ADDVANTAGE TECHNOLOGIES GROUP INC (Form: 10-Q, Received: 02/12/2019 10:34:38)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED December 31, 2018

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM________________ TO ______________

Commission File number 1‑10799

ADDvantage Technologies Group, Inc.

(Exact name of registrant as specified in its charter)

OKLAHOMA	73‑1351610
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1221 E. Houston

Broken Arrow, Oklahoma 74012

(Address of principal executive office)

(918) 251-9121

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).	Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ (do not check if a smaller reporting company) Smaller reporting company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).	Yes ☐ No ☒

Shares outstanding of the issuer's $.01 par value common stock as of January 31, 2019 were 10,361,292.

ADDVANTAGE TECHNOLOGIES GROUP, INC.

Form 10-Q

For the Period Ended December 31, 2018

	PART I. FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements.

	Consolidated Condensed Balance Sheets (unaudited)	2
	December 31, 2018 and September 30, 2018

	Consolidated Condensed Statements of Operations (unaudited)	4
	Three Months Ended December 31, 2018 and 2017

	Consolidated Condensed Statements of Cash Flows (unaudited )	5
	Three Months Ended December 31, 2018 and 2017

	Notes to Unaudited Consolidated Condensed Financial Statements	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	15

Item 4.	Controls and Procedures .	20

	PART II. OTHER INFORMATION

Item 5.	Other Information.	21

Item 6.	Exhibits.	21

	SIGNATURES

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

ADDVANTAGE TECHNOLOGIES GROUP, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

	December 31, 2018			September 30, 2018
Assets
Current assets:
Cash and cash equivalents	$	2,779,289		$	3,129,280
Accounts receivable, net of allowance for doubtful accounts of $150,000		5,010,736			4,400,868
Income tax receivable		116,256			178,766
Inventories, net of allowance for excess and obsolete
inventory of $4,993,000 and $4,965,000, respectively		18,572,493			18,888,042
Prepaid expenses		386,789			264,757
Assets held for sale	‒				3,666,753
Total current assets		26,865,563			30,528,466

Property and equipment, at cost:
Land and buildings		2,208,676			2,208,676
Machinery and equipment		3,882,878			3,884,859
Leasehold improvements		200,617			200,617
Total property and equipment, at cost		6,292,171			6,294,152
Less: Accumulated depreciation		(4,324,319	)		(4,276,024	)
Net property and equipment		1,967,852			2,018,128

Investment in and loans to equity method investee		12,000			49,000
Intangibles, net of accumulated amortization		6,577,623			6,844,398
Goodwill		4,820,185			4,820,185
Other assets		683,418			134,443

Total assets	$	40,926,641		$	44,394,620

See notes to unaudited consolidated condensed financial statements.

ADDVANTAGE TECHNOLOGIES GROUP, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

	December 31, 2018			September 30, 2018
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	3,876,056		$	4,657,188
Accrued expenses		1,277,431			1,150,010
Notes payable – current portion	‒				2,594,185
Deferred gain – current portion		138,380		‒
Other current liabilities		643,559			664,374
Total current liabilities		5,935,426			9,065,757

Deferred gain, less current portion		1,233,883		‒
Other liabilities		165,992			801,612
Total liabilities		7,335,301			9,867,369

Shareholders’ equity:
Common stock, $.01 par value; 30,000,000 shares authorized; 10,861,950 and 10,806,803 shares issued, respectively; 10,361,292 and 10,306,145 shares outstanding, respectively		108,620			108,068
Paid in capital		(4,495,825	)		(4,598,343	)
Retained earnings		38,978,559			40,017,540
Total shareholders’ equity before treasury stock		34,591,354			35,527,265

Less: Treasury stock, 500,658 shares, at cost		(1,000,014	)		(1,000,014	)
Total shareholders’ equity		33,591,340			34,527,251

Total liabilities and shareholders’ equity	$	40,926,641		$	44,394,620

See notes to unaudited consolidated condensed financial statements.

ADDVANTAGE TECHNOLOGIES GROUP, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended December 31,
	2018			2017
Sales	$	11,272,286		$	12,284,765
Cost of sales		8,430,724			8,903,610
Gross profit		2,841,562			3,381,155
Operating, selling, general and administrative expenses		3,796,680			3,646,823
Loss from operations		(955,118	)		(265,668	)
Interest expense		24,863			96,094
Loss before income taxes		(979,981	)		(361,762	)
Provision for income taxes		59,000			345,000

Net loss	$	(1,038,981	)	$	(706,762	)

Loss per share:
Basic	$	(0.10	)	$	(0.07	)
Diluted	$	(0.10	)	$	(0.07	)
Shares used in per share calculation:
Basic		10,361,292			10,225,995
Diluted		10,361,292			10,225,995

See notes to unaudited consolidated condensed financial statements.

ADDVANTAGE TECHNOLOGIES GROUP, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended December 31,
	2018			2017
Operating Activities
Net loss	$	(1,038,981	)	$	(706,762	)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation		111,717			98,143
Amortization		266,775			313,311
Provision for excess and obsolete inventories		28,000			161,100
Charge for lower of cost or net realizable value for inventories	‒				11,528
Gain on disposal of property and equipment		(20,906	)		(6,862	)
Deferred income tax provision	‒				345,000
Share based compensation expense		54,320			38,578
Changes in assets and liabilities:
Accounts receivable		(609,868	)		267,469
Income tax receivable\payable		62,510			2,676
Inventories		287,549			(245,558	)
Prepaid expenses		(73,282	)		38,275
Other assets		(48,975	)		3,250
Accounts payable		(781,132	)		86,169
Accrued expenses		127,421			(243,271	)
Other liabilities		10,565			20,087
Net cash provided by (used in) operating activities		(1,624,287	)		183,133

Investing Activities
Acquisition of net operating assets		(500,000	)		–
Loan repayment from (investment in and loans to) equity method investee		37,000			(41,341	)
Purchases of property and equipment		(1,519	)		–
Disposals of property and equipment		–			23,113
Proceeds from sale of Broken Arrow, OK building		5,000,000			–
Net cash provided by (used in) investing activities		4,535,481			(18,228	)

Financing Activities
Guaranteed payments for acquisition of business		(667,000	)		(667,000	)
Payments on notes payable		(2,594,185	)		(3,055,737	)
Net cash used in financing activities		(3,261,185	)		(3,722,737	)

Net decrease in cash and cash equivalents		(349,991	)		(3,557,832	)
Cash and cash equivalents at beginning of period		3,129,280			3,972,723
Cash and cash equivalents at end of period	$	2,779,289		$	414,891

Supplemental cash flow information:
Cash paid for interest	$	57,178		$	118,292
Cash paid for income taxes	$	–		$	–

See notes to unaudited consolidated condensed financial statements.

ADDVANTAGE TECHNOLOGIES GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Note 1 - Basis of Presentation and Accounting Policies

Basis of presentation

The consolidated condensed financial statements include the accounts of ADDvantage Technologies Group, Inc. and its subsidiaries, all of which are wholly owned (collectively, the “Company” or “we”). Intercompany balances and transactions have been eliminated in consolidation. The Company’s reportable segments are Cable Television (“Cable TV”) and Telecommunications (“Telco”).

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. However, the information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the consolidated condensed financial statements not misleading. It is suggested that these consolidated condensed financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018.

Reclassification

The Company adopted ASU 2016-15: “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments.” on October 1, 2018. The $667,000 of guaranteed payments for acquisition of businesses have been reclassified from investing activities and are reported as a financing activity in the Consolidated Condensed Statement of Cash Flows for the three month period ended December 31, 2018. This reclassification had no effect on previously reported results of operations or retained earnings.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02: “Leases (Topic 842)” which is intended to improve financial reporting about leasing transactions. This ASU will require organizations (“lessees”) that lease assets with lease terms of more than twelve months to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Organizations that own the assets leased by lessees (“lessors”) will remain largely unchanged from current GAAP. In addition, this ASU will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for annual periods beginning after December 15, 2018 and early adoption is permitted. Based on management’s initial assessment, ASU 2016-02 will have a material impact on the Company’s consolidated financial statements. Management reviewed its lease obligations and determined that the Company generally does not enter into long-term lease obligations with the exception of its real estate leases for its facilities. The Company is a lessee on certain real estate leases that will need to be reported as right of use assets and liabilities at an estimated amount of $3 million on the Company’s consolidated financial statements on the date of adoption.

In June 2016, the FASB issued ASU 2016-13: “Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments.” This ASU requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. This ASU also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal periods. Entities may adopt earlier as of the fiscal year beginning after December 15, 2018, including interim periods within those fiscal years. We are currently in the process of evaluating this new standard update.

Note 2 – Revenue Recognition

On October 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), using the modified retrospective transition method. Management determined that there was no cumulative effect adjustment to the consolidated financial statements and the adoption of the standard did not require any adjustments to the consolidated financial statements for prior periods. Under the guidance of the standard, revenue is recognized at the time a good or service is transferred to a customer and the customer obtains control of that good or receives the service performed. Substantially all of the Company’s sales arrangements with customers are short-term in nature involving single performance obligations related to the delivery of goods or repair of equipment and generally provide for transfer of control at the time of shipment to the customer. The Company generally permits returns of product or repaired equipment due to defects; however, returns are historically insignificant.

The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for its products or repair services. The following steps are applied in determining the amount and timing of revenue recognition:

Identification of a contract with a customer is a sales arrangement involving a purchase order issued by the customer stating the goods to be transferred. Payment terms are generally net due in 30 days. Discounts on sales arrangements are generally not provided. Credit worthiness is determined by the Company based on payment experience and financial information available on the customer.

2.	Identification of performance obligations in the sales arrangement which is predominantly the promise to transfer goods, repair services or recycled items to the customer.

3.	Determination of the transaction price which is specified in the purchase order based on product pricing negotiated between the Company and the customer.

4.	Allocate the transaction price to performance obligations. Substantially all the contracts are single performance obligations and the allocated purchase price is the transaction price.

5.	Recognition of revenue which predominantly occurs upon completion of the performance obligation and transfer of control. Transfer of control generally occurs at the point the Company ships the sold or repaired product from its warehouse locations.

The Company’s principal revenues are from sales of Cable TV and Telco equipment, Cable TV repair services and Telco recycled equipment. Sales are primarily to customers in the United States. International sales are made to customers in Central America, South America and, to a substantially lesser extent, other international regions that utilize the same technology which totaled approximately $0.9 million and $1.2 million in the three months ended December 31, 2018 and 2017, respectively.

The Company’s customers include multiple system operators, resellers and direct sales to end-user customers. Sales to the Company’s largest customer totaled approximately 5% of consolidated revenues.

Our revenues by type were as follows:

	Three Months Ended December 31,
	2018			2017
Equipment sales
Cable TV	$	4,052,140		$	5,114,291
Telco		6,609,642			5,691,320
Intersegment		(40,242	)		(180	)
Recycle revenue
Cable TV	‒			‒
Telco		240,697			767,221
Repair revenue
Cable TV		410,049			712,113
Telco	‒			‒
	$	11,272,286		$	12,284,765

Note 3 – Sale and Leaseback of Assets

In October 2018, the Company entered into an agreement with David Chymiak to sell the Broken Arrow, Oklahoma facility. Mr. Chymiak is the Chief Technology Officer, President of Tulsat LLC (“Tulsat”), director, and substantial shareholder of the Company. The sale agreement provided for a purchase price of $5,000,000 payable in cash at closing. The sale closed on November 29, 2018, which generated a pretax gain of approximately $1.4 million.

In connection with the sale of the Broken Arrow, Oklahoma facility, Tulsat, which is one of the subsidiaries contained in the Cable TV segment, entered into a ten-year lease with Mr. Chymiak for a monthly rent of $44,000, or $528,000 per year. Tulsat, as tenant, will be responsible for most ongoing expenses related to the facility, including property tax, insurance and maintenance. As a result of the leaseback, the pretax gain of $1.4 million was deferred over the lease period and is reported in Deferred gain in the Consolidated Condensed Balance Sheet.

Note 4 – Disposition of Assets

In December 2018, the Company entered into an agreement for the sale of our Cable TV segment business to a company controlled by David Chymiak for $10.3 million. This sale is subject to shareholder approval, which the Company anticipates occurring in our third fiscal quarter of 2019. The purchase price will consist of $3.9 million of cash and a $6.4 million promissory note to be paid in semi-annual installments over five years with an interest rate of 6.0%. If the sale receives shareholder approval, the Company estimates that this sale will result in a pretax loss of approximately $2.8 million. In addition, if the sale receives shareholder approval, the Company will accelerate the remaining deferred gain of $1.4 million from the sale of the Broken Arrow, Oklahoma facility (see Note 3 – Sale and Leaseback of Assets).

Note 5 – Inventories

Inventories at December 31, 2018 and September 30, 2018 are as follows:

	December 31, 2018			September 30, 2018
New:
Cable TV	$	12,056,677		$	12,594,138
Telco		1,612,763			1,371,545
Refurbished and used:
Cable TV		2,968,626			2,981,413
Telco		6,927,427			6,905,946
Allowance for excess and obsolete inventory:
Cable TV		(4,150,000	)		(4,150,000	)
Telco		(843,000	)		(815,000	)

	$	18,572,493		$	18,888,042

New inventory includes products purchased from manufacturers plus “surplus-new”, which are unused products purchased from other distributors or multiple system operators. Refurbished inventory includes factory refurbished, Company refurbished and used products. Generally, the Company does not refurbish its used inventory until there is a sale of that product or to keep a certain quantity on hand.

The Company regularly reviews the Cable TV segment inventory quantities on hand, and an adjustment to cost is recognized when the loss of usefulness of an item or other factors, such as obsolete and excess inventories, indicate that cost will not be recovered when an item is sold. The Company recorded charges in the Cable TV segment to allow for obsolete inventory, which increased the cost of sales by zero and $0.2 million during the three months ended December 31, 2018 and 2017, respectively, to an allowance of $4.2 million at December 31, 2018.

In the three months ended December 31, 2018 and 2017, the Telco segment identified certain inventory that more than likely will not be sold or that the cost will not be recovered when it is processed through its recycling program. Therefore, the Company has a $0.8 million allowance at December 31, 2018. In the three months ended December 31, 2018, the Company increased the allowance by $30 thousand. The Company also reviewed the cost of inventories against estimated net realizable value and recorded a lower of cost or net realizable value charge for the three months ended December 31, 2018 and December 31, 2017 of zero and $12 thousand, respectively, for inventories that have a cost in excess of estimated net realizable value.

Note 6 – Intangible Assets

The intangible assets with their associated accumulated amortization amounts at December 31 , 2018 and September 30, 2018 are as follows:

	December 31, 2018
	Gross		Accumulated Amortization			Net
Intangible assets:
Customer relationships – 10 years	$	8,152,000	$	(2,917,689	)	$	5,234,311
Trade name – 10 years		2,119,000		(807,355	)		1,311,645
Non-compete agreements – 3 years		374,000		(342,333	)		31,667

Total intangible assets	$	10,645,000	$	(4,067,377	)	$	6,577,623

	September 30, 2018
	Gross		Accumulated Amortization			Net
Intangible assets:
Customer relationships – 10 years	$	8,152,000	$	(2,713,890	)	$	5,438,110
Trade name – 10 years		2,119,000		(754,380	)		1,364,620
Non-compete agreements – 3 years		374,000		(332,332	)		41,668

Total intangible assets	$	10,645,000	$	(3,800,602	)	$	6,844,398

Note 7 – Notes Payable and Line of Credit

Forbearance Agreement

On May 31, 2018, the Company entered into a forbearance agreement with BOKF, NA dba Bank of Oklahoma (“Lender”) relating to the Company’s Amended and Restated Credit and Term Loan Agreement (“Credit and Term Loan Agreement”).

Under the forbearance agreement, which is Amendment Ten to the Credit and Term Loan Agreement, Lender agreed to delete the fixed charge ratio covenant from the Credit and Term Loan Agreement and to forbear from exercising its rights and remedies under the Credit and Term Loan Agreement through October 31, 2018 subject to, among other things, the following terms:

·	Reducing the revolving line commitment from $5.0 million to $3.0 million;

·	Terminating the Lender’s obligation to lend or make advances under the revolving line of credit;

·	Limiting the Company’s capital expenditure to $100,000 during the forbearance period;

·	Requiring semi-monthly reporting of its borrowing base calculation; and

·	Requiring the Company to remain in compliance with the terms of the amended Credit and Term Loan

Agreement.

Revolving credit and term loans created under the Credit and Term Loan Agreement were collateralized by inventory, accounts receivable, equipment and fixtures, general intangibles and a mortgage on certain property. Among other financial covenants, the Credit and Term Loan Agreement provided that the Company maintain a leverage ratio (total funded debt to EBITDA) of not more than 2.50 to 1.0.

The Company had two term loans outstanding under the Credit and Term Loan Agreement. The first outstanding term loan had an outstanding balance of $0.6 million and was due on October 31, 2018, with monthly principal payments of $15,334 plus accrued interest. The interest rate was the prevailing 30-day LIBOR rate plus 1.4% (3.66% at October 31, 2018).

The second outstanding term loan had an outstanding balance of $1.5 million and was due October 31, 2018, with monthly principal and interest payments of $118,809. The interest rate on the term loan was a fixed interest rate of 4.40%.

In November 2018, the Company extinguished its two outstanding term loans under the forbearance agreement by paying the outstanding balances of $2.1 million.

The forbearance agreement reduced its line of credit to $3.0 million from $5.0 million, while other terms of its line of credit remained essentially the same. Any future borrowings under the line of credit were due on October 31, 2018. In October 2018, the Company extinguished its line of credit under the forbearance agreement by paying the outstanding balance of $0.5 million.

Since the Company extinguished all of its outstanding term loans and line of credit outstanding under the forbearance agreement in the first quarter of 2019, the Company is no longer subject to the terms of the forbearance agreement and has been released from the Credit and Term Loan Agreement.

New Credit Agreement

In December 2018, the Company entered into a new credit agreement with a different lender. This credit agreement contains a $2.5 million revolving line of credit and matures on December 17, 2019. The line of credit requires quarterly interest payments based on the prevailing Wall Street Journal Prime Rate plus 0.75% (6.25% at December 31, 2018), and the interest rate is reset monthly. The new credit agreement provides that the Company maintain a fixed charge coverage ratio (net cash flow to total fixed charges) of not less than 1.25 to 1.0. Future borrowings under the line of credit are limited to the lesser of $2.5 million or the sum of 80% of eligible accounts receivable and 25% of eligible Telco segment inventory. Under these limitations, the Company’s total available line of credit borrowing base was $2.5 million at December 31, 2018.

Fair Value of Debt

The carrying value of the Company’s variable-rate line of credit approximates its fair value since the interest rate fluctuates periodically based on a floating interest rate.

Note 8 – Earnings Per Share

Basic earnings per share are based on the sum of the average number of common shares outstanding and issuable, restricted and deferred shares. Diluted earnings per share include any dilutive effect of stock options and restricted stock. In computing the diluted weighted average shares, the average share price for the period is used in determining the number of shares assumed to be reacquired under the treasury stock method from the exercise of options.

Basic and diluted earnings per share for the three months ended December 31, 2018 and 2017 are:

	Three Months Ended December 31,
	2018			2017
Net loss attributable to common shareholders	$	(1,038,981	)	$	(706,762	)

Basic weighted average shares		10,361,292			10,225,995
Effect of dilutive securities:
Stock options	‒				–
Diluted weighted average shares		10,361,292			10,225,995

Loss per common share:
Basic	$	(0.10	)	$	(0.07	)
Diluted	$	(0.10	)	$	(0.07	)

The table below includes information related to stock options that were outstanding at the end of each respective three-month period ended December 31, but have been excluded from the computation of weighted-average stock options for dilutive securities because their effect would be anti-dilutive. The stock options were anti-dilutive because the Company had a net loss for the periods presented. Additionally, for certain stock options, the exercise price exceeded the average market price per share of our common stock for the three months ended December 31, 2018 and 2017.

	Three Months Ended December 31,
	2018		2017
Stock options excluded		620,000		700,000
Weighted average exercise price of
stock options	$	1.83	$	2.54
Average market price of common stock	$	1.34	$	1.46

Note 9 – Stock-Based Compensation

Plan Information

The 2015 Incentive Stock Plan (the “Plan”) provides for awards of stock options and restricted stock to officers, directors, key employees and consultants. Under the Plan, option prices will be set by the Compensation Committee and may not be less than the fair market value of the stock on the grant date.

At December 31, 2018, 1,100,415 shares of common stock were reserved for stock award grants under the Plan. Of these reserved shares, 157,154 shares were available for future grants.

Stock Options

All share-based payments to employees, including grants of employee stock options, are recognized in the financial statements based on their grant date fair value over the requisite service period. Compensation expense for share-based awards is included in the operating, selling, general and administrative expense section of the Company’s consolidated condensed statements of operations.

Stock options are valued at the date of the award, which does not precede the approval date, and compensation cost is recognized on a straight-line basis over the vesting period. Stock options granted to employees generally become exercisable over a three, four or five-year period from the date of grant and generally expire ten years after the date of grant. Stock options granted to the Board of Directors generally become exercisable on the date of grant and generally expire ten years after the grant.

A summary of the status of the Company's stock options at December 31, 2018 and changes during the three months then ended is presented below:

	Shares		Wtd. Avg. Ex. Price
Outstanding at September 30, 2018		290,000	$	2.40
Granted		330,000	$	1.33
Exercised		–		–
Expired		–		–
Forfeited	‒		‒
Outstanding at December 31, 2018		620,000	$	1.83

Exercisable at December 31, 2018		396,667	$	2.02

The Company granted 330,000 nonqualified stock options for the three months ended December 31, 2018. The Company estimates the fair value of the options granted using the Black-Scholes option valuation model. The Company estimates the expected term of options granted based on the historical grants and exercises of the Company’s options. The Company estimates the volatility of its common stock at the date of the grant based on both the historical volatility as well as the implied volatility on its common stock. The Company bases the risk-free rate that is used in the Black-Scholes option valuation model on the implied yield in effect at the time of the option grant on U.S. Treasury zero-coupon issues with equivalent expected term. The Company has never paid cash dividends on its common stock and does not anticipate paying cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero in the Black-Scholes option valuation model. The Company amortizes the resulting fair value of the options ratably over the vesting period of the awards. The Company recognizes forfeitures as they occur.

The estimated fair value at date of grant for stock options utilizing the Black-Scholes option valuation model and the assumptions that were used in the Black-Scholes option valuation model for the three months ended December 31, 2018 are as follows:

	Three Months Ended December 31, 2018
Estimated fair value of options at grant date	$	132,620
Black-Scholes model assumptions:
Average expected life (years)		5
Average expected volatility factor		28	%
Average risk-free interest rate		3.0	%
Average expected dividends yield		–

Compensation expense related to unvested stock options recorded for the three months ended December 31, 2018 is as follows:

	Three Months Ended December 31, 2018
Fiscal year 2017 grant	$	4,594
Fiscal year 2019 grants	$	23,476

The Company records compensation expense over the vesting term of the related options. At December 31, 2018, compensation costs related to these unvested stock options not yet recognized in the consolidated condensed statements of operations was $128,018.

Restricted Stock

The Company granted restricted stock in October 2018 to its Chairman of the Board of Directors totaling 55,147 shares, which were valued at market value on the date of grant. The shares will vest 20% per year with the first installment vesting on the first anniversary of the grant date. The Company granted restricted stock in March 2018 to its Board of Directors and a Company officer totaling 80,150 shares, which were valued at market value on the date of grant. The shares are being held by the Company for 12 months and will be delivered to the directors at the end of the 12 month holding period. The fair value of these shares at issuance totaled $105,000, which is being amortized over the 12 month holding period as compensation expense. The unamortized portion of the restricted stock is included in prepaid expenses on the Company’s consolidated condensed balance sheets.

