EXHIBIT 10.1

Customer No.NEW

 

Attachments to Loan Agreement

Loan No. 1.01

 

Information Schedule

 

 

Attachment 1 – Collateral Description

 

Term Loan

 

Attachment 2 – Conditions to Closing

 

 

Attachment 2A – Additional Conditions

 

Non-Revolving Line of Credit

 

Attachment 3 – Financial Reports

 

 

Attachment 4 – Insurance Requirements

X

Revolving Line of Credit

 

Attachment 5 – Additional Covenants

 

 

 

RBC Centura

LOAN AGREEMENT
(Secured)

THIS LOAN AGREEMENT  (“Loan Agreement”), entered into effective as of the date
stated in the Loan Agreement Supplement and Information Schedule (“Information
Schedule”), by and between the person identified in the Information Schedule as
the Borrower (whether one or more, “Borrower”) and RBC CENTURA BANK, a North
Carolina banking corporation (“Bank”).

A.

Borrower has applied to Bank for a loan or loans as described below (whether one
or more, “Loan”).

B.

Borrower will use the proceeds of the Loan for the purposes described on the
Information Schedule.

C.

Bank is willing to make the Loan based on the terms and conditions set forth in
this Loan Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Borrower and Bank hereby agree as follows:

Article I.  Definitions.

Section 1.1.  Definitions.  For the purposes hereof:

(a)  “Affiliate” means, with respect to any person, any person that owns or
controls directly or indirectly such person, any person that controls or is
controlled by or is under common control with such person, and each of such
person’s senior executive officers, directors, executives, managers, members or
partners;

(b)  “Collateral” shall have the meaning set forth in Article III;

(c)  “Contractual Obligation” means as to any person, any provision of any
security issued by such person, or of any agreement, instrument or undertaking
to which such person is a party or by which it or any of its property is now or
hereinafter bound, whether such Contractual Obligation is verbal, written or
electronic, direct or indirect, fixed or contingent;

(d)  “Closing” means the date of funding of the Term Loan or the date of the
first disbursement on either the Non-Revolving Line of Credit or the Revolving
Line of Credit, as applicable hereunder, which may occur on a date different
than the Closing Date;

(e)  “Closing Date” means the date as of which this Loan Agreement is executed
by Borrower and Bank;

(f)  “Commitment” means Bank’s commitment letter to Borrower described on the
Information Schedule;

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(g)  “Default Condition” means the occurrence or existence of an event or
condition which, upon the giving of notice or the passage of time, or both,
would constitute an Event of Default;

(h)  “Draw Request” means a written request by Borrower for a disbursement of
proceeds by Bank under the Non-Revolving Line of Credit or the Revolving Line of
Credit, such request to be in a form and containing such information and
certifications as Bank may deem necessary or appropriate to document and
determine the propriety of the request for a disbursement;

(i)  “Event of Default” means an Event of Default as defined in Article X;

(j)  “Financing Statements” means the UCC financing statements filed in order to
perfect Bank’s lien on certain personal property and fixtures as more
particularly described therein and includes initial statements, continuation
statements, amendment statements and all other statements permitted under the
UCC;

(k)  “GAAP” means generally accepted accounting principles as in effect in the
United States which are consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors;

(l)  “Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any person exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government;

(m)  “Indebtedness” means with respect to any person, all indebtedness,
obligations and liabilities of such person for money borrowed, all indebtedness
of such person for the acquisition of property, all indebtedness secured by any
lien on the property of such person whether or not such indebtedness is the
personal obligation of such person, all liability of such person by way of
endorsements (other than for collection or deposit of negotiable instruments in
the ordinary course of business), all indebtedness of such person under
agreements relating to derivatives transactions (e.g. interest rate swaps, caps,
floors or collar transactions, or other similar transactions made pursuant to an
International Swap Dealers Association, Inc. Master Agreement or similar
agreement), all contingent obligations, all capitalized leases, all synthetic
leases and all other items which in accordance with GAAP are classified as
liabilities on a balance sheet, provided, however, Indebtedness shall not
include any consumer credit as defined under the Federal Reserve Board’s
Regulation Z (Truth-in-Lending)(12 CFR 226 et. seq.);

(n)  “Knowledge” or “to best of knowledge” are synonymous and means actual
knowledge or such level of knowledge or awareness as would be obtained or should
have been known at the time by a prudent business person under substantially
similar circumstance after reasonable investigation, and with respect to
Borrower means the knowledge of (1) the person executing this Loan Agreement on
behalf of Borrower, (2) any person executing any certification on behalf of
Borrower that is being delivered to or given to Bank in connection with the Loan
and (3) any person employed by Borrower who is primarily responsible for a
matter for which a representation, warranty or certification is being given to
Bank by Borrower where such representation, warranty or certification is limited
to knowledge;

