corp. is required to replace a roofing system within an eight month period. JPS Elastomerics Corp. is appealing certain aspects of this award and has reserved the full
amount of this award in its financial statements] 

 EXHIBIT 4.14 
  
 List of Subsidiaries 
  

			
	 JPS Industries
	 	 JPS Elastomerics Corp.

		
	 	 	 JPS Converter and Industrial Corp.

		
	 	 	 International Fabrics, Inc

		
	 	 	 JPS Auto Inc.

		
	 	 	 JPS Carpet Corp.

		
	 JPS Elastomerics Corp.
	 	 None

		
	 JPS Converter and Industrial Corp.
	 	 None

 EXHIBIT 4.15 
  
 Environmental Disclosures 
  
 Regulated Materials generated, stored or disposed of on Borrowers’ property: 
  
 [to be provided by Borrowers] 
  

Non-compliance with Environmental Laws or notification of action, suit, proceeding or investigation: 
  
 [to be provided by Borrowers] 

 EXHIBIT 4.18 
  
 Names; Mergers; Acquisitions 
  

			
	 Prior Names:
	 	 
		
	 JPS Industries, Inc.
	 	 JPS Textile Group, Inc.

	 	 	 (Formation through June 23, 1999)

		
	 JPS Elastomerics Corp.
	 	 JPS Acquisition Elastomerics Corp.

	 	 	 (Formation through May 11, 1988)

		
	 JPS Converter and Industrial Corp.
	 	 JPS Acquisition Converter and Yarn Corp.

	 	 	 (Formation through May 11, 1988)

		
	 	 	 JPS Converter and Yarn Corp.

	 	 	 (May 11, 1988 through November 1, 1988)

		
	 Corporate, Fictitious or Trade Names
	 	 
		
	 JPS Industries, Inc.
	 	 JPS Textile Group

		
	 JPS Elastomerics Corp.
	 	 Stevens Roofing

	 	 	 Stevens Urethane

		
	 JPS Converter and Industrial Corp.
	 	 JPS Glass

		
	 Survivor of Mergers, Acquisitions
	 	 
		
	 	 	 Borrowers

 EXHIBIT 4.23 
  
 Corporate Structure 
  
 (i) Subsidiary information: 
  

						
	 Name

	  	Jurisdiction

	  	Ownership %

	 
	 JPS Elastomerics Corp.
	  	Delaware	  	100	%
	 JPS Converter and Industrial Corp.
	  	Delaware	  	100	%
	 International Fabrics, Inc
	  	Delaware	  	100	%
	 JPS Auto Inc.
	  	Delaware	  	100	%
	 JPS Carpet Corp.
	  	Delaware	  	100	%

  
 (ii) Each
Borrower’s corporate or joint venture Affiliates: None 
  
 (iii) Equity interests of each Borrower: 
  

							
	 	  	 Number of
 Authorized Shares

	  	 Number of
 Issued Shares

	  	 Number of
 Outstanding Shares

	 JPS Industries, Inc.
	  	22,000,000	  	10,000,000	  	9,494,259
	 JPS Elastomerics Corp.
	  	1,000	  	100	  	100
	 JPS Converter and Industrial Corp.
	  	1,000	  	100	  	100

 EXHIBIT 5.6 
  
 COMPLIANCE CERTIFICATE 
  
 [Letterhead of Borrowing Agent] 
  
                     ,
20     
  
 Wachovia Bank, National Association

 191 Peachtree Street, N.E. 
 30th Floor 
 Atlanta, Georgia 30303

  
 The undersigned, the chief financial officer of JPS
INDUSTRIES, INC. a Delaware corporation (in its capacity as the representative of each of JPS Industries, Inc., JPS Elastomerics Corp., and JPS Converter and Industrial Corp., “Borrowing Agent”) gives this certificate to WACHOVIA
BANK, NATIONAL ASSOCIATION (“Bank”) in accordance with the requirements of Section 5.6(e) of that certain Amended and Restated Loan and Security Agreement dated April _, 2004, among Borrowing Agent, the borrowers parties thereto
and Bank (as at any time amended, the “Loan Agreement”). Capitalized terms used in this Certificate, unless otherwise defined herein, shall have the meanings ascribed to them in the Loan Agreement. 
  
 1. Based upon my review of the balance sheets and statements of income of
Borrowers and their Subsidiaries for the [Fiscal Year] [quarterly period] ending                     ,
20     , copies of which are attached hereto, I hereby certify that: 
  
 (a) Minimum EBITDA is
$                    ; 
  
 (b) Fixed Charge Coverage Ratio is
$                    ; 
  
 (c) Capital Expenditures during the period and for the Fiscal Year to date total
$                     for Borrowers. 
  
 2. No Default exists on the date hereof, other than:
                                       
  [if none, so state]; and 
  
 3. No Event of
Default exists on the date hereof, other than:
                                       
  [if none, so state]. 
  
 4. As of the date
hereof, Borrowers are current in their payment of all accrued rent and other charges to Persons who own or lease any premises where any of the Collateral is located, and there are no pending disputes or claims regarding Borrowers failure to pay or
delay in payment of any such rent or other charges. 
  
 5.
Attached hereto is a schedule showing the calculations that support Borrowers’ compliance [non-compliance] with the financial covenants, as shown above. 
  
  

	
	 Very truly yours,

	  
  

 Chief Financial OfficerForm of 2004 Stock Incentive Plan and form of agreements thereunder

 EXHIBIT 10.4 
  
 PRN CORPORATION 
  
 2004 STOCK INCENTIVE PLAN 
  
 (Adopted by the Board on May 3, 2004) 

 Table of Contents 
  

					
	 	  	 	  	Page

		
	SECTION 1. ESTABLISHMENT AND PURPOSE	  	1
		
	SECTION 2. DEFINITIONS	  	1
	    (a)	  	“Affiliate”	  	1
	    (b)	  	“Award”	  	1
	    (c)	  	“Board of Directors”	  	1
	    (d)	  	“Change in Control”	  	1
	    (e)	  	“Code”	  	2
	    (f)	  	“Committee”	  	2
	    (g)	  	“Company”	  	2
	    (h)	  	“Consultant”	  	2
	    (i)	  	“Employee”	  	3
	    (j)	  	“Exchange Act”	  	3
	    (k)	  	“Exercise Price”	  	3
	    (l)	  	“Fair Market Value”	  	3
	    (m)	  	“ISO”	  	3
	    (n)	  	“Nonstatutory Option” or “NSO”	  	3
	    (o)	  	“Offeree”	  	3
	    (p)	  	“Option”	  	4
	    (q)	  	“Optionee”	  	4
	    (r)	  	“Outside Director”	  	4
	    (s)	  	“Parent”	  	4
	    (t)	  	“Participant”	  	4
	    (u)	  	“Plan”	  	4
	    (v)	  	“Purchase Price”	  	4
	    (w)	  	“Restricted Share”	  	4
	    (x)	  	“Restricted Share Agreement”	  	4
	    (y)	  	“SAR”	  	4
	    (z)	  	“SAR Agreement”	  	4
	    (aa)	  	“Service”	  	4
	    (bb)	  	“Share”	  	4
	    (cc)	  	“Stock”	  	4
	    (dd)	  	“Stock Option Agreement”	  	4
	    (ee)	  	“Stock Unit”	  	4
	    (ff)	  	“Stock Unit Agreement”	  	5
	    (gg)	  	“Subsidiary”	  	5
	    (hh)	  	“Total and Permanent Disability”	  	5
		
	SECTION 3. ADMINISTRATION	  	5
	    (a)	  	Committee Composition	  	5
	    (b)	  	Committee for Non-Officer Grants	  	5
	    (c)	  	Committee Procedures	  	5

  
 PRN
CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  

 -i- 

					
	    (d)	  	Committee Responsibilities	  	5
		
	SECTION 4. ELIGIBILITY	  	7
	    (a)	  	General Rule	  	7
	    (b)	  	Automatic Grants to Outside Directors	  	7
	    (c)	  	Ten-Percent Stockholders	  	8
	    (d)	  	Attribution Rules	  	8
	    (e)	  	Outstanding Stock	  	8
		