Note 10 – Segment Reporting

The Company is reporting its financial performance based on its external reporting segments: Cable Television and Telecommunications. These reportable segments are described below.

Cable Television (“Cable TV”)

The Company’s Cable TV segment sells new, surplus and re-manufactured cable television equipment throughout North America, Central America, South America and, to a substantially lesser extent, other international regions that utilize the same technology. In addition, this segment repairs cable television equipment for various cable companies.

Telecommunications (“Telco”)

The Company’s Telco segment sells new and used telecommunications networking equipment, including both central office and customer premise equipment, to its customer base of telecommunications providers, enterprise customers and resellers located primarily in North America. In addition, this segment offers its customers decommissioning services for surplus and obsolete equipment, which it in turn processes through its recycling program.

The Company evaluates performance and allocates its resources based on operating income. The accounting policies of its reportable segments are the same as those described in the summary of significant accounting policies.

Segment assets consist primarily of cash and cash equivalents, accounts receivable, inventory, property and equipment, goodwill and intangible assets.

	Three Months Ended
	December 31, 2018			December 31, 2017
Sales
Cable TV	$	4,462,189		$	5,826,405
Telco		6,850,339			6,458,540
Intersegment		(40,242	)		(180	)
Total sales	$	11,272,286		$	12,284,765

Gross profit
Cable TV	$	1,118,173		$	1,201,127
Telco		1,723,389			2,180,028
Total gross profit	$	2,841,562		$	3,381,155

Operating loss
Cable TV	$	(320,381	)	$	(188,500	)
Telco		(634,737	)		(77,168	)
Total operating loss	$	(955,118	)	$	(265,668	)

	December 31, 2018		September 30, 2018
Segment assets
Cable TV	$	14,293,755	$	18,371,530
Telco		22,520,031		22,173,797
Non-allocated		4,112,855		3,849,293
Total assets	$	40,926,641	$	44,394,620

Note 11 – Subsequent Events

Purchase of Net Assets of Fulton Technologies, Inc. and Mill City Communications, Inc.

On December 27, 2018, the Company entered into a purchase agreement to acquire substantially all of the net assets of Fulton Technologies, Inc. (“Fulton”) and Mill City Communications, Inc. (“Mill City”). These companies provide turn-key wireless infrastructure services for wireless carriers, contractors supporting the wireless carriers, and equipment manufacturers. These services primarily consist of installing and decommissioning equipment on cell towers and small cell towers. This agreement closed on January 4, 2019. This acquisition is part of the overall growth strategy that will further diversify the Company into the broader telecommunications industry by providing wireless infrastructure services to the wireless telecommunications market.

The purchase price for the net assets of Fulton Technologies, Inc. and Mill City Communications, Inc. was $1.7 million, subject to a working capital adjustment. A deposit of $500,000 was paid on December 27, 2018 in connection with signing the purchase agreement and is reflected in other non-current assets in the Consolidated Condensed Balance Sheet. The purchase price will be allocated to the major categories of assets and liabilities based on their estimated fair values at the acquisition date. Any remaining amount will be recorded as goodwill. The acquisition occurred on January 4, 2019, and the Company is still determining the initial purchase price allocation.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Special Note on Forward-Looking Statements

Certain statements in Management's Discussion and Analysis (“MD&A”), other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements generally are identified by the words “estimates,” “projects,” “believes,” “plans,” “intends,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. These statements are subject to a number of risks, uncertainties and developments beyond our control or foresight, including changes in the trends of the cable television industry, changes in the trends of the telecommunications industry, changes in our supplier agreements, technological developments, changes in the general economic environment, the growth or formation of competitors, changes in governmental regulation or taxation, changes in our personnel and other such factors. Our actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in the forward-looking statements. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

Overview

The following MD&A is intended to help the reader understand the results of operations, financial condition, and cash flows of the Company. MD&A is provided as a supplement to, and should be read in conjunction with the information presented elsewhere in this quarterly report on Form 10-Q and with the information presented in our annual report on Form 10-K for the year ended September 30, 2018, which includes our audited consolidated financial statements and the accompanying notes to the consolidated financial statements.

The Company is reporting its financial performance based on its external reporting segments: Cable Television and Telecommunications. These reportable segments are described below.

Cable Television (“Cable TV”)

The Company’s Cable TV segment sells new, surplus and re-manufactured cable television equipment throughout North America, Central America and South America. In addition, this segment also repairs cable television equipment for various cable companies.

Telecommunications (“Telco”)

Purchase of Net Assets of Fulton Technologies, Inc. and Mill City Communications, Inc.

On December 27, 2018, we entered into a purchase agreement to acquire substantially all of the net assets of Fulton Technologies, Inc. (“Fulton”) and Mill City Communications, Inc. (“Mill City”). We closed on this agreement on January 4, 2019. These companies provide turn-key wireless infrastructure services for the four major U.S. wireless carriers, national integrators, and original equipment manufacturers that support these wireless carriers. These services primarily consist of the installation and upgrade of technology on cell sites and the construction of new small cells for 5G. Pursuing an acquisition strategy rather than organically building this service offering eliminates the need to invest a significant amount of time launching the business and provides the additional benefit of established and experienced operational teams, as well as pre-existing revenue streams from the major customers in the industry. We anticipate that the purchase price plus integration costs of Fulton and Mill City would be similar to those we would

have incurred to launch this services platform organically. This acquisition is part of the overall growth strategy that will further diversify the Company into the broader telecommunications industry by providing wireless infrastructure services to the wireless telecommunications market.

The purchase price for the net assets of Fulton and Mill City was $1.7 million in cash, subject to a working capital adjustment. A deposit of $500,000 was paid on December 27, 2018 in connection with signing the purchase agreement.

Results of Operations

Comparison of Results of Operations for the Three Months Ended December 31, 2018 and December 31, 2017

Consolidated

Consolidated sales decreased $1.0 million before the impact of intercompany sales, or 8%, to $11.3 million for the three months ended December 31, 2018 from $12.3 million for the three months ended December 31, 2017. The decrease in sales was in the Cable TV segment of $1.4 million, partially offset by an increase in the Telco segment of $0.4 million. Consolidated gross profit decreased $0.6 million, or 16%, to $2.8 million for the three months ended December 31, 2018 from $3.4 million for the same period last year. The decrease in gross profit was in the Cable TV segment and Telco segment of $0.1 million and $0.5 million, respectively.

Consolidated operating, selling, general and administrative expenses include all personnel costs, which include fringe benefits, insurance and business taxes, as well as occupancy, communication and professional services, among other less significant cost categories. Operating, selling, general and administrative expenses increased $0.2 million, or 4%, to $3.8 million for the three months ended December 31, 2018 from $3.6 million the same period last year. This was due to an increase in the Telco segment of $0.2 million.

Interest expense decreased $80 thousand, to $20 thousand, for the three months ended December 31, 2018 from $0.1 million for the same period last year primarily related to the impact of paying off our two term loans in November 2018.

The provision for income taxes was $0.1 million for the three months ended December 31, 2018 from a provision for income taxes of $0.3 million for the three months ended December 31, 2017. The decrease in the tax provision was due primarily to the valuation allowance netting the deferred tax assets to zero.

Segment Results

Cable TV

Sales for the Cable TV segment decreased $1.4 million to $4.4 million for the three months ended December 31, 2018 from $5.8 million for the same period last year. The decrease in sales was due to a decrease in equipment sales and repair service revenue of $1.1 million and $0.3 million, respectively. The decrease in the equipment sales was due primarily to an overall decrease in demand for the three months ended December 31, 2018 as compared to last year. The decrease in repair service revenue was due primarily to the closing of a repair facility in April 2018.

Gross margin was 25% for the three months ended December 31, 2018 compared to 21% for the same period last year. The increase in gross margin in 2019 was due primarily to a significant decrease in volume from a new equipment sales customer with low margins.

Operating, selling, general and administrative expenses remained flat at $1.4 million for the three months ended December 31, 2018 and for the same period last year.

Telco

Sales for the Telco segment increased $0.4 million to $6.9 million for the three months ended December 31, 2018 from $6.5 million for the same period last year. The increase in sales for the Telco segment was due to an increase in equipment sales of $0.9 million, partially offset by a decrease in recycling revenue of $0.5 million. The increase in Telco equipment sales was due to Nave Communications of $0.7 million and Triton Datacom of $0.2 million. The decrease in recycling revenue was due primarily to higher revenue in the prior year due to the timing of recycling shipments.

Gross margin was 25% for the three months ended December 31, 2018 and 34% for the three months ended December 31, 2017. The decrease in gross margin was due primarily to lower gross margins from equipment sales primarily resulting from an increase in sales of new equipment which generally yields lower margins than used equipment sales. In addition, our margin was also impacted by lower margins from our recycling program as a result of lower revenues to cover our fixed costs. The lower revenues from the recycling program for the three months ended December 31, 2018 decreased gross profit by $0.4 million.

Operating, selling, general and administrative expenses increased $0.2 million to $2.4 million for the three months ended December 31, 2018 from $2.2 million for the same period last year. This increase was due primarily to professional service expenses allocated to this segment related to the asset acquisition of Fulton and Mill City.

Non-GAAP Financial Measure

Adjusted EBITDA is a supplemental, non-GAAP financial measure. EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA as presented excludes other income, interest income and income from equity method investment. Adjusted EBITDA is presented below because this metric is used by the financial community as a method of measuring our financial performance and of evaluating the market value of companies considered to be in similar businesses. Since Adjusted EBITDA is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, net earnings as an indicator of operating performance. Adjusted EBITDA, as calculated below, may not be comparable to similarly titled measures employed by other companies. In addition, Adjusted EBITDA is not necessarily a measure of our ability to fund our cash needs.

A reconciliation by segment of loss from operations to Adjusted EBITDA follows:

	Three Months Ended December 31, 2018									Three Months Ended December 31, 2017
	Cable TV			Telco			Total			Cable TV			Telco			Total
Loss from operations	$	(320,381	)	$	(634,737	)	$	(955,118	)	$	(188,500	)	$	(77,168	)	$	(265,668	)
Depreciation		80,020			31,697			111,717			66,948			31,195			98,143
Amortization		−			266,775			266,775			−			313,311			313,311
Adjusted EBITDA	$	(240,361	)	$	(336,265	)	$	(576,626	)	$	(121,552	)	$	267,338		$	145,786

Critical Accounting Policies

Note 1 to the Consolidated Financial Statements in Form 10-K for fiscal 2018 includes a summary of the significant accounting policies or methods used in the preparation of our Consolidated Financial Statements. Some of those significant accounting policies or methods require us to make estimates and assumptions that affect the amounts reported by us. We believe the following items require the most significant judgments and often involve complex estimates.

General

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience,

current market conditions, and various other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates under different assumptions or conditions. The most significant estimates and assumptions are discussed below.

Inventory Valuation

Our position in the industry requires us to carry large inventory quantities relative to annual sales, but it also allows us to realize high overall gross profit margins on our sales. We market our products primarily to MSOs, telecommunication providers and other users of cable television and telecommunication equipment who are seeking products for which manufacturers have discontinued production or cannot ship new equipment on a same-day basis as well as providing used products as an alternative to new products from the manufacturer. Carrying these large inventory quantities represents our largest risk.

We are required to make judgments as to future demand requirements from our customers. We regularly review the value of our inventory in detail with consideration given to rapidly changing technology which can significantly affect future customer demand. For individual inventory items, we may carry inventory quantities that are excessive relative to market potential, or we may not be able to recover our acquisition costs for sales that we do make. In order to address the risks associated with our investment in inventory, we review inventory quantities on hand and reduce the carrying value when the loss of usefulness of an item or other factors, such as obsolete and excess inventories, indicate that cost will not be recovered when an item is sold.

Our inventories consist of new and used electronic components for the cable television and telecommunications industries. Inventory is stated at the lower of cost or net realizable value, with cost determined using the weighted-average method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. At December 31, 2018, we had total inventory, before the reserve for excess and obsolete inventories, of $23.6 million, consisting of $13.7 million in new products and $9.9 million in used or refurbished products.

For the Cable TV segment, our reserve at December 31, 2018 for excess and obsolete inventory was $4.2 million. If actual market conditions are less favorable than those projected by management, and our estimates prove to be inaccurate, we could be required to increase our inventory reserve and our gross margins could be materially adversely affected.

The Telco segment identified certain inventory that more than likely will not be sold or that the cost will not be recovered when it is processed through its recycling program. Therefore, we have an obsolete and excess inventory reserve of $0.8 million at December 31, 2018. In the three months ended December 31, 2018, we increased the reserve by $30 thousand. If actual market conditions differ from those projected by management, this could have a material impact on our gross margin and inventory balances based on additional write-downs to net realizable value or a benefit from inventories previously written down.

Inbound freight charges are included in cost of sales. Purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs and other inventory expenditures are included in operating expenses, since the amounts involved are not considered material.

Accounts Receivable Valuation

Management judgments and estimates are made in connection with establishing the allowance for doubtful accounts. Specifically, we analyze the aging of accounts receivable balances, historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms. Significant changes in customer concentration or payment terms, deterioration of customer credit-worthiness, or weakening in economic trends could have a significant impact on the collectability of receivables and our operating results. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, an additional provision to the allowance for doubtful accounts may be required. The reserve for bad debts was $0.2 million at December 31, 2018 and September 30, 2018. At December 31, 2018, accounts receivable, net of allowance for doubtful accounts, was $5.0 million.

Goodwill

Goodwill represents the excess of purchase price of acquisitions over the acquisition date fair value of the net identifiable tangible and intangible assets acquired. Goodwill is not amortized and is tested at least annually for impairment. We perform our annual analysis during the fourth quarter of each fiscal year and in any other period in which indicators of impairment warrant additional analysis. Goodwill is evaluated for impairment by first comparing our estimate of the fair value of each reporting unit, with the reporting unit’s carrying value, including goodwill. Our reporting units for purposes of the goodwill impairment calculation are aggregated into the Cable TV operating segment and the Telco operating segment.

Management utilizes a discounted cash flow analysis to determine the estimated fair value of each reporting unit. Significant judgments and assumptions including the discount rate, anticipated revenue growth rate, gross margins and operating expenses are inherent in these fair value estimates. As a result, actual results may differ from the estimates utilized in our discounted cash flow analysis. The use of alternate judgments and/or assumptions could result in the recognition of different levels of impairment charges in the financial statements.

The Cable TV segment does not have a goodwill balance as it was fully impaired in fiscal year 2018. We did not record a goodwill impairment for the Telco segment in the three year period ended September 30, 2018. In addition, we are implementing strategic plans as discussed in Recent Business Developments in our fiscal year 2018 Form 10-K to help prevent impairment charges in the future. Although we do not anticipate a future impairment charge, certain events could occur that might adversely affect the reported value of goodwill. Such events could include, but are not limited to, economic or competitive conditions, a significant change in technology, the economic condition of the customers and industries we serve, a significant decline in the real estate markets we operate in, a material negative change in the relationships with one or more of our significant customers or equipment suppliers, failure to successfully implement our plan to restructure and expand the Telco sales organization, and failure to reduce inventory levels within the Telco segment. If our judgments and assumptions change as a result of the occurrence of any of these events or other events that we do not currently anticipate, our expectations as to future results and our estimate of the implied fair value of the Telco segment also may change.

Intangibles

Intangible assets that have finite useful lives are amortized on a straight-line basis over their estimated useful lives ranging from 3 years to 10 years.

Liquidity and Capital Resources

Cash Flows Used in Operating Activities

We finance our operations primarily through cash flows provided by operations, and we have a new bank line of credit of up to $2.5 million. During the three months ended December 31, 2018, we used $1.6 million of cash flows for operations. The cash flows from operations was negatively impacted by $0.8 million from a net decrease in accounts payable and $0.6 million from a net increase in accounts receivable. The cash flows from operations was favorably impacted by $0.3 million from a net decrease in inventory.

Cash Flows Provided by Investing Activities

During the three months ended December 31, 2018, cash provided by investing activities was $4.5 million, which primarily related to the sale of our Broken Arrow, Oklahoma facility to a company controlled by David Chymiak for $5.0 million in cash. In addition, in December 2018, we entered into an agreement with a company controlled by David Chymiak to sell our Cable TV Segment. We anticipate that this sale will close in the third fiscal quarter of 2019 and generate approximately $3.9 million in cash at closing.

In December 2018, we entered into a purchase agreement to acquire substantially all of the net assets of Fulton and Mill City. A deposit of $500,000 was paid on December 27, 2018 in connection with signing the purchase agreement.

The purchase price for the net assets of Fulton and Mill City was $1.7 million, subject to a working capital adjustment, and closed on January 4, 2019.

Cash Flows Used for Financing Activities

In November 2018, we extinguished our two outstanding term loans under the forbearance agreement by paying the outstanding balances of $2.1 million.

In October 2018, we also extinguished our line of credit under the forbearance agreement by paying the outstanding balance of $0.5 million.

Since we extinguished all of our outstanding term loans and line of credit outstanding under the forbearance agreement in the first quarter of 2019, we are no longer subject to the terms of the forbearance agreement and have been released from the Credit and Term Loan Agreement.

In December 2018, the Company entered into a new credit agreement with a different lender. This credit agreement contains a $2.5 million revolving line of credit and matures on December 17, 2019. The Line of Credit requires quarterly interest payments based on the prevailing Wall Street Journal Prime Rate plus 0.75% (6.25% at December 31, 2018), and the interest rate is reset monthly. The new credit agreement provides that the Company maintain a fixed charge coverage ratio (net cash flow to total fixed charges) of not less than 1.25 to 1.0. Future borrowings under the Line of Credit are limited to the lesser of $2.5 million or the sum of 80% of eligible accounts receivable and 25% of eligible inventory. Under these limitations, the Company’s total available Line of Credit borrowing base was $2.5 million at December 31, 2018.

We believe that our cash and cash equivalents of $2.8 million at December 31, 2018 and our existing line of credit as well as the anticipated third quarter closing of the sale of the Cable TV segment will provide sufficient liquidity and capital resources to cover our operating losses, pay the remaining purchase price for the Fulton and Mill City asset purchase and cover our additional working capital and debt payment needs.

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure the information we are required to disclose in the reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based on their evaluation as of December 31, 2018, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to accomplish their objectives and to ensure the information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

PART II. OTHER INFORMATION

Item 5. Other Information.

(a) The 2019 annual meeting will be held in September 2019 at a date and time to be set by the Board of Directors. If you want to include a shareholder proposal in the proxy statement for the 2019 annual meeting, it must be delivered to our executive offices, 1221 East Houston, Broken Arrow, Oklahoma, 74012, on or before April 30, 2019. In addition, if you wish to present a proposal at the 2019 annual meeting that will not be included in our proxy statement and you fail to notify us by June 30, 2019, then the proxies solicited by our Board for the 2019 annual meeting will include discretionary authority to vote on your proposal in the event that it is properly brought before the meeting.

Item 6. Exhibits.

Exhibit No.	Description

10.1	Stock Purchase Agreement by and among Leveling 8, Inc. and ADDvantage Technologies Group, Inc. dated as of December 26, 2018.

10.2	Business Bank Loan Agreement dated December 17, 2018.

31.1	Certification of Chief Executive Officer under Section 302 of the Sarbanes Oxley Act of 2002.

31.2	Certification of Chief Financial Officer under Section 302 of the Sarbanes Oxley Act of 2002.

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document.

101.SCH	XBRL Taxonomy Extension Schema.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase.

101.DEF	XBRL Taxonomy Extension Definition Linkbase.

101.LAB	XBRL Taxonomy Extension Label Linkbase.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ADDVANTAGE TECHNOLOGIES GROUP, INC.

( Registrant)

Date: February 12, 2019 /s/ Joseph E. Hart

Joseph E. Hart,

President and Chief Executive Officer

(Principal Executive Officer)

Date: February 12, 2019 /s/ Scott A. Francis

Scott A. Francis,

Chief Financial Officer

(Principal Financial Officer)

Exhibit Index

The following documents are included as exhibits to this Form 10-Q:

Exhibit No.	Description

10.1	Stock Purchase Agreement by and among Leveling 8, Inc. and ADDvantage Technologies Group, Inc. dated as of December 26, 2018.

10.2	Financial Institution Business Loan Agreement dated December 17, 2018.

31.1	Certification of Chief Executive Officer under Section 302 of the Sarbanes Oxley Act of 2002.

31.2	Certification of Chief Financial Officer under Section 302 of the Sarbanes Oxley Act of 2002.

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document.

101.SCH	XBRL Taxonomy Extension Schema.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase.

101.DEF	XBRL Taxonomy Extension Definition Linkbase.

101.LAB	XBRL Taxonomy Extension Label Linkbase.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

STOCK PURCHASE AGREEMENT

and

ADDvantage Technologies Group, Inc.

dated as of December 26, 2018

ARTICLE I	DEFINITIONS	1
ARTICLE II	PURCHASE AND SALE	7
Section 2.01	Purchase and Sale	7
Section 2.02	Purchase Price	7
Section 2.03	Deliveries at the Closing	7
Section 2.04	Purchase Price Adjustment	8
Section 2.05	Closing	10
Section 2.06	Collateral Agreements	10
Section 2.07	As-Is, Where-Is	10
ARTICLE III	REPRESENTATIONS AND WARRANTIES OF SELLER	11
Section 3.01	Organization and Authority of Seller	11
Section 3.02	Organization, Authority and Qualification of the Companies	11
Section 3.03	Capitalization	12
Section 3.04	Non-Contravention	13
Section 3.05	Consents	13
Section 3.06	Special Committee Approval	13
Section 3.07	Legal Proceedings	13
Section 3.08	Tax Matters	14
Section 3.09	Seller Not a Creditor of, or Debtor, to the Companies	16
Section 3.10	Benefit Plans	16
Section 3.11	Continuity of Representations and Update of Schedules	19
ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF BUYER	19
Section 4.01	Organization and Authority of Buyer	19
Section 4.02	Non-Contravention	20
Section 4.03	Governmental Consents	20
Section 4.04	Investment Purpose	20
Section 4.05	Sufficiency of Funds	20
Section 4.06	Legal Proceedings	20
Section 4.07	Sole Participant	20

TABLE OF CONTENTS

(continued)

Page

Section 4.08	C Corporation Status	20
ARTICLE V	COVENANTS	21
Section 5.01	Conduct of Business Prior to the Closing	21
Section 5.02	Access to Information	21
Section 5.03	Shareholder Meeting; Proxy Material	21
Section 5.04	No Solicitation of Other Bids	22
Section 5.05	Notice of Certain Events	24
Section 5.06	Resignations	24
Section 5.07	Non-Competition; Non-Solicitation; Buyer Standstill	24
Section 5.08	Governmental Approvals and Consents	26
Section 5.09	Books and Records	27
Section 5.10	Closing Conditions	28
Section 5.11	Public Announcements	28
Section 5.12	Employees; Benefit Plans	28
Section 5.13	Seller Due Diligence	28
Section 5.14	Further Assurances	28
ARTICLE VI	TAX MATTERS	29
Section 6.01	Tax Covenants	29
Section 6.02	Termination of Existing Tax Sharing Agreements	30
Section 6.03	Straddle Period	30
Section 6.04	Responsibility for Tax Audits and Contests	31
Section 6.05	Treatment of Indemnification Payments	31
Section 6.06	Survival	31
Section 6.07	Conflict	31
Section 6.08	Cooperation and Exchange of Information	31
Section 6.09	Section 338(h)(10) Election	31
ARTICLE VII	CONDITIONS TO CLOSING	32
Section 7.01	Conditions to Obligations of All Parties	32
Section 7.02	Conditions to Obligations of Buyer	33
Section 7.03	Conditions to Obligations of Seller	34

TABLE OF CONTENTS

(continued)

Page

ARTICLE VIII	INDEMNIFICATION	35
Section 8.01	Survival	35
Section 8.02	Indemnification by Seller	35
Section 8.03	Indemnification by Buyer	36
Section 8.04	Indemnification Procedures	36
Section 8.05	Exclusive Remedies	37
ARTICLE IX	TERMINATION	38
Section 9.01	Termination	38
Section 9.02	Effect of Termination	39
ARTICLE X	MISCELLANEOUS	39
Section 10.01	Expenses	39
Section 10.02	Notices	40
Section 10.03	Interpretation	41
Section 10.04	Headings	41
Section 10.05	Severability	41
Section 10.06	Entire Agreement	41
Section 10.07	Successors and Assigns	41
Section 10.08	No Third-Party Beneficiaries	41
Section 10.09	Amendment and Modification; Waiver	42
Section 10.10	Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	42
Section 10.11	Equitable Remedies	43
Section 10.12	Attorneys’ Fees	43
Section 10.13	Cumulative Remedies	43
Section 10.14	Time of the Essence	43
Section 10.15	Counterparts	43

EXHIBITS

Exhibit A Guaranty and Covenant Agreement

Exhibit B Promissory Note

iii

TABLE OF CONTENTS

(continued)

Page

SELLER DISCLOSURE AND EXCEPTION SCHEDULES

Schedule 2.06 Collateral Agreements

Schedule 3.05 Consents

Schedule 3.08 Tax Matters

Schedule 3.09 Seller not a Creditor of, or Debtor to, the Companies

Schedule 3.10 Benefit Plans

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement” ), dated as of December 26, 2018 (the “ Effective Date ”), is entered into among Leveling 8 Inc , an Oklahoma corporation ( “Buyer” ) and ADDvantage Technologies Group, Inc ., an Oklahoma corporation ( “Seller” ).