(o)   “Loan” refers to the loan or loans made pursuant to this Loan Agreement
and evidenced by the Note, and, (1) as stated on the Information Schedule can
include one or more of a Term Loan, a Non-Revolving Line of Credit or a
Revolving Line of Credit and (2) if more than one loan is made pursuant to this
Loan Agreement, the term can reference one, any combination of, or all of the
loans, as the context so requires;

(p)  “Loan Agreement” means this Loan Agreement, as amended, supplemented,
modified, extended and restated from time to time;

(q)  “Loan Amount” means the loan amounts stated on the Information Schedule for
each of the Term Loan, the Non-Revolving Line of Credit and the Revolving Line
of Credit, as applicable;

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(r)  “Loan Documents” means this Loan Agreement, the Note and any other
instruments, documents, statements and agreements evidencing or securing the
Loan (as amended, supplemented, modified, extended and restated from time to
time), which may include, without limitation, deeds to secure debts, security
deeds, mortgages, deeds of trust, assignments, security agreements, pledge
agreements, guaranty agreements, control agreements and financing statements;

(s)  “Non-Revolving Line of Credit” means and refers to a loan under which the
proceeds are advanced from time to time over a period of time up to the Loan
Amount for the Non-Revolving Line of Credit but may not be reborrowed once
repaid, and under this Loan Agreement, if so indicated on the Information
Schedule or so stated in the Note, the Loan includes a Non-Revolving Line of
Credit and references in this Loan Agreement to the Non-Revolving Line of Credit
shall be to such Loan;

(t)  “Note” means the promissory note or promissory notes of Borrower in favor
of Bank evidencing the Loan, together with any amendments, modifications,
extensions, renewals, substitutions and replacements thereto or therefor, and
(1) unless otherwise specifically provided in this Loan Agreement and to the
extent applicable, the Term Loan, the Non-Revolving Line of Credit and the
Revolving Line of Credit shall each be evidenced by a separate promissory note
identified on the Information Schedule and (2) if more than one loan is made
pursuant to this Loan Agreement, the term can reference one, any combination of,
or all of the promissory notes, as the context so requires;

(u)  “Organization” means and includes any of the following – a Registered
Organization, a Governmental Authority, a business trust, an estate, a trust, a
partnership or association, two or more persons having a joint or common
interest, and any other legal or commercial entity;

(v)  “Permitted Encumbrances” means (i) liens and security interests securing
the Indebtedness owed by Borrower to the Bank hereunder; (ii) liens for taxes,
assessments, or similar charges either not yet due or being contested in good
faith; (iii) liens of materialmen, mechanics, warehousemen, landlords or
carriers, or other like liens arising in the ordinary course of business and
securing obligations which are not yet delinquent; (iv) purchase money liens or
purchase money security interest upon or in any property acquired or held by
Borrower in the ordinary course of business to secure Indebtedness outstanding
on the Closing Date or permitted to be incurred under the Loan Documents; (v)
liens and security interests which, as of the Closing Date, have been disclosed
to and approved by the Bank in writing; (vi) liens for the acquisition of office
equipment, computer hardware and software, furniture and other equipment needed
for Borrower’s business so long as any such lien applies only to such acquired
equipment; and (vii) liens and security interest upon not more than Two Hundred
Fifty Thousand and 00/100 Dollars ($250,000.00) of Collateral, in aggregate;

(w)  “Registered Organization” means an Organization organized solely under the
law of a single state or the United States and as to which the state or the
United States must maintain a public record showing the Organization to have
been organized;

(x)  “Related Person” shall have the meaning set forth in Section 8.7;

(y)  “Requirement of Law” means as to any person, any law, treaty, rule,
regulation, ordinance, determination of an arbitrator, order of a court and
determination, advisory opinion, order, guideline, finding or requirement of any
other Governmental Authority, in each case applicable to and binding upon such
person or any of its properties or to which such person or any of its properties
is subject, either individually or jointly with another person or persons;

(z)  “Revolving Line of Credit” means and refers to a loan under which loan
proceeds may be borrowed, repaid, reborrowed and repaid from time to time so
long as the maximum amount outstanding at any time does not exceed the Loan
Amount for the Revolving Line of Credit, and under this Loan Agreement, if so
indicated on the Information Schedule or so stated in the Note, the Loan
includes a Revolving Line of Credit and references in this Loan Agreement to the
Revolving Line of Credit shall be to such Loan;

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(aa)  “Subsidiary” means any Registered Organization or other Organization, the
majority (by number of votes) of the outstanding voting interests of which is at
the time owned or controlled by Borrower, or by one or more Subsidiaries of
Borrower, or Borrower and one or more Subsidiaries of Borrower, and which is
consolidated in the Borrower’s financial statements;

(bb)  “Term Loan” means and refers to a loan under which all of the proceeds
thereof are advanced at one time at Closing with the Borrower not having any
right to reborrow once paid, and under this Loan Agreement, if so indicated on
the Information Schedule or so stated in the Note, the Loan includes a Term Loan
and references in this Loan Agreement to the Term Loan shall be to such Loan.

