FIFTH AMENDMENT TO LOAN AGREEMENT

FIFTH AMENDMENT TO LOAN AGREEMENT

            THIS FIFTH AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and entered into as of the 3rd day of October, 2008, by and among (a) LABARGE, INC., a Delaware corporation (the “Company”) and LABARGE ELECTRONICS, INC., a Missouri corporation (“LaBarge Electronics”) (individually, a “Borrower” and collectively, the “Borrowers”), (b) U.S. BANK NATIONAL ASSOCIATION, WELLS FARGO BANK, NATIONAL ASSOCIATION and NATIONAL CITY BANK OF PENNSYLVANIA (individually, a “Lender” and collectively, the "Lenders") and (c) U.S. BANK NATIONAL ASSOCIATION, as agent for the Lenders (in such capacity, the “Agent”).

WITNESSETH:

            WHEREAS, the Borrowers, the Lenders (other than Wells Fargo Bank, National Association) and the Agent are parties to that certain Loan Agreement dated as of February 17, 2004, as amended by that certain First Amendment to Loan Agreement dated as of April 16, 2004, that certain Second Amendment to Loan Agreement dated as of August 18, 2005, that certain Third Amendment to Loan Agreement dated as of February 10, 2006, and that certain Fourth Amendment to Loan Agreement dated as of December 1, 2006 (as so amended, the "Loan Agreement"; all capitalized terms used and not otherwise defined in this Amendment shall have the respective meanings ascribed to them in the Loan Agreement as amended by this Amendment); and

            WHEREAS, Wells Fargo Bank, National Association desires to be added as a Lender under, and as a party to, the Loan Agreement; and

            WHEREAS, National City Bank of Pennsylvania desires to withdraw as a Lender under the Loan Agreement; and

            WHEREAS, the Borrowers, the Lenders and the Agent desire to amend the Loan Agreement in the manner hereinafter set forth;

            NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrowers, the Lenders and the Agent hereby agree as follows:

            1.         Wells Fargo Bank, National Association is hereby added as Lender under, and as a party to, the Loan Agreement with a Pro Rata Share of 28.571428571429% and a Revolving Credit Commitment of $7,142,857.14.

            2.         On the effective date of this Amendment, (a) the Company shall prepay in full all of the outstanding Revolving Credit Loans together with all accrued and unpaid interest thereon and any amounts owed under Section 2.14 with respect to such prepayments, (b) after giving effect to the prepayments set forth in (a) above, U.S. Bank and Wells Fargo Bank, National Association shall make such payments to National City Bank of Pennsylvania as shall be necessary to cause the respective Pro Rata Shares of the Lenders in the principal amount of the outstanding Revolving Credit Loans and the principal amount of the outstanding Term Loan (prior to giving effect to the additional advances on the Term Loan in the aggregate amount of $3,500,000.00 to be made by U.S. Bank and Wells Fargo Bank, National Association on the effective date of this Amendment) to be as follows: (i) U.S. Bank – 71.428571428571%, (ii) Wells Fargo Bank, National Association - 28.571428571429%; and (iii) National City Bank of Pennsylvania - 0%, (c) after giving effect to the prepayments set forth in (a) above, each Borrower shall pay to National City Bank of Pennsylvania in full all of the outstanding Borrower’s Obligations (other than the principal amount of the outstanding Revolving Credit Loans and the principal amount of the outstanding Term Loan) owed by such Borrower to National City Bank of Pennsylvania (including, without limitation, all accrued but unpaid interest and all accrued but unpaid fees). Upon receipt of such payments from the other Lenders and the Borrowers, (a) National City Bank of Pennsylvania shall deliver its original Revolving Credit Note to the Company marked “CANCELLED” and (b) National City Bank of Pennsylvania shall deliver its original Term Loan Note to LaBarge Electronics marked “CANCELLED”. From and after the effective date of this Amendment, National City Bank of Pennsylvania shall no longer be a Lender under or a party to, the Loan Agreement or any of the other Transaction Documents or have any right, commitment or obligation of any kind under, the Loan Agreement or any of the other Transaction Documents or any participation interest in any Letter of Credit issued under the Loan Agreement.

            3.         The first “WHEREAS” clause on page 1 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “WHEREAS, (a) the Company has applied for a revolving credit facility from the Lenders consisting of revolving credit loans and letters of credit in an aggregate principal amount of up to $25,000,000.00 (including a swing line subfacility thereunder from U.S. Bank in the principal amount of up to $5,000,000.00) and (b) LaBarge Electronics has applied to the Lenders for a term loan from the Lenders in the aggregate principal amount of $10,000,000.00; and”

            4.         The definitions of “Applicable Commitment Fee Rate”, “Applicable LIBOR Margin” and “Applicable Base Rate Margin” set forth in Section 1.01 of the Loan Agreement are hereby deleted in their entirety and the following substituted in lieu thereof:

            “ Applicable Commitment Fee Rate , Applicable LIBOR Margin and Applicable Base Rate Margin shall mean the per annum rate shown in the applicable column below based on the applicable Consolidated Debt to Consolidated EBITDA Ratio:

The determination of the Applicable Commitment Fee Rate, the Applicable LIBOR Margin and the Applicable Base Rate Margin as of any date shall be based on the Consolidated Debt to Consolidated EBITDA Ratio as of the end of the most recently ended fiscal quarter of the Company for which financial statements of the Company and its Subsidiaries have been delivered to the Agent and the Lenders pursuant to Section 5.01(a), and shall be effective for purposes of determining the Applicable Commitment Fee Rate, the Applicable LIBOR Margin and the Applicable Base Rate Margin from and after the first day of the first month immediately following the date on which delivery of such financial statements is required until the first day of the first month immediately following the next such date on which delivery of such financial statements of the Company and its Subsidiaries is so required. Notwithstanding the foregoing, if the applicable financial statements for any fiscal quarter of the Company are not delivered to the Agent and the Lenders when due in accordance with Section 5.01(a), then (a) Applicable Commitment Fee Rate shall mean 0.500% per annum, (b) Applicable LIBOR Margin shall mean 2.250% per annum and (c) Applicable Base Rate Margin shall mean 0.500% per annum during the period commencing on the date such financial statements were due and ending on the first (1st) day of the first month immediately following the date on which such financial statements are delivered to the Agent and the Lenders.”

