Exhibit 10.1

 

 

LOAN AGREEMENT

 

dated as of December 29, 2010

 

between

 

STELLARIS LLC,
as Borrower

 

and

 

RBS ASSET FINANCE, INC.,
as Lender

 

 

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ARTICLE I: DEFINITIONS AND ACCOUNTING TERMS

 

 

 

Section 1.01.

Defined Terms

1

Section 1.02.

Rules of Construction

4

Section 1.03.

Accounting and Financial Determinations

4

 

 

 

ARTICLE II: THE LOANS

 

 

 

 

Section 2.01.

Loans

4

Section 2.02.

Note

5

Section 2.03.

Scheduled Payments

5

Section 2.04.

Prepayments

5

Section 2.05.

Interest Provisions

5

Section 2.06.

Payments Absolute

6

Section 2.07.

Increased Capital Costs

6

Section 2.08.

Taxes

6

 

 

 

ARTICLE III

 

 

 

CONDITIONS TO LOANS

6

 

 

ARTICLE IV

 

 

 

REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER

8

 

 

ARTICLE V

 

 

 

SECURITY INTEREST

10

 

 

ARTICLE VI: COVENANTS

 

 

 

Section 6.01.

Affirmative Covenants

10

Section 6.02.

Negative Covenants

11

Section 6.03.

Indemnity

12

Section 6.04.

Performance by Lender

13

 

 

 

ARTICLE VII: EVENTS OF DEFAULT

 

 

 

 

 

Section 7.01.

Events of Default

13

 

Section 7.02.

Remedies

14

 

Section 7.03.

Use of Proceeds

14

 

 

 

 

 

ARTICLE VIII: MISCELLANEOUS PROVISIONS

 

 

 

 

Section 8.01.

Waivers, Amendments

15

Section 8.02.

Notices

15

Section 8.03.

Severability

15

Section 8.04.

Execution in Counterparts

15

Section 8.05.

Further Assurance and Corrective Instruments

15

Section 8.06.

Time of the Essence

15

Section 8.07.

Entire Agreement

15

Section 8.08.

Governing Law

15

Section 8.09.

Successors and Assigns; Assignments by Lender

15

Section 8.10.

Assignments, Participations and Securitizations

15

Section 8.11.

Waiver of Jury Trial

16

Section 8.12.

Forum Selection and Consent to Jurisdiction

16

Section 8.13.

Waiver of Certain Claims

17

 

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SCHEDULES

 

 

 

SCHEDULE I

—

Additional Definitions

 

SCHEDULE II

—

Additional Conditions Precedent

 

SCHEDULE III

—

Financial Covenants

 

SCHEDULE IV

—

Disclosure Statements

 

SCHEDULE V

—

List of Subsidiaries

 

 

ii

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LOAN AGREEMENT

 

THIS LOAN AGREEMENT (this “Agreement”) dated as of December 29, 2010 between
STELLARIS, a Nevada limited liability company (together with its successors and
assigns, “Borrower”), and RBS ASSET FINANCE, INC., a New York corporation
(together with its successors and assigns, “Lender”).

 

W I T N E S S E T H:

 

WHEREAS, Borrower desires to obtain one or more loans from Lender in an
aggregate principal amount not to exceed the Maximum Principal Amount (as
defined below), secured by the Collateral (as defined below).

 

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the premises contained in this Agreement,
Lender and Borrower agree as follows:

 

ARTICLE I:  DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.01.  Defined Terms.  The following terms shall have the following
meanings for all purposes of this Agreement:

 

“Affiliate” means any Person that, directly or indirectly, controls, is
controlled by or is under common control with any other Person.  “Controls,”
“controlled by” or “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 such Person whether by ownership of voting securities, contract or
otherwise.  Without limitation, any director, executive officer or beneficial
owner of 20% or more of the equity of a Person shall for purposes of this
Agreement be deemed to control the other Person.  In no event shall Lender be
deemed an “Affiliate” of Borrower.

 

“Agreement” means this Loan Agreement, as amended, supplemented, restated or
otherwise modified from time to time in accordance with the terms hereof.

 

“Authorizing Entities” has the meaning ascribed to such term in Schedule I
hereto.

 

“Borrower’s State” has the meaning ascribed to such term in Schedule I hereto.

 

“Business Day” means any day on which Lender is open for business and is neither
a Saturday or Sunday nor a legal holiday on which banks are authorized or
required to be closed in New York, New York or Chicago, Illinois.

 

“Change of Control” means a change in control of Borrower, any Subsidiary or any
Guarantor, including, without limitation, a change in control resulting from
direct or indirect transfers of voting stock or partnership, membership or other
ownership interests, whether in one or a series of transactions.  “Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of Borrower, any Subsidiary or any
Guarantor, and a Change of Control shall occur if any of the following occurs:
(a) any Person or group (as such term is used in Section 13(d)(3) of the
Exchange Act) acquires, after the date of this Agreement, the beneficial
ownership directly or indirectly, of 50% or more of the voting power of the
total outstanding stock or other ownership interests of Borrower, any Subsidiary
or any Guarantor or (b) the occurrence of an Owner Change.

 

“Closing Date” means with respect to the initial Loan, the Initial Closing Date,
and with respect to any Loan funded after the Initial Closing Date, the date
that the proceeds of such Loan are disbursed to, or on behalf of, Borrower.

 

“Closing Fee” has the meaning ascribed to such term in Schedule I hereto.

 

“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

 

“Collateral” means the property described on each Collateral Schedule, which
property shall be acceptable to Lender, in its sole discretion, and any other
assets of Borrower, any Guarantor or any other Person that are subject to a Lien
in favor of Lender pursuant to any Loan Document.

 

“Collateral Schedule” means each schedule describing Collateral attached to and
referencing a Note or Notes and executed by Borrower and Lender.

 

“Commitment” means Lender’s obligation to make Loans to Borrower pursuant to
Section 2.01 in an amount not to exceed the Maximum Principal Amount.

 

“Commitment Termination Date” means the earliest of (a) the date on which the
aggregate Original Principal Amount of all Loans equals the Maximum Principal
Amount, (b) the Scheduled Commitment Termination Date, (c) the date that an
Event of Default described in subsection (i) of Section 7.01 occurs or (d) the
date on which Lender elects to terminate the Commitment following (i) an Event
of Default or (ii) the occurrence of a material adverse change in the business,
assets or financial condition of Borrower or any Guarantor.

 

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“Corporate Guarantor” means any Guarantor that is not an Individual Guarantor.

 

“Default” means any Event of Default or any condition, occurrence or event that,
after notice or lapse of time or both, would constitute an Event of Default.

 

“Default Rate” has the meaning ascribed to such term in Section 2.05(c).

 

“Environmental Laws” means (a) all Federal Toxic Waste Laws, (b) all local,
state or foreign law, statute, regulation, or ordinance analogous to any of the
Federal Toxic Waste Laws and (c) all other federal, state, local, or foreign law
(including any common law, consent decrees and administrative orders), statute,
regulation, or ordinance regulating, permitting, prohibiting or otherwise
restricting the placement, discharge, release, generation, treatment or disposal
upon or into any environmental media of any substance, pollutant, contaminant or
waste that is now or hereafter classified or considered to be hazardous or
toxic; “Environmental Laws” shall also include any and all amendments to any of
(a), (b) or (c).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with Borrower or any Guarantor, as applicable, is treated as a
single employer under Section 414(b) or (c) of the Code or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived by the Pension Benefit
Guaranty Corporation), (b) the existence with respect to any Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived, (c) the filing pursuant to
Section 412 (d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan, (d) the
incurrence by Borrower, any Guarantor or any of its or their ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan, (e) the receipt by Borrower, any Guarantor or any of its or their ERISA
Affiliates from the Pension Benefit Guaranty Corporation or a plan administrator
of any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan, (f) the incurrence by the Borrower,
any Guarantor or any of its or their ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan or (g) the receipt by Borrower, any Guarantor or any of its or their ERISA
Affiliates of any notice, or the receipt by any Multiemployer Plan from
Borrower, any Guarantor or any ERISA Affiliate of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.

 

“Event of Default” has the meaning assigned to such term in Section 7.01.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

“Federal Toxic Waste Laws” means any federal law or implementing regulation
regulating any substance, matter, material, waste, contaminant or pollutant, the
generation, storage, disposal, handling, release, treatment, discharge or
emission of which is regulated, prohibited or limited, including, without
limitation: (i) the Resource Conservation and Recovery Act, as amended by the
Hazardous and Solid Waste Amendments of 1984, as now or hereafter amended (42
U.S.C. Section 6901 et seq.), (ii) the Comprehensive Environmental Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act of 1986, as now or hereafter amended (42 U.S.C. Section 9601
et seq.), (iii) the Clean Water Act, as now or hereafter amended (33 U.S.C.
Section 1251 et seq.), (iv) the Toxic Substances and Control Act, as now or
hereafter amended (15 U.S.C. Section 2601 et seq.) and (v) the Clean Air Act, as
now or hereafter amended (42 U.S.C. Section 7401 et seq.).