	SECTION 5. STOCK SUBJECT TO PLAN	  	8
	    (a)	  	Basic Limitation	  	8
	    (b)	  	Award Limitation	  	8
	    (c)	  	Additional Shares	  	9
		
	SECTION 6. RESTRICTED SHARES	  	9
	    (a)	  	Restricted Stock Agreement	  	9
	    (b)	  	Payment for Awards	  	9
	    (c)	  	Vesting	  	9
	    (d)	  	Voting and Dividend Rights	  	9
	    (e)	  	Restrictions on Transfer of Shares	  	9
		
	SECTION 7. TERMS AND CONDITIONS OF OPTIONS	  	10
	    (a)	  	Stock Option Agreement	  	10
	    (b)	  	Number of Shares	  	10
	    (c)	  	Exercise Price	  	10
	    (d)	  	Withholding Taxes	  	10
	    (e)	  	Exercisability and Term	  	10
	    (f)	  	Exercise of Options Upon Termination of Service	  	11
	    (g)	  	Effect of Change in Control	  	11
	    (h)	  	Leaves of Absence	  	11
	    (i)	  	No Rights as a Stockholder	  	11
	    (j)	  	Modification, Extension and Renewal of Options	  	11
	    (k)	  	Restrictions on Transfer of Shares	  	11
	    (l)	  	Buyout Provisions	  	12
		
	SECTION 8. PAYMENT FOR SHARES	  	12
	    (a)	  	General Rule	  	12
	    (b)	  	Surrender of Stock	  	12
	    (c)	  	Services Rendered	  	12
	    (d)	  	Cashless Exercise	  	12
	    (e)	  	Exercise/Pledge	  	12
	    (f)	  	Promissory Note	  	12
	    (g)	  	Other Forms of Payment	  	13
	    (h)	  	Limitations under Applicable Law	  	13

  
 PRN
CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  
  

 -ii- 

					
	SECTION 9. STOCK APPRECIATION RIGHTS	  	13
	    (a)	  	SAR Agreement	  	13
	    (b)	  	Number of Shares	  	13
	    (c)	  	Exercise Price	  	13
	    (d)	  	Exercisability and Term	  	13
	    (e)	  	Effect of Change in Control	  	13
	    (f)	  	Exercise of SARs	  	13
	    (g)	  	Modification or Assumption of SARs	  	14
		
	SECTION 10. STOCK UNITS	  	14
	    (a)	  	Stock Unit Agreement	  	14
	    (b)	  	Payment for Awards	  	14
	    (c)	  	Vesting Conditions	  	14
	    (d)	  	Voting and Dividend Rights	  	14
	    (e)	  	Form and Time of Settlement of Stock Units	  	14
	    (f)	  	Death of Recipient	  	15
	    (g)	  	Creditors’ Rights	  	15
		
	SECTION 11. ADJUSTMENT OF SHARES	  	15
	    (a)	  	Adjustments	  	15
	    (b)	  	Dissolution or Liquidation	  	16
	    (c)	  	Reorganizations	  	16
	    (d)	  	Reservation of Rights	  	16
		
	SECTION 12. DEFERRAL OF AWARDS	  	16
		
	SECTION 13. AWARDS UNDER OTHER PLANS	  	17
		
	SECTION 14. PAYMENT OF DIRECTOR’S FEES IN SECURITIES	  	17
	    (a)	  	Effective Date	  	17
	    (b)	  	Elections to Receive NSOs, Restricted Shares or Stock Units	  	17
	    (c)	  	Number and Terms of NSOs, Restricted Shares or Stock Units	  	17
		
	SECTION 15. LEGAL AND REGULATORY REQUIREMENTS	  	17
		
	SECTION 16. WITHHOLDING TAXES	  	18
	    (a)	  	General	  	18
	    (b)	  	Share Withholding	  	18
		
	SECTION 17. OTHER PROVISIONS APPLICABLE TO AWARDS	  	18
	    (a)	  	Transferability	  	18
	    (b)	  	Qualifying Performance Criteria	  	18
		
	SECTION 18. NO EMPLOYMENT RIGHTS	  	19
		
	SECTION 19. DURATION AND AMENDMENTS	  	19
	    (a)	  	Term of the Plan	  	19

  
 PRN
CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  
  

 -iii- 

					
	    (b)	  	Right to Amend or Terminate the Plan	  	19
	    (c)	  	Effect of Termination	  	19
		
	SECTION 20. EXECUTION	  	21

  
 PRN
CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  
  

 -iv- 

 PRN CORPORATION 
  
 2004 STOCK INCENTIVE PLAN 
  
 SECTION 1. ESTABLISHMENT AND PURPOSE. 
  
 The Plan was adopted by the Board of Directors on May 3, 2004, effective as of the date of the initial offering of Stock to the public pursuant to a
registration statement filed by the Company with the Securities and Exchange Commission (the “Effective Date”). The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by (a)
encouraging Employees, Outside Directors and Consultants to focus on critical long-range objectives, (b) encouraging the attraction and retention of Employees, Outside Directors and Consultants with exceptional qualifications and (c) linking
Employees, Outside Directors and Consultants directly to stockholder interests through increased stock ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of restricted shares, stock units, options (which may
constitute incentive stock options or nonstatutory stock options) or stock appreciation rights. 
  
 SECTION 2. DEFINITIONS. 
  
 (a) “Affiliate” shall mean any entity other than a Subsidiary, if the Company and/or one of more Subsidiaries own not less than 50% of such entity. 
  
 (b) “Award” shall mean any award of an Option, a SAR, a Restricted Share or a Stock Unit under the
Plan. 
  
 (c) “Board of Directors” shall
mean the Board of Directors of the Company, as constituted from time to time. 
  
 (d) “Change in Control” shall mean the occurrence of any of the following events: 
  
 (i) A change in the composition of the Board of Directors occurs, as a result of which fewer than one-half of the incumbent directors are
directors who either: 
  
 (A) Had been directors
of the Company on the “look-back date” (as defined below) (the “original directors”); or 
  
 (B) Were elected, or nominated for election, to the Board of Directors with the affirmative votes of at least a majority of the aggregate
of the original directors who were still in office at the time of the election or nomination and the directors whose election or nomination was previously so approved (the “continuing directors”); or 
  
 (ii) Any “person” (as defined below) who by the
acquisition or aggregation of securities, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the 
  
 PRN CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  

 -1- 

 combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting
solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or
indirectly, such person’s beneficial ownership of any securities of the Company; or 
  
 (iii) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if
persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding
securities of each of (A) the continuing or surviving entity and (B) any direct or indirect parent corporation of such continuing or surviving entity; or 
  
 (iv) The sale, transfer or other disposition of all or substantially all of the Company’s assets. 
  
 For purposes of subsection (d)(i) above, the term “look-back” date
shall mean the later of (1) the Effective Date or (2) the date 24 months prior to the date of the event that may constitute a Change in Control. 
  
 For purposes of subsection (d)(ii)) above, the term “person” shall have the same meaning as when used in Sections 13(d) and 14(d) of the
Exchange Act but shall exclude (1) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent or Subsidiary and (2) a corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of the Stock. 
  
 Any other provision of this Section 2(d) notwithstanding, a transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding
company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction, and a Change in Control shall not be deemed to occur if the Company files a registration
statement with the Securities and Exchange Commission for the initial offering of Stock to the public. 
  
 (e) “Code” shall mean the Internal Revenue Code of 1986, as amended. 
  
 (f) “Committee” shall mean the Compensation Committee as designated by the Board of Directors, which
is authorized to administer the Plan, as described in Section 3 hereof. 
  
 (g) “Company” shall mean PRN Corporation. 
  
 (h) “Consultant” shall mean a consultant or advisor who provides bona fide services to the Company, a Parent, a Subsidiary or an Affiliate as an independent contractor or a member of the board
of directors of a Parent or a Subsidiary who is not an Employee. 
  
 PRN CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  

 -2- 

 (i) “Employee” shall mean any individual who is a common-law employee of the
Company, a Parent or a Subsidiary. 
  