            5.         The definition of “Base Rate” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entiretyand the following substituted in lieu thereof:

            “ Base Rate shall mean the Prime Rate.”

            6.         The definition of “Borrower’s Obligations” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entiretyand the following substituted in lieu thereof:

            “ Borrower's Obligations shall mean, with respect to each Borrower, any and all present and future indebtedness (principal, interest, fees, collection costs and expenses, and other amounts), liabilities and obligations (including, without limitation, guaranty obligations, letter of credit reimbursement obligations, indemnity obligations, obligations under a Swap Contract between such Borrower and a Lender and obligations under a Treasury Management Agreement between such Borrower and a Lender) of such Borrower to the Agent and/or any Lender evidenced by or arising under or in respect of this Agreement, any Note and/or any other Transaction Document, in each case whether now existing or hereafter arising, absolute or contingent, joint and/or several, secured or unsecured, direct or indirect, expressed or implied in law, contractual or tortious, liquidated or unliquidated, at law or in equity, or otherwise, and whether created directly or acquired by the Agent and/or any Lender by assignment or otherwise, and any and all costs of collection and/or Attorneys' Fees from time to time incurred in connection with any of the foregoing.”

            7.         The definition of “Borrowing Base” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “ Borrowing Base shall mean, as of the date of any determination thereof, the sum of (a) Eighty-Five Percent (85%) of the face amount of the Eligible Accounts of each of the Company, LaBarge Electronics and LaBarge/STC as of such date (less maximum discounts, credits and allowances which may be taken by or granted to Account Debtors in connection therewith and/or adjustments for reserves and allowances deemed appropriate by the Agent in its good faith discretion) plus (b) Thirty-Five Percent (35%) of the Eligible Inventory of each of the Company, LaBarge Electronics and LaBarge/STC as of such date, valued at the lower of cost or market in accordance with GAAP; provided, however, that in no event may the portion of the Borrowing Base comprised of Eligible Inventory exceed Fifty Percent (50%) of the total Borrowing Base before giving effect to this proviso (for example, if (before giving effect to this proviso) the portion of the Borrowing Base comprised of Eligible Accounts was $10,000,000.00 and the portion of the Borrowing Base comprised of Eligible Inventory was $15,000,000.00, the total Borrowing Base (after giving effect to this proviso) would be $22,500,000.00 ($10,000,000.00 + $12,500,000.00). Notwithstanding any provision contained in this definition of “Borrowing Base” to the contrary, the Lenders may at any time and from time to time, in their sole and absolute discretion, loan to the Company more than the above stated percentage of Eligible Accounts and/or more than the above stated percentage of the value of Eligible Inventory, without notice to the Company; provided, however, that no such over‑advance shall establish a custom or course of dealing or entitle the Company to any subsequent over‑advance under the same or different circumstances.”

            8.         The definition of “Consolidated Excess Cash Flow” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety.

            9.         The definition of “Consolidated Fixed Charges” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entiretyand the following substituted in lieu thereof:

            “ Consolidated Fixed Charges shall mean, for the period in question, the sum of (a) the aggregate amount of all principal payments required to be made by Borrower and its Subsidiaries on all Debt during such period (including the principal portion of payments in respect of Capitalized Leases but excluding principal payments on the Revolving Credit Loans and the Swing Line Loans and mandatory prepayments on the Term Loan under Section 2.12 of this Agreement), plus (b) Consolidated Interest Expense during such period plus (c) Consolidated Operating Lease Expense during such period, all determined on a consolidated basis and in accordance with GAAP.”

            10.       The definition of “Consolidated Operating Cash Flow” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entiretyand the following substituted in lieu thereof:

            “ Consolidated Operating Cash Flow shall mean, for the period in question, the sum of (a) Consolidated EBITDA during such period, plus (b) Consolidated Operating Lease Expense during such period, minus (c) all Federal, state, local and/or foreign income taxes paid by the Company and its Subsidiaries during such period, minus (d) all Capital Expenditures (other than any Capital Expenditures made by the Company in connection with its purchase of the land and building located in Tulsa, Oklahoma which is currently leased by the Company) made by the Company and/or any Subsidiary during such period (net of any Debt incurred by the Company and/or any Subsidiary (other than the Revolving Credit Loans and the Swing Line Loans) to finance such Capital Expenditure) minus (e) all Distributions paid by the Company on or with respect to its capital stock during such period (including, without limitation, all payments by the Company for or with respect to the redemption and/or repurchase of any capital stock of the Company), all determined on a consolidated basis and in accordance with GAAP.”

            11.       The definition of “Current Liabilities” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “ Current Liabilities shall mean, with respect to any Person, all liabilities of such Person which, in accordance with GAAP, are required to be classified as current liabili­ties on a balance sheet of such Person; provided, however, that for purposes of this Agreement the outstanding Revolving Credit Loans and Swing Line Loans under this Agreement shall be deemed to be Current Liabilities of the Company.”

            12.       The definition of “Lender(s)” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “ Lender(s) shall mean U.S. Bank (including U.S. Bank in its capacities as the maker of the Swing Line Loans and the issuer of the Letters of Credit) and Wells Fargo Bank, National Association and their respective successors and permitted assigns; provided, however, that for purposes of this Agreement and each other Transaction Document “Lender” shall also include each affiliate of a Lender which has entered into a Swap Contract or a Treasury Management Agreement with the Company and/or any of its Subsidiaries and its successors and assigns and each such affiliate and its successors and assigns shall be deemed to be a Lender party to this Agreement.”