 

“Financial Statements” has the meaning ascribed to such term in Schedule I
hereto.

 

“Fixed Rate” has the meaning ascribed to such term in Schedule I hereto.

 

“GAAP” means generally accepted accounting principles in the United States.

 

“Guarantor” means each guarantor of the Obligations.

 

“Guaranty” means one or more instruments by which a Guarantor guarantees the
Obligations, in form and substance acceptable to Lender.

 

2

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“Indebtedness” means (a) all items of indebtedness or liability which in
accordance with GAAP or federal tax law would be included in determining total
liabilities as shown on the liabilities side of a balance sheet,
(b) indebtedness secured by any mortgage, pledge, lien or security interest
existing on property owned by Borrower, whether or not the indebtedness secured
thereby shall have been assumed and (c) guaranties and endorsements (other than
for purposes of collection in the ordinary course of business) by Borrower and
other contingent obligations of Borrower in respect of, or to purchase or
otherwise acquire, indebtedness of others.

 

“Individual Guarantor” means a Guarantor that is a natural person.

 

“Initial Closing Date” has the meaning ascribed to such term in Schedule I
hereto.

 

“Interim Interest Date” has the meaning ascribed to such term in Schedule I
hereto.

 

“Interim Interest Payment Date” has the meaning ascribed to such term in
Schedule I hereto.

 

“Lien” means any security interest, mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or otherwise), charge against
or interest in property to secure payment of a debt or performance of an
obligation or other priority or preferential arrangement of any kind or nature
whatsoever.

 

“Loan” means a loan from Lender to Borrower pursuant to this Agreement.

 

“Loan Documents” means, collectively, this Agreement, each Note, each Loan
Request, any Guaranty and each other instrument or document executed or
delivered pursuant to or in connection with this Agreement and the other Loan
Documents, including, without limitation, any instrument or agreement given to
evidence or further secure the Obligations.

 

“Loan Request” means a Loan Request, duly executed by an authorized officer of
Borrower, in form and substance acceptable to Lender.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, properties or condition (financial or otherwise) of
Borrower, any Guarantor or any of their Subsidiaries, (b) the ability of
Borrower to perform or pay its Obligations or any material Indebtedness in
accordance with the terms thereof, (c) the ability of any Guarantor to perform
its, his or her obligations under a Guaranty, (d) Lender’s Lien on the
Collateral or the priority of such Lien, or (e) the validity or enforceability
of any Loan Document or the rights and remedies available to Lender under any
Loan Document.

 

“Maximum Principal Amount” has the meaning ascribed to such term in Schedule I
hereto.

 

“Multiemployer Plan” means a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

 

“Note” has the meaning ascribed to such term in Section 2.02.

 

“Notice Address” has the meaning ascribed to such term in Schedule I hereto.

 

“Obligations” means, subject to Section 8.10(c), the obligations to make the
payment of all indebtedness evidenced by the Notes, together with all
extensions, renewals, amendments and modifications thereof and the payment of
all other Indebtedness and other sums owed under, and the payment and the
performance of all obligations and covenants contained in the Loan Documents, in
each case whether now existing or hereafter incurred, direct or indirect,
absolute or contingent, and due or to become due, together with all fees and
expenses (including, without limitation, all attorneys’ fees and expenses)
incurred by Lender in connection with the collection or enforcement of any of
the Obligations.

 

“Organizational Documents” has the meaning ascribed to such term in Schedule I
hereto.

 

“Original Principal Amount” means the aggregate principal balance of each Loan
as of the Closing Date for such Loan.

 

“Owner Change” has the meaning ascribed to such term in Schedule I hereto.

 

“Payment Date” has the meaning ascribed to such term in Schedule I hereto.

 

“Permitted Liens” means any of the following:  (a) Liens (other than Liens
relating to Environmental Laws) for taxes, assessments or other governmental
charges not yet due and payable, (b) statutory Liens of landlords, carriers,
warehousemen, mechanics, materialmen and other similar Liens imposed by law,
which are incurred in the ordinary course of business for sums  that are not
delinquent, (c) Liens in favor of Lender, and (d) Liens explicitly identified in
any Loan Document as “permitted liens.”

 

“Person” means any natural person, corporation, partnership, limited liability
company, firm, association, trust, government, governmental agency or any other
entity, whether acting in an individual, fiduciary or other capacity.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which Borrower, any Guarantor or any of
its or their ERISA Affiliates is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

 

“Prepayment Fee” means with respect to each Loan, the prepayment fee described
in the related Note.

 

“Scheduled Commitment Termination Date” has the meaning ascribed to such term in
Schedule I hereto.

 

3

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“Stated Maturity Date” means, with respect to each Loan, the scheduled maturity
date described in the related Note.

 

“Subsidiary” means, with respect to any Person (the “Parent”) at any date,
(a) any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
Parent in the Parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, (b) any
corporation of which more than 50% of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors or other
governing body of such corporation (irrespective of whether at the time capital
stock of any other class or classes of such corporation shall or might have
voting power upon the occurrence of any contingency) is at the time directly or
indirectly owned by the Parent, or by one or more Subsidiaries of such Parent or
(c) any partnership, joint venture, limited liability company, or other entity
as to which the Parent, or one or more Subsidiaries of such Parent, owns more
than a 50% ownership, equity or similar interest or has power to direct or cause
the direction of management and policies, or the power to elect the managing
partner (or the equivalent), of such partnership, joint venture or other entity,
as the case may be.

 

“UCC” means the Uniform Commercial Code as from time to time in effect in the
State of New York.

 

“Voluntary Prepayment Date” has the meaning ascribed to such term in Schedule I
hereto.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

Section 1.02.  Rules of Construction.

 

(a)           The singular form of any word used herein, including the terms
defined in Section 1.01 hereof, shall include the plural, and vice versa.  The
use herein of a word of any gender shall include correlative words of all
genders.

 

(b)           Unless otherwise specified, references to Articles, Sections and
other subdivisions of this Agreement are to the designated Articles, Sections
and other subdivision of this Agreement as originally executed.  The words
“hereof,” “herein,” “hereunder” and words of similar import refer to this
Agreement as a whole.

 

(c)           The headings or titles of the several articles and sections shall
be solely for convenience of reference and shall not affect the meaning,
construction or effect of the provisions hereof.

 

Section 1.03.  Accounting and Financial Determinations.  Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder shall be made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared in accordance with GAAP consistently
applied.  In the event that GAAP changes during the term of this Agreement such
that the financial covenants contained herein would then be calculated in a
different manner or with different components, Borrower and Lender shall amend
such provisions of this Agreement in such respects as necessary to conform the
financial covenants as criteria for evaluating the financial condition of
Borrower or a Guarantor, as applicable, to substantially the same criteria as
were effective prior to such change in GAAP.

 

ARTICLE II:  THE LOANS

 

Section 2.01.  Loans.

 

(a)           Commitment.  Lender hereby agrees, subject to the terms and
conditions of this Agreement (including, without limitation, the fulfillment of
the conditions set forth in Article III or Lender’s written waiver thereof), to
make one or more Loans to Borrower from time to time during the period from the
Initial Closing Date to the Commitment Termination Date in the aggregate
Original Principal Amount not to exceed the Maximum Principal Amount (the
“Commitment”).  Not more than one Loan shall be funded in any calendar month,
and each Loan shall be in an Original Principal Amount of at least $3,000,000. 
The Original Principal Amount of each Loan shall reduce, dollar for dollar, the
remaining available amount under the Commitment, and any amount funded may not
be reborrowed after being repaid.  The Commitment shall terminate automatically
and without any further action on the Commitment Termination Date.  Borrower’s
obligation to repay a Loan shall commence, and interest shall begin to accrue,
on the Closing Date of such Loan.

 

(b)           Loan Request.  By delivering a duly completed and executed Loan
Request to Lender, on a Business Day, Borrower may irrevocably request that a
Loan be made on the Closing Date specified in such Loan Request (which date
shall be at least two Business Days but no more than 10 Business Days after the
date of delivery to Lender of such Loan Request).  On such Closing Date, subject
to the terms and conditions contained herein (including, without limitation, the
fulfillment of the conditions set forth in Article III or Lender’s written
waiver thereof), Lender shall disburse the Original Principal Amount specified
in such Loan Request to, or on behalf of, Borrower to the accounts or entities
specified in such Loan Request. Such Loan Request shall specify the applicable
Closing Date, the Original Principal Amount of such Loan and the applicable
disbursement instructions.  Borrower agrees that the proceeds of all Loans shall
be used solely for the purposes described in such Loan Request.

 

4

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Section 2.02.  Note.  Each Loan made by Lender under this Agreement shall be
evidenced by, and repaid with interest in accordance with, a single promissory
note of Borrower in form and substance acceptable to Lender, duly completed, in
the principal amount of the Original Principal Amount of such Loan, dated as of
the Closing Date for such Loan, made payable to Lender or order, and maturing on
the Stated Maturity Date of such Loan or such earlier date pursuant to an
acceleration hereunder (the “Note”).