Section 1.2.  Use and Application of Terms.  To the end of achieving the full
realization by Bank of its rights and remedies under this Loan Agreement and the
other Loan Documents, including payment in full of the Loan, in using and
applying the various terms, provisions and conditions in this Loan Agreement and
the other Loan Documents, the following shall apply:

(a)  the terms “hereby”, “hereof”, “herein”, “hereunder” and any similar words
refer to this Loan Agreement;

(b)  words in the masculine gender mean and include correlative words of the
feminine and neuter genders and words importing the singular numbered meaning
include the plural number or a collective reference, and vice versa;

(c)  words importing persons include firms, companies, associations, general
partnerships, limited partnerships, limited liability partnerships, limited
liability limited partnerships, limited liability companies, trusts, business
trusts, corporations and other Organizations, including public and quasi-public
bodies, as well as individuals;

(d)  the use of the terms “including” or “included in”, or the use of examples
generally, are not intended to be limiting, but shall mean, without limitation,
the examples provided and others that are not listed, whether similar or
dissimilar;

(e)  as the context requires, the word “and” may have a joint meaning or a
several meaning and the word “or” may have an inclusive meaning or an exclusive
meaning;

(f)  the words “attorney” and “counsel” are interchangeable in this Loan
Agreement;

(g)  the phrase “costs and expenses”, or variations thereof, shall include,
without limitation, reasonable attorneys’ fees and fees of legal assistants, and
reasonable fees of accountants, engineers, surveyors, appraisers and other
professionals or experts – and all references to attorneys’ fees or fees of
legal assistants, or to fees of accountants, engineers, surveyors, appraisers or
other professionals or experts shall mean reasonable fees;

(h)  the phrase “highest contract rate of interest under the Note” shall refer
to the highest rate at which interest accrues under the Note, including any
Default Rate, or if there is more than one Note, the highest rate under all of
the Notes, and when used in this Loan Agreement it means that interest on an
amount owing to Bank shall accrue at such rate to the same extent and in the
same manner as it would if the amount owing to Bank was included in the
principal evidenced by the Note bearing the highest contract rate of interest;

(i)  this Agreement shall not be applied, interpreted and construed more
strictly against a person because that person or that person’s attorney drafted
this Agreement; and

(j)  if any party hereto is an Organization, when any action is required or
permitted to be taken, it is intended that the same will be undertaken through
duly authorized employees or representatives of such party, or a partner,
member, manager, executive, officer or director, and any action taken by any of
the

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foregoing persons shall be presumed authorized absent a clear and convincing
showing that the person relying on such action knew or should have known that
the person acting was exceeding his authority.

Article II.  Loan.

Section 2.1.  Loan.  Subject to the terms and conditions of this Loan Agreement
and as stated on the Information Schedule relative to the type of loan or loans
to be made pursuant to this Loan Agreement, Bank will lend and Borrower may
borrow up to the respective Loan Amount for each of the Term Loan, Non-Revolving
Line of Credit and Revolving Line of Credit and the borrowing shall be evidenced
by a Note for each of the Term Loan, Non-Revolving Line of Credit and Revolving
Line of Credit.  The purpose of the Loan is described on the Information
Schedule.  Loan proceeds may not be used for any other purpose without the prior
written consent of Bank, which may be granted in Bank’s sole and absolute
discretion.  

Section 2.2.  Interest Rate/Repayment.  The outstanding principal balance of
each Loan which is subject to this Loan Agreement shall bear interest, and
principal and interest shall be repayable in accordance with the terms of the
Note for each, together with the fees, premiums, charges and cost and expenses
provided for in each Note.  Unless otherwise provided in this Loan Agreement or
the other Loan Documents, the monetary obligations Borrower now owes and the
monetary obligations that arise in the future and are owing by Borrower to Bank
under this Loan Agreement and the other Loan Documents (exclusive of the Note)
shall be payable by Borrower upon demand of Bank, with interest thereon at the
highest contract rate of interest under the Note; and, like the amounts due and
owing under the Note, the same shall be secured by the Collateral.

Section 2.3.  Disbursements.  If the Loan includes a Term Loan, upon
satisfaction of the Conditions to Closing as provided in Article V, Bank shall
advance to Borrower the Loan Amount for the Term Loan.  If the Loan includes a
Non-Revolving Line of Credit or a Revolving Line of Credit, Bank agrees that it
will, from time to time, so long as there shall exist no Default Condition or
Event of Default, make disbursements to Borrower up to but not in excess of the
Loan Amount for the Non-Revolving Line of Credit or the Revolving Line of
Credit, as applicable, in accordance with the terms and provisions set forth in
Article V, Article VI and elsewhere in this Loan Agreement.  Loan disbursements
may be made by depositing same in Borrower’s operating account with Bank or at
such other place requested by Borrower and agreed to by Bank.

