8 .	LINE OF CREDIT :

The Company entered into a Credit Agreement with Wells Fargo Bank, N.A. (“Credit Agreement”) on

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

(“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 (“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. The Credit Agreement will expire on

October

25,

2023.

As of

December

31,

2018,

the Company had

$11.5

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

$38.0

million, net of outstanding letters of credit and the amount required to avoid a covenant trigger event. Borrowings under the Credit Agreement bear interest at rates related to the daily

three

month London Interbank Offered Rate (“LIBOR”) plus

1.5%

2.0%.

As of

December

31,

2018,

the weighted-average interest rate for outstanding borrowings was

4.56%.

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 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 (“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.

The Agreement, which expired on

October

25,

2018,

provided for revolving loans and letters of credit in the aggregate of up to the maximum principal amount (the “Commitment”) of

$60

million, subject to a borrowing base. The Company had the ability to increase the Commitment to

$100

million, subject to the provisions of the Agreement. Borrowings under the Agreement bore interest at rates related to LIBOR plus

1.75%

2.25%,

or at Bank of America’s prime rate plus

0.75%

1.25%.

Borrowings under the Agreement were secured by substantially all of the Company’s assets. As of

December

31,

2017,

there were

outstanding borrowings.

Interest expense from continuing operations from line of credit borrowings and capital leases for the years ended

December

31,

2018,

2017,

and

2016

was

$0.6

million,

$0.5

million, and

$0.5

million, respectively. A nominal amount of interest was capitalized in

2018

and

2017,

and

interest was capitalized in

2016.