RECITALS

WHEREAS, Buyer wishes to purchase Seller’s cable television business which is conducted through its subsidiaries, Tulsat, LLC , an Oklahoma limited liability company ( “Tulsat” ), NCS Industries, Inc. , a Pennsylvania corporation ( “NCS” ), Addvantage Technologies Group of Missouri, Inc. , a Missouri corporation ( “Addvantage Missouri” ), Addvantage Technologies Group of Texas, Inc. , a Texas corporation ( “Addvantage Texas” ), and Tulsat-Atlanta, L.L.C. , an Oklahoma limited liability company ( “Tulsat-Atlanta” ) (each a “Company” and collectively the “ Companies” );

WHEREAS, Seller owns all of the issued and outstanding shares of common stock or, as applicable, limited liability company membership interests (the “Shares” ) of each of the Companies; and

WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, the Shares, subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

The following terms have the meanings specified or referred to in this Article I :

“Accountants” has the meaning set forth in Section 2.04(c)(iii) .

“Acquisition Proposal” means any inquiry, proposal or offer from any Person concerning (i) a merger, consolidation, liquidation, recapitalization, share exchange or other business combination transaction involving a Company or Seller; (ii) the issuance or acquisition of shares of capital stock or other equity securities of a Company or Seller; or (iii) the sale, lease, exchange or other disposition of any significant portion of a Company's or the Seller’s properties or assets.

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

“Addvantage Missouri” has the meaning set forth in the recitals.

“Addvantage Missouri Common Stock” has the meaning set forth in Section 3.03(a) .

“Addvantage Texas” has the meaning set forth in the recitals.

“Addvantage Texas Common Stock” has the meaning set forth in Section 3.03(a) .

“Adverse Recommendation Change” means an action by Seller’s Board of Directors which amounts to withholding or withdrawing, or publicly proposing to withdraw the approval, recommendation or declaration of advisability by the Seller’s Board of Directors or any such committee of the Contemplated Transactions or publicly proposing to recommend, adopt or approve any third-party Acquisition Proposal.

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with” ) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Ownership of voting equity in an entity, by itself, shall not be considered to confer control of such entity unless the owner holds more than fifty percent (50%) of the outstanding voting equity of the entity. By way of illustration and not limitation, the parties acknowledge that Guarantor is an Affiliate of Buyer.

“Agreement” has the meaning set forth in the preamble.

“Allocation Schedule ” has the meaning set forth in Section 6.09(b).

“Benefit Plan” means all stock option or share purchase plans, employee loans, home purchase loans, insurance, long-term disability, medical, dental or other executive and employee benefit plans, including without limitation the Plans as defined in Section 3.10 .

“Board of Directors” means the board of directors of Seller.

“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Tulsa, Oklahoma are authorized or required by Law to be closed for business.

“Buyer” has the meaning set forth in the preamble.

“Buyer Indemnitees” has the meaning set forth in Section 8.02 .

“ Cash ” means the aggregate book balance of the Companies’ currency on hand and collected funds on deposit with depository banks net of amounts necessary to cover checks, drafts, wire transfers and other items, if any, in process of collection and payment, as of the opening for business on the Closing Date.

“Claim Notice” has the meaning set forth in Section 8.04(a).

“Closing” has the meaning set forth in Section 2.05 .

“Closing Date” has the meaning set forth in Section 2.05 .

“Closing Working Capital” means: (a) the aggregate book value of the Current Assets of the Companies, less (b) the aggregate amount of the Current Liabilities of the Companies, determined as of the opening of business on the Closing Date.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral Agreements” has the meaning set forth in Section 2.06 .

“Commonly Controlled Entity” has the meaning set forth in Section 3.10(l).

“Company” and “Companies” have the meaning set forth in the recitals.

“ Com Tech ” means Com Tech Services, LLC, a Missouri limited liability company.

“Consent” has the meaning set forth in Section 3.05 .

"Contemplated Transactions" means each of the transactions contemplated by this Agreement.

“Current Assets” means aggregate book value of the Companies’ (a) accounts receivable incurred in the ordinary course of the Companies’ business for goods sold or services rendered (net of allowances for doubtful accounts), (b) Inventory, (c) prepaid expenses, and (d) vendor deposits, all as reflected in the accounting records of the Companies maintained by Seller, and shall not include Cash (which is to be distributed to and retained by Seller at Closing), the Machinery and Equipment, intercompany receivables or any other assets of the Companies.

“Current Liabilities” means aggregate book value of the Companies’ accounts payable and accrued expenses, but excluding any indebtedness that Seller causes to be paid in full in connection with the Closing and intercompany payables, as reflected in the accounting records of the Seller.

“Disputed Amounts” has the meaning set forth in Section 2.04(c)(iii) .

“Dollars or $” means the lawful currency of the United States.

“ Down Payment ” has the meaning set forth in Section 2.03(a)(i) .

“Encumbrance” means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

“ Exchange Ac t” means the Securities Exchange Act of 1934.

“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

“Guarantee” means that certain personal guarantee issued by the Guarantor in which Guarantor individually guarantees payment and performance by the Buyer of its obligations under this Agreement and the Transaction Documents, substantially in the form of the Guaranty and Covenant Agreement comprising Exhibit A hereto.

“ Guarantor ” shall mean David Chymiak, an individual, and The David E. Chymiak Trust.

“Indemnitee” has the meaning set forth in Section 8.04(b).

“Indemnitor” has the meaning set forth in Section 8.04(b).

“Intervening Event” means any material event or development or material change in circumstances first occurring, arising or coming to the attention of Seller’s Board of Directors after the date of this Agreement to the extent that such event, development or change in circumstances (i) was not within Seller’s Knowledge and (ii) does not relate to an Acquisition Proposal.

“ Inventory ” means those items of inventory owned by each of the Companies, and consisting of goods owned or held by one of the Companies for sale or lease or to be furnished under contracts of service or which constitute raw materials, work-in-process, or supplies or materials used or consumed in its business, as reflected in each Company’s books and records as maintained by the Seller, and the aggregate value of which shall be calculated by reference to such books and records as of the close of business on the day before the Closing Date and net of the Inventory Reserve Amount exclusive of any other reserve.

“ Inventory Reserve Amount ” means the sum of $4,800,000, which is the value, as agreed by the parties of slow-moving, excess and obsolescent items with the Companies’ Inventory.

“Knowledge” of Seller or of Buyer, or Seller’s of Buyer’s “Knowledge” or any other similar knowledge qualification, means in the case of Seller, the actual knowledge of any of Seller’s officers or directors (but excluding in any event the knowledge of the Guarantor and none of Seller’s other officers or directors) or which any of them would be deemed to have after due inquiry and in the case of Buyer the actual knowledge of Guarantor and of any of Buyer’s officers or directors or which any of them would be deemed to have after due inquiry.

“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

“Liabilities” means liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise of a Company.

“Losses” means losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers; provided, however, that “Losses” shall not include punitive or consequential damages.

“ Machinery and Equipment ” means those items of machinery and equipment owned by each Company’s books and records as maintained by the Seller, and the aggregate value of which shall be calculated, net of accumulated depreciation, by reference to such books and records as of the close of business on the day before the Closing Date.

“Minority Shareholders” means all Shareholders, other than Guarantor and any Affiliates of Guarantor.

“NCS” has the meaning set forth in the recitals.

“NCS Common Stock” has the meaning set forth in Section 3.03(a) .

“Notice of Change” has the meaning set forth in Section 5.04(d) .

“Permits” means all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities.

“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

“Post-Closing Adjustments” means the adjustments to the Purchase Price made after the Closing pursuant to the provisions of Section 2.04 .

“Post-Closing Tax Period” means any taxable period beginning after the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period beginning after the Closing Date.

“Post-Closing Taxes” means Taxes of a Company for any Post-Closing Tax Period.

“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.

“Pre-Closing Taxes” means Taxes of a Company for any Pre-Closing Tax Period.

“Proceeding” has the meaning set forth in Section 8.04(a).

“Promissory Note” means that certain Promissory Note in a principal amount equal to Six Million Three Hundred Seventy-Five Thousand Dollars ($6,375,000), subject to adjustment as provided herein, substantially in the form of Exhibit B attached hereto.

“Purchase Price” has the meaning set forth in Section 2.02 .

“Putative Indemnitee” has the meaning set forth in Section 8.04(a).

“Putative Indemnitor” has the meaning set forth in Section 8.04(a).

“Restricted Business” means the repair, service, sale and distribution of equipment and electronics in the cable television industry.

“Restricted Period” means a period of time commencing on the Closing Date and continuing for a period of three (3) years thereafter.

“Review Period” has the meaning set forth in Section 2.04(c)(i) .

“ SEC ” means the Securities and Exchange Commission.

“Section 338(h)(10) Election” has the meaning set forth in Section 6.09(a).

“Seller” has the meaning set forth in the preamble.

“Seller Indemnitees” has the meaning set forth in Section 8.03 .

“Seller Proxy Statement” means the letter to the Shareholders, notice of Shareholder Meeting, proxy statement, and forms of proxy to be filed with the SEC in connection with the Contemplated Transactions.

“Shareholder Approval” means the approval of the Contemplated Transactions by (1) Shareholders holding a majority of Seller’s outstanding common stock and (2) Minority Shareholders holding a majority of the outstanding common stock held by all Minority Shareholders as a group.

“Shareholder Meeting” means the meeting of Shareholders held for the purpose of obtaining the Shareholder Approval.

“Shareholders” means all of the holders of the outstanding shares of Seller’s common stock entitled to vote at Seller’s shareholder meetings.

“Shares” has the meaning set forth in the recitals.

“SMLLC’s” has the meaning set forth in Section 6.01(d).

“Special Committee” means a special transaction committee of the Board of Directors of Seller composed entirely of independent and disinterested directors specially appointed by the Board of Directors to negotiate and approve (or disapprove) this Agreement and the Contemplated Transactions.

“Statement of Objections” has the meaning set forth in Section 2.04(c)(ii) .

“Straddle Period” has the meaning set forth in Section 6.03 .

“Statement” has the meaning set forth in Section 2.04(b) .

“Superior Proposal” means an Acquisition Proposal that Seller’s Board of Directors has determined is superior to the Acquisition Proposal reflected in this Agreement, taking into account the financial terms, the likelihood of consummation and all other aspects of such Acquisition Proposal.

“ Target Amount ” means Eleven Million Forty Four Thousand and Forty One Dollars ($11,044,041).

“Taxes” means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

“Tax Return” means any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Territory” means the states of Oklahoma, Missouri, Pennsylvania, Texas, and Georgia.

“Transaction Documents” means this Agreement; the Promissory Note; a Transition Services Agreement; the Guarantee; and the Collateral Agreements.

“Transition Services Agreement” means the certain Transition Services Agreement to be entered into between Buyer and Seller within forty-five (45) days of the Effective Date in which the Seller and Buyer will set forth the terms upon which Seller will provide certain administrative services to Buyer for a period of up to ninety (90) days following the Closing Date.

“Tulsat” has the meaning set forth in the recitals.

“Tulsat Equity Interests” has the meaning set forth in Section 3.03(a) .

“Tulsat-Atlanta” has the meaning set forth in the recitals.

“Tulsat-Atlanta Equity Interests” has the meaning set forth in Section 3.03(a) .

“Undisputed Amounts” has the meaning set forth in Section 2.04(c)(iii) .

ARTICLE II

PURCHASE AND SALE

Section 2.01 Purchase and Sale . Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell to Buyer, and Buyer shall purchase from Seller the Shares, free and clear of all Encumbrances, for the consideration specified in Section 2.02 .

Section 2.02 Purchase Price . As consideration for the sale of the Shares, Buyer shall pay to Seller an amount equal to Ten Million Three Hundred Fourteen Thousand One Hundred Forty-One Dollars ($10,314,141) (the “Purchase Price” ) subject to the any Post-Closing Adjustments, by delivery of the Down Payment and the Promissory Note.

Section 2.03 Deliveries at the Closing .

(a)	At the Closing, Buyer shall:

(i) deliver to Seller the sum of Three Million Nine Hundred Thirty-Nine Thousand Nine Hundred Forty-One Dollars ($3,939,941) as a down payment on the Purchase Price (the “ Down Payment ”), by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer prior to the Closing Date; and

(ii) execute and deliver to Seller (and cause the Guarantor and his appropriate Affiliate(s) to execute and deliver to Seller) the Guarantee and the other Transaction Documents and all other agreements, documents, instruments or certificates required to be delivered by Buyer (or which Buyer is required to cause to be delivered) at or prior to the Closing pursuant to Section 7.03 of this Agreement.

(b)	At the Closing, Seller shall:

(i) deliver to Buyer stock certificates (or other customary indicia of ownership) evidencing the Shares, free and clear of all Encumbrances, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank, with all required stock transfer tax stamps affixed thereto; and

(ii) execute and deliver to Buyer the Transaction Documents and all other agreements, documents, instruments or certificates required to be delivered by Seller (or which Seller are required to cause to be delivered) at or prior to the Closing pursuant to Section 7.03 of this Agreement.

Section 2.04 Purchase Price Adjustment .

(a)	Post-Closing Adjustments. The Purchase Price shall be increased by , and the Buyer shall pay to the Seller, the amount by which the sum of the Closing Working

Capital plus the Machinery and Equipment exceeds the Target Amount. The Purchase Price shall be decreased by , and the Seller shall pay to the Buyer, the amount by which the Target Amount exceeds the sum of the Closing Working Capital plus the Machinery and Equipment.

(b)

Post-Closing Adjustment Statement . Within sixty (60) days after the Closing Date, Seller shall prepare and deliver to Buyer a statement setting forth its calculation of the Post-Closing Adjustments to the Purchase Price, including all of the components of the same in reasonable detail and of any Cash at Closing and of any payment due to Seller or Buyer (the “Statement” ).

(c)	Examination and Review .

(i) Examination . Buyer shall have thirty (30) days to review and object to the Statement (the “Review Period” ).

(ii) Objection . On or prior to the last day of the Review Period, the Buyer may object to the Statement by delivering to Seller a written statement setting forth the Buyer’s objections in reasonable detail, indicating each disputed item or amount and the basis for the disagreement therewith (the “Statement of Objections” ). If the Buyer fails to deliver the Statement of Objections before the expiration of the Review Period, the Post-Closing Adjustment as reflected in the Statement shall be deemed to have been accepted by the Buyer. If the Buyer delivers the Statement of Objections before the expiration of the Review Period, Buyer and the Seller shall negotiate in good faith to resolve such objections within thirty (30) days after the delivery of the Statement of Objections (the “Resolution Period” ), and, if the same are so resolved within the Resolution Period, the Post-Closing Adjustment and the Statement with such changes as may have been previously agreed in writing by Buyer and the Seller, shall be final and binding.

(iii) Resolution of Disputes . If the Seller and Buyer fail to reach an agreement with respect to all of the matters set forth in the Statement of Objections before expiration of the Resolution Period, then any amounts remaining in dispute ( “Disputed Amounts” and any amounts not so disputed, the “Undisputed Amounts” ) shall be submitted for resolution to the office of HoganTaylor, Tulsa, Oklahoma or, if HoganTaylor is unable to serve, Buyer and the Seller shall appoint by mutual agreement the office of an impartial nationally recognized firm of independent certified public accountants (in either case, the “Accountants” ) who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only and make any adjustments to Post-Closing Adjustment and the Statement as necessary. The parties hereto agree that all adjustments shall be made without regard to materiality. The Accountants shall only decide the specific items under dispute by the parties and their decision for each Disputed Amount must be within the range of values assigned to each such item in the Statement and the Statement of Objections, respectively.

(iv) Fees of the Accountants . The costs, fees and expenses of the Accountants shall be borne equally by Buyer and Seller.

(v) Determination by Accountants . The Accountants shall make a determination as soon as practicable, and in any case within thirty (30) days after their

engagement (or such other time as the parties hereto shall agree in writing), and their resolution of the Disputed Amounts and their adjustments to the Statement and the Post-Closing Adjustment shall be conclusive and binding upon the parties hereto.

(vi) Payments of Post-Closing Adjustment . Except as otherwise provided herein, any payment of the Post-Closing Adjustment, together with interest calculated as set forth below, shall be due within five (5) days of the date such Post-Closing Adjustment is finally determined in accordance with the provisions of this Section 2.04 . If the Post-Closing Adjustment is a decrease in the Purchase Price, then Seller shall pay such decrease to Buyer (which payment may, if Buyer agrees, be treated as if it were a voluntary prepayment by Buyer under the Promissory Note to be applied against installments payable thereon in the order in which they become due). If the Post-Closing Adjustment is an increase in the Purchase Price, the Buyer shall pay such increase to the Seller. All payments required to be made hereunder shall be made by wire transfer of immediately available funds within five (5) days after the Post-Closing Adjustment determination to such account as is directed by the recipient of the payment and, if not paid, within such time, shall bear interest from the date of determination to and including the date of payment at the rate equal to six percent (6%) per annum above the Applicable Federal Rate, as of the Closing Date, for long-term loans payable annually, calculated daily on the basis of a 365 day year and the actual number of days elapsed, without compounding.

(d)	Adjustments for Tax Purposes . Any payments made pursuant to this Section 2.04 shall be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless otherwise required by Law.

Section 2.05 Closing . Subject to the terms and conditions of this Agreement, the purchase and sale of the Shares contemplated hereby shall take place at a closing (the “Closing” ) to be held at 10:00 a.m., Tulsa, Oklahoma time, on a date designated in writing by Seller to Buyer which is no later than three (3) Business Days after the last of the conditions to Closing set forth in Article VII have been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date), at the offices of Seller in Tulsa, Oklahoma, or at such other time or on such other date or at such other place as the Seller and Buyer may mutually agree upon in writing (the day on which the Closing takes place being the “Closing Date” ).

Section 2.06 Collateral Agreements .

(a)

Agreement to Form . Within forty-five (45) days of the Effective Date Buyer and Seller will agree to the terms of various mortgages, security agreements, subordination agreements, pledge agreements and account control agreements (collectively, the “Collateral Agreements” ) under which Buyer, Guarantor and this Affiliate will grant Seller at Closing the following liens and security interests:

(i) a first priority security interest in Guarantor’s securities account with Charles Schwab, having a fair market value of One Million Five Hundred Thousand Dollars ($1,500,000) on the Closing Date;

(ii) a first priority security interest in the Two Million Five Hundred and Two Thousand Nine Hundred and Two (2,502,902) shares of Seller’s common stock owned by Guarantor;

(iii) a second lien on the real properties owned by the Companies, the Guarantor or their Affiliates as described on Schedule 2.06 hereto; and

(iv) a second lien on any other assets of the Companies or on the equity of the Buyer.

(b)	Release Amounts . The Seller has agreed that it will release certain items of collateral upon the payment of certain agreed amounts on the Note as set forth on Schedule 2.06 .

(c)	Amendment to Agreement . The Buyer and Seller will in due course amend this Agreement to attach the agreed form of the Collateral Agreements to this Agreement as Exhibits.

Section 2.07 As-Is, Where-Is . BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING, SELLER SHALL CONVEY TO BUYER AND BUYER SHALL ACCEPT THE SHARES, THE COMPANIES AND THEIR BUSINESSES AND ASSETS AS-IS WHERE-IS, WITH ALL FAULTS, SUBJECT ONLY TO SELLER’S REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNITIES SET FORTH IN THIS AGREEMENT. BUYER ACKNOWLEDGES THAT IT IS A OWNED AND CONTROLLED BY GUARANTOR, WHO IS AN OFFICER AND DIRECTOR OF SELLER WHO HAS PARTICIPATED IN THE MANAGEMENT AND AFFAIRS OF THE COMPANIES ON AN ON-GOING BASIS AND THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER IS RELYING SOLELY ON ITS OWN, AND GUARANTOR’S, KNOWLEDGE AND EXPERTISE AND THAT THEY WILL MAKE SUCH OWN INDEPENDENT INVESTIGATION AND VERIFICATION OF THE ACCURACY OF ANY DOCUMENTS AND INFORMATION PROVIDED BY SELLER AS THEY SHALL DEEM NECESSARY OR APPROPRIATE.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

To induce Buyer to enter into this Agreement and for Buyer’s reliance, Seller hereby represents and warrants to Buyer that the statements contained in this Article III are true and correct as of the date hereof.

Section 3.01 Organization and Authority of Seller . Seller is a corporation duly organized, validly existing and in good standing under the Laws of the state of Oklahoma. Seller has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the Contemplated Transactions. The execution and delivery by Seller of this Agreement and the other Transaction Documents, the performance by Seller of its obligations hereunder and the consummation by Seller of the Contemplated Transactions have been duly authorized by all requisite corporate action on the part of Seller

other than the obtaining of Shareholder Approval. This Agreement has been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer and Shareholder Approval) this Agreement constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

Section 3.02 Organization, Authority and Qualification of the Companies .

(a)

Tulsat is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Oklahoma and has full power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. A copy of Tulsat’s Articles of Organization and Operating Agreement have been delivered to the Buyer.

(b)

NCS is a corporation duly organized, validly existing and in good standing under the Laws of the Commonwealth of Pennsylvania and has full corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. A copy of NCS’ Articles or Certificate of Incorporation and its Bylaws have been delivered to the Buyer.

(c)

Addvantage Missouri is a corporation duly organized, validly existing and in good standing under the Laws of the State of Missouri and has full corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. A copy of Addvantage Missouri’s Articles or Certificate of Incorporation has been delivered to the Buyer.