 

Section 2.03.  Scheduled Payments.  On each Payment Date, Borrower shall pay the
aggregate scheduled principal and interest payments owed with respect to each
Loan as set forth in the Notes and any prepayment as provided in Section 2.04;
provided, however, on the Stated Maturity Date or date of acceleration of a
Loan, Borrower shall repay in full the aggregate then outstanding principal
amount of such Loan plus all accrued and unpaid interest thereon and all other
amounts owed hereunder or under any other Loan Document related to such Loan.

 

All amounts required to be paid by Borrower hereunder shall be paid in lawful
money of the United States of America in immediately available funds to the
following account, or to such other account as designated by Lender to Borrower
in writing:

 

Account Name:

 

RBS Asset Finance Customer Payments

Account Number:

 

450000-149-1

ABA Number:

 

241070417

Bank:

 

RBS Citizens, National Association

 

 

One Citizens Drive

 

 

Riverside, RI 02915

Reference:

 

Company name and invoice number

 

Any payment received after 12:00 p.m. New York time will be deemed to be
received on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of interest or the fees
hereunder, as the case may be.  All payments shall be applied first to accrued
interest and then to principal.

 

Section 2.04.  Prepayments.

 

(a)           Voluntary Prepayments.  Prior to the Stated Maturity Date,
Borrower may, from time to time on any Payment Date occurring after the
Voluntary Prepayment Date, make a voluntary prepayment, in whole but not in
part, of the outstanding principal amount of the Loans; provided, however, that
(a) any such voluntary partial prepayment shall be made only of a Loan in full;
(b) all such voluntary prepayments shall require notice on or before the date
that is 30 calendar days in advance of any prepayment of the Loans; and (c) in
connection with each such voluntary prepayment, Borrower shall pay all accrued
interest on the outstanding principal amount of the Loan or Loans prepaid, all
other amount owed under any Loan Document and, except as otherwise provided in
any Loan Document, the aggregate Prepayment Fee for the Loan or Loans prepaid,
which shall not be refundable.

 

(b)           Mandatory Prepayment Upon Acceleration. Upon any acceleration of
any Loan pursuant to Section 7.02, Borrower shall immediately repay all (or if
only a portion is accelerated thereunder, such portion of) the Loans then
outstanding, including accrued and unpaid interest thereon, plus the aggregate
Prepayment Fee for all such Loans and all other amounts owed under the Loan
Documents.

 

Section 2.05.  Interest Provisions.

 

(a)           Interest on the outstanding principal amount of each Loan shall
accrue at a rate per annum equal to the Fixed Rate for such Loan.  Interest
shall be computed on the basis of a 360-day year consisting of 12 30-day months.
On the Interim Interest Payment Date for a Loan, Borrower shall pay interest
accruing on such Loan from the applicable Closing Date through and including the
last day of the calendar month immediately preceding the applicable Interim
Interest Date.  Interest accruing on each Loan on and after the Interim Interest
Date for such Loan shall be payable on each Payment Date or the date of
prepayment, as applicable.

 

(b)           Any payment under a Loan Document that is not paid by Borrower on
the due date thereof shall, to the extent permissible by law, bear a late charge
equal to the lesser of three cents ($.03) per dollar of the delinquent amount or
the lawful maximum, and Borrower shall be obligated to pay the same immediately
upon receipt of Lender’s written invoice therefor.

 

(c)           Upon the occurrence and during the continuation of any Event of
Default or after acceleration, Borrower shall pay interest (i) with respect to
all Loans at a rate per annum equal to the rate otherwise in effect plus an
additional 3% per annum and (ii) with respect to all other Obligations of
Borrower to Lender at a rate per annum equal to the highest Fixed Rate then in
effect plus an additional 3% per annum (each such rate, a “Default Rate”).

 

5

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(d)           The obligations of Borrower hereunder and under the Notes and the
other Loan Documents shall be subject to the limitation that payments of
interest to Lender, plus any other amounts paid to Lender in connection herewith
and therewith, shall not be required to the extent (but only to the extent) that
contracting for and receiving such payment by Lender would be contrary to the
provisions of any law applicable to Lender limiting the highest rate of interest
which may be contracted for, charged or received by Lender, and in such event
Borrower shall pay such Lender interest and other amounts at the highest rate
permitted by applicable law.

 

Section 2.06.  Payments Absolute.  The obligations of Borrower to pay interest
and principal required under this Article II and to make other payments under
the Loan Documents and to perform and observe the covenants and agreements
contained herein and therein shall be absolute and unconditional in all events,
without abatement, diminution, deduction, setoff or defense for any reason,
including, without limitation, any failure of the Collateral to be delivered,
installed or constructed, as applicable, any defects, malfunctions, breakdowns
or infirmities in the Collateral or any accident, condemnation, destruction or
unforeseen circumstances.  Notwithstanding any dispute between Borrower and
Lender or any other person, Borrower shall make all payments under the Loan
Documents when due and shall not withhold any payments pending final resolution
of such dispute, nor shall Borrower assert any right of set-off or counterclaim
against its obligation to make such payments required under the Loan Documents.

 

Section 2.07.  Increased Capital Costs.  If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other
governmental authority affects or would affect the amount of capital required or
expected to be maintained by Lender or any Person controlling Lender, and Lender
determines that the rate of return on its or such controlling Person’s capital
as a consequence of its Commitment or the Loans made by Lender is reduced to a
level below that which Lender or such controlling Person could have achieved but
for the occurrence of any such circumstance, then, in any such case upon notice
from time to time by Lender to Borrower, Borrower shall immediately pay directly
to Lender additional amounts sufficient to compensate Lender or such controlling
Person for such reduction in rate of return.  A statement of Lender as to any
such additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
Borrower.  In determining such amount, Lender may use any method of averaging
and attribution that it shall deem applicable.

 

Section 2.08.  Taxes.

 

(a)           Withholding Taxes.  Any and all payments by Borrower of principal
of, and interest on, the Loans and all other amounts payable hereunder and under
the Loan Documents shall be made free and clear of and without deduction for any
present or future taxes, levies, imposts, deductions, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by Lender’s gross or
net income or receipts by the jurisdiction under the laws of which Lender is
organized or any political subdivision thereof or in which Lender is maintaining
a lending office (such non-excluded items are referred to herein as “Taxes”). 
In the event that any withholding or deduction from any payment to be made by
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then Borrower will (i) pay directly to the
relevant authority the full amount required to be so withheld or deducted;
(ii) promptly forward to Lender an official receipt or other documentation
satisfactory to Lender evidencing such payment to such authority; and (iii) pay
to Lender such additional amount or amounts as is necessary to ensure that the
net amount actually received by Lender will equal the full amount Lender would
have received had no such withholding or deduction been required (including
penalties, interest, additional taxes and expenses (including reasonable
attorney’s fees and expenses) arising therefrom or with respect thereto).

 

(b)           Other Taxes.  In addition, Borrower shall pay any present or
future stamp, documentary, excise, property or similar taxes, charges or levies
that arise from any payment made hereunder or under the Note or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (collectively, “Other Taxes”).

 

(c)           Tax Indemnity.  Borrower shall indemnify Lender for the full
amount of Taxes and Other Taxes (including, without limitation, any amounts paid
by Lender) and any liability (including, without limitation, penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto.  This indemnification shall be made within 30 days from the date Lender
makes written demand therefor and shall survive the termination of this
Agreement.

 

ARTICLE III:  CONDITIONS TO LOANS

 

Lender’s agreement to make the Loans to Borrower hereunder and to disburse the
proceeds thereof shall be subject to the condition precedent that Lender shall
have received, on or prior to the applicable Closing Date (or by such other time
as may be specified herein with respect thereto), all of the following, each in
form and substance satisfactory to Lender:

 

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(a)           This Agreement and all other Loan Documents, properly executed on
behalf of Borrower, and each of the exhibits and schedules hereto and thereto
properly completed.

 

(b)           The respective Note, properly executed on behalf of Borrower.

 

(c)           A Loan Request for each Loan to be funded, duly completed and
properly executed on behalf of Borrower.

 

(d)           A certificate of the Secretary or an Assistant Secretary of
Borrower, certifying as to (i) the resolutions of the Authorizing Entities of
Borrower, authorizing the execution, delivery and performance of this Agreement,
the Note, the other Loan Documents and any related documents, (ii) the
Organizational Documents of Borrower, and (iii) the signatures of the officers
or agents of Borrower authorized to execute and deliver this Agreement, the
Note, the other Loan Documents and other instruments, agreements and
certificates on behalf of Borrower.

 

(e)           Current certified copies of the Organizational Documents of
Borrower.

 

(f)            A Certificate of Good Standing issued as to Borrower by the
Secretary of the State of the state of Borrower’s organization not more than 30
days prior to the Closing Date.

 

(g)           A Certificate of Qualification issued as to Borrower by the
Secretary of the State of the state where the Collateral is or will be located
not more than 30 days prior to the Closing Date.