 (j)
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
  
 (k) “Exercise Price” shall mean, in the case of an Option, the amount for which one Common Share may be purchased upon exercise of
such Option, as specified in the applicable Stock Option Agreement. “Exercise Price,” in the case of a SAR, shall mean an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value of one Common
Share in determining the amount payable upon exercise of such SAR. 
  
 (l) “Fair Market Value” with respect to a Share, shall mean the market price of one Share of Stock, determined by the Committee as follows: 
  
 (i) If the Stock was traded over-the-counter on the date in question but was not traded on The Nasdaq Stock
Market, then the Fair Market Value shall be equal to the last transaction price quoted for such date by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean between the last reported representative bid and asked prices quoted for
such date by the principal automated inter-dealer quotation system on which the Stock is quoted or, if the Stock is not quoted on any such system, by the “Pink Sheets” published by the National Quotation Bureau, Inc.; 
  
 (ii) If the Stock was traded on The Nasdaq Stock Market,
then the Fair Market Value shall be equal to the last reported sale price quoted for such date by The Nasdaq Stock Market; 
  
 (iii) If the Stock was traded on a United States stock exchange on the date in question, then the Fair Market Value shall be equal to the
closing price reported for such date by the applicable composite-transactions report; and 
  
 (iv) If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on
such basis as it deems appropriate. 
  
 In all cases, the determination of Fair
Market Value by the Committee shall be conclusive and binding on all persons. 
  
 (m) “ISO” shall mean an employee incentive stock option described in Section 422 of the Code. 
  
 (n) “Nonstatutory Option” or “NSO” shall mean an employee stock option that is not an ISO. 
  
 (o) “Offeree” shall mean an individual to whom the
Committee has offered the right to acquire Shares under the Plan (other than upon exercise of an Option). 
  
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 2004 STOCK INCENTIVE
PLAN 
  

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 (p) “Option” shall mean an ISO or Nonstatutory Option granted under the Plan and
entitling the holder to purchase Shares. 
  
 (q)
“Optionee” shall mean an individual or estate who holds an Option or SAR. 
  
 (r) “Outside Director” shall mean a member of the Board of Directors who is not a common-law employee of, or paid consultant to, the Company, a Parent or a Subsidiary. 
  
 (s) “Parent” shall mean any corporation (other than
the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be a Parent commencing as of such date. 
  
 (t) “Participant” shall mean an individual or estate who holds an Award. 
  
 (u) “Plan” shall mean this 2004 Stock Incentive Plan
of PRN Corporation, as amended from time to time. 
  
 (v)
“Purchase Price” shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Committee. 
  
 (w) “Restricted Share” shall mean a Share awarded
under the Plan. 
  
 (x) “Restricted Share
Agreement” shall mean the agreement between the Company and the recipient of a Restricted Share which contains the terms, conditions and restrictions pertaining to such Restricted Shares. 
  
 (y) “SAR” shall mean a stock appreciation right
granted under the Plan. 
  
 (z) “SAR
Agreement” shall mean the agreement between the Company and an Optionee which contains the terms, conditions and restrictions pertaining to his or her SAR. 
  
 (aa) “Service” shall mean service as an Employee, Consultant or Outside Director. 
  
 (bb) “Share” shall mean one share of Stock, as
adjusted in accordance with Section 8 (if applicable). 
  
 (cc)
“Stock” shall mean the Common Stock of the Company. 
  
 (dd) “Stock Option Agreement” shall mean the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his Option. 
  
 (ee) “Stock Unit” shall mean a bookkeeping entry
representing the equivalent of one Share, as awarded under the Plan. 
  
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 (ff) “Stock Unit Agreement” shall mean the agreement between the Company and the
recipient of a Stock Unit which contains the terms, conditions and restrictions pertaining to such Stock Unit. 
  
 (gg) “Subsidiary” shall mean any corporation, if the Company and/or one or more other Subsidiaries own not less than 50% of the
total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

  
 (hh) “Total and Permanent Disability”
shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted, or can be expected to last, for a
continuous period of not less than 12 months. 
  
 SECTION 3. ADMINISTRATION.

  
 (a) Committee Composition. The Plan shall be
administered by the Committee. The Committee shall consist of two or more directors of the Company, who shall be appointed by the Board. In addition, the composition of the Committee shall satisfy (i) such requirements as the Securities and Exchange
Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act; and (ii) such requirements as the Internal Revenue Service may establish for outside
directors acting under plans intended to qualify for exemption under Section 162(m)(4)(C) of the Code. 
  
 (b) Committee for Non-Officer Grants. The Board may also appoint one or more separate committees of the Board, each composed of one or more
directors of the Company who need not satisfy the requirements of Section 3(a), who may administer the Plan with respect to Employees who are not considered officers or directors of the Company under Section 16 of the Exchange Act, may grant Awards
under the Plan to such Employees and may determine all terms of such grants. Within the limitations of the preceding sentence, any reference in the Plan to the Committee shall include such committee or committees appointed pursuant to the preceding
sentence. The Board of Directors may also authorize one or more officers of the Company to designate Employees, other than officers under Section 16 of the Exchange Act, to receive Awards and/or to determine the number of such Awards to be received
by such persons; provided, however, that the Board of Directors shall specify the total number of Awards that such officers may so award. 
  
 (c) Committee Procedures. The Board of Directors shall designate one of the members of the Committee as chairman. The Committee may hold
meetings at such times and places as it shall determine. The acts of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of the
Committee. 
  
 (d) Committee Responsibilities.
Subject to the provisions of the Plan, the Committee shall have full authority and discretion to take the following actions: 
  
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STOCK INCENTIVE PLAN 
  

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 (i) To interpret the Plan and to apply its provisions; 
  
 (ii) To adopt, amend or rescind rules, procedures and forms
relating to the Plan; 
  
 (iii) To authorize any
person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan; 
  
 (iv) To determine when Awards are to be granted under the Plan; 
  
 (v) To select the Offerees and Optionees; 
  
 (vi) To determine the number of Shares to be made subject to each Award; 
  
 (vii) To prescribe the terms and conditions of each Award,
including (without limitation) the Exercise Price and Purchase Price, and the vesting or duration of the Award (including accelerating the vesting of Awards, either at the time of the Award or thereafter, without the consent of the Participant), to
determine whether an Option is to be classified as an ISO or as a Nonstatutory Option, and to specify the provisions of the agreement relating to such Award; 
  

(viii) To amend any outstanding Award agreement, subject to applicable legal restrictions and to the consent of the Participant if the
Participant’s rights or obligations would be materially impaired; 
  
 (ix) To prescribe the consideration for the grant of each Award or other right under the Plan and to determine the sufficiency of such consideration; 
  
 (x) To determine the disposition of each Award or other right under the Plan in the event of a
Participant’s divorce or dissolution of marriage; 
  
 (xi) To determine whether Awards under the Plan will be granted in replacement of other grants under an incentive or other compensation plan of an acquired business; 
  
 (xii) To correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award
agreement; 
  
 (xiii) To establish or verify the
extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Award; and 
  
 (xiv) To take any other actions deemed necessary or advisable for the administration of the Plan.

  

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 2004 STOCK INCENTIVE PLAN 
  
 -6- 

 Subject to the requirements of applicable law, the Committee may designate persons other than members of the Committee to
carry out its responsibilities and may prescribe such conditions and limitations as it may deem appropriate, except that the Committee may not delegate its authority with regard to the selection for participation of or the granting of Options or
other rights under the Plan to persons subject to Section 16 of the Exchange Act. All decisions, interpretations and other actions of the Committee shall be final and binding on all Offerees, all Optionees, and all persons deriving their rights from
an Offeree or Optionee. No member of the Committee shall be liable for any action that he has taken or has failed to take in good faith with respect to the Plan, any Option, or any right to acquire Shares under the Plan. 
  
 SECTION 4. ELIGIBILITY 
  
 (a) General Rule. Only Employees shall be eligible for the grant of ISOs. Only Employees, Consultants and
Outside Directors shall be eligible for the grant of Restricted Shares, Stock Units, Nonstatutory Options or SARs. 
  
 (b) Automatic Grants to Outside Directors. 
  