            13.       The definitions of “Loan” and “Loans” set forth in Section 1.01 of the Loan Agreement are hereby deleted in their entirety and the following substituted in lieu thereof:

            “ Loan shall mean each Revolving Credit Loan, each Swing Line Loan and the Term Loan; and Loans shall mean any or all of the foregoing.”

            14.       The definitions of “Note” and “Notes” set forth in Section 1.01 of the Loan Agreement are hereby deleted in their entirety and the following substituted in lieu thereof:

            “ Note shall mean each Revolving Credit Note, the Swing Line Note and each Term Loan Note; and Notes shall mean all of the foregoing.”

            15.       The following new definition of “Notice of Swing Line Borrowing” is hereby added to Section 1.01 of the Loan Agreement in proper alphabetical order:

            “ Notice of Swing Line Borrowing shall have the meaning ascribed thereto in Section 2.04(e).”

            16.       The definition of “Obligor” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “ Obligor shall mean the Company, LaBarge Electronics, LaBarge/STC and each other Person who is or shall at any time hereafter become primarily or secondarily liable on any of the Borrower’s Obligations owed by any one or more of the Borrowers or who grants the Agent for the ratable benefit of the Lenders a Lien upon any of the Property of such Person as security for any of the Borrower’s Obligations owed by any one or more of the Borrowers and/or any Guarantee thereof.”

            17.       The definition of “Pro Rata Share” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “ Pro Rata Share shall mean for the item at issue, with respect to each Lender, a percentage, the numerator of which is the portion of such item owned or held by such Lender and the denominator of which is the total amount of such item owned or held by all of the Lenders.  For example, (a) if the amount of the Revolving Credit Commitment of a Lender is $1,000,000.00 and the total amount of the Revolving Credit Commitments of all of the Lenders is $5,000,000.00, such Lender's Pro Rata Share of the Revolving Credit Commitments would be Twenty Percent (20%) and (b) if the original principal amount of a Loan is $5,000,000.00 and the portion of such Loan made by one Lender is $500,000.00, such Lender's Pro Rata Share of such Loan would be Ten Percent (10%). As of October 3, 2008, the Pro Rata Shares of the Lenders with respect to the Revolving Credit Commitments, the Revolving Credit Loans and the Term Loan are as follows: (a) U.S. Bank – 71.428571428571%; (b) Wells Fargo Bank, National Association – 28.571428571429% and (c) National City Bank of Pennsylvania – 0%.”

            18.       The definition of “Required Lenders” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “ Required Lenders shall mean at any time Lenders having Fifty-One Percent (51%) or more of the aggregate amount of Loans (other than Swing Line Loans) then outstanding or, if no Loans (other than Swing Line Loans) are then outstanding, then Fifty-One Percent (51%) or more of the total Revolving Credit Commitments of all of the Lenders; provided, however, that if there are three (3) or fewer Lenders, Required Lenders shall mean all of the Lenders.”

            19.       The definition of “Revolving Credit Commitment” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “ Revolving Credit Commitment shall mean, subject to any reduction of the Revolving Credit Commitments pursuant to Section 2.01(e) and to any assignments of the Revolving Credit Commitments by the Lenders to the extent permitted by Section 8.12: (a) with respect to U.S. Bank - $17,857,142.86; (b) with respect to Wells Fargo Bank, National Association - $7,142,857.14; and (b) with respect to National City Bank of Pennsylvania - $0.00.”

            20.       The definition of “Revolving Credit Period” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “ Revolving Credit Period shall mean the period commencing February 17, 2004, and ending October 3, 2010;provided, however, that the Revolving Credit Period shall end on the date the Revolving Credit Commitments are terminated pursuant to Section 6 or otherwise.”

            21.       The definition of “Subordination Agreement” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety.

            22.       The following new definitions of “Swing Line Commitment”, “Swing Line Loan”, “Swing Line Loans” and “Swing Line Note” are hereby added to Section 1.01 of the Loan Agreement in proper alphabetical order:

            “ Swing Line Commitment shall mean $5,000,000.00.

            Swing Line Loan and Swing Line Loans shall have the meanings ascribed thereto in Section 2.01A(a).

            Swing Line Note shall have the meaning ascribed thereto in Section 2.05(e).”

            23.       The definition of “Term Loan Commitments” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety.

            24.       The definition of “Total Revolving Credit Outstandings” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “ Total Revolving Credit Outstandings shall mean, as of any date, the sum of (a) the aggregate principal amount of all Revolving Credit Loans outstanding as of such date, plus (b) the aggregate principal amount of all Swing Line Loans outstanding as of such date plus (c) the aggregate undrawn face amount of all Letters of Credit outstanding as of such date plus all unreimbursed drawings with respect thereto.”

            25.       The definition of “Transaction Documents” set forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “ Transaction Documents shall mean this Agreement, the Notes, the Letter of Credit Reimbursement Agreement, the Letter of Credit Applications, the Revolving Credit Guaranty, the Term Loan Guaranty, the Company Patent, Trademark and License Security Agreement, the Company Security Agreement, the Company Stock Pledge Agreement, the LaBarge Electronics Collateral Assignment of Asset Sale and Purchase Agreement, the LaBarge Electronics Membership Interest Pledge Agreement, the LaBarge Electronics Patent, Trademark and License Security Agreement, the LaBarge Electronics Security Agreement, the LaBarge/STC Patent, Trademark and License Security Agreement, the LaBarge/STC Security Agreement and any and all other agreements, documents and instruments heretofore, now or hereafter delivered to the Agent and/or any Lender with respect to or in connection with or pursuant to this Agreement, any Loans made hereunder, any Letters of Credit issued hereunder, any of the Borrower’s Obligations owed by any one or more of the Borrowers, any Guarantee of any of the Borrower’s Obligations owed by any one or more of the Borrowers, and executed by or on behalf of the Company, LaBarge Electronics and/or any other Obligor,including, without limitation, any Swap Contract and/or Treasury Management Agreement heretofore, now or hereafter executed by a Borrower with or in favor of a Lender, each as the same may from time to time be amended, modified, extended, renewed or restated.”