 

(h)           The Guaranties, if any, properly executed by or on behalf of
Guarantors.

 

(i)            A certificate of the Secretary or an Assistant Secretary of any
Corporate Guarantor certifying as to (i) the resolutions of the Authorizing
Entities of such Guarantor, authorizing the execution, delivery and performance
of the Guaranty and any related documents, (ii) the Organizational Documents of
Guarantor, and (iii) the signatures of the officers or agents of Guarantor
authorized to execute and deliver the Guaranty and other instruments, agreements
and certificates on behalf of Guarantor.

 

(j)            Current certified copies of the Organizational Documents of any
Corporate Guarantor.

 

(k)           A Certificate of Good Standing issued as to all Corporate
Guarantors by the Secretary of the State of the state of such Guarantor’s
organization not more than 30 days prior to the Closing Date.

 

(l)            Opinion of counsel to Borrower and such opinions of local counsel
to Borrower, as required by Lender.

 

(m)          Opinion of counsel to Guarantors, as applicable.

 

(n)           Certificates of the insurance required hereunder, containing a
lender’s loss payable clause or endorsement in favor of Lender.

 

(o)           A true and correct copy of any and all leases pursuant to which
Borrower is leasing any property where the Collateral will be located, together
with a landlord’s disclaimer and consent with respect to each such lease.

 

(p)           A true and correct copy of any and all mortgages, deeds of trust
or similar agreements (whether or not Borrower is a party to any such agreement)
relating to the Collateral or any property where the Collateral will be located,
together with a mortgagee’s waiver or estoppel certificate, as applicable, with
respect to each such mortgage, deed of trust or similar agreement.

 

(q)           The original certificate of title or manufacturer’s certificate of
origin and title application if any of the Collateral is subject to certificate
of title laws.

 

(r)            Current searches of appropriate filing offices showing that
(i) no state or federal tax liens have been filed and remain in effect against
Borrower, and (ii) no financing statements have been filed and remain in effect
against Borrower relating to the Collateral except those financing statements
filed by Lender.

 

(s)           Payment of the Closing Fee and, if any, all of Lender’s other
fees, commissions and expenses in connection with the funding of each Loan.  In
addition to the foregoing, each time Borrower submits a Loan Request, Borrower
shall pay to Lender a fee (in each case, the “Documentation Fee”) in the amount
of (i) $500 if the Loan Request is $2,500,000 or more, or (ii) $250 if the Loan
Request is less than $2,500,000.

 

(t)            Evidence that no Default or event or circumstance that could
reasonably be likely to have a Material Adverse Effect has occurred.

 

(u)           Any other documents or items required by Lender.

 

(v)           Any other documents or items listed on Schedule II hereto.

 

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ARTICLE IV:  REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER

 

Borrower represents, warrants and covenants for the benefit of Lender, as
follows:

 

(a)           Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. Borrower
is in good standing and is duly licensed or qualified to transact business in
each jurisdiction where the nature of its business requires such qualification,
except for those jurisdictions in which the failure to qualify could not
reasonably be expected to have a Material Adverse Effect.  Borrower’s exact
legal name is as set forth on the execution page hereof.

 

(b)           Borrower has full power and authority and holds all requisite
governmental licenses, permits and other approvals to (i) enter into and perform
its obligations under this Agreement, the Note and each other Loan Document to
which it is a party and to own its property, (ii) use the Collateral and
(iii) conduct its business substantially as currently conducted by it, except as
to clause (iii) where the failure to hold such licenses, permits and approvals
could not reasonably be expected to have a Material Adverse Effect.

 

(c)           This Agreement, the Note and the other Loan Documents to which it
is a party have been duly authorized, executed and delivered by Borrower and
constitute legal, valid and binding obligations of Borrower, enforceable against
Borrower in accordance with their respective terms, except to the extent limited
by bankruptcy, reorganization or other laws of general application relating to
or effecting the enforcement of creditors’ rights.

 

(d)           The execution and delivery of this Agreement, the Note and the
other Loan Documents, the consummation of the transactions contemplated hereby
and thereby and the fulfillment of the terms and conditions hereof and thereof
do not and will not violate any law, rule, regulation or order, conflict with or
result in a breach of any of the terms or conditions of any Organizational
Document of Borrower or of any corporate restriction or of any agreement or
instrument to which Borrower is now a party and do not and will not constitute a
default under any of the foregoing or result in the creation or imposition of
any liens, charges or encumbrances of any nature upon any of the property or
assets of Borrower other than Liens in favor of Lender.

 

(e)           The authorization, execution, delivery and performance of this
Agreement, the Note and the other Loan Documents by Borrower do not require
submission to, approval of, or other action by any governmental authority or
agency, except for such action that has been duly obtained or taken and is in
full force and effect.

 

(f)            Each of the Loan Documents that purports to create a security
interest creates a valid first priority Lien on the Collateral subject only to
Permitted Liens, securing the payment and performance of the Obligations.

 

(g)           Except as disclosed on Schedule IV, there is no action, suit,
proceeding, claim, inquiry or investigation, at law or in equity, before or by
any court, regulatory agency, public board or body pending or, to the best of
Borrower’s knowledge, threatened against or affecting Borrower, any Guarantor or
any of their Subsidiaries, challenging Borrower’s or any Guarantor’s authority
to enter into this Agreement, the Note or any of the other Loan Documents or any
other action wherein an unfavorable ruling or finding would adversely affect the
enforceability of this Agreement, the Note or any of the other Loan Documents,
or could reasonably be expected to have a Material Adverse Effect.

 

(h)           Borrower has good, marketable and insurable title in fee simple to
all Collateral that is real property, and good title to all other Collateral, in
each case free and clear of all Liens except for Permitted Liens. With respect
to Collateral that is personal property, Borrower owns/leases the real property
where the Collateral will be located, subject to no Liens of any kind except for
Permitted Liens, and has provided a complete and accurate legal description and
the exact name of the fee simple owner of record of such real property, and no
person other than Borrower is in occupancy or possession of any portion of such
real property.

 

(i)            Borrower is in compliance with all laws, rules, regulations and
orders of governmental authorities applicable to it and its properties except to
the extent the non-compliance with which could not reasonably be expected to
have a Material Adverse Effect.

 

(j)            Borrower has heretofore furnished to Lender the Financial
Statements and those statements fairly present the financial condition of
Borrower and such Guarantor, if any, on the dates thereof and the results of its
operations and cash flows for the periods then ended and were prepared in
accordance with GAAP.  Since the date of the most recent financial statements,
there has been no material adverse change in the business, properties or
condition (financial or otherwise) of Borrower or any Guarantor.   Except as
disclosed in the Financial Statements or the notes thereto and for the items
disclosed on Schedule IV, neither Borrower nor any Guarantor, as of each Closing
Date, has or will have any liabilities, contingent or otherwise, that could
reasonably be expected to have a Material Adverse Effect.

 

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(k)           Borrower has paid or caused to be paid, and will pay, to the
proper authorities when due all federal, state and local taxes required to be
withheld by it. Borrower has filed, and will pay, all federal, state and local
tax returns which are required to be filed, and Borrower has paid or caused to
be paid to the respective taxing authorities all taxes as shown on said returns
or on any assessment received by it to the extent such taxes have become due,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP have been set aside on its books.

 

(l)            For purposes of Section 9-307 of the UCC, Borrower is and will
remain located in the Borrower’s State. Borrower’s residence for federal income
tax purposes is located at its Notice Address specified in Schedule I. Borrower
has authorized Lender to file financing statements that are sufficient when
filed to perfect the security interests created pursuant to this Agreement and
the other Loan Documents. When such financing statements are filed in the
offices noted therein, Lender will have a valid and perfected security interest
in the Collateral that constitutes personal property, subject to no other Lien
other than Permitted Liens.

 

(m)          None of the Collateral constitutes a replacement of, substitution
for or accessory to any property of Borrower subject to a lien of any kind.

 

(n)           No ERISA Event has occurred or is reasonably likely to occur with
respect to any Plan, and each Plan is in compliance in all material respects
with the applicable provisions of ERISA.

 

(o)           Borrower has obtained all permits, licenses and other
authorizations which are required under all Environmental Laws at Borrower’s
facilities or in connection with the operation of its business.  Except as
disclosed on Schedule IV, Borrower and all activities of Borrower at its
facilities comply with all Environmental Laws and with all terms and conditions
of any required permits, licenses and authorizations applicable to Borrower with
respect thereto.  Except as disclosed on Schedule IV, Borrower is also in
compliance with all limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
Environmental Laws or contained in any plan, order, decree, judgment or notice
of which Borrower is aware.  Except as disclosed on Schedule IV, Borrower is not
aware of, nor has Borrower received notice of, any events, conditions,
circumstances, activities, practices, incidents, actions or plans which may
interfere with or prevent continued compliance with, or which may give rise to
any liability under, any Environmental Laws.