 (i) Each Outside Director who is serving on the Board of Directors on the Effective Date and who has not previously been granted an option
to purchase Common Stock of the Company, or who first joins the Board of Directors after the Effective Date shall receive a Nonstatutory Option, subject to approval of the Plan by the Company’s stockholders, to purchase 50,000 Shares (subject
to adjustment under Section 11) on the Effective Date or, if later, the first business day after his or her election to the Board of Directors. The Shares subject to each Option granted under this Section 4(b)(i) shall vest and become exercisable
monthly over the 24-month period beginning on the day which is one month after the date of grant, at a monthly rate of 4.1667% of the total number of Shares subject to such Option. Notwithstanding the foregoing, each such Option shall become vested
if a Change in Control occurs with respect to the Company during the Optionee’s Service. 
  
 (ii) On the first business day following the conclusion of each regular annual meeting of the Company’s stockholders, commencing with
the annual meeting occurring in 2006, each Outside Director who was not elected to the Board for the first time at such meeting and who will continue serving as a member of the Board of Directors thereafter shall receive an Option to purchase 15,000
Shares (subject to adjustment under Section 11), provided that such Outside Director has served on the Board of Directors for at least 18 months. Each Option granted under this Section 4(b)(ii) shall vest and become exercisable ratably over 12
months. Notwithstanding the foregoing, each Option granted under this Section 4(b)(ii) shall become vested if a Change in Control occurs with respect to the Company during the Optionee’s Service. 
  
 (iii) The Exercise Price of all Nonstatutory Options granted
to an Outside Director under this Section 4(b) shall be equal to 100% of the Fair Market Value of a Share on the date of grant, payable in one of the forms described in Section 8(a), (b) or (d). 
  
 (iv) All Nonstatutory Options granted to an Outside Director
under this Section 4(b) shall terminate on the earlier of (A) the day before the tenth anniversary of the date 
  

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 2004 STOCK INCENTIVE PLAN 
  
 -7- 

 of grant of such Options or (B) the date twelve months after the termination of such Outside Director’s Service for
any reason; provided, however, that any such Options that are not vested upon the termination of the Outside Director’s Service for any reason shall terminate immediately and may not be exercised. 
  
 (c) Ten-Percent Stockholders. An Employee who owns more than
10% of the total combined voting power of all classes of outstanding stock of the Company, a Parent or Subsidiary shall not be eligible for the grant of an ISO unless such grant satisfies the requirements of Section 422(c)(5) of the Code.

  
 (d) Attribution Rules. For purposes of Section
4(c) above, in determining stock ownership, an Employee shall be deemed to own the stock owned, directly or indirectly, by or for such Employee’s brothers, sisters, spouse, ancestors and lineal descendants. Stock owned, directly or indirectly,
by or for a corporation, partnership, estate or trust shall be deemed to be owned proportionately by or for its stockholders, partners or beneficiaries. 
  
 (e) Outstanding Stock. For purposes of Section 4(c) above, “outstanding stock” shall include all stock actually issued and
outstanding immediately after the grant. “Outstanding stock” shall not include shares authorized for issuance under outstanding options held by the Employee or by any other person. 
  
 SECTION 5. STOCK SUBJECT TO PLAN 
  
 (a) Basic Limitation. Shares offered under the Plan shall be
authorized but unissued Shares or treasury Shares. The aggregate number of Shares authorized for issuance as Awards under the Plan shall not exceed 2,100,000 Shares, plus (x) any Shares remaining available for grant of awards under the
Company’s 1997 Stock Incentive Plan on the effective date of the Plan (including Shares subject to outstanding options under the Company’s 1997 Stock Incentive Plan on the effective date of this Plan that are subsequently forfeited or
terminate for any other reason before being exercised and unvested Shares that are forfeited pursuant to such plan after the effective date of this Plan) and (y) an annual increase on the first day of each fiscal year during the term of the Plan,
beginning January 1, 2007, in each case in an amount equal to the lesser of (i) 1,000,000 Shares, (ii) 3% of the outstanding Shares on the last day of the immediately preceding year, or (iii) an amount determined by the Board. The limitations of
this Section 5(a) shall be subject to adjustment pursuant to Section 11. The number of Shares that are subject to Options or other Awards outstanding at any time under the Plan shall not exceed the number of Shares which then remain available for
issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. 
  
 (b) Award Limitation. Subject to the provisions of Section 11, no Participant may receive Options, SARs,
Restricted Shares or Stock Units under the Plan in any calendar year that relate to more than 250,000 Shares, except that grants to a Participant in the calendar year in which his or her service first commences shall not relate to more than 750,000
Shares. 
  

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 2004 STOCK INCENTIVE PLAN 
  
 -8- 

 (c) Additional Shares. If Restricted Shares or Shares issued upon the exercise of Options
are forfeited, then such Shares shall again become available for Awards under the Plan. If Stock Units, Options or SARs are forfeited or terminate for any other reason before being exercised, then the corresponding Shares shall again become
available for Awards under the Plan. If Stock Units are settled, then only the number of Shares (if any) actually issued in settlement of such Stock Units shall reduce the number available under Section 5(a) and the balance shall again become
available for Awards under the Plan. If SARs are exercised, then only the number of Shares (if any) actually issued in settlement of such SARs shall reduce the number available in Section 5(a) and the balance shall again become available for Awards
under the Plan. 
  
 SECTION 6. RESTRICTED SHARES. 
  
 (a) Restricted Stock Agreement. Each grant of Restricted
Shares under the Plan shall be evidenced by a Restricted Stock Agreement between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock Agreements entered into under the Plan need not be identical. 
  
 (b) Payment for Awards. Subject to the following sentence, Restricted Shares may be sold or awarded under the Plan for such consideration as
the Committee may determine, including (without limitation) cash, cash equivalents, full-recourse promissory notes, past services and future services. To the extent that an Award consists of newly issued Restricted Shares, the Award recipient shall
furnish consideration with a value not less than the par value of such Restricted Shares in the form of cash, cash equivalents, or past services rendered to the Company (or a Parent or Subsidiary), as the Committee may determine. 
  
 (c) Vesting. Each Award of Restricted Shares may or may not be
subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement. A Restricted Stock Agreement may provide for accelerated vesting in the event of the
Participant’s death, disability or retirement or other events. The Committee may determine, at the time of granting Restricted Shares of thereafter, that all or part of such Restricted Shares shall become vested in the event that a Change in
Control occurs with respect to the Company. 
  
 (d)
Voting and Dividend Rights. The holders of Restricted Shares awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders. A Restricted Stock Agreement, however, may require that
the holders of Restricted Shares invest any cash dividends received in additional Restricted Shares. Such additional Restricted Shares shall be subject to the same conditions and restrictions as the Award with respect to which the dividends were
paid. 
  
 (e) Restrictions on Transfer of Shares.
Restricted Shares shall be subject to such rights of repurchase, rights of first refusal or other restrictions as the Committee may determine. 
  

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 -9- 

 Such restrictions shall be set forth in the applicable Restricted Stock Agreement and shall apply in addition to any
general restrictions that may apply to all holders of Shares. 
  
 SECTION 7.
TERMS AND CONDITIONS OF OPTIONS. 
  
 (a) Stock
Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to
any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The Stock Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan need not be identical. Options may be granted in consideration of a reduction in the Optionee’s other compensation. 
  
 (b) Number of Shares. Each Stock Option Agreement shall specify
the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 11. 
  
 (c) Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an ISO shall not be less than 100%
of the Fair Market Value of a Share on the date of grant, except as otherwise provided in 4(c), and the Exercise Price of an NSO shall not be less 85% of the Fair Market Value of a Share on the date of grant. Notwithstanding the foregoing, a Stock
Option Agreement may specify that the exercise price of an NSO may vary in accordance with a predetermined formula. Subject to the foregoing in this Section 7(c), the Exercise Price under any Option shall be determined by the Committee at its sole
discretion. The Exercise Price shall be payable in one of the forms described in Section 8. 
  
 (d) Withholding Taxes. As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign
withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that
may arise in connection with the disposition of Shares acquired by exercising an Option. 
  