26.       The following new definition of “Treasury Management Agreement” is hereby added to Section 1.01 of the Loan Agreement in proper alphabetical order:

“ Treasury Management Agreement shall mean any agreement, document or instrument governing the provision of depository, treasury and/or cash management services, including, without limitation, deposit accounts, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services.”

27.       The following new definition of “USA Patriot Act” is hereby added to Section 1.01 of the Loan Agreement in proper alphabetical order:

“ USA Patriot Act shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107‑56, as from time to time amended.”

            28.       Section 2.01 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “2.01    Revolving Credit Commitments .  (a)  Subject to the terms and conditions set forth in this Agreement and so long as no Default or Event of Default has occurred and is continuing, during the Revolving Credit Period, each Lender severally agrees to make such loans to the Company (individually, a "Revolving Credit Loan" and collectively, the "Revolving Credit Loans") as the Company may from time to time request pursuant to Section 2.04.  Each Revolving Credit Loan under this Section 2.01(a) which is a Revolving Credit Base Rate Loan shall be for an aggregate principal amount of at least $100,000.00 or any larger multiple of $25,000.00.  Each Revolving Credit Loan under this Section 2.01(a) which is a Revolving Credit LIBOR Loan shall be for an aggregate principal amount of at least $1,000,000.00 or any larger multiple of $250,000.00.  The aggregate principal amount of Revolving Credit Loans which each Lender shall be required to have outstanding under this Agreement as of any date shall not exceed the product of (i) such Lender’s Pro Rata Share of the total Revolving Credit Commitments of all of the Lenders multiplied by (ii) the sum of (A) the lesser of (1) the total Revolving Credit Commitments of all of the Lenders as of such date or (2) the Borrowing Base as of such date minus (B) the aggregate principal amount of Swing Line Loans outstanding as of such date minus (C) the aggregate undrawn face amount of all Letters of Credit outstanding as of such date plus all unreimbursed drawings with respect thereto; provided, however, that in no event shall (i) the Total Revolving Credit Outstandings as of any date exceed the lesser of (A) the total Revolving Credit Commitments of all of the Lenders as of such date or (B) the Borrowing Base as of such date or (ii) the sum of (A) the aggregate principal amount of all outstanding Revolving Credit Loans made by any Lender, plus (B) such Lender’s Pro Rata Share of the aggregate principal amount of Swing Line Loans then outstanding plus (C) such Lender’s Pro Rata Share of the aggregate undrawn face amount of all outstanding Letters of Credit plus all unreimbursed drawings with respect thereto exceed the amount of such Lender’s Revolving Credit Commitment.  Each Revolving Credit Loan under this Section 2.01 shall be made from the several Lenders ratably in proportion to their respective Pro Rata Shares.  Within the foregoing limits, the Company may borrow under this Section 2.01(a), prepay under Section 2.11 and reborrow at any time during the Revolving Credit Period under this Section 2.01(a).  All Revolving Credit Loans not paid prior to the last day of the Revolving Credit Period, together with all accrued and unpaid interest thereon and all fees and other amounts owing by the Company to the Agent and/or the Lenders with respect thereto, shall be due and payable on the last day of the Revolving Credit Period.  The failure of any Lender to make any Revolving Credit Loan required under this Agreement shall not release any other Lender from its obligation to make Revolving Credit Loans as provided herein.

            (b)        The Company shall deliver to the Agent and each Lender on or before the date of this Agreement (with respect to the fiscal month of the Company ended August 31, 2008) and on or before the fifteenth (15th) day of each month thereafter commencing October 15, 2008, a borrowing base certificate in the form of Exhibit A attached hereto and incorporated herein by reference (a "Borrowing Base Certificate") (together with such supporting information as the Agent or any Lender may reasonably request in connection therewith) setting forth:

            (i)         the Borrowing Base and its components as of the end of the immediately preceding fiscal month of the Company;

            (ii)        the aggregate principal amount of all Revolving Credit Loans outstanding as of the end of the immediately preceding fiscal month of the Company;

            (iii)       the aggregate principal amount of all Swing Line Loans outstanding as of the end of the immediately preceding fiscal month of the Company;

            (iv)       the aggregate undrawn face amount of all Letters of Credit outstanding as of the end of the immediately preceding fiscal month of the Company plus all unreimbursed drawings with respect thereto; and

            (v)        the difference, if any, between the Borrowing Base and the Total Revolving Credit Outstandings as of the end of the immediately preceding fiscal month of the Company.

The Borrowing Base shown in such Borrowing Base Certificate shall be and remain the Borrowing Base hereunder until the next Borrowing Base Certificate is delivered to the Agent and each Lender, at which time the Borrowing Base shall be the amount shown in such subsequent Borrowing Base Certificate.  Each Borrowing Base Certificate shall be certified (subject to normal year‑end adjustments) as being true, correct and complete in all material respects by the President or the Chief Financial Officer of the Company.

            (c)        If at any time the Total Revolving Credit Outstandings are greater than the Borrowing Base as shown on the most recent Borrowing Base Certificate, the Company shall be automatically required (without demand or notice of any kind by the Agent or any Lender, all of which are hereby expressly waived by the Company) to immediately repay the Revolving Credit Loans and/or the Swing Line Loans and/or surrender for cancellation the outstanding Letters of Credit, in either case in an amount sufficient to reduce the amount of the Total Revolving Credit Outstandings to the amount of the Borrowing Base.