Section 2.4.  Advances Do Not Constitute a Waiver.  If Loan includes a
Non-Revolving Line of Credit or a Revolving Line of Credit, no advance of Loan
proceeds shall constitute a waiver of any of the conditions of Bank’s
obligations to make further advances nor, in the event Borrower is unable to
satisfy any such condition, shall any such advance have the effect of precluding
Bank from thereafter declaring such inability to be an Event of Default
hereunder.

Article III.  Collateral.

As security for the payment of the Loan and the other obligations evidenced by
and arising under any one or more of this Loan Agreement and the other Loan
Documents, the Loan shall be secured by and Bank is hereby granted a lien and
security interest in the property and property rights (“Collateral”) described
on Attachment 1, together with the proceeds, products, accessions, additions,
replacements and substitutions thereto and thereof.   Bank’s lien and security
interest in the Collateral is and shall be a perfected first priority lien and
security interest, subject only to the Permitted Encumbrances.  Borrower, and
all other persons who may own and all persons who may have an ownership interest
in any of the Collateral, shall execute and deliver to Bank and shall cause all
persons who may be in control of or possession of any of the Collateral to
execute and deliver to Bank, all deeds to secure debts, mortgages, deeds of
trust, security deeds, assignments, security agreements, pledge agreements,
control agreements, financing statements and other documents, statements and
agreements as Bank and its counsel deem necessary or desirable to further
evidence and perfect or create and perfect the liens and security interests of
Bank in and to the Collateral – and, in connection with the further evidencing
and perfection or creation and perfection of the liens and security interests as
aforesaid, each and all of the foregoing persons shall deliver possession of any
and all of the Collateral to Bank and its agents, and they each shall record or
file, and cause to be recorded or filed any and all of the foregoing documents,
statements and agreements as and when directed by Bank and its counsel.

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Article IV.  Representations and Warranties.

In order to induce the Bank to enter into this Loan Agreement and to make the
Loan, Borrower hereby makes the following representations and warranties,
effective as of Closing, which representations and warranties shall survive the
execution and delivery of this Loan Agreement and any other Loan Documents, any
inspections and examinations at any time made by Bank and made on behalf of Bank
and, if the Loan includes a Non-Revolving Line of Credit or a Revolving Line of
Credit, the same shall be deemed renewed and effective as of any advances made
by Bank hereunder or under the Loan Documents.

Section 4.1.  Financial Position of Borrower.  The financial statements
delivered by Borrower to Bank in connection with Borrower’s application for the
Loan are complete, accurate and correct and present fairly the financial
condition of Borrower at such date.  All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved, except as otherwise
noted therein, and subject, in the case of unaudited interim financial
statements, to the absence of notes and normal and recurring year end
adjustments that are not expected to be material in amount.  Borrower has no
material contingent obligation, liability for taxes, long term lease and unusual
forward or long-term commitment which is not reflected in such statements or in
the notes thereto.

Section 4.2.  No Change.  Since the date of the financial statements delivered
by Borrower to Bank in connection with Borrower’s application for the Loan, (1)
there have been no material adverse changes in any one or more of the business,
operations, assets and financial condition of Borrower and (2) if Borrower is an
Organization, no dividends and no other distributions have been declared or paid
to the owners of an equity or profit interest in Borrower, nor have any such
interests in Borrower been redeemed, retired, purchased or otherwise acquired
for value, nor have any of Borrower’s assets been disposed of or distributed by
Borrower, other than in the ordinary course of business.

Section 4.3.  Organizational Existence; Compliance With Law.  If Borrower is an
Organization, Borrower (1) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (2) has the
power, authority and the legal right to own and operate its property, to lease
the property it operates and to conduct the business as presently conducted and
as proposed to be conducted, as represented to Bank, (3) is duly qualified as a
foreign Organization and in good standing under the laws of each jurisdiction
where its ownership, lease, and operation of property and the conduct of its
business requires such qualification, and (4) is in compliance in all material
respects with all Requirements of Law, except in those instances where the
failure to comply therewith does not and will not, in the aggregate, have a
material adverse impact on any one or more of the business, operations, property
and financial  condition of Borrower and does not and will not materially
adversely affect the ability of Borrower to perform its obligations under the
Loan Documents.

Section 4.4.  Corporate Power; Authorization; Enforceable Obligations.  If
Borrower is an Organization, Borrower has the power, authority and the legal
right (1) to make, deliver and perform under the Loan Documents, (2) to borrow
hereunder and has taken all action to authorize the borrowings on the terms and
conditions of the Loan Documents, including the Note, (3) to authorize the
execution, delivery and performance of the Loan Documents to which it is a party
and (4) to pledge and mortgage its property as contemplated by the Loan
Documents.  No consent or authorization of, filing with, and other act by or in
respect of any Governmental Authority or any other person is required in
connection with the borrowings hereunder and in connection with the execution,
delivery, performance, validity and enforceability of the Loan Documents, the
Silicon Valley Bank under that certain credit agreement by and between it and
the Borrower (the “SVB Agreement”), which SVB Agreement shall be terminated
concurrently with or immediately after the parties’ entry into this Loan
Agreement.  The Loan Documents, including the Note, have or will be duly
executed and delivered on or at Closing. The Loan Documents, when executed and
delivered, will constitute legal, valid and binding obligations of Borrower,
enforceable in accordance with their terms except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance or transfer or other similar laws relating to
or generally affecting creditors’ rights and general equitable principals
(whether at law or in equity) including (a) the possible unavailability of
specific performance, injunctive relief or any other equitable remedy and (b)
concepts of materiality, reasonableness, good faith and fair dealing and, the
Loan Documents, when executed and delivered, will not be subject to rescission,
invalidation, nullification or other avoidance, and will not conflict with, or
result in the breach