 (e) Exercisability and Term. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. The Stock Option Agreement shall also specify the term
of the Option; provided that the term of an ISO shall in no event exceed 10 years from the date of grant (five years for Employees described in Section 4(c). A Stock Option Agreement may provide for accelerated exercisability in the event of the
Optionee’s death, disability, or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service. Options may be awarded in combination with SARs, and such an
Award may provide that the Options will not be exercisable unless the related SARs are forfeited. Subject to the foregoing in this Section 7(e), the Committee at its sole discretion shall determine when all or any installment of an Option is to
become exercisable and when an Option is to expire. 
  

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 -10- 

 (f) Exercise of Options Upon Termination of Service. Each Stock Option Agreement shall set
forth the extent to which the Optionee shall have the right to exercise the Option following termination of the Optionee’s Service with the Company and its Subsidiaries, and the right to exercise the Option of any executors or administrators of
the Optionee’s estate or any person who has acquired such Option(s) directly from the Optionee by bequest or inheritance. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued
pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service. 
  
 (g) Effect of Change in Control. The Committee may determine, at the time of granting an Option or thereafter, that such Option shall become
exercisable as to all or part of the Shares subject to such Option in the event that a Change in Control occurs with respect to the Company. 
  
 (h) Leaves of Absence. An Employee’s Service shall cease when such Employee ceases to be actively employed by, or a Consultant to, the
Company (or any subsidiary) as determined in the sole discretion of the Board of Directors. For purposes of Options, Service does not terminate when an Employee goes on a bona fide leave of absence, that was approved by the Company in writing, if
the terms of the leave provide for continued service crediting, or when continued service crediting is required by applicable law. However, for purposes of determining whether an Option is entitled to ISO status, an Employee’s Service will be
treated as terminating 90 days after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or by a contract. Service terminates in any event when the approved leave ends, unless such Employee
immediately returns to active work. The Company determines which leaves count toward Service, and when Service terminates for all purposes under the Plan. 
  
 (i) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any
Shares covered by his Option until the date of the issuance of a stock certificate for such Shares. No adjustments shall be made, except as provided in Section 11. 
  
 (j) Modification, Extension and Renewal of Options. Within the limitations of the Plan, the Committee may
modify, extend or renew outstanding options or may accept the cancellation of outstanding options (to the extent not previously exercised), whether or not granted hereunder, in return for the grant of new Options for the same or a different number
of Shares and at the same or a different exercise price, or in return for the grant of the same or a different number of Shares. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, materially
impair his or her rights or obligations under such Option. 
  
 (k) Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set 
  
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CORPORATION 
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 forth in the applicable Stock Option Agreement and shall apply in addition to any general restrictions that may apply to
all holders of Shares. 
  
 (l) Buyout Provisions.
The Committee may at any time (a) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (b) authorize an Optionee to elect to cash out an Option previously granted, in either case at such time and based upon such
terms and conditions as the Committee shall establish. 
  
 SECTION 8. PAYMENT
FOR SHARES. 
  
 (a) General Rule. The entire
Exercise Price or Purchase Price of Shares issued under the Plan shall be payable in lawful money of the United States of America at the time when such Shares are purchased, except as provided in Section 8(b) through Section 8(g) below. 

 
 (b) Surrender of Stock. To the extent that a Stock Option
Agreement so provides, payment may be made all or in part by surrendering, or attesting to the ownership of, Shares which have already been owned by the Optionee or his representative. Such Shares shall be valued at their Fair Market Value on the
date when the new Shares are purchased under the Plan. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such action would cause the Company to recognize compensation expense (or additional
compensation expense) with respect to the Option for financial reporting purposes. 
  
 (c) Services Rendered. At the discretion of the Committee, Shares may be awarded under the Plan in consideration of services rendered to the Company or a Subsidiary prior to the award. If Shares are
awarded without the payment of a Purchase Price in cash, the Committee shall make a determination (at the time of the award) of the value of the services rendered by the Offeree and the sufficiency of the consideration to meet the requirements of
Section 6(b). 
  
 (d) Cashless Exercise. To the
extent that a Stock Option Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale
proceeds to the Company in payment of the aggregate Exercise Price. 
  
 (e) Exercise/Pledge. To the extent that a Stock Option Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker or lender
to pledge Shares, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of the aggregate Exercise Price. 
  
 (f) Promissory Note. To the extent that a Stock Option Agreement or Restricted Stock Agreement so provides, payment may be made all or in
part by delivering (on a form prescribed by the Company) a full-recourse promissory note. However, the par value of the Common Shares being purchased under the Plan, if newly issued, shall be paid in cash or cash equivalents. 
  
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 2004 STOCK INCENTIVE PLAN 
  

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 (g) Other Forms of Payment. To the extent that a Stock Option Agreement or Restricted Stock
Agreement so provides, payment may be made in any other form that is consistent with applicable laws, regulations and rules. 
  
 (h) Limitations under Applicable Law. Notwithstanding anything herein or in a Stock Option Agreement or Restricted Stock Agreement to the
contrary, payment may not be made in any form that is unlawful, as determined by the Committee in its sole discretion. 
  
 SECTION 9. STOCK APPRECIATION RIGHTS. 
  
 (a) SAR Agreement. Each grant of a SAR under the Plan shall be evidenced by a SAR Agreement between the Optionee and the Company. Such SAR
shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR Agreements entered into under the Plan need not be identical. SARs may be granted
in consideration of a reduction in the Optionee’s other compensation. 
  
 (b) Number of Shares. Each SAR Agreement shall specify the number of Shares to which the SAR pertains and shall provide for the adjustment of such number in accordance with Section 11. 
  
 (c) Exercise Price. Each SAR Agreement shall specify the
Exercise Price. A SAR Agreement may specify an Exercise Price that varies in accordance with a predetermined formula while the SAR is outstanding. 
  
 (d) Exercisability and Term. Each SAR Agreement shall specify the date when all or any installment of the SAR is to become exercisable. The
SAR Agreement shall also specify the term of the SAR. A SAR Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability or retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionee’s service. SARs may be awarded in combination with Options, and such an Award may provide that the SARs will not be exercisable unless the related Options are forfeited. A SAR may be
included in an ISO only at the time of grant but may be included in an NSO at the time of grant or thereafter. A SAR granted under the Plan may provide that it will be exercisable only in the event of a Change in Control. 
  
 (e) Effect of Change in Control. The Committee may determine,
at the time of granting a SAR or thereafter, that such SAR shall become fully exercisable as to all Common Shares subject to such SAR in the event that a Change in Control occurs with respect to the Company. 
  
 (f) Exercise of SARs. Upon exercise of a SAR, the Optionee (or
any person having the right to exercise the SAR after his or her death) shall receive from the Company (a) Shares, (b) cash or (c) a combination of Shares and cash, as the Committee shall determine. The amount of cash and/or the Fair Market Value of
Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the Shares subject to the SARs exceeds the Exercise Price. 
  
 PRN CORPORATION 
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 (g) Modification or Assumption of SARs. Within the limitations of the Plan, the Committee
may modify, extend or assume outstanding SARs or may accept the cancellation of outstanding SARs (whether granted by the Company or by another issuer) in return for the grant of new SARs for the same or a different number of shares and at the same
or a different exercise price. The foregoing notwithstanding, no modification of a SAR shall, without the consent of the holder, materially impair his or her rights or obligations under such SAR. 
  
 SECTION 10. STOCK UNITS. 
  
 (a) Stock Unit Agreement. Each grant of Stock Units under the
Plan shall be evidenced by a Stock Unit Agreement between the recipient and the Company. Such Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Unit Agreements entered into under the Plan need not be identical. Stock Units may be granted in consideration of a reduction in the recipient’s other compensation. 
  
 (b) Payment for Awards. To the extent that an Award is granted
in the form of Stock Units, no cash consideration shall be required of the Award recipients. 
  
 (c) Vesting Conditions. Each Award of Stock Units may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Stock Unit
Agreement. A Stock Unit Agreement may provide for accelerated vesting in the event of the Participant’s death, disability or retirement or other events. The Committee may determine, at the time of granting Stock Units or thereafter, that all or
part of such Stock Units shall become vested in the event that a Change in Control occurs with respect to the Company. 
  
