On December 29, 2022, Pro-Dex, Inc. entered into Amendment No. 2 to Amended and Restated Credit Agreement with Minnesota Bank and Trust, successor by merger to Minnesota Bank and Trust, which amends the Company's Amended and Restated Credit Agreement and Amended and Restated Revolving Credit Note with MBT and provides for a supplemental line of credit in the amount of $3,000,000. The Revolving Note has been amended to extend the maturity date of the Company's existing revolving credit note with MBT from November 5, 2023 to December 29, 2024, to increase the Revolving Note facility from $2,000,000 to $7,000,000, and to increase the interest rate on the Revolving Note.

The Revolving Note may be borrowed against from time to time by the Company through its maturity date on the terms set forth in the Credit Agreement. As of the date of this Current Report on Form 8-K, the Company's has drawn $2,800,000 against the Revolving Note, the entire amount of which remains outstanding. Loan origination fees in the amount of $16,000 are payable to MBT in conjunction with the Revolving Note and Supplemental Note.

The Supplemental Note is evidenced by a Supplemental Revolving Credit Note dated as of the Amendment Date made by the Company in favor of MBT. The purpose of the Supplemental Note is for financing acquisitions and repurchasing shares of the Company's common stock. The Supplemental Note may be borrowed against from time to time by the Company through its maturity date of December 29, 2024 on the terms set forth in the Credit Agreement.

No amounts have been drawn on the Supplemental Note as of the date of this Current Report on Form 8-K. The Revolving Note and Supplemental Note bear interest at an annual rate equal to the greater of (a) 5.0% or (b) SOFR for a one-month period from the website of the CME Group Benchmark Administration Limited plus 2.5%. Commencing on the first day of each month after the Company initially borrows against the Revolving Note and/or Supplemental Note and each month thereafter until maturity, the Company is required to pay all accrued and unpaid interest on the Revolving Note and Supplemental Note through the date of payment. Any principal on the Revolving Note and/or Supplemental Note that is not previously prepaid by the Company shall be due and payable in full on the maturity date.

Upon the occurrence and during the continuance of an event of default, the interest rate of the Revolving Note and Supplemental Note is increased by 3% and MBT may, at its option, declare the Revolving Note and Supplemental Note immediately due and payable in full. The Credit Agreement, Revolving Note and Supplemental Note contain representations and warranties, affirmative, negative and financial covenants, and events of default that are customary for loans of this type.