 

(p)           All factual information heretofor or contemporaneously furnished
by or on behalf of Borrower or any Guarantor in writing to Lender for purposes
of or in connection with this Agreement or any transaction contemplated hereby
is, and all other such factual information hereafter furnished by or on behalf
of Borrower or any Guarantor to Lender will be, true and correct in every
material respect on the date as of which such information is dated or certified,
and such information is not, or shall not be, as the case may be, incomplete by
omitting to state any material fact necessary to make such information not
misleading.

 

(q)           None of Borrower, any Guarantor or any of their Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying “margin stock.” None
of the proceeds of any Loan will be used for the purpose of, or be made
available by Borrower, any Guarantor or any of their Subsidiaries in any manner
to any other Person to enable or assist such Person in, directly or indirectly
purchasing or carrying “margin stock”. Terms for which meanings are provided in
F.R.S. Board Regulation T, U or X or any regulations substituted therefor, as
from time to time in effect, are used in this Section with such meanings.

 

(r)            None of Borrower, any Guarantor or any of their Subsidiaries is
an “investment company” nor a “company controlled by an investment company”
within the meaning of the Investment Company Act of 1940, as amended, or a
“holding company,” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company,” within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

 

(s)            Schedule V is an accurate and complete list of all Subsidiaries
of Borrower and each Corporate Guarantor and the respective ownership interests
therein.

 

(t)            Borrower and each Guarantor are solvent and will not be rendered
insolvent by the Loan Documents or the transactions contemplated thereby and,
after giving effect to such transactions, neither Borrower nor any Guarantor
will be left with an unreasonably small amount of capital with which to engage
in its business, nor does Borrower or any Guarantor intend to incur, or believe
that it has incurred, debts beyond its ability to pay as they mature.  Neither
Borrower nor any Guarantor contemplates the commencement of insolvency,
bankruptcy, liquidation or consolidation proceedings or the appointment of a
receiver, liquidator, conservator, trustee or similar official in respect of
Borrower or any Guarantor or any of their assets. Neither Borrower nor any
Guarantor are entering into the transactions contemplated by the Loan Documents
with any intent to hinder, delay or defraud any of Borrower’s or any Guarantor’s
creditors.

 

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ARTICLE V:  SECURITY INTEREST

 

This Agreement is intended to constitute a security agreement within the meaning
of the UCC.  To secure the payment and performance of the Obligations, Borrower
hereby grants to Lender a security interest constituting a first Lien on the
Collateral.  Borrower hereby authorizes, and ratifies any previous authorization
for, Lender to file UCC financing statements and any amendments thereto
describing the Collateral and containing any other information required by the
applicable UCC.  Borrower authorizes Lender, and hereby grants Lender a power of
attorney (which is coupled with an interest), to file financing statements and
amendments thereto describing the Collateral and containing any other
information required by the applicable UCC and all proper terminations of the
filings of other secured parties with respect to the Collateral, in such form
and substance as Lender, in its sole discretion, may determine.  Borrower hereby
waives any right that Borrower may have to file with the applicable filing
officer, and agrees that it will not file or authorize the filing of, any
financing statement, amendment, termination or other record pertaining to the
Collateral and/or Lender’s interest therein, except as authorized by Lender in
writing.

 

ARTICLE VI:  COVENANTS

 

Section 6.01.  Affirmative Covenants.  So long as any Loan shall remain unpaid,
Borrower will comply, and shall cause each Guarantor to comply, with the
following requirements unless waived by Lender in writing:

 

(a)           Financial Statements.  Borrower shall deliver to Lender for
Borrower and each Corporate Guarantor respectively: (i) as soon as practicable,
and in any event within 45 days after the end of each fiscal quarter (other than
the last fiscal quarter), unaudited financial statements including in each
instance, balance sheets, income statements, and statements of cash flow, on a
consolidated and consolidating basis, as appropriate, and separate profit and
loss statements as of and for the quarterly period then ended and for the fiscal
year to date, prepared in accordance with GAAP, and certified by Borrower’s
chief financial officer or such Corporate Guarantor’s chief financial officer,
as applicable, to be true and correct, (ii) as soon as practicable, and in any
event within 90 days after the end of each fiscal year, annual unaudited
financial statements (management prepared) for Borrower and audited financial
statement for Guarantor, including balance sheets, income statements and
statements of cash flow for the fiscal year then ended, on a consolidated and
consolidating basis, as appropriate, which have been prepared by the independent
accountants of Borrower or such Corporate Guarantor, as applicable, in
accordance with GAAP and (iii) as soon as practicable, any certifications
required by the Securities and Exchange Commission of the United States (the
“SEC”) or by securities laws applicable to Borrower and each Corporate Guarantor
concerning financial statements of Borrower or such Corporate Guarantor, as
applicable.  Such audited financial statements shall be accompanied by the
independent accountant’s opinion, which opinion shall be in form generally
recognized as “unqualified.”   Borrower shall be deemed to have complied with
the foregoing requirements with respect to Borrower and/or any Corporate
Guarantor, as applicable, if such entity files Forms 10-K and 10-Q with the SEC
that are publicly available within the time frames set forth above.  Borrower
shall cause each Individual Guarantor to deliver such financial information as
Lender shall require from time to time.

 

(b)           Compliance Certificate.  If any financial covenants are set forth
on Schedule III, concurrently with the delivery of the financial statements
pursuant to subsection (a), Borrower shall deliver to Lender a certificate from
Borrower’s chief financial officer or Corporate Guarantor’s chief financial
officer, as applicable, containing information (in reasonable detail and with
appropriate calculations and computations in all respects reasonably
satisfactory to Lender) that demonstrates compliance with the financial
covenants set forth on Schedule III.

 

(c)           Notices.  Borrower shall deliver to Lender each of the following:

 

(i)            as soon as possible and in any event within three Business Days
after the occurrence of a Default, an Event of Default or an event which could
reasonably be expected to result in a Material Adverse Effect, a statement of
Borrower setting forth reasonably detailed information regarding such Default,
Event of Default or event and the action that Borrower has taken and proposes to
take with respect thereto;

 

(ii)           promptly after the commencement thereof, notice in writing of all
litigation and of all proceedings before any governmental or regulatory agency
affecting Borrower, any Guarantor or any of their Subsidiaries of the type
described in Article IV hereof or which seek a monetary recovery against
Borrower, any Guarantor or any of their Subsidiaries in excess of $3,000,000;

 

(iii)          promptly upon knowledge thereof, notice of any loss, theft or
destruction of or material damage to, any accident involving any, and any
action, suit or proceeding relating to, Collateral having a value in excess of
$250,000;

 

(iv)          promptly after the amending thereof, copies of any and all
amendments to any of its Organizational Documents;

 

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(v)           promptly upon knowledge thereof, notice of the violation by
Borrower of any law, rule or regulation applicable to Borrower, which violation
could reasonably be expected to have a Material Adverse Effect.

 

(d)           Compliance with Laws.  Borrower and each of its Subsidiaries shall
comply in all material respects with all governmental rules and regulations and
all other applicable laws, rules, regulations and orders, including, without
limitation, all Environmental Laws.

 

(e)           Maintenance of Properties.  Borrower shall, at its own expense,
maintain, preserve, protect and keep the Collateral in good repair, working
order and condition in compliance with all applicable laws, rules, regulations
and the requirements of all applicable insurance policies, and make necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times and shall maintain
in full force and effect all rights, franchises, permits, licenses, trademarks,
tradenames, approvals, authorizations, leases and contracts necessary to carry
on its business as presently or proposed to be conducted where the failure to so
maintain the same could reasonably be expected to have a Material Adverse
Effect.  Borrower will not make any material alterations, modifications or
additions to the Collateral which cannot be removed without materially damaging
the functional capabilities or economic value of the Collateral unless Lender
has provided its prior written consent.

 

(f)            Insurance. Borrower shall, at its own expense, procure and
maintain continuously in effect: (i) public liability insurance for personal
injuries, death or damage to or loss of property arising out of or in any way
relating to the Collateral sufficient to protect Lender from liability in all
events, and (ii) insurance against such hazards as Lender may require,
including, without limitation, all-risk property and casualty insurance, in each
case in amounts acceptable to Lender.  All insurance policies required by this
Section shall be taken out and maintained with insurance companies acceptable to
Lender; and shall contain a provision that the insurer shall not cancel or
revise coverage thereunder without giving written notice to the insured parties
at least 30 days before the cancellation or revision becomes effective.  No
insurance shall be subject to any co-insurance clause.  Borrower shall cause
Lender to be named as loss payee on all insurance policies relating to any
Collateral and shall cause Lender to be named as additional insured under all
liability policies, in each case pursuant to appropriate endorsements in form
and substance satisfactory to Lender. Such insurance shall not be affected by
any unintentional act or negligence or representation or warranty on the part of
Borrower or other owner of the policy or the property described in such policy. 
Prior to each Closing Date, Borrower shall deposit with Lender evidence
satisfactory to Lender of such insurance and, at least 10 days prior to the
expiration thereof, shall provide Lender evidence of all renewals or
replacements thereof. Borrower shall provide or cause to be provided to Lender
and to its insurance consultant (or any agent, officer or employee of Lender)
such other information relating to its insurance coverage as may be reasonably
requested by Lender.