            (d)        If the total Revolving Credit Commitments of all of the Lenders on any date should be less than the Total Revolving Credit Outstandings on such date, whether as a result of the Company’s election to decrease the amount of the Revolving Credit Commitments of the Lenders pursuant to Section 2.01(e) or otherwise, the Company shall be automatically required (without demand or notice of any kind by the Agent or any Lender, all of which are hereby expressly waived by the Company) to immediately repay the Revolving Credit Loans and/or the Swing Line Loans and/or surrender for cancellation the outstanding Letters of Credit, in either case in an amount sufficient to reduce the amount of the Total Revolving Credit Outstandings to an amount equal to or less than the total Revolving Credit Commitments of all of the Lenders.

            (e)        The Company may, upon three (3) Business Days' prior written notice to the Agent and each Lender, terminate entirely at any time, or proportionately reduce from time to time on a pro rata basis among the Lenders based on their respective Pro Rata Shares by an aggregate amount of $1,000,000.00 or any larger multiple of $250,000.00 the unused portions of the Revolving Credit Commitments; provided, however, that (i) at no time shall the Revolving Credit Commitments be reduced to a figure less than the Total Revolving Credit Outstandings, (ii) at no time shall the Revolving Credit Commitments be reduced to less than $10,000,000.00 and (iii) any such termination or reduction shall be permanent and the Company shall have no right to thereafter reinstate or increase, as the case may be, the Revolving Credit Commitment of any Lender.”

            29.       The following new Section 2.01A is hereby added to the Loan Agreement:

            “2.01A  Swing Line Commitment .

            (a)        Subject to the terms and conditions set forth in this Agreement and so long as no Default or Event of Default has occurred and is continuing (provided, however, that U.S. Bank shall have no liability to any other Lender for making a Swing Line Loan to the Company after the occurrence or during the continuance of any Default or Event of Default unless U.S. Bank has previously received notice in writing from the Company or any other Lender of, or has actual knowledge of, the occurrence of such Default or Event of Default), during the Revolving Credit Period, U.S. Bank  agrees to make such loans to the Company (individually, a "Swing Line Loan" and collectively, the "Swing Line Loans") as the Company may from time to time request pursuant to Section 2.04. Each Swing Line Loan requested by way of a Notice of Swing Line Borrowing shall be for an aggregate principal amount of at least $100,000.00 or any larger multiple of $25,000.00. The aggregate principal amount of Swing Line Loans which U.S. Bank shall be required or permitted to have outstanding under this Agreement as of any date shall not exceed the amount of the Swing Line Commitment; provided, however, that in no event shall the Total Revolving Credit Outstandings as of any date exceed the sum of (i) the lesser of (A) total Revolving Credit Commitments of all of the Lenders as of such date or (B) the Borrowing Base as of such date.Within the foregoing limits, the Company may borrow under this Section 2.01A, prepay under Section 2.11 and reborrow at any time during the Revolving Credit Period under this Section 2.01A.  All Swing Line Loans not paid prior to the last day of the Revolving Credit Period, together with all accrued and unpaid interest thereon and all fees and other amounts owing by the Company to U.S. Bank with respect thereto, shall be due and payable on the last day of the Revolving Credit Period. Immediately upon the making of a Swing Line Loan, each Lender (other than U.S. Bank) shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from U.S. Bank a risk participation in such Swing Line Loan in an amount equal to such Lender's Pro Rata Share (based on such Lender’s Pro Rata Share of the Revolving Credit Commitments) of such Swing Line Loan.

            (b)        U.S. Bank may at any time in its sole and absolute discretion request, on behalf of  the Company (and the Company hereby irrevocably requests and authorizes U.S. Bank to so request on its behalf), that each Lender make a Revolving Credit Base Rate Loan in an amount equal to such Lender's Pro Rata Share of the amount of Swing Line Loans then outstanding.  Such request shall (i) be made in writing (which written request shall be deemed to be a Notice of Revolving Credit Borrowing for purposes hereof) and in accordance with the requirements of Section 2.04(a), (ii) not be subject to the minimum and multiples specified in Section 2.01(a) for the principal amount of the Revolving Credit Base Rate Loans and (iii) be subject to the conditions set forth in Section 3. U.S. Bank shall furnish the Company with a copy of the applicable Notice of Revolving Credit Borrowing promptly after delivering such notice to the Agent.  Each Lender shall make an amount equal to its Pro Rata Share of the amount specified in such Notice of Revolving Credit Borrowing available in immediately available funds to the Agent for the account of U.S. Bank at the Agent’s address specified in or pursuant to Section 8.07 not later than 12:00 noon (St. Louis, Missouri time) on the day specified in such Notice of Revolving Credit Borrowing, whereupon, subject to Section 2.01A(c), each Lender that so makes funds available shall be deemed to have made a Revolving Credit Base Rate Loan to the Company in such amount. The Agent shall remit the funds so received to U.S. Bank.

            (c)        If for any reason any Swing Line Loan cannot be refinanced by such a borrowing of Revolving Credit Base Rate Loans in accordance with Section 2.01A(b) (whether as a result of a failure to satisfy one or more of the conditions set forth in Section 3 or otherwise), the request for a Revolving Credit Base Rate Loan submitted by U.S. Bank as set forth herein shall be deemed to be a request by U.S. Bank that each of the other Lenders fund its risk participation in the relevant Swing Line Loan(s) and each such Lender's payment to the Agent for the account of U.S. Bank pursuant to Section 2.01A(b) shall be deemed payment in respect of such participation.