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of, or constitute a default under the certificate of incorporation or by-laws or
other organizational or governing documents of Borrower.

Section 4.5.  No Violation.  The execution, delivery and performance of this
Loan Agreement and other Loan Documents, and the borrowings hereunder and
thereunder and the use of the proceeds thereof, and the consummation of the
transactions contemplated herein and therein, will not (1) if Borrower is an
Organization, conflict with, or result in the breach of, or constitute a default
under the certificate of incorporation or by-laws or other organizational or
governing documents of Borrower, (2) violate any material Requirement of Law,
(3) constitute an event of default under any material Contractual Obligation of
Borrower, other than the SVB Agreement which will be terminated concurrently
with or immediately after the parties entry into this Loan Agreement, or (4)
result in, or require the creation or imposition of any lien on any of its
properties (including any of its revenues) or on any of its equity interests
pursuant to any material Requirement of Law, material Contractual Obligation or
otherwise, except such liens as are created in favor of the Bank as a result of
the Loan Documents.

Section 4.6.  No Litigation.  No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending and to the best of
its knowledge, threatened by or against Borrower and any of its properties
(including its revenues) (1) with respect to the Loan Documents and any of the
transactions contemplated thereby or (2) which could have a material adverse
effect on any one or more of the business, operations, property and financial
condition of Borrower.  Borrower is not in default with respect to any material
order, any decree and any judgment of any court, arbitrator or governmental
body, and no event exists, and no event will exist at Closing which with the
giving of notice or the lapse of time, or both, would give rise to such a
default.

Section 4.7.  No Default – Contractual Obligations.  Borrower is not in default
under or with respect to any Contractual Obligation (including any Indebtedness)
where such default and the consequences thereof could be materially adverse to
any one or more of its business, operations, properties and financial condition,
or where such default and the consequences thereof could materially adversely
effect its ability to perform its obligations under the Loan Documents, other
than the SVB Agreement which will be terminated concurrently with or immediately
after the parties entry into this Loan Agreement; and no event exists, or will
exist at Closing which, with the giving of notice or the lapse of time, or both,
would give rise to such a default.  To the best of its knowledge, all of the
material Contractual Obligations of Borrower are valid, binding and enforceable
obligations of all of the parties thereto, in accordance with their respective
terms; to the best of its knowledge, there are no material disputes between
Borrower and the other parties to such material Contractual Obligations with
respect to such Contractual Obligations; and Borrower, after taking the Loan
into account, will be able to continue performing its obligations under such
Contractual Obligations.

Section 4.8.  No Default – Loan Documents.  No Default Condition or Event of
Default shall exist at Closing and, to the best of its knowledge, no event
exists and no event will exist at Closing which with the giving of notice or the
lapse of time, or both, would give rise to a Default Condition.

Section 4.9.  Ownership of Property; Liens; Etc.  Borrower, and each of the
other owners of the Collateral and each of the other owners of interests
therein, if any, have good and marketable title in and to the Collateral owned
by each, free and clear of any and all liens, security interests, claims,
demands, off-sets, contingencies and other outstanding interests, both legal and
equitable, except for the Permitted Encumbrances.

Section 4.10.  Taxes.  Borrower has filed or caused to be filed all tax returns,
reports, estimates and declarations which are required to be filed, and has paid
all taxes shown to be due and payable on said returns, except for those being
contested in good faith and for which adequate reserves has been established by
the Borrower in conformity with GAAP.  Borrower also has paid all assessments
made against it and any of its property and has paid all other taxes, fees and
other charges imposed on Borrower and its property by any Governmental Authority
(other than those the amount or validity of which is currently being contested
in good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been established by Borrower); and no liens have been
filed and no claims are being asserted with respect to any such taxes, fees and
other charges, and no event exists, and no event will exist at Closing which
with the giving of notice or the lapse of time, or both, would give rise to a
lien.

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Section 4.11.  Subsidiaries.  Borrower has no Subsidiaries and will have no
Subsidiaries as of Closing, except as listed on the Information Schedule.