 

(g)           Books and Records; Inspections.  Borrower will keep books and
records that accurately reflect all of its business affairs and transactions. 
Borrower will, and will cause each Guarantor to, permit Lender or any of its
representatives (including outside auditors), at reasonable times and intervals,
to visit all of its offices, to discuss its financial matters with its officers
and independent public accountant (and Borrower hereby authorizes such
independent accountant to discuss Borrower’s financial matters with Lender or
its representatives whether or not any representative of Borrower is present)
and to examine (and, at the expense of Borrower, copy extracts from) books or
other corporate records (including computer records).  If Lender exercises its
rights under this Section following the occurrence of a Default, Borrower shall
pay any fees of such independent accountant incurred in connection therewith.

 

(h)           Perfection of Liens.  Borrower shall take such action as may be
necessary or as Lender may request in order to perfect and protect Lender’s Lien
on the Collateral.  If requested by Lender, Borrower shall obtain a landlord
and/or mortgagee’s consent and waiver with respect to the property where the
Collateral is located.  If requested by Lender, Borrower shall conspicuously
mark the Collateral with appropriate lettering, labels or tags, and maintain
such markings, so as clearly to disclose Lender’s security interest in the
Collateral.

 

(i)            Title.  Borrower will at all times protect and defend, at its own
cost and expense, its title from and against all claims, liens and legal
processes of creditors of Borrower (other than Lender), and keep all Collateral
free and clear of all such claims, liens and processes other than Permitted
Liens.

 

(j)            Financial Covenants.  Borrower agrees to comply with, and to
cause each Guarantor to comply with, the financial covenants set forth on
Schedule III, if any.

 

Section 6.02.  Negative Covenants.  So long as the Loan shall remain unpaid,
Borrower agrees that unless waived by Lender in writing:

 

(a)           Liens.  Borrower will not create, incur or suffer to exist any
mortgage, deed of trust, pledge, lien, security interest, assignment or transfer
in, on or of any of the Collateral except for Permitted Liens.

 

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(b)           Fundamental Changes.  Borrower will not, and will not permit any
of its Subsidiaries to, form or acquire any Subsidiary, enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify its capital
stock, or liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution), or, other than in the ordinary course of its business, convey,
sell assign, lease, transfer, or otherwise dispose of, in one transaction or
series of transactions, all or any substantial part of its property or assets,
unless Borrower is the surviving entity and the transaction has no Material
Adverse Effect on the financial condition of Borrower.

 

(c)           Sale of Collateral.  Borrower will not, and will not permit any of
its Subsidiaries to, sell, transfer, lease, contribute or otherwise convey or
dispose of (in each case in one transaction or series of transactions), or grant
options, warrants or other rights with respect to (in each case in one
transaction or series of related transactions), or agree to do any of the
foregoing with respect to, all or any part of the Collateral, except Borrower
may lease up to $1,000,000 of Collateral to third parties, provided such lessee
is organized under the laws of the United States, the terms of such lease do not
conflict with the terms of this Agreement, the lease is pursuant to a written
agreement which expressly provides that the rights of the lessee are subordinate
to the rights of the Lender hereunder and Lender has the right to terminate such
lease upon a default by Borrower under this Agreement.  Borrower must provide
Lender with a copy of the lease and the location of the equipment on a quarterly
basis.

 

(d)           Location or Name Changes.  Borrower will not change its location
for purposes of Section 9-307 of the UCC or its name in any manner that could
make any financing statement filed in connection with any Loan Document
seriously misleading within the meaning of Section 9-506 of the UCC or any
similar statute, unless it shall have given Lender at least 30 days’ prior
written notice thereof.

 

Section 6.03.  Indemnity.

 

(a)           Whether or not covered by insurance, Borrower hereby assumes
responsibility for and agrees to reimburse Lender, its affiliates and its and
their respective officers, directors, employees and agents (individually and
collectively, the “Indemnified Parties”) for and will indemnify, defend and hold
the Indemnified Parties harmless from and against all liabilities, obligations,
losses, damages, penalties, claims, suits, actions, proceedings, judgments,
awards, amounts paid in settlements, obligations, debts, diminutions in value,
fines, penalties, charges, fees, costs and expenses (including reasonable
attorneys’ fees and expenses) of whatsoever kind and nature, imposed on,
incurred by or asserted against any Indemnified Party that in any way relate to
or arise out of any of the Loan Documents, the transactions contemplated thereby
or the Collateral, including, without limitation (collectively, the “Losses”),
(i) the selection, manufacture, construction, acquisition, acceptance or
rejection of the Collateral, (ii) the ownership of the Collateral, (iii) the
delivery, installation, lease, possession, maintenance, use, condition, return
or operation of the Collateral, (iv) the condition of the Collateral sold or
otherwise disposed of after possession by Borrower, (v) any patent or copyright
infringement, (vi) any act or omission on the part of Borrower, Guarantor or any
of its or their officers, employees, agents, contractors, lessees, licensees or
invitees, (vii) any misrepresentation or inaccuracy in any representation or
warranty of Borrower or any Guarantor, or a breach of Borrower or any Guarantor
of any of its covenants or obligations under any of the Loan Documents,
(viii) any claim, loss, cost or expense involving alleged damage to the
environment relating to the Collateral , including, without limitation,
investigation, removal, cleanup and remedial costs, (ix) any personal injury,
wrongful death or property damage arising under any statutory or common law or
tort law theory, including, without limitation, damages assess for the
maintenance of a private or public nuisance or for the conducting of an
abnormally dangerous activity on or near the Collateral, (x) any past, present
or threatened, in writing, injury to, or destruction of, the Collateral,
including, without limitation, costs to investigate and assess such injury or
damage and (xi) any administrative process or proceeding or judicial or other
similar proceeding (including, without limitation, any alternative dispute
resolution process and any bankruptcy proceeding) in any way connected with any
matter addressed in any of the Loan Documents.

 

(b)           If any action or proceeding be commenced, to which action or
proceeding the Indemnified Parties are made a party by reason of the execution
or performance of this Agreement or any other Loan Document, or in which it
becomes necessary to defend or uphold the Lien of this Agreement, all sums paid
by the Indemnified Parties, for the expense of any litigation to prosecute or
defend the rights and Lien created hereby or otherwise, shall be paid by
Borrower to such Indemnified Parties, as the case may be, as hereinafter
provided. Borrower will pay and save the Indemnified Parties harmless against
any and all liability with respect to any intangible personal property tax or
similar imposition of any state or any subdivision or authority thereof now or
hereafter in effect, to the extent that the same may be payable by the
Indemnified Parties in respect of this Agreement or any Obligation.

 

(c)           All amounts payable to the Indemnified Parties under this
Section shall be deemed Obligations secured by this Agreement and shall be
payable immediately upon demand.  In case any action, suit or proceeding is
brought against the Indemnified Parties by reason of any such occurrence,
Borrower, upon request of such Indemnified Parties, will, at Borrower’s expense,
resist and defend such action, suit or proceeding or cause the same to be
resisted or defended by counsel designated by Lender.  The obligations of
Borrower under this Section shall survive the termination of this Agreement and
not be merged with any applicable judgment.  If and to the extent that the
foregoing undertaking may be unenforceable for any reason, Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Losses that is permissible under applicable law.

 

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Section 6.04.  Performance by Lender.  If Borrower at any time fails to perform
or observe any of the covenants or agreements contained in this Agreement,
Lender may, but need not, perform or observe such covenant on behalf and in the
name, place and stead of Borrower (or, at Lender’s option, in Lender’s name) and
may, but need not, take any and all other actions which Lender may reasonably
deem necessary to cure or correct such failure (including, without limitation,
the payment of taxes, the satisfaction of security interests, liens or
encumbrances, the performance of obligations owed to account debtors or other
obligors, the procurement and maintenance of insurance, the execution of
assignments, security agreements and financing statements, and the endorsement
of instruments), and Borrower shall thereupon pay to Lender on demand the amount
of all moneys expended and all costs and expenses (including reasonable
attorneys’ fees and legal expenses) incurred by Lender in connection with or as
a result of the performance or observance of such agreements or the taking of
such action by Lender, together with interest thereon from the date expended or
incurred at the lesser of the highest Default Rate then in effect or the highest
rate permitted by law.  To facilitate the performance or observance by Lender of
such covenants of Borrower, Borrower hereby irrevocably appoints Lender, or the
delegate of Lender, acting alone, as the attorney in fact of Borrower with the
right (but not the duty) from time to time to create, prepare, complete,
execute, deliver, endorse or file in the name and on behalf of Borrower any and
all instruments, documents, assignments, security agreements, financing
statements, applications for insurance and other agreements and writings
required to be obtained, executed, delivered or endorsed by Borrower under this
Agreement.