            (d)        If any Lender fails to make available to U.S. Bank any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.01A by the time specified in Section 2.01A(b), U.S. Bank shall be entitled to recover from such Lender, on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to U.S. Bank at a rate per annum equal to the Fed Funds Rate. A certificate of U.S. Bank submitted to any Lender with respect to any amounts owing under this Section 2.01A shall be conclusive absent demonstrable error.

            (e)        Each Lender's obligation to make Revolving Credit Base Rate Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.01A shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any set-off, counterclaim, recoupment, defense or other right that such Lender may have against U.S. Bank, the Company or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or Event of Default or (iii) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender's obligation to make Revolving Credit Base Rate Loans pursuant to this Section 2.01A (but not such Lender’s obligation to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.01A) is subject to the conditions set forth in Section 3. No such purchase or funding of risk participations shall relieve or otherwise impair the obligation of the Company to repay Swing Line Loans, together with interest as provided herein.

            (f)         At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if U.S. Bank receives any payment on account of such Swing Line Loan, U.S. Bank will distribute to such Lender its Pro Rata Share of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender's risk participation was funded) in the same funds as those received by U.S. Bank.

            (g)        If any payment received by U.S. Bank in respect of principal or interest on any Swing Line Loan is required to be returned by U.S. Bank to the Company or any other Person for any reason, each Lender shall pay to U.S. Bank its Pro Rata Share thereof on the demand of U.S. Bank, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Fed Funds Rate.

(h)        Until a Lender funds its Revolving Credit Base Rate Loans or risk participation pursuant to this Section 2.01A to refinance such Lender's Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of U.S. Bank.

            (i)         The Company shall make all payments of principal and interest in respect of the Swing Line Loans directly to U.S. Bank.”

            30.       Section 2.02 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “2.02    Term Loan . The Lenders have heretofore made LaBarge Electronics a term loan in the aggregate original principal amount of $25,000,000.00 (the "Term Loan"). As of October 3, 2008, the outstanding principal balance of the Term Loan is $3,000,000.00. LaBarge Electronics desires to borrow an additional aggregate principal amount of $7,000,000.00 from the Lenders, thereby increasing the aggregate outstanding principal amount of the Term Loan from $3,000,000.00 to $10,000,000.00. LaBarge Electronics shall borrow (a) $3,500,000.00 of such additional principal amount on October 3, 2008, and (b) the remaining $3,500,000.00 of such additional principal amount on November 30, 2008, or on such earlier Business Day during the period commencing October 3, 2008, and ending November 30, 2008, as LaBarge Electronics may elect upon not less than three (3) Business Days’ prior written notice to the Agent (the “Additional Term Loan Advance Date”). Subject to the terms and conditions set forth in this Agreement, and so long as no Default or Event of Default has occurred and is continuing, each Lender severally agrees to make an additional advance on the Term Loan to LaBarge Electronics (a) on October 3, 2008, in a principal amount equal to such Lender’s Pro Rata Share of $3,500,000.00 and (b) on the Additional Term Loan Advance Date in a principal amount equal to such Lender’s Pro Rata Share of $3,500,000.00. The Term Loan shall mature on October 3, 2010. Principal on the Term Loan shall be due and payable in nine (9) consecutive quarterly installments as follows: eight (8) equal consecutive quarterly installments in the amount of $500,000.00 each, due and payable on the last day of each November, February, May and August commencing November 30, 2008, with the ninth (9th) and final installment in the amount of the then outstanding principal balance of the Term Loan due and payable on October 3, 2010. All principal payments and prepayments on the Term Loan shall, unless otherwise directed by LaBarge Electronics in writing at or prior to the time of such payment or prepayment, be applied first to that portion of the Term Loan, if any, accruing interest based on the Adjusted Base Rate and then to those portions of the Term Loan, if any, accruing interest based on the LIBOR Rate (and among those portions of the Term Loan, if any, accruing interest based on the LIBOR Rate, being applied to the Interest Periods in the order of their respective expiration dates (i.e. earliest expiration date first)).”

            31.       Section 2.04(a) of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “(a)      The Company shall give notice (a "Notice of Revolving Credit Borrowing") to the Agent by 12:00 noon (St. Louis time) on the Business Day of each Revolving Credit Base Rate Loan to be made to the Company, and by 12:00 noon (St. Louis Time) at least two (2) Eurodollar Business Days before each Revolving Credit LIBOR Loan to be made to the Company, specifying:

                        (i)         the date of such Revolving Credit Loan, which shall be a Business Day during the Revolving Credit Period in the case of a Revolving Credit Base Rate Loan and a Eurodollar Business Day during the Revolving Credit Period in the case of a Revolving Credit LIBOR Loan,

                        (ii)        the aggregate principal amount of such Revolving Credit Loan,

                        (iii)       whether such Revolving Credit Loan is to be a Revolving Credit Base Rate Loan or a Revolving Credit LIBOR Loan, and

                        (iv)       in the case of a Revolving Credit LIBOR Loan, the duration of the initial Interest Period applicable thereto, subject to the provisions of the definition of Interest Period.”

            32.       Section 2.04(d) of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “(d)      The Company hereby irrevocably authorizes the Agent and each Lender to rely on telephonic, facsimile, telegraphic, telex or written instructions of any person identifying himself or herself as one of the individuals listed on Schedule 2.04 attached hereto (or any other individual from time to time authorized to act on behalf of the Company pursuant to a resolution adopted by the Board of Directors of the Company and certified by the Secretary of the Company and delivered to the Agent and each Lender) (each, an “Authorized Person”) with respect to any request to make a Revolving Credit Loan or a Swing Line Loan or a repayment hereunder, and on any signature which the Agent or such Lender, as the case may be, believes in good faith to be genuine, and the Company shall be bound thereby in the same manner as if such individual were actually authorized or such signature were genuine.  The Company also hereby agrees to defend and indemnify the Agent and each Lender and hold the Agent and each Lender harmless from and against any and all claims, demands, damages, liabilities, losses, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) relating to or arising out of or in connection with the acceptance of any notices or instructions believed by the Agent or such Lender, as the case may be, in good faith to have been sent or delivered by an Authorized Person, regardless of whether such notice or instruction was in fact delivered by an Authorized Person.”