Section 4.12.  Disclosure.  Neither this Loan Agreement nor, the other Loan
Documents, nor any representation, certificate, statement and other document
furnished to Bank prior to or contemporaneous with the execution and delivery of
this Loan Agreement by Borrower contain or will contain when executed and
delivered any untrue statement of any material fact or omits disclosure of any
material fact necessary to make the statements contained herein and therein not
misleading.  There is no material fact known to Borrower which has not been
disclosed to Bank in writing which affects in a materially adverse manner either
or both (1) the property, business, or financial condition of Borrower, or (2)
the ability of Borrower to fully perform this Loan Agreement, the other Loan
Documents and any and all other transactions contemplated herein and therein.
 After giving effect to the Loan and the transactions herein contemplated,
Borrower will have assets having a fair market value in excess of the amount
required to timely pay its probable liabilities on its existing debts as they
become due in the ordinary course of business, and has, and will have, access to
adequate capital for the conduct of its business and the timely payment of its
debts from time to time incurred in connection therewith as such debts mature.

Section 4.13.  Collateral in Compliance.  All of the Collateral and all other
property of Borrower that is necessary for the full use and enjoyment of the
Collateral is in material compliance with all material Requirements of Law,
including zoning, subdivision and environmental rules and regulations, and will
be operated in such manner to remain in material compliance with such laws until
the Loan is paid and satisfied in full.

Section 4.14.  No Materially Adverse Contracts, Etc.  Borrower is not subject to
any one or more charter restrictions, corporate laws or other similar legal
restrictions and restraints, judgments, decrees, orders, rules, regulations and
other Requirements of Law which has or is expected in the future to have a
material adverse effect on any one or more of the business, assets and financial
condition of Borrower.  Borrower is not a party to any contract or agreement
which has or is expected to have in the future any material adverse effect on
the business, assets and financial condition of Borrower.

Section 4.15.  Name.  Borrower operates its business and owns its assets only
under the name of Borrower and its Subsidiary and as otherwise described in its
public filings with the Securities and Exchange Commission.

Section 4.16.  Environmental Compliance.  With respect to any real property
owned by Borrower, any real property leased by Borrower and any real property
otherwise in Borrower’s possession or control (including all improvements
located on any of the foregoing real property): (1) as of the date hereof, (i)
to Borrower’s Knowledge, there are no hazardous materials, substances, wastes or
other environmentally regulated, controlled or sensitive materials or
substances, including, without limitation, any oil, gas or other petroleum
related products, any lead based paints, any materials containing asbestos or
any biological, chemical or nuclear contaminated materials or substances,
located on, in or under any of such property in violation of any material
environmental laws and (ii) to Borrower’s Knowledge, there are no harmful or
hazardous levels or concentrations of mold, spores or other fungi on, in or
under such property and there are no harmful or hazardous levels or
concentrations of radon or other similar gases on, in or under such property
(collectively (i) and (ii), “hazardous substances”); or (2) Borrower has fully
disclosed to Bank, in writing, the existence, extent and nature of any such
hazardous substances, and (i) Borrower is legally authorized and empowered to
maintain such hazardous substances on, in or under such property or use them in
connection with such property, (ii) such hazardous substances are being used,
maintained and controlled in substantially full compliance with all material
Requirements of Law and (iii) Borrower has obtained and will constantly maintain
all licenses, permits and approvals required with respect thereto, and is and
will remain in substantially full compliance with all of the terms, conditions
and requirements of such licenses, permits and approvals.  The records of
Borrower do not now, nor to the best knowledge of Borrower have they ever
revealed any discharge, spill or disposal of any hazardous substances at, on and
under any of the aforementioned property.  Borrower has not received any notice
of a violation or an alleged violation, a claim or an alleged claim,  a civil
action or a threatened civil action, a criminal action or a threatened criminal
action,  an administrative action or a threatened administrative action, an
administrative penalty, a fine or a lien from any person whatsoever (including
any Governmental Authority) against Borrower and any of the aforementioned
property relating to any hazardous substances or any other environmental matter.

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Section 4.17.  OFAC. Borrower (1) is not a person whose property or interest in
property is blocked or subject to blocking pursuant to Section 1 of Executive
Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)), (2) does not engage in any dealings or transactions prohibited by
Section 2 of such executive order, or is not otherwise associated with any such
person in any manner violative of Section 2, and (3) is not a person on the list
of Specially Designated Nationals and Blocked Persons or subject to the
limitations or prohibitions under any other U.S. Department of Treasury’s Office
of Foreign Assets Control regulation or executive order.

Section 4.18.  Patriot Act. Without limiting Borrower’s other representations
and warranties in this Article IV relating to compliance with applicable
Requirements of Law, Borrower is in compliance, in all material respects, with
(1) the Trading with the Enemy Act, as amended, and each of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (2) the Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act
of 2001).

Article V.  Conditions to Closing.