(d)

Addvantage Texas is a corporation duly organized, validly existing and in good standing under the Laws of the State of Texas and has full corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. A copy of Addvantage Texas’ Articles or Certificate of Incorporation and its Bylaws have been delivered to the Buyer.

(e)

Tulsat-Atlanta is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Oklahoma and has full power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. A copy of Tulsat-Atlanta’s Articles of Organization and Operating Agreement have been delivered to the Buyer.

Section 3.03 Capitalization .

(a)

There are 2,000 outstanding membership interests in Tulsat ( “Tulsat Equity Interests” ). The authorized capital stock of the NCS consists of 100,000 shares of common stock, par value $5.00 per share ( “NCS Common Stock” ), of which 100,000 shares are issued and outstanding. The authorized capital stock of the Addvantage Missouri consists of 30,000 shares of common stock, par value $1.00 per share ( “Addvantage Missouri

Common Stock” ), of which 500 shares are issued and outstanding. The authorized capital stock of the Addvantage Texas consists of 1,000 shares of common stock, par value $1.00 ( “Addvantage Texas Common Stock” ), of which 1,000 shares are issued and outstanding. There are 2,000 outstanding membership interests in Tulsat-Atlanta ( “Tulsat-Atlanta Equity Interests” ), which, together with the Tulsat Equity Interests, NCS Common Stock, Addvantage Missouri Common Stock, and Addvantage Texas Common Stock, constitute all of the Shares. All of the Shares have been duly authorized, are validly issued, fully paid and non-assessable, and are owned of record and beneficially by Seller, free and clear of all Encumbrances. Upon consummation of the Contemplated Transactions, Buyer shall own all of the Shares, free and clear of all Encumbrances, other than any Encumbrances placed on the Shares by Buyer.

(b)	All of the Shares were issued in compliance with applicable Laws. None of the Shares were issued in violation of any agreement, arrangement or commitment to which Seller or any Company is a party or is subject to or in violation of any preemptive or similar rights of any Person.

(c)

There are no outstanding or authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital stock or membership interests of any Company or obligating Seller or any Company to issue or sell any shares of capital stock or membership interests of, or any other interest in, any Company. The Companies do not have outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares.

Section 3.04 Non-Contravention . The execution, delivery, and performance of this Agreement by Seller, and the consummation by Seller of Contemplated Transactions do not and will not: (i) subject to obtaining the Shareholder Approval, contravene or conflict with, or result in any violation or breach of, the certificate of incorporation, by-laws or other organizational documents of Seller or any Company; (ii) assuming that all Consents contemplated by clauses (i) through (iii) of Section 3.05 have been obtained or made, conflict with or violate any Law applicable to the Seller or any Company, or any of their respective properties or assets; or (iii) result in the creation or imposition of any Encumbrance on any properties or assets of a Company.

Section 3.05 Consents . Except as set forth on Schedule 3.05 , no consent, approval, order, or authorization of, or registration, declaration, or filing with, or notice to any Person (any of the foregoing being a “ Consent” ), including any Governmental Authority is required to be obtained or made by the Seller in connection with the execution, delivery, and performance by the Seller of this Agreement or the consummation by the Seller of the Contemplated Transactions, except for: (i) the filing of the Seller Proxy Statement in definitive form with the SEC in accordance with the Exchange Act, and such reports under the Exchange Act as may be required in connection with this Agreement and the Contemplated Transactions; (ii) such Consents as may be required under applicable state securities or "blue sky" Laws and the securities Laws of any foreign country or the rules and regulations of the NASDAQ National Market; and (iii) such other Consents which if not obtained or made would not reasonably be

expected to have, individually or in the aggregate, a material adverse effect on Seller or any Company.

Section 3.06 Special Committee Approval . Seller’s Special Committee, by resolutions duly adopted by a unanimous vote at a meeting of all members of the Special Committee duly called and held and, not subsequently rescinded or modified in any way, has: (i) determined that this Agreement and the Contemplated Transactions, upon the terms and subject to the conditions set forth herein, are fair to, and in the best interests of, Seller, Seller’s Shareholders and Seller’s Minority Shareholders; (ii) approved and declared advisable this Agreement, including the execution, delivery, and performance thereof, and the consummation of the Contemplated Transactions, upon the terms and subject to the conditions set forth herein; (iii) directed that the Contemplated Transactions be submitted to a vote of the Seller’s Shareholders and Minority Shareholders for adoption at the Shareholder Meeting; and (iv) resolved to recommend that Seller’s Shareholders and Minority Shareholders vote in favor of approving the Contemplated Transactions.

Section 3.07 Legal Proceedings . There are no Actions pending or, to Seller’s Knowledge, threatened against or by a Company, Seller or any Affiliate of Seller that challenges or seeks to prevent, enjoin or otherwise delay the Contemplated Transactions.

Section 3.08 Tax Matters .

(a)

Except as set forth in Schedule 3.08 , each of the Companies has timely filed all Tax Returns required to be filed by it, and all such Tax Returns are true, complete and accurate in all material respects. All Taxes due and owing by the Companies (whether or not shown on any Tax Returns) have been paid and all accrued and unpaid Taxes as of the Closing Date will not exceed the liability on the financial statements for Taxes as adjusted for operations and transactions through the Closing Date, and the provision for Taxes in the Financial Statements is sufficient for all accrued and unpaid Taxes as of the respective dates thereof.

(b)

Seller has delivered to Buyer true and complete copies of the federal income tax returns of Seller and its consolidated subsidiaries, including the Companies, as filed with the United States Internal Revenue Service for each of the fiscal years ended September 30, 2015, September 30, 2016, and September 30, 2017, respectively, and all examination reports, and statements of deficiencies assessed against or agreed to by the Companies with respect to such taxable periods. Each of such returns was prepared, in conformity with information contained in the books and records of Seller and its consolidated subsidiaries, including the Companies. Except as set forth in Schedule 3.08 , the provision for Taxes on each of the financial statements referenced in Section 3.08 is sufficient and reflects accounting for income Taxes consistent with the requirements of ASC 740, Seller has taken no uncertain tax position, all Taxes (whether or not shown on any tax return, including, without limitation, income, property, sales, use, franchise, capital stock, excise, added value, employees’ income withholding, social security and unemployment taxes imposed by the United States, any state or any foreign country, or by any other taxing authority, which have become due or payable by the Seller or any of its subsidiaries, including the Companies, and all interest and penalties thereon, whether disputed or not, have been paid in full or adequately provided for by reserves shown in its books of account;

all deposits required by law to be made by Seller or any of its subsidiaries, including the Companies, with respect to estimated income, franchise and employees’ withholding taxes have been duly made; and all tax returns, including estimated tax returns, required to be filed have been duly filed.

(c)

Except as set forth in Schedule 3.08 , the federal and state income tax returns of Seller and its consolidated subsidiaries, including the Companies, have never been audited, assessed deficiencies or agreed to a tax adjustment. Schedule 3.08 also sets forth a list of those states in which income, franchise or sales and use tax returns were filed by Seller and its consolidated subsidiaries, or by any of the Companies, during the last five (5) franchise tax years, and no claim has ever been made by an authority in a jurisdiction where the Companies do not file Tax Returns that any Company is or may be subject to taxation by that jurisdiction.

(d)	Except as set forth on Schedule 3.08 :

(i)	None of the Companies has consented to extend the time or waived the statute of limitations in relation to any Tax that may be assessed or collected by any taxing authority;

(ii)	None of the Companies has requested or been granted an extension of the time for filing any Tax Return to a date later than the Closing Date;

(iii)

There is no action, suit, taxing authority proceeding or audit now in progress or pending against or with respect to the Companies with respect to any Tax;

(iv)

None of the assets of any Company constitutes tax-exempt bond financing property within the meaning of Section 168 of the Code, and none of such assets is subject to a lease, safe harbor lease or other contract as a result of which such Company is not treated as the owner for U.S. federal income Tax purposes;

(v)

None of the Companies has been a member of an Affiliated Group (other than a group of which Seller is or was the parent) or has any Liability for Taxes of any Person (other than the Companies) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise);

(vi)	None of the Companies is a party to or bound by any Tax allocation or Tax sharing agreement;

(vii)

There are no Liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Companies;

(viii)

Each of the Companies has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, member, partner or other third party;

(ix)

No Company is a party to any agreement, contract, arrangement, or plan that has resulted or would result, separately or in the aggregate, in the payment of (A) any “excess parachute payment” within the meaning of Code Section 280G (or any corresponding provision of state, local, or foreign Tax law) and (B) any amount that will

not be fully deductible as a result of Code Section 162(m) (or any corresponding provision of state, local, or foreign Tax law);

(x)	None of the Companies has been a United States real property holding corporation within the meaning of Code Section 897(c)(2) during the applicable period specified in Code Section 897(c)(1)(A)(ii);

(xi)	Seller is a not “foreign person” within the meaning of Section 1445 of the Code;

(xii)

None of the Companies nor Seller will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (A) change in method of accounting for a taxable period ending on or prior to the Closing Date; (B) “closing agreement” as described in Code Section 7121 (or any corresponding, or similar provision of state, local or foreign Tax law) executed on or prior to the Closing Date; (C) deferred intercompany transactions or any excess loss account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision of state, local or foreign tax laws); (D) installment sale or open transaction disposition made on or prior to the Closing Date; (E) prepaid amount received on or prior to the Closing Date; or (F) any election under Section 108(i) of the Code or comparable provisions of state, local or foreign Tax laws;

(xiii)

None of the Companies has entered into any “reportable transactions” as defined in the Treasury Regulations; and

(xiv)

None of the Companies has distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Code Sections 355 or 361.

Section 3.09 Seller Not a Creditor of, or Debtor, to the Companies . Except as set forth in Schedule 3.09 , Seller (a) is not the holder of any debt, account or note payable by any of the Companies; (b) is not indebted to any of the Companies for the payment of any debt, account or note receivable; and (c) owns no property or rights, tangible or intangible, used in or related, directly or indirectly, to the Restricted Business other than by reason of the Benefit Plans and its provision of administrative services to the Companies and their employees.

Section 3.10 Benefit Plans . Except as set forth on Schedule 3.10 , Seller and each of the Companies is in compliance in all material respects with all reporting and disclosure requirements applicable to it and to each Pension Plan and each Welfare Plan adopted and administered by it under the Code, the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), and all Department of Labor and Internal Revenue Service regulations promulgated thereunder. For purposes of this Section, “ Pension Plan ” means and includes each “ employee pension benefit plan ” (within the meaning of Section 3(2)(A) of ERISA) maintained by Seller or the Companies, or any of them for the benefit of individual employed by any of the Companies, and “ Welfare Plans ” means and includes each “ employee welfare benefit plan ” (within the meaning of Section 3(1) of ERISA) maintained by Seller or the Companies, or any of them for the benefit of individual employed by any of the Companies.

(a)

All of the Pension Plans and Welfare Plans (each, a “ Plan ” and, collectively, the “ Plans ”) maintained by or for the benefit of any of the Companies, or its or their employees, are listed and described in Schedule 3.10 . There is no outstanding liability of any of the Companies to any Plan (other than payroll deduction contributions not yet remitted to the Plan trustee), and Seller knows of any potential liabilities in connection therewith. Schedule 3.10 sets forth on a Plan by Plan basis, the present value of benefits payable as of the date hereof, presently or in the future, to individuals employed by any of the Companies under each unfunded Plan. Seller has provided Buyer with (i) true and complete copies of each Plan and all amendments thereto (or, if not written, a summary of its terms); (ii) any related trust agreement or other funding agreement, including, but not limited to, insurance contracts; (iii) the most recent IRS determination letter, if applicable; (iv) any summary plan description and other material written communication (or a description of any material oral communications) by Seller or the Companies to individuals employed by any of the Companies concerning the benefits provided under the Plan; and (v) the most recent financial statements and last three (3) Form 5500 annual reports (including attached schedules).

(b)

For each Plan that is intended to satisfy the provisions of Section 401(a) of the Code, (i) such Plan has been timely amended to comply with changes in applicable law and regulatory guidance; (ii) Seller and/or the Companies have obtained a favorable determination letter from the IRS to such effect; (iii) none of the determination letters has been revoked by the IRS, nor has the IRS given any indication to Seller or the Companies that it intends to revoke any such determination letter; (iv) no such employee pension benefit plan is subject to Title IV of ERISA or Sections 412(n) or 430 of the Code; and (v) no prohibited transaction within the meaning of Section 406 of ERISA has occurred with respect to any employee pension benefit plan and no tax has been imposed pursuant to Section 4975 or 4976 of the Code in respect thereof.

(c)

Except as set forth in Schedule 3.10 , each Plan has been maintained, funded and administered in accordance with their terms and comply in form and in application in all material respects with the applicable requirements of applicable laws, including, but not limited to, ERISA and the Code. No fiduciary has any liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of any Plan.

(d)

No civil or criminal action brought pursuant to the provisions of Title I, Subtitle B, Part 5 of ERISA or any other federal or state law is pending or, to Seller’s Knowledge threatened, against any fiduciary of the Plans. None of the Plans, nor any fiduciary thereof, has been, or is currently, the direct or indirect subject of an audit, investigation or examination by any govern-mental or quasi-governmental agency and there are no actions, suits or claims pending (other than for benefits in the normal course), pending, or to Seller’s Knowledge threatened, and Seller has no Knowledge of any facts which could give rise to any action, suit or claim, against any Plan or any of the Companies, which might subject any of the Companies to any material liability.

(e)	Each Plan that is intended to meet the requirements of tax-favored status under Part III of Subchapter B of Chapter 1 of Subtitle A of the Code meets such requirements.

(f)

For each Plan which is a “group health plan” within the meaning of Section 5000(b)(1) of the Code and, except as set forth in Schedule 3.10 , Seller and the Companies have complied in all respects with the notice and continuation coverage requirements of Section 4980B of the Code, the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“ COBRA ”), and Part 6 of Subtitle B of Title I of ERISA and the regulations thereunder and the Family and Medical Leave Act of 1994, and all regulations promulgated thereunder.

(g)	All contributions to, and payments from, the Plans which are required to have been made by Seller and the Companies and their Commonly Controlled Entities with respect to any period ending on or before the Closing Date, in accordance with such Plans, have been timely made.

(h)

Neither Seller, the Companies, nor any Commonly Controlled Entity has any formal plan or commitment, whether legally binding or not, to create any additional Plan or modify or change any existing Plans that would affect any employee or terminated employee, manager or director of the Companies, Seller or any Commonly Controlled Entity.

(i)

Neither the execution, delivery or performance of this Agreement by Seller nor the consummation of the transactions contemplated hereby will (i) accelerate the time of payment or vesting, or increase the amount of compensation due any such director, manager, officer or employee under any of the Plans or (ii) result in any prohibited transaction described in Section 406 of ERISA or Section 4975 of the Code for which an exemption is not available.

(j)

None of the Plans, nor any of their related trusts, and none of the Companies nor any trustee, administrator or other “ party in interest ” or “ disqualified person ” (within the meaning of Section 3(14) of ERISA or Section 4975(e)(2) of the Code, respectively) with respect to any Plan, has engaged in any non-exempt “ prohibited transaction ” (within the meaning of Section 406 of ERISA or Section 4975(c) of the Code, respectively) with respect to the participation of any of the Companies therein, which could subject any of the Plans, their related trusts, any trustee, administrator or other fiduciary of any such Plan, any of the Companies, Buyer, or any other party dealing with the Plan, to the penalties or excise tax imposed on prohibited transactions by Section 502 of ERISA or Section 4975 of the Code or which could have a material adverse effect on the assets, business or financial condition of any of the Companies.

(k)

Each of the Plans complies currently, and has complied in the past, both as to form and operation, in all material respects with its own terms and with the provisions of ERISA and the Code, and all other applicable laws, rules and regulations; all necessary governmental approvals and determinations for the Plan has been obtained, including where applicable, a favorable determination as to its qualification under Sections 401(a), and 501(a) of the Code; and nothing has occurred since the date of each such determination or recognition letter that would adversely affect such qualification. All amounts that are currently owing to plan participants, and contributions required to be made, to each of the Plans have been paid or contributed with respect to all periods prior to the Closing Date or provided for by adequate reserves on the Valuation Date Balance Sheet.

(l)

None of the Companies nor any other entity, including Seller, whether or not incorporated, which is deemed to be under “ common control ” (as defined in Section 414 of the Code, or 4001(b) of ERISA) with the Companies, or any of them (“ Commonly Controlled Entity ”), maintains or contributes to any “ employee pension benefit plan ” (within the meaning of Section 3(2)(A) of ERISA) ) that (a) is a “ defined contribution plan ” described in Section 3(34) of ERISA or Section 414(i) of the Code, or a “ defined benefit plan ” described in Section 3(35) of ERISA or Section 414(j) of the Code, and (b) gives rise, or will give rise, to any liability of any of the Companies for (i) any delinquent premium payments due under Section 4007 or ERISA with respect to any such defined benefit plan, or (ii) any unpaid minimum funding contributions that would result in the imposition of a lien on any assets of any of the Companies pursuant to Section 412(c)(11) of the Code or Section 302(c)(11) of ERISA. None of the Companies, nor any Commonly Controlled Entity, including Seller, sponsors or sponsored, or maintains or maintained, any defined benefit plan that has been, or will be, terminated in a manner that would result in any liability of any of the Companies to the Pension Benefit Guaranty Corporation or that would result in the imposition of a lien on any assets of any of the Companies pursuant to Section 4068 of ERISA. At no time during the five-year period immediately preceding the first day of the year in which the Closing Date occurs has any of the Companies or any Commonly Controlled Entity, including Seller, participated in or contributed to any “ multi-employer plan ” (within the meaning of Section 4001(a)(3) of ERISA or Section 414(f) of the Code), or had an obligation to participate in or contribute to any such multi-employer plan. No agreement subject to Section 4204 of ERISA has been entered into in connection with the transaction contemplated in the Agreement. None of the Welfare Plans provides for or promises retiree medical, disability or life insurance benefits to any current or former employee, officer, or director of any of the Companies.

(m)

All “health plans” and “group health plans” (as those terms are defined by the Health Insurance Portability and Accountability Act of 1996, Public Law 104-191 (“ HIPAA ”)) that Seller, or the Companies or any Commonly Controlled Entity sponsors are in compliance with all applicable requirements under HIPAA. Specifically, but without limitation, all such health plans timely adopted the legally necessary policies and procedures, business associate agreements, and other required documentation to comply with privacy component of HIPAA and the regulations issued thereunder including but not limited to 45 CFR 160 and CFR Part 164 (“ HIPAA Regulations ”) as amended from time to time. Neither Seller, the Companies, nor any Commonly Controlled Entity, nor any of their respective health plans or group health plans, have violated any applicable requirements of HIPAA or the HIPAA Regulations.

Section 3.11 Continuity of Representations and Update of Schedules . Seller covenants and agrees to advise Buyer promptly, when Seller has Knowledge, of any material adverse change in or deviation or from any of the foregoing representations and warranties from the Effective Date through the Closing Date. Seller agrees that, with respect to its representations and warranties contained in this Agreement, Seller shall, when Seller has Knowledge, supplement or amend the Schedules to this Agreement as of the Closing Date with respect to any matter hereafter arising or discovered which, if existing or known at the date of this Agreement, would have been required to be set forth or described.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller that the statements contained in this Article IV are true and correct as of the date hereof.

Section 4.01 Organization and Authority of Buyer . Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the state of Oklahoma. Buyer has all necessary power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the Contemplated Transactions. The execution and delivery by Buyer of this Agreement and the other Transaction Documents, the performance by Buyer of its obligations hereunder and the consummation by Buyer of the transactions contemplated hereby have been duly authorized by all requisite action on the part of Buyer’s Directors. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller and Shareholder Approval) this Agreement constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

Section 4.02 Non-Contravention . The execution, delivery, and performance of this Agreement by Buyer, and the consummation by Buyer of Contemplated Transactions do not and will not: (i), contravene or conflict with, or result in any violation or breach of, the Certificate of Incorporation and Bylaws and other organizational documents of Buyer; or (ii) assuming that all Consents contemplated by clauses (i) through (iii) of Section 4.03 have been obtained or made, conflict with or violate any Law applicable to Buyer, or any of their respective properties or assets.

Section 4.03 Governmental Consents . No Consent of any Governmental Authority is required to be obtained or made by the Buyer in connection with the execution, delivery, and performance by the Buyer of this Agreement or the consummation by the Buyer of the Contemplated Transactions, except for: (i) the filing of the Seller Proxy Statement in definitive form with the SEC in accordance with the Exchange Act, and such reports under the Exchange Act as may be required in connection with this Agreement and the Contemplated Transactions; (ii) such Consents as may be required under applicable state securities or "blue sky" Laws and the securities Laws of any foreign country or the rules and regulations of the NASDAQ National Market; and (iii) such other Consents which if not obtained or made would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Buyer.

Section 4.04 Investment Purpose . Buyer is acquiring the Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer acknowledges that the Shares are not registered under the Securities Act of 1933, as amended, or any state securities laws, and that the Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act of 1933, as amended or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable.

Section 4.05 Sufficiency of Funds . Buyer has or, subject to Section 7.02(d) will have at the time of Closing, sufficient cash on hand or other sources of immediately available funds to enable it to make the Down Payment and consummate the Contemplated Transactions.

Section 4.06 Legal Proceedings . There are no Actions pending or, to Buyer's Knowledge, threatened against or by Buyer that challenge or seek to prevent, enjoin or otherwise delay the Contemplated Transactions. No event has occurred or circumstances exist that may give rise or serve as a basis for any such Action.

Section 4.07 Sole Participant . The Guarantor is the sole shareholder and director and president of the Buyer. No other Shareholder owns any interest of any kind in Buyer, is a party to any contract, oral or written, with Buyer or is a participant of any kind, whether as a lender, service provider, agent or otherwise, in the Buyer or its business.

Section 4.08 C Corporation Status . Buyer has elected and is a valid “C Corporation” under the Code and will maintain such status through the making of the 338(h)(10) election described in Section 6.09 .

ARTICLE V

COVENANTS

Section 5.01 Conduct of Business Prior to the Closing . From the date hereof until the Closing, except as otherwise contemplated by this Agreement or consented to in writing by Buyer, Seller shall, and shall cause each Company to conduct the business of the Companies in the ordinary course of business consistent with past practice and use reasonable efforts to maintain and preserve intact the current organization, business and franchise of each Company and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with any Company; provided, however, that on or about the Closing Date, and prior to consummating the Contemplated Transaction each of the Companies shall declare and pay to Seller, as the sole shareholder of the Companies, a dividend or distribution in an amount equal to all of the Cash held by such Company.

Section 5.02 Access to Information . From the date hereof until the Closing, Seller shall, and shall cause each Company to afford Buyer and its representatives full and free access to and the right to inspect all of the Real Property, properties, assets, premises, books and records, contracts and other documents and data related to the Companies.

Section 5.03 Shareholder Meeting; Proxy Material .