 (d) Voting and Dividend Rights. The holders of Stock Units shall have no voting rights. Prior to settlement or forfeiture, any Stock Unit
awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all cash dividends paid on one Share while the Stock Unit is
outstanding. Dividend equivalents may be converted into additional Stock Units. Settlement of dividend equivalents may be made in the form of cash, in the form of Shares, or in a combination of both. Prior to distribution, any dividend equivalents
which are not paid shall be subject to the same conditions and restrictions (including without limitation, any forfeiture conditions) as the Stock Units to which they attach. 
  
 (e) Form and Time of Settlement of Stock Units. Settlement of vested Stock Units may be made in the form of
(a) cash, (b) Shares or (c) any combination of both, as determined by the Committee. The actual number of Stock Units eligible for settlement may be larger or smaller than the number included in the original Award, based on predetermined performance
factors. Methods of converting Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of Shares over a series of trading days. Vested Stock Units may be settled in a lump sum or in installments. The
distribution may occur or commence when all vesting conditions applicable to the Stock Units have been satisfied or have lapsed, or it may be 
  
 PRN CORPORATION 
 2004
STOCK INCENTIVE PLAN 
  

 -14- 

 deferred to any later date. The amount of a deferred distribution may be increased by an interest factor or by dividend
equivalents. Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Section 11. 
  
 (f) Death of Recipient. Any Stock Units Award that becomes payable after the recipient’s death shall be distributed to the
recipient’s beneficiary or beneficiaries. Each recipient of a Stock Units Award under the Plan shall designate one or more beneficiaries for this purpose by filing the prescribed form with the Company. A beneficiary designation may be changed
by filing the prescribed form with the Company at any time before the Award recipient’s death. If no beneficiary was designated or if no designated beneficiary survives the Award recipient, then any Stock Units Award that becomes payable after
the recipient’s death shall be distributed to the recipient’s estate. 
  
 (g) Creditors’ Rights. A holder of Stock Units shall have no rights other than those of a general creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company,
subject to the terms and conditions of the applicable Stock Unit Agreement. 
  
 SECTION 11. ADJUSTMENT OF SHARES. 
  
 (a)
Adjustments. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the price of
Shares, a combination or consolidation of the outstanding Stock (by reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole
discretion, deems appropriate in one or more of: 
  
 (i) The number of Options, SARs, Restricted Shares and Stock Units available for future Awards under Section 5; 
  
 (ii) The limitations set forth in Sections 5(a) and (b); 
  
 (iii) The number of NSOs to be granted to Outside Directors under Section 4(b); 
  
 (iv) The number of Shares covered by each outstanding Option
and SAR; 
  
 (v) The Exercise Price under each
outstanding Option and SAR; or 
  
 (vi) The
number of Stock Units included in any prior Award which has not yet been settled. 
  
 Except as provided in this Section 11, a Participant shall have no rights by reason of any issue by the Company of stock of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of
any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class. 
  
 PRN CORPORATION 
 2004
STOCK INCENTIVE PLAN 
  

 -15- 

 (b) Dissolution or Liquidation. To the extent not previously exercised or settled, Options, SARs
and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company. 
  
 (c) Reorganizations. In the event that the Company is a party to a merger or other reorganization, outstanding Awards shall be subject to the
agreement of merger or reorganization. Such agreement shall provide for: 
  
 (i) The continuation of the outstanding Awards by the Company, if the Company is a surviving corporation; 
  
 (ii) The assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary; 
  
 (iii) The substitution by the surviving corporation or its
parent or subsidiary of its own awards for the outstanding Awards; 
  
 (iv) Full exercisability or vesting and accelerated expiration of the outstanding Awards; or 
  
 (v) Settlement of the full value of the outstanding Awards in cash or cash equivalents followed by cancellation of such Awards.

  
 (d) Reservation of Rights. Except as provided in this
Section 11, an Optionee or Offeree shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares of stock of any class. Any
issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to
an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or
to dissolve, liquidate, sell or transfer all or any part of its business or assets. 
  
 SECTION 12. DEFERRAL OF AWARDS 
  
 The Committee
(in its sole discretion) may permit or require a Participant to: 
  
 Have cash that otherwise would be paid to such Participant as a result of the exercise of a SAR or the settlement of Stock Units credited to a deferred compensation account established for such Participant by the Committee as an entry on
the Company’s books; 
  
 Have Shares that otherwise would be
delivered to such Participant as a result of the exercise of an Option or SAR converted into an equal number of Stock Units; or 
  
 PRN CORPORATION 
 2004
STOCK INCENTIVE PLAN 
  

 -16- 

 Have Shares that otherwise would be delivered to such Participant as a result of the exercise of an
Option or SAR or the settlement of Stock Units converted into amounts credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books. Such amounts shall be determined by
reference to the Fair Market Value of such Shares as of the date when they otherwise would have been delivered to such Participant. 
  
 A deferred compensation account established under this Section 12 may be credited with interest or other forms of investment return, as determined by the
Committee. A Participant for whom such an account is established shall have no rights other than those of a general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of the Company and shall be subject to
the terms and conditions of the applicable agreement between such Participant and the Company. If the deferral or conversion of Awards is permitted or required, the Committee (in its sole discretion) may establish rules, procedures and forms
pertaining to such Awards, including (without limitation) the settlement of deferred compensation accounts established under this Section 12. 
  
 SECTION 13. AWARDS UNDER OTHER PLANS 
  
 The Company may grant awards under other plans or programs. Such awards may be settled in the form of Shares issued under this Plan. Such Shares shall be
treated for all purposes under the Plan like Shares issued in settlement of Stock Units and shall, when issued, reduce the number of Shares available under Section 5. 
  
 SECTION 14. PAYMENT OF DIRECTOR’S FEES IN SECURITIES. 
  
 (a) Effective Date. No provision of this Section 14 shall be effective unless and until the Board has
determined to implement such provision. 
  
 (b)
Elections to Receive NSOs, Restricted Shares or Stock Units. An Outside Director may elect to receive his or her annual retainer payments and/or meeting fees from the Company in the form of cash, NSOs, Restricted Shares or Stock Units, or
a combination thereof, as determined by the Board. Such NSOs, Restricted Shares and Stock Units shall be issued under the Plan. An election under this Section 14 shall be filed with the Company on the prescribed form. 
  
 (c) Number and Terms of NSOs, Restricted Shares or Stock Units.
The number of NSOs, Restricted Shares or Stock Units to be granted to Outside Directors in lieu of annual retainers and meeting fees that would otherwise be paid in cash shall be calculated in a manner determined by the Board. The terms of such
NSOs, Restricted Shares or Stock Units shall also be determined by the Board. 
  
 SECTION 15. LEGAL AND REGULATORY REQUIREMENTS 
  
 Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without 
  
 PRN CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  

 -17- 

 
limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations and the
regulations of any stock exchange on which the Company’s securities may then be listed, and the Company has obtained the approval or favorable ruling from any governmental agency which the Company determines is necessary or advisable. The
Company shall not be liable to a Participant or other persons as to: (a) the non-issuance or sale of Shares as to which the Company has been unable to obtain from any regulatory body having jurisdiction the authority deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares under the Plan; and (b) any tax consequences expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Award granted under
the Plan. 
  
 SECTION 16. WITHHOLDING TAXES. 
  
 (a) General. To the extent required by applicable federal,
state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required
to issue any Shares or make any cash payment under the Plan until such obligations are satisfied. 
  
 (b) Share Withholding. The Committee may permit a Participant to satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Shares that he or she previously acquired. Such Shares shall be valued at their Fair Market Value on
the date when taxes otherwise would be withheld in cash. In no event may a Participant have Shares withheld that would otherwise be issued to him or her in excess of the number necessary to satisfy the legally required minimum tax withholding.

  
 SECTION 17. OTHER PROVISIONS APPLICABLE TO AWARDS. 
  
 (a) Transferability. Unless the agreement evidencing an Award
(or an amendment thereto authorized by the Committee) expressly provides otherwise, no Award granted under this Plan, nor any interest in such Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any
manner (prior to the vesting and lapse of any and all restrictions applicable to Shares issued under such Award), other than by will or the laws of descent and distribution; provided, however, that an ISO may be transferred or assigned only to the
extent consistent with Section 422 of the Code. Any purported assignment, transfer or encumbrance in violation of this Section 17(a) shall be void and unenforceable against the Company. 
  