All of the conditions set forth in this Article V must be satisfied and
completed, or the satisfaction and completion thereof waived by Bank, prior to
any disbursement of proceeds by Bank under the Loan, whether the Loan includes a
Term Loan, Non-Revolving Line of Credit or Revolving Line of Credit.  If all of
the conditions are not met to Bank’s satisfaction, or the completion thereof
waived by Bank, Bank may, at its option, (1) withhold disbursement until the
same are met, (2) disburse and require that any unsatisfied terms and conditions
be satisfied as a condition subsequent to Closing within such period of time as
may be designated by the Bank or (3) terminate its obligation to fund the Loan
and recover from Borrower all costs and expenses incurred by Bank in connection
with its preparations for making the Loan to Borrower, together with the fees
and other costs and expenses required to be paid by Borrower under the
Commitment.   A waiver by Bank of a condition must be in writing to be effective
and a waiver as to one or more conditions shall not constitute a waiver as to
other conditions and shall not establish a “course of dealing or practice” that
would require a waiver of the same or a similar condition at some later time.

Section 5.1.  Loan Documents.  Bank shall have received fully executed and, if
necessary, recorded or filed, originals of the Loan Documents required by the
Commitment, this Loan Agreement and as may be otherwise required by Bank and its
counsel to evidence the Loan and create and perfect the first priority liens and
security interests in the Collateral, subject only to the Permitted
Encumbrances.

Section 5.2.  Supporting Documentation.  The Bank shall have received the
supporting documentation and items listed on Attachment 2, and all of the other
terms and conditions listed on Attachment 2 and elsewhere in this Loan Agreement
shall have been satisfied, including, without limitation, perfection in favor of
Bank of a first priority lien and security interest in all of the Collateral,
subject only to the Permitted Encumbrances.

Section 5.3.  Representations and Warranties.  The representations and
warranties made by Borrower which are contained herein and those which are
contained any certificate, document, financial statement and other statement
furnished at any time under and in connection herewith, shall be correct in all
material respects on and as of Closing, as if made on and as of such date, and
on and as of the date of each subsequent disbursement of Loan proceeds.

Section 5.4.  No Default or Event of Default.  No Default Condition or Event of
Default shall have occurred and be continuing as of Closing, or after giving
effect to the Loan to be made at Closing, nor shall a Default Condition or event
of Default exist as of the date of subsequent disbursement of Loan proceeds.

Section 5.5.  Commitment Fee.  Borrower shall have paid to Bank the commitment
fee of $15,000.00 and all other fees and costs and expenses to be paid by
Borrower at or before Closing, as provided in the Commitment.

Section 5.6.  Additional Matters.  All other documents and legal matters in
connection with the transactions contemplated by this Loan Agreement shall be
received by the Bank in form and substance satisfactory to the Bank

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and its counsel and such counsel shall have received all information and such
counterpart originals, or certified or other such copies of such documents, as
such counsel may reasonably request.

Section 5.7.  General.  Without imposing any obligation or undertaking on Bank
and its counsel and without acknowledging compliance with the representations
and warranties or waiving strict compliance by Borrower with all of the terms
and conditions of this Loan Agreement and the materiality of all of the
representations and warranties of Borrower, Bank and Bank’s counsel shall retain
the right to be satisfied that all matters required to be performed in
connection with this transaction have been performed in such a manner that the
Loan proceeds can be advanced, the lien and security position of Bank perfected
in the Collateral and that no event exists which will jeopardize the Loan and
the prospect of payment of the Loan.

Article VI.  Non-Revolving and Revolving Line of Credit – Conditions Precedent
to Disbursements
Following the First Disbursement.

If the Loan includes either a Non-Revolving Line of Credit or a Revolving Line
of Credit, all of the conditions set forth in this Article VI must be satisfied
before Bank is obligated to make any disbursements and each of the conditions
must be and remain satisfied at the time of each disbursement subsequent to the
first disbursement.  As in Article V, all of the conditions in this Article VI
must be met to Bank’s satisfaction.  If the Loan includes a Non-Revolving Line
of Credit, once disbursements are repaid, the amount repaid may not be
reborrowed and the maximum principal amount that may be borrowed under the Note
for the Non-Revolving Line of Credit and pursuant to this Loan Agreement is the
Loan Amount for the Non-Revolving Line of Credit.  If the Loan includes a
Revolving Line of Credit, Loan proceeds may be borrowed, repaid, reborrowed and
repaid under the Note for the Revolving Line of Credit and pursuant to this Loan
Agreement, but at no time shall the amount of principal outstanding exceed the
Loan Amount for the Revolving Line of Credit.  If the Loan includes a
Non-Revolving Line of Credit or a Revolving Line of Credit, Attachment 2A
contains additional terms and provisions relating to such Loans.

Section 6.1.  Existing Conditions.  All of the conditions stated in Article V
must have been satisfied to Bank’s satisfaction and they each must remain
satisfied at the time of the disbursement, or the completion thereof waived by
Bank.

Section 6.2.  Additional Conditions.  All of the conditions stated in Attachment
2A must have been satisfied to Bank’s satisfaction and they each must remain
satisfied at the time of each disbursement, or the completion thereof waived by
Bank.