 

ARTICLE VII:  EVENTS OF DEFAULT

 

Section 7.01.  Events of Default.  Each of the following events or occurrences
shall constitute an “Event of Default”:

 

(a)           Borrower shall default in the payment of any Obligation when due
and such failure continues for 10 calendar days;

 

(b)           Any representation or warranty of Borrower made in any Loan
Document or any other writing or certificate furnished by or on behalf of
Borrower pursuant to any Loan Document is or shall be incorrect when made in any
material respect;

 

(c)           Borrower shall fail to perform any of its obligations under
Section 6.01(c), 6.01(f), 6.01(i), 6.01(j) or 6.02(a);

 

(d)           Borrower shall default in the due performance and observance of
any other agreement contained herein or in any other Loan Document (other than
items set forth elsewhere in this Section 7.01), and such default shall continue
unremedied for a period of 30 days after Borrower has actual knowledge thereof
or has received notice by Lender thereof;

 

(e)           The occurrence of an event of default or a breach or default,
after the passage of all applicable notice and cure or grace periods provided
therefor, under any other Loan Document or any other agreement between or among
Borrower, any Guarantor or any of their Subsidiaries and Lender or any of its
Affiliates;

 

(f)            The occurrence of a default or an event of default (however
defined) under any instrument, agreement or other document evidencing or
relating to, and the acceleration of, any indebtedness or other monetary
obligation of Borrower, any Guarantor or any of their Subsidiaries having a
principal amount (including, without limitation, the amount of any outstanding
letters of credit), individually or in the aggregate, in excess of $3,000,000;

 

(g)           Any judgment or order for the payment of money (not paid or fully
covered by insurance maintained in accordance with the requirements of this
Agreement and as to which the relevant insurance company has acknowledged
coverage) in excess of $3,000,000 shall be rendered against Borrower, or
$5,000,000 against Guarantor or any of their Subsidiaries;

 

(h)           The occurrence of any Change in Control;

 

(i)            Borrower, any Guarantor or any of their Subsidiaries shall be or
become insolvent, or admit in writing its inability to pay its debts as they
mature, or make an assignment for the benefit of creditors; or Borrower, any
Guarantor or any of their Subsidiaries shall apply for or consent to the
appointment of any receiver, trustee or similar officer for it or for all or any
substantial part of its property; or such receiver, trustee or similar officer
shall be appointed without the application or consent of Borrower, any Guarantor
or any of their Subsidiaries; or Borrower, any Guarantor or any of their
Subsidiaries shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment
of debt, dissolution, liquidation or similar proceeding relating to it under the
laws of any jurisdiction; or any such proceeding shall be instituted (by
petition, application or otherwise) against Borrower, any Guarantor or any of
their Subsidiaries; or any Individual Guarantor shall become disabled or die;

 

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(j)            Any Loan Document or any Lien granted thereunder shall (except in
accordance with its terms), in whole or in part, terminate, cease to be
effective or cease to be the legally valid, binding and enforceable obligation
of Borrower; Borrower, any Guarantor, any of their Subsidiaries or any other
party shall, directly or indirectly, contest in any manner the effectiveness,
validity, binding nature or enforceability of any Loan Document or any Lien
granted thereunder; or any Lien securing (or required to secure) any Obligation
shall, in whole or in part, cease to be a first priority perfected Lien subject
only to Permitted Liens;

 

(k)           The occurrence of an ERISA Event that, when taken together with
all other ERISA Events that have occurred, could reasonably be expected to
result in liability under Title IV of ERISA of Borrower or any Guarantor or any
of their Subsidiaries in an aggregate amount exceeding $3,000,000;

 

(l)            The termination of, or the receipt by Lender of notice of the
termination of, any lease with respect to the real property where the Collateral
is located; or

 

(m)          The occurrence of a material adverse change in the business, assets
or financial condition of Borrower, any Guarantor or any of their Subsidiaries.

 

Section 7.02.  Remedies.  (a)  Following the occurrence of an Event of Default
described in subsection (i) of Section 7.01, all of the outstanding principal
amount of the Loans and other Obligations shall be due and payable and the
Commitment (if not theretofore terminated) shall terminate, whereupon the full
unpaid amount of such Loans and other Obligations which shall be so declared due
and payable shall be and become immediately due and payable, without
presentment, notice of dishonor, protest or further notice of any kind, all of
which are hereby expressly waived by Borrower, and, as the case may be, the
Commitment shall terminate.

 

(b)  Following the occurrence of any Event of Default and subject to subsection
(a) of this Section, Lender may exercise, at its option, concurrently,
successively or in any combination, all rights and remedies of a secured party
in, to and against the Collateral granted by the UCC or otherwise available at
law or in equity, including, without limitation:

 

(i)            by notice to Borrower, declare all or any portion of the
outstanding principal amount of the Loans and other Obligations to be due and
payable and/or the Commitment (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations which shall
be so declared due and payable shall be and become immediately due and payable,
without presentment, notice of dishonor, protest or further notice of any kind,
all of which are hereby expressly waived by Borrower, and/or, as the case may
be, the Commitment shall terminate;

 

(ii)           recover all fees and expenses (including, without limitation,
reasonable attorneys’ fees) in connection with the collection or enforcement of
the Obligations, which fees and expenses shall constitute additional Obligations
of Borrower hereunder;

 

(iii)          take immediate and exclusive possession of the Collateral, which
constitutes personal property, or any part thereof, with or without any court
order or other process of law and enter the premises where such Collateral is
located and remove the same therefrom, or require Borrower to assemble and
package such Collateral and make it available to Lender for its possession at a
place designated by Lender;

 

(iv)          sell, lease, sublease, hold or otherwise dispose of all or any
part of the Collateral and hold, maintain, preserve and prepare the Collateral
for sale until disposed of;

 

(v)           act as, and Borrower hereby constitutes and appoints Lender,
Borrower’s true, lawful and irrevocable attorney-in-fact (which appointment is
coupled with an interest) to demand, receive and enforce payments and to give
receipts, releases, satisfaction for and to sue for moneys payable to Borrower
under or with respect to any of the Collateral, and actions taken pursuant to
this appointment may be taken either in the name of Borrower or in the name of
Lender with the same force and effect as if this appointment had not been made;

 

(vi)          sue for specific performance of any Obligation or recover damages
for breach thereof; and

 

(vii)         exercise any one or more of the remedies available under any Loan
Document.

 

Section 7.03.  Use of Proceeds.  Any proceeds received by Lender in exercising
the rights and remedies specified in Section 7.02 shall be first applied to pay
the costs and expenses, including, without limitation, reasonable attorneys’
fees and expenses, incurred by Lender as a result of an Event of Default.  Any
proceeds remaining after payment of such costs and expenses shall be applied to
the satisfaction of the Obligations as determined by Lender in its sole
discretion and, unless Lender accepts the Collateral in full or partial
satisfaction of the Obligations, any excess proceeds after satisfaction of all
Obligations shall be paid to Borrower.

 

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ARTICLE VIII:  MISCELLANEOUS PROVISIONS

 

Section 8.01.  Waivers, Amendments.  No provision of this Agreement or any of
the other Loan Documents shall be deemed waived or amended except by a written
instrument setting forth the matter waived or amended and signed by the party
against which enforcement of such waiver or amendment is sought.  Waiver of any
matter shall not be deemed a waiver of the same or any other matter on any
future occasion.  No notice to or demand on Borrower in any case shall entitle
it to any notice or demand in similar or other circumstances.

 

Section 8.02.  Notices.  All notices, certificates, requests, demands and other
communications provided for hereunder or under any Loan Document shall be in
writing and shall be (a) personally delivered or (b) sent by overnight courier
of national reputation, and shall be deemed to have been given on (i) the date
received if personally delivered and (ii) the next Business Day if sent by
overnight courier.   All communications shall be addressed to the party to whom
notice is being given at its Notice Address.

 

If notice to Borrower of any intended disposition of the Collateral or any other
intended action is required by law in a particular instance, such notice shall
be deemed commercially reasonable if given (in the manner specified in this
Section) at least 10 calendar days prior to the date of intended disposition or
other action.

 

Section 8.03.  Severability.  Any provision of this Agreement or any other Loan
Document which is invalid, illegal or unenforceable in any jurisdiction shall,
as to such provision and such jurisdiction, be ineffective to the extent of such
invalidity, illegality or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity,
legality or enforceability of such provision in any other jurisdiction.

 

Section 8.04.  Execution in Counterparts.  This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute one and the same document, and any of the parties hereto may execute
this Agreement by signing any such counterpart, provided that only the original
marked “ORIGINAL: 1 of 4” on the execution page thereof shall constitute chattel
paper under the UCC.

 

Section 8.05.  Further Assurance and Corrective Instruments.  Borrower hereby
agrees that it will, from time to time, execute, acknowledge and deliver or
authorize, as applicable, or cause to be executed, acknowledged and delivered or
authorized, such further acts, instruments, conveyances, transfers and
assurances and take such other actions, as Lender reasonably deems necessary or
advisable for the implementation, correction, confirmation or perfection of this
Agreement or the other Loan Documents and any rights of Lender hereunder or
thereunder. Borrower hereby designates and appoints Lender as its agent, and
grants to Lender a power of attorney (which is coupled with an interest), to
execute on behalf of Borrower such additional documents and to take such other
action.