 (b) Qualifying Performance Criteria. The number of Shares or other benefits granted, issued, retainable and/or
vested under an Award may be made subject to the attainment of performance goals for a specified period of time relating to one or more of the following performance criteria, either individually, alternatively or in any combination, applied to
either the Company as a whole or to a business unit or Subsidiary, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period of years, on an 
  
  
 PRN CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  

 -18- 

 absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison
group or index, in each case as specified by the Committee in the Award: (a) cash flow, (b) earnings per share, (c) earnings before interest, taxes and amortization, (d) return on equity, (e) total stockholder return, (f) share price performance,
(g) return on capital, (h) return on assets or net assets, (i) revenue, (j) income or net income, (k) operating income or net operating income, (l) operating profit or net operating profit, (m) operating margin or profit margin, (n) return on
operating revenue, (o) return on invested capital, or (p) market segment shares (“Qualifying Performance Criteria”). The Committee may appropriately adjust any evaluation of performance under a Qualifying Performance Criteria to exclude
any of the following events that occurs during a performance period: (i) asset write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting
reported results, (iv) accruals for reorganization and restructuring programs and (v) any extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in managements’ discussion and analysis of financial
condition and results of operations appearing in the Company’s annual report to stockholders for the applicable year. If applicable, the Committee shall determine the Qualifying Performance Criteria not later than the 90th day of the performance period, and shall determine and certify, for each Participant, the extent to which the Qualifying
Performance Criteria have been met. The Committee may not in any event increase the amount of compensation payable under the Plan upon the attainment of a Qualifying Performance Goal to a Participant who is a “covered employee” within the
meaning of Section 162(m) of the Code. 
  
 SECTION 18. NO EMPLOYMENT RIGHTS

  
 No provision of the Plan, nor any right or Option granted
under the Plan, shall be construed to give any person any right to become, to be treated as, or to remain an Employee. The Company and its Subsidiaries reserve the right to terminate any person’s Service at any time and for any reason, with or
without notice. 
  
 SECTION 19. DURATION AND AMENDMENTS. 
  
 (a) Term of the Plan. The Plan, as set forth herein, shall
terminate automatically on May 2, 2014 and may be terminated on any earlier date pursuant to Subsection (b) below. 
  
 (b) Right to Amend or Terminate the Plan. The Board of Directors may amend the Plan at any time and from time to time. Rights and
obligations under any Award granted before amendment of the Plan shall not be materially impaired by such amendment, except with consent of the Participant. An amendment of the Plan shall be subject to the approval of the Company’s stockholders
only to the extent required by applicable laws, regulations or rules. 
  
 (c) Effect of Termination. No Awards shall be granted under the Plan after the termination thereof. The termination of the Plan shall not affect Awards previously granted under the Plan. 
  
 [Remainder of this page intentionally left blank] 
  
 PRN CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  

 -19- 

 SECTION 20. EXECUTION. 
  

To record the adoption of the Plan by the Board of Directors, the Company has caused its authorized officer to execute the same. 
  

			
	PRN CORPORATION
		
	By	 	  

	 Name
	 	  

	 Title
	 	  

  
  
  
 PRN CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  

 -20- 

 PRN CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  
 NOTICE OF STOCK OPTION GRANT 
  
 You have been granted the following Option to purchase Common Stock of PRN CORPORATION (the “Company”) under the Company’s
2004 Stock Incentive Plan (the “Plan”): 
  

			
	Name of Optionee:	  	[Name of Optionee]
		
	Total Number of Option Shares Granted:	  	[Total Number of Shares]
		
	Type of Option:	  	  ̈ Incentive Stock Option
  
  ̈ Nonstatutory Stock Option

		
	Exercise Price Per Share:	  	$            
		
	Grant Date:	  	[Date of Grant]
		
	Vesting Commencement Date:	  	[Vesting Commencement Date]
		
	Vesting Schedule:	  	This Option becomes exercisable with respect to the first  1/4th of the shares subject to this Option when you complete 12 months of continuous
“Service” (as defined in the Plan) from the Vesting Commencement Date. Thereafter, this Option becomes exercisable with respect to an additional  1/48th of the shares subject to this Option when you complete each
additional month of Service.
		
	Expiration Date:	  	[Expiration Date] This Option expires earlier if your Service terminates earlier, as described in the Stock Option Agreement.

  

 PRN CORPORATION 
 NOTICE OF STOCK OPTION GRANT 
  
 -1- 

 By your signature and the signature of the Company’s representative below, you and the Company agree
that this Option is granted under and governed by the term and conditions of the Plan and the Stock Option Agreement, both of which are attached to and made a part of this document. 
  

							
	OPTIONEE	 	 	 	PRN CORPORATION
				
	 	 	 	 	By:	 	 
	
	 	 	 	 	 	

	Optionee’s Signature	 	 	 	 	 	 
				
	 	 	 	 	Title:	 	 
	
	 	 	 	 	 	

	Optionee’s Printed Name	 	 	 	 	 	 

  

 PRN CORPORATION 
 NOTICE OF STOCK OPTION GRANT 
  
 -2- 

 PRN CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  
 STOCK OPTION AGREEMENT 
  

			
		
	Tax Treatment	 	This Option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code or a nonstatutory option, as provided in the Notice of Stock Option Grant. Even if this
Option is designated as an incentive stock option, it shall be deemed to be an nonstatutory option to the extent required by the $100,000 annual limitation under Section 422(d) of the Internal Revenue Code.
		
	Vesting	 	This Option becomes exercisable in installments, as shown in the Notice of Stock Option Grant. This Option will in no event become exercisable for additional shares after your Service has
terminated for any reason.
		
	Term	 	This Option expires in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the Notice of Stock Option Grant (fifth
anniversary for a more than 10% stockholder as provided under the Plan if this is an incentive stock option). This Option may expire earlier if your Service terminates, as described below.
		
	Regular Termination	 	If your Service terminates for any reason except death or “Total and Permanent Disability” (as defined in the Plan), then this Option will expire at the close of business at Company
headquarters on the date three (3) months after the date your Service terminates (or, if earlier, the Expiration Date). The Company has discretion to determine when your Service terminates for all purposes of the Plan and its determinations are
conclusive and binding on all persons.
		
	Death	 	If you die, then this Option will expire at the close of business at Company headquarters on the date 12 months after the date your Service terminates (or, if earlier, the Expiration Date).
During that period of up to 12 months, your estate or heirs may exercise the Option.
		
	Disability	 	If your Service terminates because of your Total and Permanent Disability, then this Option will expire at the close of business at Company headquarters on the date 12 months after the date
your Service terminates (or, if earlier, the Expiration Date).

  

 PRN CORPORATION 
 STOCK OPTION AGREEMENT 
  
 -3- 

			
		
	Leaves of Absence	 	For purposes of this Option, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the
Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work.
		
	 	 	If you go on a leave of absence, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s leave of absence policy or the
terms of your leave. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement
between you and the Company pertaining to your part-time schedule.
		
	Restrictions on Exercise	 	The Company will not permit you to exercise this Option if the issuance of shares at that time would violate any law or regulation. The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of the Company stock pursuant to this Option shall relieve the Company of any liability with respect to the non-issuance or sale of the Company
stock as to which such approval shall not have been obtained. However, the Company shall use its best efforts to obtain such approval.
		
	Notice of Exercise	 	When you wish to exercise this Option you must notify the Company by completing the attached “Notice of Exercise of Stock Option” form and filing it with the Human Resources
Department of the Company. You notice must specify how many shares you wish to purchase. Your notice must also specify how your shares should be registered. The notice will be effective when it is received by the Company. If someone else wants to
exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
		
	Form of Payment	 	 When you submit your notice of exercise, you must include payment of the Option exercise price for the shares you are purchasing. Payment may be
made in the following form(s):
  
 •   Your personal check, a cashier’s check or a money order.