            33.       The following new Sections 2.04(e) and 2.04(f) are hereby added to the Loan Agreement:

“(e)      Except as set forth in this Section 2.04(e), the Company shall give notice (a "Notice of Swing Line Borrowing") to U.S. Bank by 12:00 noon (St. Louis time) on the Business Day of each Swing Line Loan, specifying:

            (i)         the date of such Swing Line Loan, which must be a Business Day during the Revolving Credit Period; and

            (ii)        the principal amount of such Swing Line Loan.

A Notice of Swing Line Borrowing shall not be revocable by the Company.

Pursuant to a certain U.S. Bank Treasury Management Service Agreement by and between the Company and U.S. Bank and any and all other terms and conditions, agreements, documents and/or instruments related thereto, as the same may from time to time be amended, modified, restated or replaced, the Company has requested and authorized U.S. Bank to (A) to apply any collected balances (after funding advances) in excess of a mutually predetermined amount (the “Target Balance”) remaining at the end of any day in the Company’s Account No. 4349567042 at U.S. Bank (the “Company’s Operating Account”) to the repayment of any outstanding Swing Line Loans and (B) subject to all of the other terms and conditions of this Agreement (including the preconditions to Loans set forth in Section 3.02), make a Swing Line Loan to the Company at the end of any day on which the Company shall have an overdraft (negative collected balance) or a collected balance otherwise less than the Target Balance in the Company’s Operating Account (a “Deficiency Amount”) after crediting all deposits received in immediately available funds and debiting all withdrawals made and checks presented against the Company’s Operating Account and honored by U.S. Bank as of such date, which Swing Line Loan shall be in the amount of the Deficiency Amount, without any other request or authorization therefor from the Company and without notice to the Company.  A Notice of Swing Line Borrowing shall not be required in connection with a Swing Line Loan made to cover any Deficiency Amount in the Company’s Operating Account as set forth in the immediately preceding sentence.

            (f)         Unless U.S. Bank determines that any applicable condition specified in Section 3 has not been satisfied, U.S. Bank will make the proceeds of each Swing Line Loan available to the Company by 3:00 p.m. (St. Louis time) by crediting such funds to the Company’s Operating Account.”

            34.       Section 2.05(b) of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “(b)      The Term Loan of each Lender to LaBarge Electronics shall be evidenced by a Term Loan Promissory Note of LaBarge Electronics payable to the order of such Lender in an original principal amount equal to the amount of such Lender's Pro Rata Share of $10,000,000.00, each of which Term Loan Promissory Notes shall be in substantially the form of Exhibit C attached hereto and incorporated herein by reference (with appropriate insertions)(collectively, as the same may from time to time be amended, modified, extended, renewed, restated or replaced (including, without limitation, any Term Loan Note issued in full or partial replacement of an existing Term Loan Note as a result of an assignment by a Lender), the "Term Loan Notes").”

            35.       The following new Sections 2.05(e) and 2.05(f) are hereby added to the Loan Agreement:

             “(e)      The Swing Line Loans of U.S. Bank to the Company shall be evidenced by a Swing Line Note of the Company payable to the order of U.S. Bank in a principal amount equal to the amount of the Swing Line Commitment, which Swing Line Note shall be in substantially the form of Exhibit I attached hereto and incorporated herein by reference (with appropriate insertions) (as the same may from time to time be amended, modified extended, renewed or restated, the "Swing Line Note").

            (f)         U.S. Bank shall record in its books and records the date and amount of each Swing Line Loan made by it and the date and amount of each payment of principal and/or interest made by the Company with respect thereto; provided, however, that the obligation of the Company to repay each Swing Line Loan actually made by U.S. Bank to the Company under this Agreement shall be absolute and unconditional, notwithstanding any failure of U.S. Bank to make any such recordation or any mistake by U.S. Bank in connection with any such recordation. The books and records of U.S. Bank showing the account between U.S. Bank and the Company shall be conclusive evidence of the items set forth therein in the absence of demonstrable error.”

            36.       Section 2.06 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “2.06    Duration of Interest Periods and Selection of Interest Rates .

            (a)        The duration of the initial Interest Period for each Revolving Credit LIBOR Loan shall be as specified in the applicable Notice of Revolving Credit Borrowing.  The Company shall elect the duration of each subsequent Interest Period applicable to such Revolving Credit LIBOR Loan and the interest rate to be applicable during such subsequent Interest Period (and the Company shall have the option (i) in the case of any Revolving Credit Base Rate Loan, to elect that such Revolving Credit Loan become a Revolving Credit LIBOR Loan and the Interest Period to be applicable thereto, and (ii) in the case of any Revolving Credit LIBOR Loan, to elect that such Revolving Credit Loan become a Revolving Credit Base Rate Loan), by giving oral or written notice of such election to the Agent by 12:00 noon (St. Louis time) on the Business Day of, in the case of the election of the Adjusted Base Rate, and by 12:00 noon (St. Louis time) at least two (2) Eurodollar Business Days before, in the case of the election of the LIBOR Rate, the end of the immediately preceding Interest Period applicable thereto, if any; provided, however, that notwithstanding the foregoing, in addition to and without limiting the rights and remedies of the Agent and the Lenders under Section 6 hereof, so long as any Default or Event of Default under this Agreement has occurred and is continuing, the Company shall not be permitted to renew any Revolving Credit LIBOR Loan as a Revolving Credit LIBOR Loan or to convert any Revolving Credit Base Rate Loan into a Revolving Credit LIBOR Loan.  Upon receipt of any such notice given by Borrower to the Agent under this Section 2.06(a), the Agent shall notify each Lender by 1:00 p.m. (St. Louis time) on the date of receipt of such notice (which must be a Business Day) of the contents thereof.  If the Agent does not receive a notice of election for a Revolving Credit Loan pursuant to this Section 2.06(a) within the applicable time limits specified herein, the Company shall be deemed to have elected to pay such Revolving Credit Loan in whole pursuant to Section 2.11 on the last day of the current Interest Period with respect thereto and to reborrow the principal amount of such Revolving Credit Loan on such date as a Revolving Credit Base Rate Loan.