(a) Seller shall take all action necessary to duly call, give notice of, convene, and hold the Shareholder Meeting as soon as reasonably practicable after the date of this Agreement, and, in connection therewith, Seller shall mail the Seller Proxy Statement to Shareholders in advance of such meeting. Unless Seller’s Board of Directors shall have effected an Adverse Recommendation Change as permitted by Section 5.04 hereof, the Seller Proxy Statement shall include the Board of Director’s recommendation of the adoption of this Agreement and the approval of the Contemplated Transactions. Subject to Section 5.04 hereof,

Seller shall use reasonable best efforts to: (i) solicit from the Shareholders proxies in favor of the adoption of this Agreement and approval of the Contemplated Transactions; and (ii) take all other actions necessary or advisable to secure the Shareholder Approval. Seller shall not submit any other proposals for approval at the Shareholder Meeting without the prior written consent of Buyer. Seller shall keep Buyer updated with respect to proxy solicitation results as requested by Buyer. Once the Shareholders Meeting has been called and noticed, Seller shall not postpone or adjourn the Shareholders Meeting without the consent of Buyer (other than: (A) in order to obtain a quorum of its Shareholders or (B) to allow reasonable additional time after the filing and mailing of any supplemental or amended disclosures to the Seller Proxy Statement for compliance with applicable legal requirements). If the Board of Directors makes an Adverse Recommendation Change, it will not alter the obligation of Seller to submit the adoption of this Agreement and the approval of the Contemplated Transactions to the Shareholders at the Shareholders Meeting to consider and vote upon, unless this Agreement shall have been terminated in accordance with its terms prior to the Shareholders Meeting.

(b) In connection with the Shareholder Meeting, as soon as reasonably practicable following the date of this Agreement, Seller shall prepare and file the Seller Proxy Statement with the SEC. Seller shall not file the Seller Proxy Statement, or any amendment or supplement thereto, without providing Buyer a reasonable opportunity to review and comment thereon (which comments shall be reasonably considered by Seller). Seller shall use commercially reasonable efforts to cause the Seller Proxy Statement at the date that it (and any amendment or supplement thereto) is first published, sent, or given to the Shareholders and at the time of the Shareholders Meeting, to comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder. Seller shall use commercially reasonable efforts to resolve, and each party agrees to consult and cooperate with the other party in resolving, all SEC comments with respect to the Seller Proxy Statement as promptly as practicable after receipt thereof and to cause the Seller Proxy Statement in definitive form to be cleared by the SEC and mailed to the Shareholders as promptly as reasonably practicable following filing with the SEC. Seller agrees to consult with Buyer prior to responding to SEC comments with respect to the preliminary Seller Proxy Statement. Seller agrees to correct any information which shall have become false or misleading and shall promptly prepare and mail to the Shareholders an amendment or supplement setting forth such correction. Seller shall as soon as reasonably practicable: (i) notify Buyer of the receipt of any comments from the SEC with respect to the Seller Proxy Statement and any request by the SEC for any amendment to the Seller Proxy Statement or for additional information; and (ii) provide Buyer with copies of all written correspondence between Seller, on the one hand, and the SEC, on the other hand, with respect to the Seller Proxy Statement. Buyer shall cooperate fully with Seller, as requested by Seller, in all aspects of the preparation of the Seller Proxy Statement, shall advise Seller promptly upon discovery of any false or misleading information concerning Buyer or Buyer’s intentions in the Seller Proxy Statement and shall assist Seller, as requested by Seller, in reviewing and responding to SEC comments regarding the Seller Proxy Statement.

Section 5.04 No Solicitation of Other Bids .

(a)

Seller shall not, and, shall not authorize or permit any of its Affiliates (including a Company) or any of its or their representatives to, directly or indirectly, (i) encourage, solicit, initiate, facilitate or continue inquiries regarding a third-party Acquisition Proposal; (ii) enter into discussions or negotiations with, or provide any information to, any Person concerning a possible third-party Acquisition

Proposal; or (iii) enter into any agreements or other instruments (whether or not binding) regarding a third-party Acquisition Proposal. Seller shall immediately cease and cause to be terminated, and shall cause its Affiliates (including a Company) and all of its and their representatives to immediately cease and cause to be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect to, or that could lead to, a third-party Acquisition Proposal.

(b)

Notwithstanding anything to the contrary in this Agreement, prior to obtaining Shareholder Approval, Seller and Seller’s Board of Directors may take any actions described in clause (ii) of Section 5.04(a) with respect to a third party if (x) Seller receives a written Acquisition Proposal with respect to Seller from such third party (and such Acquisition Proposal was not initiated, sought, solicited, knowingly encouraged or facilitated in violation of this Section 5.04 ) and (y) such proposal constitutes, or Seller’s Board of Directors determines in good faith that such proposal could reasonably be expected to lead to, a Superior Proposal. Nothing contained in this Section 5.04 shall prohibit Seller or Seller’s Board of Directors from taking and disclosing to the Shareholders a position with respect to an Acquisition Proposal pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or from making any similar disclosure, if Seller’s Board of Directors has reasonably determined in good faith that the failure to do so would be reasonably likely to be a breach of its fiduciary obligations to the Shareholders or would violate applicable Law; provided, that this sentence shall not permit Seller’s Board of Directors to make an Adverse Recommendation Change, except to the extent permitted by Section 5.04(c) or Section 5.04(d) .

(c)

Notwithstanding the foregoing, at any time prior to obtaining Shareholder Approval, and subject to Seller’s compliance at all times with the provisions of this Section 5.04 (other than immaterial non-compliance), in response to a Superior Proposal that has not been withdrawn and did not result from a breach of Section 5.04(a) or Section 5.04(b) , Seller’s Board of Directors may make an Adverse Recommendation Change; provided, however, that Seller may not make an Adverse Recommendation Change in response to a Superior Proposal with respect to Seller (x) until two (2) days after Seller provides written notice to Buyer advising Buyer that Seller’s Board of Directors has received a Superior Proposal, specifying the material terms and conditions of such Superior Proposal, identifying the Person or group making such Superior Proposal and including copies of all documents pertaining to such Superior Proposal (it being understood and agreed that any change to the financial or other material terms of a proposal that was previously the subject of a notice hereunder shall require a new notice as provided herein) and (y) unless Seller’s Board of Directors determines in good faith that the failure to make an Adverse Recommendation Change could be a breach of its fiduciary obligations to the Shareholders.

(d)

Notwithstanding the foregoing, at any time prior to obtaining Shareholder Approval, following any Intervening Event, Seller’s Board of Directors may make an Adverse Recommendation Change after Seller’s Board of Directors (i) determines in good faith that the failure to make such an Adverse Recommendation Change in response to such Intervening Event could be a breach of its fiduciary obligations to the Shareholders; (ii) determines in good faith that the reasons for making such an Adverse Recommendation Change are independent of and unrelated to any pending Acquisition Proposal with respect to

Seller; and (iii) provides written notice to Buyer (a " Notice of Change ") advising Buyer that Seller’s Board of Directors is contemplating making an Adverse Recommendation Change and specifying the material facts and information constituting the basis for such contemplated determination; provided, however, that Seller’s Board of Directors may not make such an Adverse Recommendation Change until the second (2nd) day after receipt by Buyer of a Notice of Change.

(e)

The parties agree that in addition to the obligations of Seller set forth in paragraphs (a) through (d) of this Section 5.04 , as promptly as practicable after receipt thereof, and in any event within forty-eight (48) hours, Seller, shall advise Buyer in writing of any request for information or any Acquisition Proposal received from any Person, or any inquiry, discussions or negotiations with respect to any Acquisition Proposal, and the terms and conditions of such request, Acquisition Proposal, inquiry, discussions or negotiations, and Seller shall promptly provide to Buyer copies of any written materials received by Seller in connection with any of the foregoing and the identity of the Person or group making any such request, Acquisition Proposal or inquiry or with whom any discussions or negotiations are taking place. Seller agrees that it shall simultaneously provide to Buyer any non-public information concerning itself or its Affiliates provided to any other Person or group in connection with any Acquisition Proposal which was not previously provided to Buyer; provided, that Buyer shall, as a condition to its receipt of such non-public information, enter into any confidentiality, non-disclosure or non-use covenant as Seller shall reasonably request.

Section 5.05 Notice of Certain Events .

(a)	From the date hereof until the Closing, Seller shall promptly notify Buyer in writing of:

(i)

any fact, circumstance, event or action the existence, occurrence or taking of which has resulted in, or could reasonably be expected to result in, any representation or warranty made by Seller hereunder not being true and correct or has resulted in, or could reasonably be expected to result in, the failure of any of the conditions set forth in Section 7.02 to be satisfied;

(ii)	any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the Contemplated Transactions; and

(iii)

any notice or other communication from any Governmental Authority in connection with the Contemplated Transactions.

Section 5.06 Resignations . Seller shall cause to be delivered to Buyer written resignations, effective as of the Closing Date, of the officers and directors of each Company.

Section 5.07 Non-Competition; Non-Solicitation; Buyer Standstill .

(a)

During the Restricted Period, Seller shall not, and shall not permit any of its Affiliates to, directly or indirectly, (i) engage in or assist others in engaging in the Restricted Business in the Territory; (ii) have an interest in any Person that engages directly or indirectly in the Restricted Business in the Territory in any capacity, including as a partner, shareholder,

member, employee, principal, agent, trustee or consultant; or (iii) intentionally interfere in any material respect with the business relationships (whether formed prior to or after the date of this Agreement) between a Company and customers or suppliers of such Company. Notwithstanding the foregoing, Seller or its Affiliates may own, directly or indirectly, solely as an investment, securities of any Person traded on any national securities exchange if Seller is not a controlling Person of, or a member of a group which controls, such Person and does not, directly or indirectly, own 5% or more of any class of securities of such Person. Notwithstanding the restrictions recited in items (i) and (ii) of this Section 5.07(a) , Buyer and Seller acknowledge that there is some existing overlap between the current Cable TV business-related products sold by the Companies and certain products sold and serviced by Seller’s Nave Communications and occasionally by its Triton Datacom subsidiaries. Since some of the technologies employed in the core networks of certain CATV- and telecom-network providers are common to both, Buyer and Seller agree that Seller may occasionally engage in conduct technically prohibited by item (i) of this Section 5.07(a) or have an interest in a Person occasionally engaged in such conduct, provided that (A) such conduct is not, in Buyer’s reasonable opinion, materially adverse to Buyer’s ownership and operation of the Restricted Business and (B) Seller shall, upon demand by Buyer, immediately cease and desist from continuing to engage in such conduct or shall divest itself from its interest in any Person which is engaging therein.

(b)

During the Restricted Period, Seller shall not, and shall not permit any of its Affiliates to, directly or indirectly, solicit any employee of a Company or encourage any such employee to leave such employment, except pursuant to a general solicitation which is not directed specifically to any such employees; provided, that nothing in this Section 5.07(b) shall prevent Seller or any of its Affiliates from hiring (i) any employee whose employment has been terminated by a Company or Buyer or (ii) after one hundred eighty (180) days from the date of termination of employment, any employee whose employment has been terminated by the employee.

(c)

During the Restricted Period, neither Buyer nor any of its Affiliates will, individually or collectively, directly or indirectly (including, without limitation, agreeing or advising, assisting or encouraging, or providing information or financing to others to) unless specifically requested in writing in advance by Seller:

(i)

Acquire, or agree, offer, seek or propose to acquire (or request permission to do so), from any Person, directly or indirectly, by purchase or merger, through the acquisition of control of another Person, by joining a partnership, limited partnership or other or otherwise, beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) any equity securities of Seller, or direct or indirect rights (including convertible securities) or options or warrants to acquire such beneficial ownership (or otherwise act in concert with respect to any such securities, rights or options with any Person that so acquires, offers to acquire or agrees to acquire);

(ii)

make, or in any way participate in, directly or indirectly, any solicitation of proxies to vote (as such terms are used in the Regulation 14A promulgated under the Exchange Act), become a participant in any election contest (as such terms are defined in Rule 14a-11 promulgated under the Exchange Act) or initiate, propose or otherwise solicit shareholders of Seller for the approval of any shareholder proposals (or

request permission to do so), in each case with respect to Seller; provided, however, that the foregoing shall not apply to any person who is a member of the Board of Directors of Seller acting in his capacity as a director of Seller with respect to matters approved by a majority of Seller’s Board;

(iii)

form, join, in any way participate in, or encourage the formation of, a group (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting securities of Seller;

(iv)	deposit any securities of Seller into a voting trust, or subject any securities of Seller to any agreement or arrangement with respect to the voting of such securities, or other agreement or arrangement having similar effect;

(v)	alone or in concert with others, seek, propose, encourage or support any effort, to influence or control the management, Board of Directors, business, policies, affairs or actions of Seller;

(vi)	sell or transfer any voting securities of Seller to any Person except for sales or transfers receiving the prior approval of the Board of Directors;

(vii)

request Seller (or any directors, officers, employees or agents of Seller), directly or indirectly, to amend, waive or modify any provision of this Section 5.07(c) ; or

(viii)

enter into any discussions, negotiations, arrangements or understandings with any party other than Seller or its advisors, or make any public announcement, with respect to any matters set forth in Section 5.07(c)(i) – (vii).

If, at any time during the Restricted Period, Buyer or Buyer’s Affiliate is approached by any Person concerning Buyer or its Affiliate’s participation in a transaction involving Seller’s assets or businesses or securities issued by Seller or concerning any of the activities prohibited to Buyer or its Affiliate under this Section 5.07(c) , Buyer will immediately inform Seller in writing of the nature of such contact and the parties thereto.

(d)

Each of Seller and Buyer acknowledges that a breach or threatened breach of this Section 5.07 would give rise to irreparable harm to the other, for which monetary damages would not be an adequate remedy, and each hereby agrees that in the event of a breach or a threatened breach by it of any such obligations, the other shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).

(e) Each of Seller and Buyer acknowledges that the restrictions contained in this Section 5.07 are reasonable and necessary to protect the other’s legitimate interests and constitute a material inducement for each to enter into this Agreement and consummate the Contemplated Transactions. In the event that any covenant contained in this Section 5.07 should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such

jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable Law. The covenants contained in this Section 5.07 and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

Section 5.08 Governmental Approvals and Consents .

(a)

Each party hereto shall, as promptly as possible, (i) make, or cause or be made, all filings and submissions required under any Law applicable to such party or any of its Affiliates; and (ii) use reasonable best efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement and the other Transaction Documents. Each party shall cooperate fully with the other party and its Affiliates in promptly seeking to obtain all such consents, authorizations, orders and approvals. Neither Seller nor Buyer shall willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any required consents, authorizations, orders and approvals. Buyer shall reasonably cooperate with Seller in connection with the timely filing with the SEC of a Current Report on Form 8-K, reporting the signing of this Agreement and the completion of the Contemplated Transactions.

(b)	Seller shall use reasonable best efforts to give all notices to, and obtain all consents from, all third parties.

(c)

Without limiting the generality of the parties' undertakings pursuant to subsections (a) and (b) above, each of the parties hereto shall use all reasonable best efforts to respond to any inquiries by any Governmental Authority regarding antitrust or other matters with respect to the Contemplated Transactions or any Transaction Document.

(d)

All analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals made by or on behalf of either party before any Governmental Authority or the staff or regulators of any Governmental Authority, in connection with the Contemplated Transactions (but, for the avoidance of doubt, not including any interactions between Seller or a Company with Governmental Authorities in the ordinary course of business, any disclosure which is not permitted by Law or any disclosure containing confidential information the disclosure of which is prohibited by the provisions of any agreement to which any of the Companies is bound) shall be disclosed to the other party hereunder in advance of any filing, submission or attendance, it being the intent that the parties will consult and cooperate with one another, and consider in good faith the views of one another, in connection with any such analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals. Each party shall give notice to the other party with respect to any meeting, discussion, appearance or contact with any Governmental Authority or the staff or regulators of any Governmental Authority, with such notice being sufficient to provide the other party with the opportunity to attend and participate in such meeting, discussion, appearance or contact.

Section 5.09 Books and Records .

(a)	In order to facilitate the resolution of any claims made against or incurred by Seller prior to the Closing, or for any other reasonable purpose, for a period of three (3) years after the Closing, Buyer shall:

(i)	retain the books and records (including personnel files) of the Companies relating to periods prior to the Closing in a manner reasonably consistent with the prior practices of the Companies; and

(ii)	upon reasonable notice, afford the representatives of Seller reasonable access (including the right to make, at Seller's expense, photocopies), during normal business hours, to such books and records;

provided, however , that any books and records related to Tax matters shall be retained pursuant to the periods set forth in Article VI .

(b)	In order to facilitate the resolution of any claims made by or against or incurred by Buyer or a Company after the Closing, or for any other reasonable purpose, for a period of three (3) years following the Closing, Seller shall:

(i)	retain the books and records (including personnel files) of Seller which relate to the Companies and their operations for periods prior to the Closing; and

(ii)	upon reasonable notice, afford the representatives of Buyer or a Company reasonable access (including the right to make, at Buyer's expense, photocopies), during normal business hours, to such books and records;

provided, however , that any books and records related to Tax matters shall be retained pursuant to the periods set forth in Article VI .

(c)	Neither Buyer nor Seller shall be obligated to provide the other party with access to any books or records (including personnel files) pursuant to this Section 5.09 where such access would violate any Law.

Section 5.10 Closing Conditions . From the date hereof until the Closing, each party hereto shall, and Seller shall cause each Company to, use commercially reasonable efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article VII hereof.

Section 5.11 Public Announcements . Unless otherwise required by applicable Law or stock exchange requirements (based upon the reasonable advice of counsel), no party to this Agreement shall make any public announcements in respect of this Agreement or the Contemplated Transactions or otherwise communicate with any news media without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed), and the parties shall cooperate as to the timing and contents of any such announcement.

Section 5.12 Employees; Benefit Plans . At Closing, Buyer shall have established benefit plans providing employee benefits substantially similar to those provided by the existing Benefit Plans to be maintained for the benefit of employees of the Companies.

Section 5.13 Seller Due Diligence . Prior to Closing, Seller shall perform due diligence on Buyer’s and Guarantor’s financial position and Buyer’s and Guarantor’s ability to make payments under the Note as they come due. Buyer shall assist Seller in Seller’s performance of such due diligence and shall allow Seller to inspect Buyer’s books and records which relate to Buyer’s and Guarantor’s financial position.

Section 5.14 Further Assurances . Each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the Contemplated Transactions.

ARTICLE VI

TAX MATTERS

Section 6.01 Tax Covenants .

(a)

Without the prior written consent of Buyer (which shall not be unreasonably withheld), Seller (and, prior to the Closing, the Companies, their Affiliates and their respective representatives) shall not, to the extent it may affect, or relate to, the Companies, make, change or rescind any Tax election, amend any Tax Return or take any position on any Tax Return, take any action, omit to take any action or enter into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer or a Company in respect of any Post-Closing Tax Period.

(b)

All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other Transaction Documents (including any Real Property transfer Tax and any other similar Tax) shall be borne equally by Buyer and Seller, and paid by Seller when due. Seller shall, at its own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Buyer shall cooperate with respect thereto as necessary).

(c)

Seller shall prepare, or cause to be prepared, all Tax Returns required to be filed by a Company after the Closing Date with respect to a Pre-Closing Tax Period. Any such Tax Return shall be prepared in a manner consistent with past practice (unless otherwise required by Law) and without a change of any election or any accounting method and shall be submitted by Seller to Buyer (together with schedules, statements and, to the extent requested by the Seller, supporting documentation) at least forty-five (45) days prior to the due date (including extensions) of such Tax Return. If Buyer objects to any item on any such Tax Return, it shall, within ten (10) days after delivery of such Tax Return, notify Seller in writing that it so objects, specifying with particularity any such item and stating the specific factual or legal basis for any such objection. If a notice of objection shall be duly delivered, Buyer and Seller shall negotiate in good faith and use their reasonable best efforts to resolve such items. If Buyer and Seller are unable to reach such agreement within ten (10) days after receipt by Seller of such notice, the disputed items shall be resolved by the Accountants and any determination by the Accountants shall be final. The Accountants shall resolve any disputed

items within thirty (30) days of having the item referred to it pursuant to such procedures as it may require. If the Accountants are unable to resolve any disputed items before the due date for such Tax Return, the Tax Return shall be filed as prepared by Seller and then amended to reflect the Accountant’s resolution. The costs, fees and expenses of the Accountant’s shall be borne equally by Buyer and Seller. The preparation and filing of any Tax Return of the Company that does not relate to a Pre-Closing Tax Period shall be exclusively within the control of Buyer.

(d)

Each Tulsat and Tulsat-Atlanta (collectively, the “ SMLLC’s” ) has been treated since formation, and will continue to be treated through the Closing, as a wholly-owned single member limited liability company “disregarded entity” for income tax purposes pursuant to Treasury Regulation Section 301.7701-3(b)(1)(ii). No other election is pending to change the income Tax treatment of either SMLLC, and no Governmental Authority has challenged either SMLLC’s status as a disregarded entity. Prior to Closing, Seller shall not, or permit either SMLLC to, take or allow any action that would result in the change of their status as a “disregarded entity” within the meaning of Code Section 301.7701-3.

(e)

Seller shall be responsible for and reimburse Buyer with fifteen (15) days with respect to (i) any and all Taxes imposed on any of the Companies or for which any such Company may otherwise be liable for any date prior to and including the Closing Date, by a closing of the books as of the Closing Date, including that may flow from consummation of the Contemplated Transactions including, without limitation, recognized deferred intercompany gains under Treasury Regulations Section 1.1502-13, recognized excess loss accounts under Treasury Regulations Section 1.1502-19 and (ii) any and all Taxes assessed, by audit or otherwise, for any period prior to the Closing Date. Tax attributes shall be allocated between the Companies and Seller and its Affiliates to the particular entity that originated such item. The parties shall cooperate in good faith connection with any carryback claims made after the Closing Date.

(f)

Seller and its Affiliates, other than the Companies, shall jointly and severally indemnify the Buyer and the Companies and hold them harmless from and against, any Losses attributable to (i) any and all Taxes imposed on any of the Companies or for which any such Company may otherwise be liable for any date prior to and including the Closing Date; (ii) all Taxes of any member of an affiliated, consolidated, combined or unitary group of which any Company (or any predecessor) is or was a member on or prior to the Closing Date, including pursuant to Treasury Regulation Section 1.1502-6 or any analogous or similar state, local or non-U.S. law or regulation; (iii) any and all Taxes of any person (other than the Companies) imposed on the Companies as a transferee or successor, by contract or pursuant to any law, rule, or regulation, which Taxes relate to an event or transaction occurring before the Closing; and (iv) any Taxes resulting from a breach of representations and warranties set forth in Section 3.08 .

Section 6.02 Termination of Existing Tax Sharing Agreements . Any and all existing Tax sharing agreements (whether written or not) binding upon a Company shall be terminated as of the Closing Date. After such date neither the Companies, Seller nor any of Seller’s Affiliates and their respective representatives shall have any further rights or liabilities thereunder.

Section 6.03 Straddle Period . In the case of Taxes that are payable with respect to a taxable period that begins before and ends after the Closing Date (each such period, a “Straddle Period” ), the portion of any such Taxes that are treated as Pre-Closing Taxes for purposes of this Agreement shall be:

(a)	in the case of Taxes based upon, or related to, income or receipts, deemed equal to the amount which would be payable if the taxable year ended with the Closing Date; and

(b)	in the case of other Taxes, deemed to be the amount of such Taxes for the entire period multiplied by a fraction the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire period.

Section 6.04 Responsibility for Tax Audits and Contests . The Seller shall control any audit or contest with respect to income Taxes for a p re-Closing Date tax period or, with respect to all other Taxes , for a period ending on or before the Closing Date and the Buyer shall control any other audit or contest; provided, however, that the party with the greater potential Tax liability shall control any audit or contest with respect to a year during which a Straddle Period occurs; provided further, that the party so in control of an audit or contest with respect to a Straddle Period shall allow the other party to participate at such other party’s cost and expense. The party in control of an audit or controversy shall keep the other party informed of the status of the audit or controversy (including providing copies of correspondence and pleadings). Neither party shall settle any audit or contest in a way that would adversely affect the other party without the other party’s written consent, which the other party shall not unreasonably withhold. The parties shall each provide the other with all information reasonably necessary to conduct an audit or contest with respect to Taxes.