  

 PRN CORPORATION 
 STOCK OPTION AGREEMENT 
  
 -4- 

	 	•	Certificates for shares of Company stock that you own, along with any forms needed to effect a transfer of those shares to the Company. The value of the shares, determined as of the
effective date of the Option exercise, will be applied to the Option exercise price. Instead of surrendering shares of Company stock, you may attest to the ownership of those shares on a form provided by the Company and have the same number of
shares subtracted from the Option shares issued to you. However, you may not surrender, or attest to the ownership of shares of Company stock in payment of the exercise price if your action would cause the Company to recognize a compensation expense
(or additional compensation expense) with respect to this Option for financial reporting purposes. 

  

	 	•	By delivering on a form approved by the Committee of an irrevocable direction to a securities broker approved by the Company to sell all or part of your Option shares and to deliver
to the Company from the sale proceeds in an amount sufficient to pay the Option exercise price and any withholding taxes. The balance of the sale proceeds, if any, will be delivered to you. The directions must be given by signing a special
“Notice of Exercise” form provided by the Company. 

  

	 	•	Irrevocable directions to a securities broker or lender approved by the Company to pledge Option shares as security for a loan and to deliver to the Company from the loan proceeds
an amount sufficient to pay the Option exercise price and any withholding taxes. The directions must be given by signing a special “Notice of Exercise” form provided by the Company. 

  
 Notwithstanding the foregoing, payment may not be made in any form that is
unlawful, as determined by the Company in its sole discretion. 
  

	 Withholding Taxes and Stock Withholding 
	 You will not be allowed to exercise this Option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be
due as a result of the Option exercise. These arrangements may include withholding shares of Company stock that otherwise would be issued to you when you exercise this Option. The value of these shares, determined as of the effective date of the
Option exercise, will be applied to the withholding taxes. 

  
  

 PRN CORPORATION 
 STOCK OPTION AGREEMENT 
  
 -5- 

			
		
	Restrictions on Resale	 	By signing this Agreement, you agree not to sell any Option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale
(e.g., a lock-up period after the Company goes public). This restriction will apply as long as you are an employee, consultant or director of the Company or a subsidiary of the Company.
		
	Transfer of Option	 	In general, only you can exercise this Option prior to your death. You cannot transfer or assign this Option, other than as designated by you by will or by the laws of descent and
distribution, except as provided below. For instance, you may not sell this Option or use it as security for a loan. If you attempt to do any of these things, this Option will immediately become invalid. You may in any event dispose of this Option
in your will. Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your former spouse, nor is the Company obligated to recognize your former spouse’s interest in your Option in
any other way.
		
	 	 	However, if this Option is designated as a nonstatutory stock option in the Notice of Stock Option Grant, then the “Committee” (as defined in the Plan) may, in its sole discretion,
allow you to transfer this Option as a gift to one or more family members. For purposes of this Agreement, “family member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law or sister-in-law (including adoptive relationships), any individual sharing your household (other than a tenant or employee), a trust in which one or more of these individuals have more than 50% of the beneficial
interest, a foundation in which you or one or more of these persons control the management of assets, and any entity in which you or one or more of these persons own more than 50% of the voting interest.
		
	 	 	In addition, if this Option is designated as a nonstatutory stock option in the Notice of Stock Option Grant, then the Committee may, in its sole discretion, allow you to transfer this option
to your spouse or former spouse pursuant to a domestic relations order in settlement of marital property rights.
		
	 	 	The Committee will allow you to transfer this Option only if both you and the transferee(s) execute the forms prescribed by the Committee, which include the consent of the transferee(s) to be
bound by this Agreement.

  

 PRN CORPORATION 
 STOCK OPTION AGREEMENT 
  
 -6- 

	 Retention Rights 
	 Neither your Option nor this Agreement gives you the right to be retained by the Company or a subsidiary of the Company in any capacity. The
Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause. 

  

	 Stockholder Rights 
	 You, or your estate or heirs, have no rights as a stockholder of the Company until you have exercised this Option by giving the required notice to
the Company and paying the exercise price. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this Option, except as described in the Plan. 

  

	 Adjustments 
	 In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this Option and the exercise
price per share may be adjusted pursuant to the Plan. 

  

	 Applicable Law 
	 This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions).

  

	 The Plan and Other Agreements 
	 The text of the Plan is incorporated in this Agreement by reference. All capitalized terms in the Stock Option Agreement shall have the meanings
assigned to them in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or negotiations concerning this Option are superseded. This Agreement
may be amended only by another written agreement, signed by both parties. 

  
 BY SIGNING THE COVER SHEET OF THIS AGREEMENT, 
 YOU AGREE TO ALL OF THE TERMS AND CONDITIONS

 DESCRIBED ABOVE AND IN THE PLAN. 
  

 PRN CORPORATION 
 STOCK OPTION AGREEMENT 
  
 -7- 

 PRN CORPORATION 
 2004 STOCK INCENTIVE PLAN 
  
 NOTICE OF EXERCISE OF STOCK OPTION 
  
 You must sign this Notice on the last page before submitting 
 it to the Company

  
 OPTIONEE INFORMATION: 
  

							
	Name:	 	  

	 	Social Security Number:	 	  

	Address:	 	  

	 	Employee Number:	 	  

  
 OPTION INFORMATION: 

 

			
	Date of Grant:                      ,
200    	 	Type of Stock Option:
		
	Exercise Price per Share: $                	 	  ̈   Nonstatutory
(NSO)

		
	 Total number of shares of Common Stock of PRN CORPORATION (the “Company”) covered by
 option:
                                        
            
	 	  ̈   Incentive
(ISO)

  
 EXERCISE INFORMATION:

  
 Number of shares of Common Stock of the Company for which option is being
exercised now:                             . (These shares are referred to below as the
“Purchased Shares.”) 
  
 Total exercise price for the Purchased Shares:
$                 
  
 Form of payment enclosed [check all that apply]: 
  

	 ̈	Check for $                , payable to “PRN CORPORATION.”

  

	 ̈	Certificate(s) for                      shares of Common Stock of the
Company that I have owned for at least six months or have purchased in the open market. (These shares will be valued as of the date when the Company receives this notice.) 

  

 -1- 

					
	 ̈	 	Attestation Form covering                      shares of Common Stock of
the Company. (These shares will be valued as of the date when the Company receives this notice.)
	
	Name(s) in which the Purchased Shares should be registered 
[please check one
box]:
			
	 ̈	 	In my name only	  	 
			
	 ̈	 	In the names of my spouse and myself as community property	  	 My spouse’s name (if applicable):
  

			
	 ̈	 	In the names of my spouse and myself as joint tenants with the right of survivorship	  	 
			
	 ̈	 	In the name of an eligible revocable trust	  	 Full legal name of revocable trust:
  

  

  

		
	The certificate for the Purchased Shares should be sent to the
following address:	  	  

  

  

  

  

  

  
 ACKNOWLEDGMENTS: 
  

	1.	I understand that all sales of Purchased Shares are subject to compliance with the Company’s policy on securities trades. 

  

	2.	I hereby acknowledge that I received and read a copy of the prospectus describing the Company’s 2004 Stock Incentive Plan and the tax consequences of an exercise.

  

	3.	In the case of a nonstatutory option, I understand that I must recognize ordinary income equal to the spread between the fair market value of the Purchased Shares on the date of
exercise and the exercise price. I further understand that I am required to pay withholding taxes at the time of exercising a nonstatutory option. 

  

	4.	In the case of an incentive stock option, I agree to notify the Company if I dispose of the Purchased Shares before I have met both of the tax holding periods applicable to
incentive stock options (that is, if I make a disqualifying disposition). 

  

 -2- 

	5.	I acknowledge that the Company has encouraged me to consult my own adviser to determine the form of ownership that is appropriate for me. In the event that I choose to transfer my
Purchased Shares to a trust that does not satisfy the requirements of the Internal Revenue Service (i.e., a trust that is not an eligible revocable trust), I also acknowledge that the transfer will be treated as a “disposition” for tax
purposes. As a result, the favorable ISO tax treatment will be unavailable and other unfavorable tax consequences may occur. 

  

					
	SIGNATURE AND DATE:	 	 	 	 
			
	  

	 	 	 	                         ,
200    

  

 -3-

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