            (b)        The Term Loan shall bear interest on the outstanding principal amount thereof at a rate per annum equal to the Adjusted Base Rate.  LaBarge Electronics may from time to time fix the interest rate on all or any portion of the Term Loan in an amount not less than $500,000.00 or any larger multiple of $250,000.00 at the LIBOR Rate for the Interest Period selected by LaBarge Electronics (subject to the definition of Interest Period); provided, however, that notwithstanding the foregoing, in addition to and without limiting the rights and remedies of the Agent and the Lenders under Section 6 hereof, so long as any Default or Event of Default under this Agreement has occurred and is continuing, LaBarge Electronics shall not be permitted to fix the interest rate on all or any portion of the Term Loan at the LIBOR Rate.  If LaBarge Electronics elects to have any portion of the Term Loan bear interest at the LIBOR Rate, LaBarge Electronics shall give oral or written notice (an "Interest Rate Selection Notice") to the Agent by 12:00 noon (St. Louis time) at least two (2) Eurodollar Business Days before any date (which must be a Eurodollar Business Day) upon which LaBarge Electronics desires to fix the interest rate on any portion of the Term Loan, which Interest Rate Selection Notice shall specify the portion of the Term Loan which is to bear interest at the LIBOR Rate and the initial Interest Period applicable thereto.  LaBarge Electronics may not revoke or rescind any Interest Rate Selection Notice.  Upon receipt of any such Interest Rate Selection Notice given by LaBarge Electronics to the Agent under this Section 2.06(b), the Agent shall notify each Lender by 1:00 p.m. (St. Louis time) on the date of receipt of such Interest Rate Selection Notice (which must be a Business Day) of the contents thereof.  Unless LaBarge Electronics shall have otherwise notified the Agent in accordance with this Section 2.06(b), upon the expiration of any Interest Period, that portion of the Term Loan bearing interest at the LIBOR Rate during such Interest Period shall bear interest at the Adjusted Base Rate from and after the expiration of such Interest Period.

            (c)        The Company and LaBarge Electronics, collectively, may not have outstanding and the Lenders shall not be obligated to make more than ten (10) LIBOR Loans at any one time.”

            37.       Section 2.07(e) of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “(e)      So long as no Event of Default has occurred and is continuing, the from time to time outstanding principal balance of each Swing Line Loan shall bear interest prior to the maturity of the Swing Line Note (whether by reason of acceleration or otherwise) at a rate per annum equal to the Adjusted Base Rate. So long as any Event of Default has occurred and is continuing, the from time to time outstanding principal balance of each Swing Line Loan shall, unless otherwise agreed in writing by each Lender, bear interest prior to the maturity of the Swing Line Note (whether by reason of acceleration or otherwise) at a rate per annum equal to Three Percent (3%) per annum over and above the Adjusted Base Rate. Such interest shall be due and payable monthly on the last day of each month, commencing on the first such date after such Swing Line Loan is made, and at the maturity of the Swing Line Note (whether by reason of acceleration or otherwise). From and after the maturity of the Swing Line Note (whether by reason of acceleration or otherwise), the from time to time outstanding principal balance of each Swing Line Loan shall bear interest at a rate per annum equal to Three Percent (3%) per annum over and above the Adjusted Base Rate and be due and payable on demand.

            (f)         The Agent shall determine each interest rate applicable to the Loans hereunder and its determination thereof shall be conclusive in the absence of demonstrable error.”

            38.       Section 2.09 of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

            “2.09    Fees .

            (a)        From and including the date of this Agreement to but excluding the last day of the Revolving Credit Period, the Company shall pay to the Agent for the account of each Lender a nonrefundable commitment fee on the unused portion of the Revolving Credit Commitment of such Lender (determined by subtracting such Lender's Pro Rata Share of the Total Revolving Credit Outstandings from such Lender's Revolving Credit Commitment) at a rate per annum equal to the Applicable Commitment Fee Rate. Said commitment fee shall be (i) calculated on a daily basis, (ii) payable quarterly in arrears on each March 31, June 30, September 30 and December 31 during the Revolving Credit Period and on the last day of the Revolving Credit Period and (iii) calculated on an actual day, 360‑day year basis.

            (b)        From and including October 3, 2008, to but excluding the Additional Term Loan Advance Date, LaBarge Electronics shall pay to the Agent for the ratable account of the Lenders a nonrefundable commitment fee on the amount by which the aggregate outstanding principal balance of the Term Loan is less than $10,000,000.00 at a rate per annum equal to the Applicable Commitment Fee Rate. Said commitment fee shall be (i) calculated on a daily basis, (ii) payable in arrears on December 31, 2008, and (iii) calculated on an actual day, 360‑day year basis.

            (c)        The Company and LaBarge Electronics agree to pay U.S. Bank certain fees in the amounts set forth in that certain letter agreement by and between the Company and U.S. Bank dated July 23, 2008, as the same may from time to time be amended, modified, extended, renewed or restated.”

            39.       The following new Section 2.11(e) is hereby added to the Loan Agreement:

            “(e)      The Borrower may, upon oral or written notice to U.S. Bank no later than 12:00 noon (St. Louis time) on date of the prepayme