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CREDIT AGREEMENT

This Credit Agreement ("Agreement") is entered into as of January 20, 2025 ("Effective Date"), by and among:

LENDER:
PACIFIC WESTERN BANK, N.A., a national banking association ("Lender")
Principal Address: 9701 Wilshire Boulevard, Suite 700, Beverly Hills, CA 90212
Contact: Commercial Lending Department
Phone: (310) 555-4500
Attention: David Morrison, Senior Vice President

BORROWER:
SUMMIT MANUFACTURING CORP., a Delaware corporation ("Borrower")
Principal Address: 2200 Indust

{
  "document_type": "loan_agreement",
  "loan_type": "term_loan",
  "effective_date": "2025-01-20",
  "parties": {
    "lender": {
      "name": "Pacific Western Bank, N.A.",
      "type": "bank",
      "address": "9701 Wilshire Boulevard, Suite 700, Beverly Hills, CA 90212"
    },
    "borrower": {
      "name": "Summit Manufacturing Corp.",
      "type": "corporation",
      "address": "2200 Industrial Parkway, Suite 100, Irvine, CA 92614"
    },
    "guarantors": [
      {
        "name": "Summit Holdings LLC",
        "guarantee_type": "Full"
      },
      {
        "name": "James Thornton",
        "guarantee_type": "Limited"
      }
    ]
  },
  "facility": {
    "commitment_amount": "$20,000,000",
    "term_loan_amount": "$15,000,000",
    "revolver_amount": "$5,000,000",
    "currency": "USD",
    "purpose": "Refinancing existing indebtedness ($8,500,000), acquisition of manufacturing equipment ($4,500,000), working capital and general corporate purposes ($2,000,000)"
  },
  "interest": {
    "rate_type": "Floating",
    "base_rate": "SOFR",
    "margin": "3.25% (Term Loan), 3.75% (Revolving)",
    "all_in_rate": "8.50% (Term Loan), 9.00% (Revolving)",
    "default_rate": "Applicable rate plus 3.00%",
    "payment_frequency": "Monthly",
    "day_count": "Actual/360"
  },
  "fees": {
    "commitment_fee": "0.50% ($100,000)",
    "origination_fee": "0.75% ($150,000)",
    "exit_fee": "Year 1: 2.00%, Year 2: 1.50%, Year 3: 1.00%, Year 4+: None",
    "other_fees": [
      "Unused line fee: 0.25% per annum on unused Revolving Credit",
      "Late payment fee: 5% of payment more than 10 days past due",
      "Wire transfer fee: $25 per transfer",
      "Audit fee: Actual costs up to $15,000"
    ]
  },
  "repayment": {
    "maturity_date": "2030-01-20",
    "amortization": "Monthly principal payments: $150,000 (Months 1-24), $200,000 (Months 25-48), $250,000 (Months 49-60)",
    "principal_payments": "Monthly installments plus balloon at maturity",
    "bullet_payment": "Remaining balance due at Maturity Date",
    "prepayment": {
      "permitted": true,
      "penalty": "Year 1: 2.00%, Year 2: 1.50%, Year 3: 1.00%, Year 4+: None",
      "notice_days": 30
    }
  },
  "security": {
    "secured": true,
    "collateral": [
      "All accounts receivable",
      "All inventory",
      "All equipment and machinery",
      "All intellectual property",
      "All general intangibles",
      "All proceeds"
    ],
    "security_documents": [
      "Security Agreement",
      "UCC-1 Financing Statements",
      "Intellectual Property Security Agreement",
      "Deposit Account Control Agreements",
      "Landlord Waivers"
    ],
    "priority": "First lien"
  },
  "covenants": {
    "affirmative_covenants": [
      "Monthly unaudited financial statements within 30 days",
      "Quarterly management-certified financials within 45 days",
      "Annual audited financial statements within 120 days",
      "Maintain insurance as required",
      "Pay all taxes when due",
      "Maintain corporate existence and comply with laws",
      "Provide access for inspections and audits",
      "Notify Lender of Material Adverse Change within 5 business days"
    ],
    "negative_covenants": [
      "No additional indebtedness exceeding $100,000 without consent",
      "No liens on Collateral other than Permitted Liens",
      "No capital expenditures exceeding $500,000 annually without consent",
      "No dividends while Event of Default exists",
      "No asset sales outside ordinary course",
      "No mergers or acquisitions without consent",
      "No investments or loans exceeding $100,000 without consent",
      "No change in nature of business"
    ],
    "financial_covenants": [
      {
        "covenant": "Debt Service Coverage Ratio",
        "requirement": "Minimum 1.25x",
        "testing_frequency": "Quarterly"
      },
      {
        "covenant": "Total Leverage Ratio",
        "requirement": "Maximum 3.50x",
        "testing_frequency": "Quarterly"
      },
      {
        "covenant": "Current Ratio",
        "requirement": "Minimum 1.20x",
        "testing_frequency": "Quarterly"
      },
      {
        "covenant": "Minimum Liquidity",
        "requirement": "$1,000,000 unrestricted cash",
        "testing_frequency": "At all times"
      }
    ]
  },
  "events_of_default": {
    "payment_default": "Failure to pay principal when due or interest/fees within 5 days",
    "covenant_default": "Breach of any covenant, 30-day cure for non-financial covenants",
    "cross_default": true,
    "material_adverse_change": true,
    "bankruptcy": true,
    "cure_periods": "Monetary: 5 days; Financial covenant: No cure period; Other covenants: 30 days"
  },
  "remedies": {
    "acceleration": "Upon Event of Default, all amounts immediately due and payable",
    "foreclosure": "Foreclosure on Collateral, direct collection of receivables, possession of inventory/equipment",
    "setoff": "May set off deposit account balances against amounts owed"
  },
  "representations_warranties": {
    "borrower_reps": [
      "Duly organized and in good standing",
      "Execution within corporate powers",
      "No consents required",
      "Loan Documents valid and binding",
      "No material litigation",
      "Financial statements complete and accurate",
      "No Material Adverse Change",
      "Not in default under material agreements",
      "All taxes paid",
      "Owns Collateral free of liens except Permitted Liens"
    ],
    "bring_down": "All representations true on each borrowing date"
  },
  "conditions_precedent": {
    "closing_conditions": [
      "Execution of all Loan Documents",
      "Corporate resolutions and officer's certificates",
      "Satisfactory due diligence",
      "Lien searches showing no prior liens",
      "UCC financing statement filing",
      "Insurance certificates with Lender as loss payee",
      "Payment of closing fees",
      "Legal opinion",
      "No Material Adverse Change"
    ],
    "draw_conditions": [
      "No Event of Default or Default",
      "Representations remain true",
      "Borrowing Base Certificate dated within 30 days",
      "Availability under Borrowing Base"
    ]
  },
  "governing_law": "State of California",
  "signatures": {
    "lender_signed": true,
    "borrower_signed": true,
    "guarantor_signed": true,
    "date_signed": "2025-01-20"
  }
}