 

Section 8.06.  Time of the Essence.  Time is of the essence with respect to the
performance by Borrower of the Obligations.

 

Section 8.07.  Entire Agreement.  This Agreement and the other Loan Documents
constitute the entire agreement between Lender and Borrower.  There are no other
understandings, agreements, representations or warranties, written or oral,
between Lender and Borrower with respect to the subject matter of this Agreement
and the other Loan Documents. Upon the execution and delivery of this Agreement
and the other Loan Documents, any proposal or loan commitment with respect to
the transactions contemplated by this Agreement shall be deemed null and void
and of no further force and effect (except to the extent of the provisions
therein concerning any Closing Fee), and the terms and conditions of this
Agreement and the other Loan Documents shall control notwithstanding that such
terms and conditions may be inconsistent with or vary from those set forth in
such bid proposal or loan commitment.

 

Section 8.08.  Governing Law.  THIS AGREEMENT AND THE NOTES SHALL EACH BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

 

Section 8.09.  Successors and Assigns; Assignments by Lender.  This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that Borrower may
not assign or transfer its rights or obligations hereunder without the prior
written consent of Lender.  Lender may assign, in whole or in part, its rights
under this Agreement, including, without limitation, in connection with any
assignment, participation and/or securitization.  Upon any assignment by Lender
of its entire right and interest under the Loan Documents, Lender shall
automatically be relieved, from and after the date of such assignment, of any
liability for the performance of any obligation of Lender therein.

 

Section 8.10.  Assignments, Participations and Securitizations.  Borrower
acknowledges and agrees that a material inducement to Lender’s willingness to
complete the transactions contemplated by the Loan Documents is that Lender may,
at any time, complete an assignment, participation or securitization with
respect to any Loan Document or any or all of the servicing rights with respect
thereto.  In connection with any such assignment, participation or
securitization:

 

15

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(a)           Borrower agrees to cooperate in good faith with Lender, including,
without limitation, providing such documents, financial information and other
information (“Information”) reasonably requested by Lender or any entity
involved with respect to such assignment, participation or securitization;

 

(b)           Borrower consents to Lender’s providing the Information, including
any other information that Lender may now have or hereafter acquire with respect
to Borrower or the Collateral to any entity involved with respect to such
assignment, participation or securitization;

 

(c)           Notwithstanding anything to the contrary in any Loan Document, in
the event that Lender assigns a Note, (i) the related Loan shall be deemed a
separate loan that includes and incorporates each term and condition in this
Agreement and the other Loan Documents related thereto, (ii) the term
“Obligations” as used herein and in the Loan Documents with respect to any
assignee shall mean only the Indebtedness and obligations evidenced by or
related to the Notes held by the assignee and (iii) the term Collateral as used
herein and in the Loan Documents with respect to such assignee shall mean only
the Collateral described on the Collateral Schedules that specifically refer to
the Notes held by such assignee.

 

(d)           If at least one, but not all, of the Loans is subject to an
assignment, participation or securitization, Borrower, at Lender’s request,
shall promptly execute (i) a separate loan agreement with respect to the Loans
subject to assignment, participation or securitization which shall be in
substantially the same form and substance as this Agreement but shall only apply
with respect to Collateral corresponding to such Loans subject to an assignment,
participation or securitization and (ii) an amendment to the Loan Documents to
delete the Collateral corresponding to the Loans that are subject to assignment,
participation or securitization.

 

Section 8.11.  Waiver of Jury Trial.  LENDER AND BORROWER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY OF THE LOAN
DOCUMENTS, ANY DEALINGS BETWEEN LENDER AND BORROWER RELATING TO THE SUBJECT
MATTER OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY LOAN DOCUMENT,
AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LENDER AND BORROWER.
BORROWER ACKNOWLEDGES AND AGREES THAT THIS PROVISION IS A MATERIAL INDUCEMENT
FOR LENDER ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.  THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). 
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY LOAN DOCUMENT, OR TO ANY
OTHER DOCUMENT OR AGREEMENT RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY RELATED TRANSACTION.  IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

Section 8.12.  Forum Selection and Consent to Jurisdiction.  BORROWER AND LENDER
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE OF NEW
YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK, AND ANY APPELLATE COURT FROM
ANY THEREOF, IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR IN
CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREUNDER OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL MAY BE
FOUND.  BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
SUCH COURTS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION.  BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK. BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT THAT BORROWER HAS OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, BORROWER
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

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Section 8.13.  Waiver of Certain Claims.  TO THE EXTENT PERMITTED BY APPLICABLE
LAW, BORROWER AND EACH GUARANTOR SHALL NOT ASSERT, AND HEREBY WAIVES, ANY CLAIM
AGAINST LENDER ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL
OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF, ANY LOAN DOCUMENT OR ANY AGREEMENT OR
INSTRUMENT CONTEMPLATED THEREBY, ANY LOAN OR THE USE OF THE PROCEEDS THEREOF.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS.]

 

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

 

 

BORROWER:

 

 

 

STELLARIS LLC

 

 

 

 

 

By

/s/ A. Theeuwes

 

Name

A. Theeuwes

 

Title

Senior Vice President

 

 

 

 

 

 

 

LENDER:

 

 

 

RBS ASSET FINANCE, INC.

 

 

 

 

 

 

 

By

/s/ Cynthia Prince

 

Name

Cynthia Prince

 

Title

Sr. Vice President

 

 

[EXECUTION PAGE OF LOAN AGREEMENT]

 

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SCHEDULE I

 

The following terms shall have the following meanings:

 

“Authorizing Entities” means (i) with respect to Borrower, the managing members
and, if required, the members of Borrower and (ii) with respect to each
Corporate Guarantor, the board of directors and, if required, the shareholders
of such Guarantor.

 

“Borrower’s State” means Nevada.

 

“Closing Fee” means the $500.00 Fee, as defined in the certain Proposal Letter
dated November 29, 2010, from Lender to Borrower relating to the Loans.

 

“Financial Statements” means the unaudited financial statements of Borrower and
audited financial statements of each Guarantor for their fiscal years
December 31, 2009 and the unaudited financial statement of Borrower and each
Guarantor and for the months ended September 30, 2010.

 

“Fixed Rate” means, with respect to each Loan and each Note, a rate per annum
equal to the sum of (i) the 3.5 - year Interest Swap Rate as published on the
Federal Reserve Statistical Release H.15(519) on the day that is two Business
Days prior to the applicable Closing Date and (ii) 2.25%, which rate will be set
forth in such Note.

 

“Initial Closing Date” means December 29, 2010.

 

“Interim Interest Date” means, with respect to each Loan and each Note, the
interim interest date described in such Note.

 

“Interim Interest Payment Date” means, with respect to each Loan and each Note,
the interim interest date described in such Note.

 

“Maximum Principal Amount” means $7,500,000.00.

 

“Notice Address” means with respect to Borrower or Lender, as applicable, the
following address, or such other address as such party may designate in writing
to the other party:

 

If to Borrower:

Senior Vice President, Finance

 

Stellaris LLC

 

26000 Commercenter Drive

 

Lake Forest, CA 92630

 

Telephone No.: (949) 454-7162

 

Facsimile No.: (949) 595-5532

 

 

If to Lender:

RBS Asset Finance, Inc.

 

71 S. Wacker Drive, Suite 2800

 

Chicago, IL 60606

 

Telephone No.: (312) 777-3500

 

Facsimile No.: (312) 777-4001

 

“Organizational Documents” means (i) with respect to Borrower, the certificate
of formation and limited liability company/operating agreement of Borrower and
(ii) with respect to each Corporate Guarantor, the articles of incorporation and
by-laws of such Guarantor.

 

“Owner Change” means Guarantor shall cease to be the record and beneficial owner
of at least 100% of equity ownership of Borrower.

 

“Payment Date” means the first Business Day of each calendar month.

 

“Scheduled Commitment Termination Date” means December 23, 2011.

 

“Voluntary Prepayment Date” means prior to the first anniversary of the Initial
Closing Date.

 

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SCHEDULE II

 

ADDITIONAL CONDITIONS PRECEDENT

 

EQUIPMENT — In addition to the conditions precedent contained in Article III of
the Loan Agreement, Borrower shall deliver to Lender, on or prior to the
applicable Closing Date, each of the following items, in form and substance
acceptable to Lender:

 

(a)           Manufacturer or supplier invoice(s) and/or bill(s) of sale
relating to the Collateral and, if such invoices have been paid by Borrower,
evidence of payment therefore.

 

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SCHEDULE III

 

FINANCIAL COVENANTS

 

NONE

 

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SCHEDULE IV

 

DISCLOSURE STATEMENTS

 

NONE

 

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SCHEDULE V

 

LIST OF SUBSIDIARIES

 

NONE

 

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