16 .	Subsequent Event

October

25,

2018,

upon expiration of the Loan and Security Agreement with Bank of America, N.A. dated

October 26, 2015,

as amended on

October 19, 2016,

the Company entered into a Credit Agreement with Wells Fargo Bank, N.A. (the “Credit Agreement”). The Credit Agreement provides for revolving loans and letters of credit in the aggregate amount of up to

$60

million, subject to a borrowing base (the “Revolver Commitment”). The Company has the ability to increase the Revolver Commitment to

$100

million, subject to the provisions of the Credit Agreement. The borrowing base is calculated by applying various advance rates to eligible accounts receivable, contract assets, inventories and fixed assets, subject to various exclusions, adjustments and sublimits. As of

October

25,

2018,

the Company had

$6.0

million of outstanding borrowings under the Credit Agreement and additional borrowing capacity of

$32.5

million.

Borrowings under the Credit Agreement bear interest at rates related to the daily

three

month London Interbank Offered Rate plus

1.5%

2.0%.

The Credit Agreement requires the payment of an unused line fee of between

0.25%

and

0.375%,

based on the amount by which the Revolver Commitment exceeds the average daily balance of outstanding borrowings (as defined in the Credit Agreement) during any month. Such fee is payable monthly in arrears. The Credit Agreement will expire on

October

25,

2023.

The Credit Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants, events of default and indemnification provisions in favor of the lender. The negative covenants include restrictions regarding the incurrence of liens and indebtedness and certain acquisitions and dispositions of assets and other matters, all subject to certain exceptions. The Credit Agreement also requires the Company to regularly provide financial information to Wells Fargo and to maintain a specified fixed charge coverage ratio upon certain triggers.

In connection with the execution and delivery of the Credit Agreement, the Company and certain of its subsidiaries also entered into a Guaranty and Security Agreement with Wells Fargo (the “Guaranty and Security Agreement”). Pursuant to the Guaranty and Security Agreement, the Company’s obligations under the Credit Agreement are secured by a security interest in substantially all of the Company’s and its subsidiaries’ assets.