Section 6.05 Treatment of Indemnification Payments . Any payments made for indemnification pursuant to this Article VI shall be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless otherwise required by Law.

Section 6.06 Survival . Notwithstanding anything in this Agreement to the contrary, the representations and warranties set forth in Section 3.08 and the provisions of this Article VI shall survive for the applicable statutes of limitations, giving effect to any waiver, plus sixty (60) days.

Section 6.07 Conflict . In the event of a conflict or overlap between the provisions of this Article VI and any other provision of this Agreement, this Article VI shall control.

Section 6.08 Cooperation and Exchange of Information . Seller and Buyer shall provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return pursuant to this Article VI or in connection with any audit or other proceeding in respect of Taxes of a Company. Such cooperation and information shall include providing copies of relevant Tax Returns or portions thereof, together with accompanying schedules, related work papers and documents relating to rulings or other determinations by tax authorities. Seller and Buyer shall retain all Tax Returns, schedules and work papers, records and other documents in their possession relating to Tax matters of the Companies for any taxable period beginning before the Closing Date until the expiration of the statute of limitations of the taxable periods to which such Tax Returns and other documents relate, without regard to extensions except to the extent notified by the other party in writing of such extensions for the respective Tax periods. Prior to transferring, destroying or discarding any Tax Returns, schedules and work papers, records and other documents in its possession relating to Tax matters of the

Companies for any taxable period beginning before the Closing Date, Seller or Buyer (as the case may be) shall provide the other party with reasonable written notice and offer the other party the opportunity to take custody of such materials.

Section 6.09 Section 338(h)(10) Election .

(a) Election . The Companies and Seller shall join with Buyer in making a timely election under Section 338(h)(10) of the Code (and any corresponding election under state, local, and foreign Law) with respect to the purchase and sale of the Shares of the Companies hereunder (collectively, a “Section 338(h)(10) Election” )

(b) Allocation of Purchase Price . Seller and Buyer agree that the Purchase Price shall be allocated among the assets of the Company for all purposes (including Tax and financial accounting) as shown on the allocation schedule (the “Allocation Schedule.” ) The final Allocation Schedule shall be prepared by Seller and delivered to the Buyer within sixty (60) days following the Closing Date for its approval. If the Buyer does not notify the Seller in writing of an objection to the Allocation Schedule within thirty (30) days of its delivery to the Buyer, then the Allocation Schedule as prepared by the Seller shall be deemed approved by Buyer. If the Buyer notifies Seller in writing within thirty (30) days of the delivery to the Buyer of the Allocation Schedule that the Buyer objects to one or more items reflected in the Allocation Schedule as being unreasonable and states the reason for such objection, the Seller and Buyer shall negotiate in good faith to resolve such dispute; provided, however, that if the Seller and Buyer are unable to resolve any dispute with respect to the Allocation Schedule within thirty (30) days of the delivery to Seller of the written objections of the Buyer, such dispute shall be resolved by the Accountants. The fees and expenses of the Accountants shall be borne equally by Seller and Buyer. Buyer, the Companies and Sellers shall file all Tax Returns (including amended returns and claims for refund) and information reports in a manner consistent with the Allocation Schedule. Any adjustments to the Purchase Price shall be allocated in a manner consistent with the Allocation Schedule.

ARTICLE VII

CONDITIONS TO CLOSING

Section 7.01 Conditions to Obligations of All Parties . The obligations of each party to consummate the Contemplated Transactions shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:

(a)	No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the Contemplated Transactions illegal, otherwise restraining or prohibiting consummation of

such transactions or causing any of the Contemplated Transactions to be rescinded following completion thereof;

(b)

The parties shall have received all consents, authorizations, orders and approvals, if any, from the Governmental Authorities referred to in Section 3.05 or in Section 4.03 , in each case, in form and substance reasonably satisfactory to Buyer and Seller, and no such consent, authorization, order and approval shall have been revoked; and

(c)	Shareholder Approval shall have been obtained.

The condition in Section 7.01(c) above may not be waived or amended by Buyer or Seller.

Section 7.02 Conditions to Obligations of Buyer . The obligations of Buyer to consummate the Contemplated Transactions shall be subject to the fulfillment or Buyer's waiver, at or prior to the Closing, of each of the following conditions:

(a)

The representations and warranties of Seller shall be true and correct on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

(b)

Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date ; provided, that, with respect to agreements, covenants and conditions that are qualified by materiality, Seller shall have performed such agreements, covenants and conditions, as so qualified, in all respects.

(c)

No Action shall have been commenced or threatened against Buyer, Seller or any of the Companies, which would prevent the Closing. No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any of the Contemplated Transactions.

(d)	Buyer shall have obtained a binding and irrevocable commitment for financing the full amount of the Down Payment, which commitment shall not include or impose any terms or conditions which are unacceptable to Buyer.

(e)	No material adverse change in the Companies, their properties and assets, or prospects shall have occurred since the Effective Date.

(f)

Seller shall have provided Buyer with Certificates of Good Standing for each of the Companies, certified by the Secretary of State (or other appropriate government official) of the state in which such Company has been duly formed or organized, issued not more than ten (10) days prior to the Closing Date.

(g)

All mortgages, security interests, liens and other Encumbrances upon or against the properties and assets of the Companies and against the Shares, other than such mortgages, security interests, liens and Encumbrances as shall have been created by Buyer, shall have been released, and all material required approvals, consents and waivers to the Contemplated Transactions shall have been received.

(h)	Seller shall have made the Closing deliveries described in Section 2.03(b) and shall have delivered to Buyer the officer and director resignations contemplated and required by Section 5.06 .

(i)	Buyer shall have received a certificate, dated the Closing Date and signed by Seller’s President or other duly authorized officer of Seller, stating that each of the conditions set forth in Section 7.02(a) and Section 7.02(b) have been satisfied.

(j)

Buyer shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Seller certifying that (i) attached thereto are true and complete copies of all resolutions adopted by Seller’s Board of Directors, Shareholders, and Minority Shareholders authorizing Seller’s execution and delivery of this Agreement by Seller’s President or other duly authorized officer, Seller’s performance of this Agreement and the other Transaction Documents, and the consummation of the Contemplated Transactions; and (ii) that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the Contemplated Transactions.

(k)	Seller shall have delivered to Buyer a certificate pursuant to Treasury Regulations Section 1.1445-2(b) that Seller is not a foreign person within the meaning of Section 1445 of the Code.

(l)	Seller shall have delivered to Buyer such other documents or instruments as Buyer reasonably requests and are reasonably necessary to consummate the Contemplated Transactions.

Section 7.03 Conditions to Obligations of Seller . The obligations of Seller to consummate the Contemplated Transactions shall be subject to the fulfillment or waiver by Seller, at or prior to the Closing, of each of the following conditions:

(a)	The representations and warranties of Buyer shall be true and correct on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date.

(b)

Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date ; provided, that , with respect to agreements, covenants and conditions that are qualified by materiality, Buyer shall have performed such agreements, covenants and conditions, as so qualified, in all respects.

(c)	No Action shall have been commenced against Buyer, Seller or a Company, which would prevent the Closing. No injunction or restraining order shall have

been issued by any Governmental Authority, and be in effect, which restrains or prohibits any material transaction contemplated hereby.

(d)	Seller shall be satisfied that Buyer’s and Guarantor’s financial position is adequate to support Buyer’s obligations under this Agreement, including without limitation under the Promissory Note.

(e)	Buyer shall have made the Closing deliveries described in Section 2.03(a) .

(f)	Seller shall have received a certificate, dated the Closing Date and signed by Buyer’s President or other duly authorized officer of Buyer, stating that each of the conditions set forth in Section 7.03(a) and Section 7.03(b) have been satisfied.

(g)

Seller shall have received a certificate of Buyer’s Secretary certifying that attached thereto are true and complete copies of all resolutions adopted by Buyer’s sole Director or Board of Directors authorizing Buyer’s execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the Contemplated Transactions, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the Contemplated Transactions.

(h)	Buyer shall have delivered to Seller such other documents or instruments as Seller reasonably requests and are reasonably necessary to consummate the Contemplated Transactions.

(i)	Seller shall have received a written “fairness opinion” regarding the fairness of the Purchase Price to the shareholders of Seller on terms reasonably satisfactory to Seller.

ARTICLE VIII

INDEMNIFICATION

Section 8.01 Survival . Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is three (3) years from the Closing Date ; provided that those representations, warranties and made by Seller (a) with respect to Tax Matters , Pension and Welfare Plans ( Sections 3.12 and 3.15 ) and (b) in Article VI , Tax Matters , shall survive the Closing for such periods of time that the government agencies having jurisdiction over the subject matter of those representations, warranties and covenants may be empowered to assess a liability or deficiency with respect to any of the matters covered thereby . All covenants and agreements of the parties contained herein (other than any covenants or agreements contained in Article VI , which covenants and agreements are subject to Article VI ) shall survive the Closing indefinitely or for the period explicitly specified therein. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall not thereafter

be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved.

Section 8.02 Indemnification by Seller . Subject to the other terms and conditions of this Article VIII , Seller shall indemnify, hold harmless, and defend each of Buyer and its Affiliates (including the Companies) and their respective representatives (collectively, the “Buyer Indemnitees” ) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees in any way based upon or arising out of, with respect to or by reason of:

(a)

any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement or in any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date); or

(b)

any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement (other than any breach or violation of, or failure to fully perform, any covenant, agreement, undertaking or obligation in Article VI , it being understood that the sole remedy for any such breach, violation or failure shall be pursuant to Article VI ); or

(c) the ownership, management or operation of the Companies and their respective businesses during all periods prior to, and including, the Closing Date except (i) to the extent directly related to the day-to-day operation of the Restricted Business by any of the Companies under the direction of the Guarantor, including without limitation for warranty claims arising in the ordinary course of the Companies’ respective businesses; (ii) to the extent the Loss is a liability or obligation provided for in the books and records of the Company or is a Current Liability; or (iii) to the extent the Loss is Known by the Buyer at or before the time of Closing.

Section 8.03 Indemnification by Buyer . Subject to the other terms and conditions of this Article VIII , Buyer shall indemnify, hold harmless, and defend Seller and its Affiliates and their respective representatives (collectively, the “Seller Indemnitees” ) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees in any way based upon or arising out of, with respect to or by reason of:

(a)

any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or in any certificate or instrument delivered by or on behalf of Buyer pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date);

(b)	any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement (other than Article VI , it being understood that the sole remedy for any such breach thereof shall be pursuant to Article VI ); or

(c)

the ownership, management or operation of the Companies and their respective businesses during all periods subsequent to the Closing Date, including without limitation liabilities and obligations to employees and former employees of the Companies arising under the Benefit Plans for benefits payable after the Closing Date, whether arising under COBRA or otherwise.

Section 8.04 Indemnification Procedures .

(a)

A party making a claim for indemnification shall give the other party (“ Putative Indemnitor ”) written notice thereof describing the claim and the nature and amount of the alleged Loss, to the extent that the nature and amount thereof are then determinable (a “ Claim Notice ”) promptly after the party seeking indemnification (“ Putative Indemnitee ”) receives any written notice of any action, lawsuit, proceeding, investigation or other claim (a “ Proceeding ”) by a third-party against or involving the Putative Indemnitee or otherwise discovers the liability, obligation or facts giving rise to such claim for indemnification; provided, however, that the failure to notify or delay in notifying the Putative Indemnitor shall not relieve the latter of its indemnification obligations, if any, hereunder, except to the extent that the defeat of such claim is materially prejudiced as a result of such failure.

(b)

With respect to the defense of any Proceeding against or involving a Putative Indemnitee in which the claimant seeks only the recovery of a sum of money for which indemnification is provided, at its option the party undertaking indemnification (“ Indemnitor ”) may select and appoint legal counsel to undertake such defense provided, within thirty (30) days following the receipt of notice of Proceeding the Indemnitor notifies the Party being indemnified (the “ Indemnitee ”) in writing that the former will assume the defense of such claim.

(c)

The Indemnitee shall be entitled to participate in the defense of the claim and to employ separate counsel of its choice for such purpose, at its own expense; provided, however, that notwithstanding the foregoing, the Indemnitor shall bear the fees and expenses of such separate counsel incurred prior to the date upon which the Indemnitor effectively assumes control of such defense. If the Indemnitor fails to timely notify the Indemnitee that the Indemnitor elects to defend the Indemnitee pursuant to the preceding paragraph, or if the Indemnitor elects to defend the Indemnitee but fails to prosecute or settle the claim in a reasonable manner or if the Indemnitee reasonably objects to such election on the grounds that counsel for such Indemnitor cannot represent both the Indemnitee and the Indemnitor because such representation would be reasonably likely to result in a conflict of interest, then, the Indemnitee shall have the right to defend, at the sole cost and expense of the Indemnitor, the claim by all appropriate proceedings, which proceedings shall be promptly and reasonably prosecuted by the Indemnitee to a final conclusion, or settled. In such a situation, the Indemnitee shall have full control of such defense and proceedings and the Indemnitor may participate in, but not control, any defense or settlement controlled by the Indemnitee pursuant

to paragraph, and the Indemnitor shall bear its own costs and expenses with respect to such participation.

(d)

The Indemnitor must obtain the prior written consent of the Indemnitee (which shall not be unreasonably withheld, conditioned or delayed) prior to entering into any settlement of any claim or Proceeding or ceasing to defend any claim or Proceeding unless the proposed settlement involves only the payment of money damages and does not impose an injunctive or other equitable relief on the Indemnitee.

(e)

Any payment pursuant to a claim for which indemnification is due pursuant to this Agreement shall be made not later than thirty (30) days after receipt by a duly submitted Claim Notice, unless the claim is subject to defense as hereinabove contemplated, in which case payment shall be made not later than thirty (30) days after liability for and the amount of the claim is finally determined.

Section 8.05 Exclusive Remedies .

(a) Subject to Section 5.07 and Section 10.11 and except as provided therein, each of the parties acknowledges and agrees that its sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud or criminal activity on the part of the other party in connection with the Contemplated Transactions) for matters described in Sections 8.02 or 8.03 or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in Article VI and this Article VIII .

(b) In furtherance of the foregoing paragraph, each party hereby waives, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement it may have against the other parties hereto and their Affiliates and each of their respective representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in Article VI and this Article VIII .

(c) Notwithstanding anything to the contrary contained elsewhere in this Agreement, if Seller is required to make a payment to Buyer pursuant to, or to satisfy, a claim or other Loss for which indemnification is due Buyer hereunder, Buyer shall have the right, in lieu of demanding or seeking to collect such payment, to set off the amount thereof against payments due pursuant to the Promissory Note as the same shall become due.

(d) Nothing in this Section 8.05 shall limit any Person's right to seek and obtain any equitable relief to which any Person shall be entitled or to seek any remedy on account of any party's fraudulent or criminal misconduct.

ARTICLE IX

TERMINATION

Section 9.01 Termination . This Agreement may be terminated at any time prior to the Closing:

(a)	by the mutual written consent of Seller and Buyer;

(b)	by Buyer by written notice to the Seller if:

(i) Buyer is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VII and such breach, inaccuracy or failure has not been cured by Seller within ten (10) days of the Seller’s receipt of written notice of such breach from Buyer;

(ii) any of the conditions set forth in Section 7.01 or Section 7.02 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by June 30, 2019, unless such failure shall be due to the failure of Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing; or

(iii) any Action shall have been commenced against Buyer, Seller or a Company, challenging the Contemplated Transactions.

(c)	by the Seller by written notice to Buyer if:

(i) Seller is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VII and such breach, inaccuracy or failure has not been cured by Buyer within ten (10) days of Buyer's receipt of written notice of such breach from Seller;

(ii) any of the conditions set forth in Section 7.01 or Section 7.03 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by June 30, 2019, unless such failure shall be due to the failure of Seller to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by them prior to the Closing;

(iii) any Action shall have been commenced against Buyer, Seller or a Company, challenging the Contemplated Transactions;

(iv) after Seller’s performance of due diligence under Section 5.13 , Seller is not satisfied that Buyer’s or Guarantor’s financial position is adequate to support Buyer’s obligations under this Agreement, including without limitation under the Promissory Note;

(v) at any time prior to Shareholder Approval (and subject to Section 9.02 ), in order to enter into a definitive agreement with a third party providing for a Superior Proposal, if in connection with such Superior Proposal, it has complied in all respects (other than immaterial non-compliance) with all the requirements of Section 5.04 ; or

(d) by Buyer or Seller in the event that (i) there shall be any Law that makes consummation of the Contemplated Transactions illegal or otherwise prohibited, (ii) any Governmental Authority shall have issued a Governmental Order restraining or enjoining the Contemplated Transactions, and such Governmental Order shall have become final and non-appealable, or (iii) Buyer and Seller are unable to agree to the form of the Transition Services Agreement and of the Collateral Agreements within forty-five (45) days of the Effective Date.

Section 9.02 Effect of Termination . In the event of the termination of this Agreement in accordance with this Article, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except that nothing herein shall relieve any party hereto from liability for any pre-termination breach of any provision hereof.

ARTICLE X

MISCELLANEOUS

Section 10.01 Expenses . Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the Contemplated Transactions shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

Section 10.02 Notices . All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third (3 ^rd ) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 10.02) :

If to Seller:	ADDvantage Technologies Group, Inc. 1221 E. Houston Broken Arrow, OK 74012
	Facsimile:	918-251-0792
	E-mail:	sfrancis@addvantagetech.com
with a copy to:	HALL ESTILL 320 South Boston Avenue

	Suite 200 Tulsa, OK 74103-3706
	Facsimile:	918-594-0505
	E-mail:	dgustafson@hallestill.com
	Attention:	Del Gustafson, Esq.
If to Buyer:	Leveling 8 Inc 21553 E. Apache Street Catoosa, Oklahoma 74015
	E-mail:	dave@tulsat.com
with a copy to:	BARBER & BARTZ 525 S. Main Street, Suite 800 Tulsa, OK 74103
	Facsimile:	981-599-7756
	E-mail:	rbearer@barberbartz.com
	Attention:	Robert L. Bearer, Esq.

Section 10.03 Interpretation . For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles, Sections and Exhibits mean the Articles and Sections of, and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

Section 10.04 Headings . The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

Section 10.05 Severability . If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Except as provided in Section 5.07(e) , upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of

the parties as closely as possible in a mutually acceptable manner in order that the Contemplated Transactions be consummated as originally contemplated to the greatest extent possible.

Section 10.06 Entire Agreement . This Agreement and the other Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents and the Exhibits, the statements in the body of this Agreement will control.

Section 10.07 Successors and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed.

Section 10.08 No Third-Party Beneficiaries . Except as provided in Section 6.03 and Article VIII , this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 10.09 Amendment and Modification; Waiver . Except for Section 7.01(c) , which the parties may not amend or modify, this Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 10.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial .

(a)	This Agreement shall be governed by and construed in accordance with the internal laws of the State of Oklahoma without giving effect to any choice or conflict of law provision or rule (whether of the State of Oklahoma or any other jurisdiction).

(b)

ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT , THE OTHER TRANSACTION DOCUMENTS OR THE CONTEMPLATED TRANSACTIONS MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF OKLAHOMA IN EACH CASE LOCATED IN THE CITY AND COUNTY OF TULSA, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF

(b)

PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY'S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c)

EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT , THE OTHER TRANSACTION DOCUMENTS OR THE CONTEMPLATED TRANSACTIONS. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10(c) .

Section 10.11 Equitable Remedies . Each party hereto acknowledges that a breach or threatened breach by such party of any of its obligations under this Agreement (including without limitation Sections 5.01 , 5.04 , and 5.07 ) would give rise to irreparable harm to the other party for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the non-breaching party shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).

Section 10.12 Attorneys’ Fees . In the event that any party institutes any legal suit, action or proceeding against the other party to enforce the covenants contained in this Agreement (or obtain any other remedy in respect of any breach of this Agreement), the prevailing party in the suit, action or proceeding shall be entitled to receive in addition to all other damages to which it may be entitled, the costs incurred by such party in conducting the suit, action or proceeding, including reasonable attorneys' fees and expenses and court costs.

Section 10.13 Cumulative Remedies . The rights and remedies under this Agreement are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.

Section 10.14 Time of the Essence . Time shall be of the essence in this Agreement.

Section 10.15 Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

	“BUYER” LEVELING 8 INC
	By: /s/David E. Chymiak Name: David E. Chymiak Title: President

	“SELLER”
	ADDVANTAGE TECHNOLOGIES GROUP, INC. By: /s/Joseph E. Hart Name: Joseph E. Hart Title: CEO

The undersigned hereby agrees to guarantee payment and performance, as and when due, of Buyer’s obligations under this Agreement.

/s/ David E. Chymiak

David E. Chymiak, an individual

EXHIBIT A

Form of Guaranty and Covenant Agreement

GUARANTY AND COVENANT AGREEMENT

THIS GUARANTY AND COVENANT AGREEMENT (the “Guaranty Agreement”) is made effective as of _____________, by David E. Chymiak, an individual residing at _______________ and The David E. Chymiak Trust (collectively, the “Guarantor”), in favor of ADDvantage Technologies Group, Inc., an Oklahoma corporation (the “Creditor”).

W I T N E S S E T H:

WHEREAS, Guarantor is the sole shareholder of Leveling 8 Inc, an Oklahoma corporation (“Debtor”) which has entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) of even date herewith pursuant to which Debtor will purchase from Creditor the stock and membership interests of certain companies (the “Companies”) owned by Creditor engaged in the cable equipment business; and

WHEREAS, in connection with the closing of the transaction contemplated by the Stock Purchase Agreement, the Debtor will, as partial consideration under the Stock Purchase Agreement, execute and deliver to Creditor its Promissory Note in the original principal amount of $6,375,000 (the “Note”) and certain other agreements related to Buyer’s purchase of the Companies (as defined in the Stock Purchase Agreement, the “Transaction Documents”); and

WHEREAS, Guarantor as the sole shareholder of the Debtor is willing to enter into certain covenants with Creditor; and

WHEREAS, in agreeing to enter into the Stock Purchase Agreement and to accept the Note and the Transaction Documents, the Creditor is relying, among other things, on the creditworthiness of the Guarantor, the sole shareholder of Debtor, and the covenants made by Guarantor in this Guaranty Agreement; and

WHEREAS, this Guaranty Agreement is executed and delivered to the Creditor by the Guarantor to induce the Creditor to enter into the Stock Purchase Agreement, to extend credit under the Note and to enter into the Transaction Documents;

NOW, THEREFORE, in consideration of the extension of credit by the Creditor to the Debtor as evidenced by the Note, and the benefits to be received by the Guarantor therefrom, it is agreed as follows:

1. The Guarantor hereby guarantees to the Creditor the absolute, complete and punctual payment and performance by Debtor when due of all amounts and obligations owing under (i) the Stock Purchase Agreement, (ii) the Note, whether principal, interest, default interest or otherwise, and whether due on the stated maturity date of the Note, pursuant to acceleration or otherwise, (iii) each of the Transaction Documents, (iv) any other past, present or future indebtedness of Debtor to Creditor arising under any contract or otherwise and (v) all renewals, consolidations, modifications,

amendments, increases and extensions of the foregoing, together with all expenses of collection thereof including reasonable attorneys' fees and expenses (the “Indebtedness”). This Guaranty Agreement is an absolute, unconditional and continuing guaranty of payment and performance of the Indebtedness. The obligations of the Guarantor hereunder will not terminate until the entire amount of the Indebtedness has been paid to the Creditor in full in current funds. All moneys available to the Creditor for application in payment or reduction of the Indebtedness may be applied by the Creditor in such manner and in such amounts and at such time or times as the Creditor may see fit to the payment thereof as the Creditor may elect.

3. The Guarantor hereby consents to the following events and agrees that the Guarantor’s liability hereunder will not be released, reduced, impaired or affected by the occurrence of any one or more of the following events: (a) the Creditor’s obtaining collateral from Debtor or any other person to secure payment of the Indebtedness; (b) the assumption of liability by any other person (whether as guarantor or otherwise) for payment of all or any portion of the Indebtedness; (c) the release, surrender, exchange, impairment, loss, termination, waiver or other discharge of any collateral securing payment of the Indebtedness or of any assumption of liability or guarantee of payment of the Indebtedness; (d) the subordination, relinquishment, discharge or impairment of the Creditor’s rights relating to the Indebtedness or of any of the documents evidencing or securing the Indebtedness or any collateral securing the Indebtedness; (e) the full or partial release from liability of Debtor, any other guarantor, or any other person now or hereafter liable for payment of all or any portion of the Indebtedness; (f) the insolvency, bankruptcy, reorganization, disability, discharge, waiver or other exoneration of Debtor, any other guarantor, or any other person now or hereafter primarily or contingently liable for payment of the Indebtedness; (g) the renewal, consolidation, extension, modification, rearrangement, amendment or increase from time to time of the Indebtedness; (h) the failure, delay, waiver or refusal by the Creditor to exercise any right or remedy held by the Creditor under the Note, or any other document evidencing or securing the Indebtedness or otherwise executed in connection therewith or any renewals or modifications thereof; (i) the sale, encumbrance, transfer or other modification of the ownership of Debtor, or of substantially all of the assets of Debtor, or the change in the financial condition or management of Debtor; (j) the invalidity, unenforceability or insufficiency of all or any portion of this Guaranty Agreement; or (k) the failure of the Guarantor to receive notice of any one or more of the foregoing actions or events.

4. The Creditor may, at the Creditor’s option, proceed to enforce this Guaranty Agreement directly against the Guarantor immediately after the occurrence of a default on the Indebtedness without first proceeding against Debtor or any other guarantor or any other person liable for payment of the Indebtedness, and without first proceeding against or exhausting any collateral now or hereafter held by the Creditor to secure payment of the Indebtedness.

5. The Guarantor hereby waives diligence, presentment, protest, notice of protest, notice of dishonor, demand for payment, notice of nonpayment of the Indebtedness or any of the documents evidencing or securing the Indebtedness, any notice of acceptance of this Guaranty Agreement and all other notices of any nature in connection with the exercise of the Creditor’s rights under this Guaranty Agreement, the Note or the Indebtedness. Performance by the Guarantor hereunder will not entitle the Guarantor to any payment from Debtor under any claim for contribution, indemnification, subrogation or otherwise, until such time as all amounts owing by Debtor to the Creditor, have been paid in full.

6. The Guarantor hereby agrees that in any action brought to enforce this Guaranty Agreement, the Guarantor will pay to the Creditor all reasonable attorneys’ fees, court costs and other expenses incurred by the Creditor, in the event the Creditor prevails in such action.

7. The Guarantor hereby waives and relinquishes all of the Guarantor’s rights provided by 12 Okla.Stat. § 686, 15 Okla.Stat. §§ 334, 338, 341 and 344, and all other common law, constitutional, and statutory rights, remedies, defenses and set-off credits related to Guarantor’s ability to obtain a credit for the fair market value of any real or personal property that may be mortgaged, pledged or in which a security interest is granted to the Creditor to secure the Indebtedness that may be accorded to the Guarantor under Oklahoma law.

8. Nothing herein contained will limit the Creditor in exercising any rights held under the Note or under any other documents evidencing or securing the Indebtedness. In the event of any default under the Note, or any other documents evidencing or securing all or any portion of the Indebtedness, the Creditor will be entitled to selectively and successively enforce any one or more of the rights held by the Creditor under this Guaranty Agreement, the Note or any other documents evidencing or securing the Indebtedness, and such action will not be deemed a waiver of any other right held by the Creditor. All of the remedies of the Creditor under this Guaranty Agreement, and any other documents evidencing or securing the Indebtedness are cumulative and not alternative.

9. The Guarantor hereby represents that nothing exists to impair the effectiveness of the liability of the Guarantor to the Creditor hereunder, or the immediate taking effect of this Guaranty Agreement as the agreement among the Guarantor and the Creditor.

10. Guarantor represents and warrants to Creditor that his statement of assets and liabilities as of December 1, 2018, delivered to Creditor was a materially accurate statement of his assets and liabilities as of December 26, 2018, and that it continues to be materially accurate as of the date of this Guaranty Agreement. He covenants to Creditor that he will promptly notify Creditor in writing of any material adverse changes in his financial condition occurring at any time prior to payment in full of the Note and that he will at any time or times requested by Creditor deliver to Creditor a new statement of his assets and liabilities which shall be materially accurate.

11. Guarantor covenants and agrees with Creditor that, until the Indebtedness has been paid in full, Guarantor will:

a. Furnish to Creditor in writing, after the closing of the transaction contemplated by the Stock Purchase Agreement, no later than 120 days after the close of each calendar year, a personal balance sheet of Guarantor.

b. Cause the personal balance sheet delivered to Creditor under Section 11.a. above to accurately reflect the financial condition of the Guarantor in all material respects as of its date, and to be so certified by the Guarantor.

c. In the event the Guarantor, the Debtor or the Companies deliver to any other lender any financial or operating information regarding the Guarantor, Debtor or the Companies, cause such financial or operating information (including without limitation an audit report if the same is

delivered to a lender) to be delivered to Creditor at the same time that it is delivered to any other lender.

d. At any reasonable time and from time to time and following not less than 24 hours advance notice, permit the Creditor or any agent or representative thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties, of the Debtor and the Companies, and to discuss the affairs, finances, and accounts of Debtor and the Companies with any of its officers and directors and independent accountants (if retained by Debtor or the Companies).

12. Guarantor covenants and agrees with Creditor that, until the Indebtedness has been paid or satisfied in full, Guarantor will not, and will not permit the Debtor or the Companies to, without Creditor’s prior written consent, which consent will not be unreasonably withheld, conditioned or delayed:

a. Permit the aggregate secured indebtedness which has priority over the lien or security interest of the Creditor in any property in which the Creditor has a subordinated lien or security interest to in any event or at any time exceed $5,420,000;

b. Take any action which has the effect of causing Guarantor to own less than 60% of the voting equity interest in the Debtor or of causing the Debtor to own less than 100% of each of the Companies;

c. Dividend or distribute funds or other property to any equity holder in Debtor, other than the payment of reasonable compensation to Guarantor; or

d. Liquidate (partially or entirely), sell, pledge, mortgage, grant a security interest in or otherwise transfer or convey any of Guarantor’s investments in real estate or equities.

13. This Guaranty Agreement has been negotiated, executed and delivered in Oklahoma, and is intended to be construed in accordance with the laws of the State of Oklahoma. The Guarantor hereby waives all objections to venue and consents to the jurisdiction and venue of any state or federal court located in Tulsa County, Oklahoma, as elected by the Creditor, in connection with any action instituted by the Creditor arising out of the execution, delivery or performance of this Guaranty Agreement. If any provision of this Guaranty Agreement is held to be invalid, illegal or unenforceable in any respect or application for any reason, such invalidity, illegality or unenforceability will not affect any other provisions herein contained and such other provisions will remain in full force and effect. This Guaranty Agreement will be binding on the Guarantor and the Guarantor’s heirs, personal representatives, successors and assigns and will inure to the benefit of the Creditor and all successors and assigns of the Creditor. The Guarantor hereby consents to the assignment of all or any portion of the rights of the Creditor hereunder in connection with the assignment of the Indebtedness or any portion thereof without notice to the Guarantor.

14. Any transfer in violation of Section 12 of this Guaranty Agreement shall be deemed conclusively to have been undertaken with the actual intent to defraud the Creditor, and any statute

of limitations, civil or criminal, related to such fraudulent transfer shall be deemed tolled until the date the Indebtedness is fully paid or satisfied.

15. The David E. Chymiak Trust is a revocable trust established by David E. Chymiak for estate planning purposes and is for the purposes of this Guaranty Agreement the alter ego of David E. Chymiak. The David E. Chymiak Trust and David E. Chymiak shall have joint and several liability under this Guaranty Agreement.

16. The Guarantor shall use commercially reasonable efforts to obtain and maintain over the term of the Note term life insurance with a death benefit of $5,000,000 for the benefit of Creditor with the proceeds to be applied to any balance due on the Note at the time of Guarantor’s death and any excess after payment in full of the Note distributed to the estate of Guarantor.

IN WITNESS WHEREOF, the Guarantor has duly executed this instrument effective the date first above written.

________________________________________

David E. Chymiak, an individual and as trustee of The

David E. Chymiak Trust

EXHIBIT B

Form of Promissory Note

PROMISSORY NOTE

$6,375,000 [ closing date ]

FOR VALUE RECEIVED, the undersigned, Leveling 8 Inc , an Oklahoma corporation (“Maker”), promises to pay to the order of ADDVANTAGE TECHNOLOGIES GROUP, INC., an Oklahoma corporation, its successors and assigns (“Payee”), the principal sum of Six Million Three Hundred Seventy Five Thousand Dollars ($6,375,000) plus interest thereon accruing at the rate of six percent (6%) per annum until paid payable in installments of principal plus accrued interest every six months in the amounts and on the dates set forth on Exhibit A attached hereto and made a part hereof, beginning on ____________________[ the last day of the sixth month following the month in which closing occurs] , and continuing until paid in full with all unpaid principal and interest due and payable no later than _____________________ [ five years after the closing date ]. Payments that are not made when due, including without limitation payments which are accelerated pursuant to the terms of the next paragraph, shall accrue default interest at the rate of 15% per annum until paid.

If this Note or any installment hereunder is not paid when due or if there should occur a default under any of the guarantees of this Note or under any of the mortgages, security agreements, pledge agreements, account control agreements or any other agreement securing payment of this Note or payment of any such guarantee, then the holder of this Note may, at its option, declare this Note immediately due and payable in full. If Maker or any guarantor of this Note should be dissolved or die, make an assignment for the benefit of creditors or institute or have instituted against it or him any insolvency or bankruptcy proceedings, except as hereafter provided, the holder shall have the right and option to declare this Note immediately due and payable, and notice of the election of such option is being hereby expressly waived; provided, that, in the event of the death of guarantor David E. Chymiak, the holder shall not be entitled to declare the Note immediately due and payable if (and only if) the outstanding unpaid principal balance of the Note is Four Million Dollars ($4,000,000) or less upon the date of Mr. Chymiak’s death or within 90 days thereafter and there has been no default in the timely payment of any amounts due under the Note from the date of issuance until 90 days after the date of Mr. Chymiak’s death.

The Maker hereby waives presentment, demand, protest, notice of dishonor and diligence in collecting, and agrees that additional co-makers, guarantors and sureties may become parties hereto without notice to the undersigned, without affecting the liability of the undersigned hereon.

If this Note or any portion of the principal due hereunder is not paid when due, and is given to an attorney for collection, or suit is filed hereon, and as often as any of such events occur, the prevailing party in such litigation shall be entitled to recover reasonable attorneys’ fees and court costs.

The Maker hereof may prepay all or any portion of the principal hereof at any time without prepayment penalty or premium. Any partial prepayments of the Note shall be applied to the remaining installments due under the Note at the time of the partial prepayment on a basis pro rata to the relative size of each remaining installment. For example, if one of the remaining installments represents twenty percent (20%) of all the remaining installments, then twenty percent (20%) of the partial prepayment shall be applied to such installment.

“Maker”

Leveling 8 Inc

By:

David E. Chymiak, President

EXHIBIT A

Payment Schedule		Amount
		$700,000
		$700,000
		$700,000
		$700,000
		$470,000
		$470,000
		$470,000
		$470,000
		$470,000
		$2,500,000

Seller Disclosure Schedules

To

Stock Purchase Agreement

By And Among

Leveling 8 Inc

and

ADDvantage Technologies Group, Inc.

dated as of December 26, 2018

TABLE OF CONTENTS

Schedule 2.06 Collateral

Schedule 3.05 Consents

Schedule 3.08 Tax Matters

Schedule 3.09 Seller Not a Creditor of, or Debtor, to the Companies

Schedule 3.10 Benefit Plans

Schedule 2.06

Collateral

Collateral Item Release Amount

Johns Creek, GA $1,800,000.00

Broken Arrow, OK $1,000,000.00

Sedalia, MO $500,000.00

AEY Stock $3,300,000.00

Schwab Stock $1,500,000.00

Account

Schedule 3.05

Consents

Seller will have to obtain the consent of its lender, Valley National Bank, prior to Closing.

NCS will have to provide notice to Arris Solutions, Inc. under the Non-Exclusive Value Added Reseller Agreement.

Tulsat will have to provide notice to Cisco under their reseller agreement

Schedule 3.08

Tax Matters

-Fiscal Year 2009

-Fiscal Year 2008

-Fiscal Year 2005

-Fiscal Year 2004

-Fiscal Year 2000

Income, Franchise, & Sales Tax Returns were filed in the following states in the last five year period: (1) Arizona, (2) Florida, (3) Georgia, (4) Massachusetts, (5) Maryland, (6) Missouri, (7) North Carolina, (8) Nebraska, (9) Oklahoma, (10) Pennsylvania, (11) Kentucky, (12) South Dakota, (13) Tennessee, and (14) Texas.

(d)(ii) Seller intends to file for an extension for the 2018 Tax Return until July 15, 2019

Schedule 3.09

Seller Not a Creditor of, or Debtor, to the Companies

Seller and the Companies have intercompany trade accounts receivable and accounts payable in the ordinary course of business.

Schedule 3.10

Benefit Plans

(a)

Employee Benefit Plans
Medical Insurance	United HealthCare, PPO	Premium Split
Dental Insurance	Delta Dental of Oklahoma	Employee Paid
Vision Insurance	United HealthCare	Employee Paid
Short-term Disability	United HealthCare	Employee Paid
Long-term Disability	United HealthCare	Employee Paid
Group Term Life, basic	United HealthCare	Employee Paid
Group Term Life, buy-up	United HealthCare	Employee Paid
FSA/DFSA	Discovery Benefits	Employee Paid
401(k) Defined Contribution	Bank of Oklahoma	Safe Harbor Match 100% of 5%, no true-up

BUSINESS LOAN AGREEMENT (ASSET BASED)

Borrower:

ADDVANTAGE TECHNOLOGIES GROUP INC (TIN: 73-1351610), ADDVANTAGE TRITON LLC (TIN:

81-3651007), NAVE COMMUNICATIONS COMPANY (TIN: 52-2182495) and ADDVANTAGE ACQUISITION CORP (TIN: 46-4862341)

1221 E HOUSTON

BROKEN ARROW, OK 74012

Lender: Valley National Bank

Yale Location

P. 0. Box 54639

Tulsa, OK 74155

THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated December 17, 2018, is made and executed between ADDVANTAGE TECHNOLOGIES GROUP INC, ADDVANTAGE TRITON LLC, NAVE COMMUNICATIONS COMPANY and ADDVANTAGE ACQUISITION CORP

("Borrower") and Valley National Bank ("Lender"} on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement. Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower's representations, warranties, and agreements as set forth in this Agreement; {B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender's sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of December 17, 2018, and shall continue in full force and effect until such time as arr of Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until' such time as the parties may agree in writing to terminate this Agreement.

ADVANCE AUTHORITY. The following person or persons are authorized, except as provided in this paragraph, to request advances and authorize payments under the line of credit until Lender receives from Borrower, at Lender's address shown above, written notice of revocation of such authority: JOSEPH E HART, President of ADDVANTAGE TECHNOLOGIES GROUP INC; SCOTT A FRANCIS, Vice President/CFO/Secretary of ADDVANTAGE TECHNOLOGIES GROUP INC; JOSEPH E HART, President of ADDVANTAGE TECHNOLOGIES GROUP INC, Manager of ADDVANTAGE TRITON LLC; SCOTT A FRANCIS, Vice President/CFO/Secretary of ADDVANTAGE TECHNOLOGIES GROUP INC, Manager of ADDVANTAGE TRITON LLC; JOSEPH E HART, President of NAVE COMMUNICATIONS COMPANY; SCOTT A FRANCIS, Vice President/CFO/Treasurer/Secretary of NAVE COMMUNICATIONS COMPANY; JOSEPH E HART, President of ADDVANTAGE

ACQUISITION CORP; and SCOTT A FRANCIS, Vice President/CFO/Treasurer/Secretary of ADDVANTAGE ACQUISITION CORP. along with a monthly Borrowing Base and Loan Officer's approval.

LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to time from the date of this Agreement to the Expiration Date, provided the aggregate amount of such Advances outstanding at any time does not exceed the Borrowing Base. Within the foregoing limits, Borrower may borrow, partially or wholly prepay, and reborrow under this Agreement as follows:

Conditions Precedent to Each Advance. Lender's obligation to make any Advance to or for the account of Borrower under this Agreement is subject to the following conditions precedent, with all documents, instruments, opinions, reports, and other items required under this Agreement to be in form and substance satisfactory to Lender.

(1)	Lender shall have received evidence that this Agreement and all Related Documents have been duly authorized, executed, and delivered by Borrower to Lender.

(2)	Lender shall have received such opinions of counsel, supplemental opinions, and documents as Lender may request.

(3)	The security interests in the Collateral shall have been duly authorized, created, and perfected with first lien priority and shall be in full force and effect.

(4)	All guaranties required by Lender for the credit facility(ies) shall have been executed by each Guarantor, delivered to Lender, and be in full force and effect.

(5)	Lender , at its option and for its sole benefit, shall have conducted an audit of Borrower's Accounts, Inventory, books, records, and operations, and Lender shall be satisfied as to their condition.·

(6)	Borrower shall have paid to Lender all fees, costs, and expenses specified in this Agreement and the Related Documents as are then due and payable.

(7)	There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement, and Borrower shall have delivered to Lender the compliance certiiicate ca!!ed for in the paragraph below titled "Compliance Certificate."

Making Loan Advances. Advances under this credit facility, as well as directions for payment from Borrower's accounts, may be requested orally or in writing by authorized persons. Lender may, but need not, require that all oral requests be confirmed in writing. Each Advance shall be conclusively deemed to have been made at the request of and for the benefit of Borrower (1) when credited to any deposit account of Borrower maintained with Lender or (2) when advanced in accordance with the instructions of an authorized person. Lender, at its option, may set a cutoff time, after which all requests for Advances will be treated as having been requested on the next succeeding Business Day. Under no circumstances shall Lender be required to make any Advance in an amount less than $1,000.00.

Mandatory Loan Repayments. If at any time the aggregate principal amount of the outstanding Advances shall exceed the applicable Borrowing Base, Borrower, immediately upon written or oral notice from Lender, shall pay to Lender an amount equal to the difference between the outstanding principal balance of the Advances and the Borrowing Base. On the Expiration Date, Borrower shall pay to Lender in full the aggregate unpaid principal amount of a!! Advances then outstanding and all accrued unpaid interest, together with all other applicable fees, costs and charges, if any, not yet paid.

Loan Account. Lender shall maintain on its books a record of account in which Lender shall make entries for each Advance and such other debits and credits as shall be appropriate in connection with the credit facility. Lender shall provide Borrower with periodic statements of Borrower's account, which statements shall be considered to be correct and conclusively binding on Borrower unless Borrower notifies Lender to the contrary within thirty (30) days after Borrower's receipt of any such statement which Borrower deems to be incorrect.

COLLATERAL. To secure payment of the Primary Credit Facility and performance of all other Loans, obligations and duties owed by Borrower to Lender, Borrower (and others, if required) shall grant to Lender Security Interests in such property and assets as Lender may require. Lender's Security Interests in the Collateral shall be continuing liens and shall include the proceeds and products of the Collateral, including without limitation the proceeds of any insurance. With respect to the Collateral, Borrower agrees and represents and warrants to Lender.

Perfection of Security Interests. Borrower agrees to execute all documents perfecting Lender's Security Interest and to take whatever actions are requested by Lender to perfect and continue Lender's Security Interests in the Collateral. Upon request of Lender, Borrower will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Borrower will note Lender's interest upon any and all chattel paper and instruments if not delivered to Lender for possession by Lender. Contemporaneous with the execution of this Agreement, Borrower will execute one or more UCC financing statements and any similar statements as may be required by applicable law, and Lender will file such financing statements and all such similar statements in the appropriate location or locations. Borrower hereby appoints Lender as its irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect or to continue any Security Interest. Lender may at any time, and without further authorization from Borrower, file a carbon, photograph, facsimile, or other reproduction of any financing statement for use as a financing statement. Borrower will reimburse Lender for all expenses for the perfection, termination, and the continuation of the perfection of Lender's security interest in the Collateral. Borrower promptly will notify Lender before any change in Borrower's name including any change to the assumed business names of Borrower. Borrower also promptly will notify Lender before any change in Borrower's Social Security Number or Employer Identification Number. Borrower further agrees to notify Lender in writing prior to any change in address or location of Borrower's principal governance office or should Borrower merge or consolidate with any other entity.

Collateral Records. Borrower does now, and at all times hereafter shall, keep correct and accurate records of the Collateral, all of which records shall be available to Lender or Lender's representative upon demand for inspection and copying at any reasonable time. With respect to the Accounts, Borrower agrees to keep and maintain such records as Lender may require, including without limitation information concerning Eligible Accounts and Account balances and agings. Records related to Accounts (Receivables) are or will be located at customers principal place of business. With respect to the Inventory, Borrower agrees to keep and maintain such records as Lender may require, including without limitation information concerning Eligible Inventory and records itemizing and describing the kind, type, quality, and quantity of Inventory, Borrower's Inventory costs and selling prices, and the daily withdrawals and additions to Inventory. Records related to Inventory are or will be located at customers principal place of business. The above is an accurate and complete list of

BUSINESS LOAN AGREEMENT (ASSET BASED)

(Continued)

Loan No: 18172001
Page 2

all locations at which Borrower keeps or maintains business records concerning Borrower's collateral.

Collateral Schedules. Concurrently with the execution and delivery of this Agreement, Borrower shall execute. and deliver to Lender schedules of Accounts and lnventory and schedules of Eligible Accounts and Eligible Inventory in form and substance satisfactory to the Lender. Thereafter supplemental schedules shall be delivered according to the following schedule: With respect to Eligible Accounts, schedules shall be delivered within 30 days of month end. With respect to Eligible Inventory, schedules shall be delivered within 30 days of month end.

Representations and Warranties Concerning Accounts. With respect to the Accounts, Borrower represents and warrants to Lender: (1) Each Account represented by Borrower to be an Eligible Account for purposes of this Agreement conforms to the requirements of the definition of an Eligible Account; {2) All Account information listed on schedules delivered to Lender will be true and correct, subject to immaterial variance; and (3) Lender, its assigns, or agents shall have the right at any time and at Borrower's expense to inspect, examine, and audit Borrower's records and to confirm with Account Debtors the accuracy of such Accounts.

Representations and Warranties Concerning Inventory. With respect to the Inventory, Borrower represents and warrants to Lender: (1) Al! Inventory represented by Borrower to be Eligible Inventory for purposes of this Agreement conforms to the requirements of the definition of Eligible Inventory; (2) All Inventory values listed on schedules delivered to Lender will be true and correct, subject to immaterial variance;

{ 3) The value of the Inventory will be determined on a consistent accounting basis; {4) Except as agreed to the contrary by Lender in writing, all Eligible Inventory is now and at all times hereafter will be in Borrower's physical possession and shall not be held by others on consignment, sa!e on approval, or sale or return; (5) Except as reflected in the Inventory schedules delivered to Lender, all Eligible Inventory is now and at all times hereafter will be of good and merchantable quality, free from defects; {6) Eligible Inventory is not now and will not at any lime hereafter be stored with a bailee, warehouseman, or similar party without Lender's prior written consent, and, in such event, Borrower will concurrently at the time of bailment cause any such bailee, warehouseman, or similar party to issue and deliver to Lender, in form acceptable to Lender, warehouse receipts in Lender name evidencing the storage of Inventory; and (7) Lender, its assigns, or agents shall have the right at any time and at Borrower's expense to inspect and examine the Inventory and to check and test the same as to quality, quantity, value, and condition.

MULTIPLE BORROWERS. This Agreement has been executed by multiple obligors who are referred to in this Agreement individually, collectively and interchangeably as "Borrower." Unless specifically stated to the contrary, the word "Borrower" as used in this Agreement, including without limitation all representations, warranties and covenants, shall include all Borrowers. Borrower understands and agrees that, with or without notice to any one Borrower, Lender may (A) make one or more additional secured or unsecured loans or otherwise extend additional credit with respect to any other Borrower; (B) with respect to any other Borrower alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of any indebtedness, including increases and decreases of the rate of interest on the indebtedness; (C) exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any security, with or without the substitution of new collateral; (D) release, substitute, agree not to sue, or deal with any one or more of Borrower's or any other Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E} determine how, when and what application of payments and credits shall be made on any indebtedness; (F) apply such security and direct the order or manner of sale of any Collateral, including without limitation, any non-judicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) sell, transfer, assign or grant participations in all or any part of the Loan; (H) exercise or refrain from exercising any rights against Borrower or others, or otherwise act or refrain from acting; ([) settle or compromise any indebtedness; and (J) subordinate the payment of all or any part of any of Borrower's indebtedness to Lender to the payment of any liabilities which may be due Lender or others.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at a!! times any Indebtedness exists:

Organization. ADDVANTAGE TECHNOLOGIES GROUP INC is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Texas. ADDVANTAGE TECHNOLOGIES GROUP INC is duly authorized to transact business in the State of Oklahoma and all other states in which ADDVANTAGE TECHNOLOGIES GROUP INC is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which ADDVANTAGE TECHNOLOGIES GROUP INC is doing business. Specifically, ADDVANTAGE TECHNOLOGIES GROUP !NC is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. ADDVANTAGE TECHNOLOGIES GROUP !NC has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. ADDVANTAGE TECHNOLOGIES GROUP INC maintains an office at 1221 E HOUSTON, BROKEN ARROW, OK 74012. Unless ADDVANTAGE TECHNOLOGIES GROUP INC has designated otherwise in writing, the principal office is the office at which ADDVANTAGE TECHNOLOGIES GROUP INC keeps its books and records including its records concerning the Collateral. ADDVANTAGE TECHNOLOGIES GROUP INC will notify Lender prior to any change in the location of ADDVANTAGE TECHNOLOGIES GROUP INC's state of organization or any change in ADDVANTAGE TECHNOLOGIES GROUP INC's name. ADDVANTAGE TECHNOLOGIES GROUP INC shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi--governmental authority or court applicable to ADDVANTAGE TECHNOLOGIES GROUP INC and ADDVANTAGE TECHNOLOGIES GROUP INC's business activities.

ADDVANTAGE TRITON LLC is a limited liability company which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Oklahoma. ADDVANTAGE TRITON LLC is duly authorized to transact business in all other states in which ADDVANTAGE TRITON LLC is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which ADDVANTAGE TRITON LLC is doing business. Specifically, ADDVANTAGE TRITON LLC is, and at all times shall be, duly qualified as a foreign limited liability company in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. ADDVANTAGE TRITON LLC has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. ADDVANTAGE TRITON LLC maintains an office at 1221 E HOUSTON, BROKEN ARROW, OK 74012. Unless ADDVANTAGE TRITON LLC has designated otherwise in writing, the principal office is the office at which ADDVANTAGE TRITON LLC keeps its books and records including its records concerning the Collateral. ADDVANTAGE TRITON LLC will notify Lender prior to any change in the location of ADDVANTAGE TRITON LLC's state of organization or any change in ADDVANTAGE TRITON LLC's name. ADDVANTAGE TRITON LLC shall do a!! things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to ADDVANTAGE TRITON LLC and ADDVANTAGE TRITON LLC's business activities.

NAVE COMMUNICATIONS COMPANY is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Maryland. NAVE COMMUNICATIONS COMPANY is duly authorized to transact business in the State of Oklahoma and all other states in which NAVE COMMUN!CATIONS COMPANY is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which NAVE COMMUNICATIONS COMPANY is doing business. Specifically, NAVE COMMUNICATIONS COMPANY is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. NAVE COMMUNICATIONS COMPANY has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. NAVE COMMUNICATIONS COMPANY maintains an office at 1009 SIMSBURY COURT, CROFTON, MD 21114. Unless NAVE COMMUNICATIONS COMPANY has designated otherwise in writing, the principal office is the office at which NAVE COMMUNICATIONS COMPANY keeps its books and records including its records concerning the Collateral. NAVE COMMUNICATIONS COMPANY will notify Lender prior to any change in the location of NAVE COMMUNICATIONS COMPANY's state of organization or any change in NAVE COMMUNICATIONS COMPANY's name. NAVE COMMUNICATIONS COMPANY shall do all things necessary to preseive and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to NAVE COMMUNICATIONS COMPANY and NAVE COMMUNICATIONS COMPANY's business activities.

ADDVANTAGE ACQUISITION CORP is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Oklahoma. ADDVANTAGE ACQUISITION CORP is duly authorized to transact business in al! other states in which ADDVANTAGE ACQUISITION CORP is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which ADDVANTAGE ACQUISITION CORP is doing business. Specifically, ADDVANTAGE ACQUISITJON CORP is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. ADDVANTAGE ACQUISITION CORP has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. ADDVANTAGE ACQUISITION CORP maintains an office at 1009 SIMSBURY COURT, CROFTON, MD 21114. Unless ADDVANTAGE

ACQUISITION CORP has designated otherwise in writing, the principal office is the office at which ADDVANTAGE ACQUISITION CORP keeps its books and records including its records concerning the Collateral. ADDVANTAGE ACQUISITION CORP will notify Lender prior to any change in the location of ADDVANTAGE ACQUISITION CORP's state of organization or any change in ADDVANTAGE ACQUISITION CORP's name. ADDVANTAGE ACQUISITION CORP shall do all things necessary to preseive and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to ADDVANTAGE ACQUISITION CORP and ADDVANTAGE ACQUISITION CORP's

BUSINESS LOAN AGREEMENT (ASSET BASED)

(Continued)

Loan No: 18172001
Page 3

business activities.

Assumed Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: None.

Authorization. Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower's articles of incorporation or organization, or bylaws, or (b) Borrower's articles of organization or membership agreements, or (c} any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's properties.

Financial Information. Each of Borrower's financial statements supplied to Lender truly and completely disclosed Borrower's financial condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements.

Legal Effect·. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when

delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.

Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and Borrower has not used or filed a financing statement under any other name for at least the last five (5) years.

Hazardous Substances. Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower's ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2} Borrower has no knowledge of, or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrower's due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or substance on the Collateral. The provisions of this section of the Agreement, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the termination, expiration or

satisfaction of this Agreement and shall not be affected by Lender's acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise.

Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial

condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing.

Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided.

Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly

securing repayment of Borrower's Loan and Note, that would be prior or that may in any way be superior to Lender's Security Interests and rights in and to such Collateral.

Binding Effect. This Agreement, the Note, all Security Agreements (if any}, and all Related Documents are binding upon the signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so !ong as this Agreement remains in effect, Borrower will:

Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all existing and al! threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.

Financial Records. Maintain its books and records in accordance with GMP, applied on a consistent basisi and permit Lender to examine and audit Borrower's books and records at all reasonable times.

Financial Statements. Furnish Lender with the following:

Annual Statements. As soon as available, but in no event later than ninety (90) days after the end of each fiscal year, Borrower's balance sheet and income statement for the year ended, compiled by a certified public accountant satisfactory to Lender.

Interim Statements. As soon as available, but in no event later than 45 days after the end of each fiscal quarter, Borrower's balance sheet and profit and loss statement for the period ended, prepared by Borrower.

All financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct.

Additional Information. Furnish such additional information and statements, as Lender may request from time to time.

Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may.require with respect to Borrower's properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offereda security interest for the Loans, Borrower will provide Lender with such lender's loss payable or other endorsements as Lender may require.

Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties insured; (5} the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. ln addition, upon request of Lender (however not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower.

Other Agreements. Comply with a!! terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements.

Loan Proceeds. Use all Loan proceeds solely for the following specific purposes: For business purposes only.

Taxes, Charges and Liens. Pay and discharge when due a!! of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge,

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levy, lien or claim so long as (1) the legality of the same shall be contested in good faith by appropriate proceedings, and (2) Borrower shall have established on Borrower's books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or claim in accordance with GAAP.

Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement.

Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner.

Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned, leased or used by Borrower.

Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation, the Americans With Disabllities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in

writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest.

Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records} in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense.

Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30} days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication· from any governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower's part in connection with any environmental activity whether or not there is damage to the environment and/or other natural resources.

Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security Interests.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may (but shall not be obligated to} take any action that Lender deems appropriate, including but not limited to discharging'or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note or at the highest rate authorized by law, from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B} be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. If Lender is required by !aw to give Borrower notice before or after Lender makes an expenditure, Borrower agrees that notice sent by regular mail at least five (5} days before the expenditure is made or notice delivered two (2} days before the expenditure is made is sufficient, and that notice within sixty (60) days after the expenditure is made is reasonable.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender.

Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, create, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with recourse any of Borrower's accounts, except to Lender.

Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged,

(2)

cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out of the ordinary course of business, or (3} pay any dividends on Borrower's stock (other than dividends payable in its stock), provided, however that notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if Borrower is a "Subchapter S Corporation" (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on its stock to its shareholders from time to time in amounts necessary to enable the shareholders to pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law which arise solely from their status as Shareholders of a Subchapter S Corporation because of their ownership of shares of Borrower's stock, or purchase or retire any of Borrower's outstanding shares or alter or amend Borrower's capital structure.

Loans, Acquisitions and Guaranties. (1} Loan, invest in or advance money or assets to any other person, enterprise or entity, (2} purchase, create or acquire any interest in any other enterprise or entity, or {3) incur any obligation as surety or guarantor other than in the ordinary course of business.

Agreements. Enter into any agreement containing any provisions which would be violated or breached by the performance of Borrower's obligations under this Agreement or in connection herewith.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or

revoke such Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in good faith deems itself insecure, even though no Event of Default sha!I have occurred.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by

law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Loan.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

Default in Favor of Third Parties. Borrower or any Granter defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's or any

Grantor's property or Borrower's or any Grantor's ability to repay the Loans or perform their respective obligations under this Agreement or any of the Related Documents.

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this

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Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien} at any time and for any reason.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or

a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.

Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Loan is impaired.

Insecurity. Lender in good faith believes itself insecure.

Right to Cure. If any default, other than a default on Indebtedness, is curable and if Borrower or Grantor, as the case may be, has not been given a notice of a similar default within the preceding twelve (12) months, it may be cured if Borrower or Granter, as the case may be, after Lender sends written notice to Borrower or Granter, as the case may be, demanding cure of such default: (1) cure the default within ten (10) days; or (2) if the cure requires more than ten (10) days, immediately initiate steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, arr commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender's option, all Indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the "Insolvency" subsection above, such acceleration shall be automatic and not optional. ln addition, Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Granter shall not affect Lender's right to declare a default and to exercise its rights and remedies.

NON-USE FEE. Quarterly non-use fee of 25 basis points.

DEPOSITS AND TREASURY SERVICES REQUIREMENT. Deposits and Treasury services are required, however a ninety (90) day grace period is allowed.

LANDLORD WAIVER. A Landlord Waiver will be obtained from Palco Telecom, allowing Valley National Bank access to secure collateral, if needed.

FIXED CHARGE COVERAGE RATIO REQUIREMENT. A fixed charge coverage ratio of 1.25:1 is required and will be tested annuplly. Fixed Charge Coverage Ratio to be defined as follows; EB!TDA plus capital contributions, plus non-cash expenses, plus one-time expenses, less total distributions, divided by principal and interest payments on all outstanding debt, plus capital expenditures(CAPEX}. FCCR is to be calculated ona trailing 12 month basis.

ADDITIONAL INDEBTEDNESS REQUIREMENT. Any additional indebtedness requires approval from Valley National Bank..

COVENANT COMPLIANCE CERTIFICATE REQUIREMENT. Borrower will provide a Covenant Compliance Certificate, as soon as available, but in no event later than ninety (90) days after the end of each fiscal year.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:

Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. Al! prior and contemporaneous representations and discussions concerning such matters either are included in this document or do not constitute an aspect of the agreement of the parties. Except as may be specifically set forth in this Agreement, no conditions precedent or subsequent, of any kind whatsoever, exist with respect to Borrower's obligations under this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

Attorneys' Fees; Expenses. Borrower agrees to pay upon demand a!! of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is .a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction). appeals, and any anticipated post-judgment collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court.

Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.

Consent to Loan Participation. Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan and will have a!! the rights granted under the participation agreement or agreements governing the sa!e of such participation interests. Borrower further waives a!! rights of offset or counterclaim that it may have now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower's obligation under the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower

further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender.

Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the

laws of the State of Oklahoma without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Oklahoma.

Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of TULSA County, State of Oklahoma.

Joint and Several Liability. All obligations of Borrower under this Agreement shall be joint and several, and all references to Borrower shall mean each and every Borrower. This means that each Borrower signing below is responsible for a!! obligations in this Agreement. Where any one or more of the parties is a corporation, partnership, limited liability company or similar entity, it is not necessary for Lender to inquire into the powers of any of the officers, directors, partners, members, or other agents acting or purporting to act on the entity's

behalf, and any obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Agreement.

No Waiver by Lender. Lender shaH not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any Granter, sha!I constitute a waiver of any of Lender's rights or of any of

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Borrower's or any Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.

Notices. To the extent permitted by applicable law, any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otheiwise required by law}, when deposited with a nationally recognized overnight courier, or, if mailed, _when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Borrower agrees to keep Lender infonned at all times of Borrower's current address. To the extent permitted by applicable !aw, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers.

Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any person or circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other person or circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.

Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrower's subsidiaries or affiliates.

Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender.

Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, Lender is relying on all representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, and shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur.

Time is of the Essence. Time is of the essence in the performance of this Agreement.

Waive Jury. All parties to this Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party against any other party.

DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shal! have the meanings attributed to such terms in the. Unifonn Conimercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accountin'g principles as in effect on the date of this Agreement:

Account. The word "Account" means a trade account, account receivable, other receivable, or other right to payment for goods sold or services rendered owing to Borrower (or to a third party granter acceptable to Lender).

Account Debtor. The words "Account Debtor" mean the person or entity obligated upon an Account.

Advance. The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf under the terms and conditions of this Agreement.

Agreement. The word "Agreement" means this Business Loan Agreement (Asset Based), as this Business Loan Agreement (Asset Based) may be amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement (Asset Based) from time to time.

Borrower. The word "Borrower" means ADDVANTAGE TECHNOLOGIES GROUP INC, ADDVANTAGE TRITON LLC, NAVE

COMMUNICATIONS COMPANY and ADDVANTAGE ACQUISITION CORP and includes all co-signers and co-makers signing the Note and all their successors and assigns.

Borrowing Base. The words "Borrowing Base" mean, as determined by Lender from time to time, the lesser of (1) $2,500,000.00 or (2) the sum of (a) 80.000% of the aggregate amount of Eligible Accounts (not to exceed in corresponding Loan amount based on Eligible Accounts $2,500,000.00), plus (b) 25.000% of the aggregate amount of Eligible Inventory.

Business Day. The words "Business Day" mean a day on which commercial banks are open in the State of Oklahoma.

Collateral. The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise. The word Collateral also includes without limitation all collateral described in the Collateral section of this Agreement.

Eligible Accounts. The words "Eligible Accounts" mean at any time, all of Borrower's Accounts which contain selling terms and conditions acceptab!e to Lender. The net amount of any Eligible Account against which Borrower may borrow shall exclude all returns, discounts, credits, and offsets of any nature. Unless otherwise agreed to by Lender in writing, Eligible Accounts do not include:

(1)	Accounts with respect to which the Account Debtor is member, employee or agent of Borrower.

(2)	Accounts with respect to which the Account Debtor is a subsidiary of, or affiliated with Borrower or its shareholders, officers, or directors.

(3)	Accounts with respect to which goods are placed on consignment, guaranteed sale, or other terms by reason of which the payment by the Account Debtor may be conditional.

(4)	Accounts with respect to which the Account Debtor is not a resident of the United States, except to the extent such Accounts are supported by insurance, bonds or other assurances satisfactory to Lender.

(5)	Accounts with respect to which Borrower is or may become liable to the Account Debtor for goods sold or services rendered by the Account Debtor to Borrower.

(6)	Accounts which are subject to dispute, counterclaim, or setoff.

(7)	Accounts with respect to which the goods have not been shipped or delivered, or the services have not been rendered, to the Account Debtor.

(8)	Accounts with respect to which Lender, in its sole discretion, deems the creditworthiness or financial condition of the Account Debtor to be unsatisfactory.

(9)

Accounts of any Account Debtor who has filed or has had filed against it a petition in bankruptcy or an application for relief under any provision of any state or federal bankruptcy, insolvency, or debtor-in-relief acts; or who has had appointed a trustee, custodian, or receiver for the assets of such Account Debtor; or who has made an assignment for the benefit of creditors or has become insolvent or fails generally to pay its debts (including its payrolls) as such debts become due.

(10)	Accounts with respect to which the Account Debtor is the United States government or any department or agency of the United States.

(11)

Accounts which have not been paid in full within 90 days from the invoice date. The entire balance of any Account of any single Account Debtor will be ineligible whenever the portion of the Account which has not been paid within 90 days from the invoice date is in excess of 5.000% of the total amount outstanding on the Account.

BUSINESS LOAN AGREEMENT (ASSET BASED)

(Continued)

Loan No: 18172001
Page 7

(12)	That portion of the Accounts of any single Account Debtor which exceeds 10.000% of all of Borrower's Accounts.

(13)	Borrowing Base is limited to eligible Accounts Receivable of subsidiaries, NAVE COMMUNICATIONS COMPANY AND

ADDVANTAGE TRITON, LLC.

Accounts Receivable for Addvantage Technologies Group Inc (cable division) are excluded from the Borrowing Base. Eligible Inventory. The words "Eligible Inventory" mean, at any time, all of Borrower's Inventory as defined below, except:

(1)	Inventory which is not owned by Borrower free and clear of all security interests, liens, encumbrances, and claims of third parties.

(2)	Inventory which Lender, in its sole discretion, deems to be obsolete, unsalable, damaged, defective, or unfit for further processing.

(3)	Work in progress.

(4)	Any inventory not owned by Addvantage Triton, LLC. The borrowing base allows for a 25% advance rate of the total eligible inventory of Addvantage Triton, LLC, with a pre-determined cap not to exceed 50% of AIR.

Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human hea!th or the environment, including without limitation the Comprehensive Environmental Response, CompenSation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. {"CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,

the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.

Event of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this Agreement.

Expiration Date. The words "Expiration Date" mean the date of termination of Lender's commitment to lend under this Agreement. GAAP. The word "GMP" means generally accepted accounting principles.

Granter. The word "Granter" means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, including without limitation all Borrowers granting such a Security Interest.

Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan.

Guaranty. The word "Guaranty'' means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.

Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos.

Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents.

Inventory. The word "Inventory" means all of Borrower's raw materials, work in process, finished goods, merchandise, parts and supplies, of every kind and description, and goods held for sale or lease or furnished under contracts of service in which Borrower now has or hereafter acquires any right, whether held by Borrower or others, and all documents of title, warehouse receipts, bills of lading, and all other documents of every type covering all or any part of the foregoing. Inventory includes inventory temporarily out of Borrower's custody or possession and al! returns on Accounts.

Lender. The word "Lender'' means Valley National Bank, its successors and assigns.

Loan. The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those !cans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time.

Note. The word "Note" means the Note dated December 17, 2018 and executed by ADDVANTAGE TECHNOLOGIES GROUP INC,

ADDVANTAGE TRITON LLC, NAVE COMMUNICATIONS COMPANY and ADDVANTAGE ACQUISITION CORP in the principal amount of

$2,500,000.00, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement.

Permitted Liens. The words "Permitted Liens" mean (1) liens and security interests securing Indebtedness owed by Borrower to Lender;

(2)

liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materia!men, mechanics, warehousemen, or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent; (4) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under the paragraph of this Agreement titled "Indebtedness and Liens"; (5) liens and security interests which, as of the date of this Agreement, have been disclosed to and approved by the Lender in writing; and (6) those liens and security interests which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of Borrower's assets.

Primary Credit Facility. The words "Primary Credit Facility" mean the credit facility described in the Line of Credit section of this Agreement.

Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Loan.

Security Agreement. The words "Security Agreement" mean and include without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest.

Security Interest. The words "Security Interest" mean, without limitation. any and all types of collateral security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge,. crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's !ien, equipment trust, conditional sale, trust receipt, lien or title retention

contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise.

BUSINESS LOAN AGREEMENT (ASSET BASED)

(Continued)

Loan No: 18172001
Page 8

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT (ASSET BASED) AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT (ASSET BASED) IS DATED DECEMBER 17, 2018.

BORROWER:

ADDVANTAGE TECHNOLOGIES GROUP INC

By: /s/ Joseph E. Hart

JOSEPH E. HART, President of ADDVANTAGE

TECHNOLOGIES GROUP INC

ADDVANTAGE TRITON LLC

ADDVANTAGE TECHNOLOGIES GROUP INC, Manager of ADDVANTAGE TRITON LLC

By: /s/ Joseph E. Hart

JOSEPH E. HART, President of ADDVANTAGE

TECHNOLOGIES GROUP INC

NAVE COMMUNICATIONS COMPANY

By: /s/ Joseph E. Hart

JOSEPH E. HART, President of NAVE

COMMUNICATIONS COMPANY

ADDVANTAGE ACQUISITION CORP

By: /s/ Joseph E. Hart

JOSEPH E. HART, President of ADDVANTAGE

ACQUISITION CORP

LENDER:

VALLEY NATIONAL BANK

By: /s/ Lauren Smith

Lauren Smith, Vice President

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph E. Hart , certify that:

1.	I have reviewed this quarterly report on Form 10-Q of ADDvantage Technologies Group, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 12, 2019

/s/ Joseph E. Hart

Joseph E. Hart

President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Scott A. Francis, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of ADDvantage Technologies Group, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

c.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

d.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 12, 2019

/s/ Scott A. Francis

Scott A. Francis

Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of ADDvantage Technologies Group, Inc. (the “Company”) for the fiscal quarter ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) I, Joseph E. Hart, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Joseph E. Hart

Name: Joseph E. Hart

Title: President and Chief Executive Officer

Date: February 12, 2019

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of ADDvantage Technologies Group, Inc. (the “Company”) for the fiscal quarter ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) I, Scott A. Francis, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Scott A. Francis

Name: Scott A. Francis

Title: Chief Financial Officer

Date: February 12, 2019