Section 6.3.  Draw Request.  Borrower shall have delivered to Bank a Draw
Request for each disbursement, and under the terms of this Loan Agreement,
including those set forth in Attachment 2A, Bank must be obligated to make the
disbursement being requested in the Draw Request.

Section 6.4.  No Default or Event of Default.  No Default Condition or Event of
Default shall have occurred and be continuing as of the date of any disbursement
of Loan proceeds.

Article VII.  Affirmative Covenants.

Borrower covenants and agrees with Bank that until the later of (1) payment in
full of the Loan and all other amounts owing to Bank under the Loan Documents or
(2) termination of Bank’s obligation to make disbursements under the Loan,
Borrower will fully and promptly do and perform in all material respects each
and every one of the matters set forth in this Article VII; and Borrower
acknowledges to Bank that the breach or default by Borrower of any of said
covenants and agreements is and the same shall be material.

Section 7.1.  Banking Relationship. Borrower shall maintain its primary banking
relationship with Bank, including, without limitation, its deposit accounts with
Bank and its money market account(s) with Bank or RBC Dain Rauscher; or, if
Borrower elects to maintain its accounts with another financial institution, at
Bank’s request made at anytime during the term of the Loan, Borrower shall cause
such other financial institution to execute and deliver to

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Bank such control agreements and blocked account agreements relative to
Borrower’s accounts as Bank deems necessary or appropriate.

Section 7.2.  Use of Loan Funds.  Borrower shall use all Loan proceeds disbursed
to Borrower only for the purposes stated in this Loan Agreement.

Section 7.3.  Payment/Performance.  Borrower shall pay when due all amounts now
owing to Bank under the Note, this Loan Agreement and the other Loan Documents
and Borrower shall pay when due all amounts which may in the future become owing
to Bank under the Note, this Loan Agreement and the other Loan Documents.
 Borrower also shall promptly perform in all material respects all other
obligations of Borrower hereunder and under the Note and the other Loan
Documents – both present obligations and obligations which may arise in the
future.

Section 7.4.  Other Indebtedness.  Borrower shall make full and timely payment
of the principal and interest on all Indebtedness on which Borrower is now
obligated and on all which it may in the future come to be obligated on to
persons other than Bank, and duly and faithfully comply with all the terms and
conditions to which Borrower is obligated thereunder, the breach of which could
materially adversely affect Borrower (inclusive of its business and its
property).

Section 7.5.  Financial Statements.  Borrower shall furnish to the Bank and
Borrower shall cause others to furnish to Bank, at the sole expense of Borrower,
such information respecting the business, assets, operations and financial
condition of Borrower as the Bank may from time to time request, including,
without limitation, the information indicated on Attachment 3, at the times
stated therein.

Section 7.6.  Inspection of Property; Books and Records; Discussions.  Borrower
shall maintain proper books and records in which full, true, accurate and
correct entries, in conformity with GAAP and all material Requirements of Law,
shall be made of all material dealings and transactions in relation to
Borrower’s business and activities.  Borrower shall permit Bank, and Borrower
shall permit representatives of Bank, during regular business hours upon one (1)
days written notice to visit and inspect any of the Collateral and any of the
other property owned or used by Borrower in its business and shall permit Bank,
and shall permit representatives of Bank, to examine and make abstracts from any
of Borrower’s books and records, in any case not more frequently than quarterly
unless an Event of Default exists and is continuing.  Borrower shall permit
Bank, and Borrower shall permit representatives of Bank, to discuss the
business, operations, properties, financial condition and prospects of Borrower
with its officers, board members, executives, managers, members, partners,
employees, agents, independent certified public accountants and others, as
applicable; provided that such Persons shall agree to maintain such information
in confidence, as required by applicable privacy law for publicly-traded
organizations; and, Borrower shall promptly furnish to Bank such reports
relating to the business, operations, prospects and financial condition of
Borrower as Bank may request from time to time.

Section 7.7.  Insurance.  Borrower shall maintain insurance set forth on
Attachment 4.  All insurance carriers shall have a Best’s Key Rating of at least
“A” and shall have a Best’s Key Rating Class of at least “IX” and Bank shall be
shown as an “additional insured” in all liability policies and a “mortgagee-loss
payee” in all casualty insurance policies.   Borrower shall deliver to Bank, and
Borrower shall cause others to deliver to Bank, annually (and at such other
times as Bank may request) a statement regarding Borrower’s insurance coverages,
such statement to contain as much detail as Bank may request; and Borrower also
shall deliver to Bank, and Borrower shall cause others to deliver to Bank,
certificates of such insurance or the policies of insurance as may be requested
by Bank.  If Borrower shall at any time or times hereafter fail to obtain and
maintain the insurance coverages on the terms set forth in Attachment 4, Bank
may, but shall not be obligated to, obtain and cause to be maintained insurance
coverage with respect to the property affected, including, at Bank’s option, the
coverages provided by any and all of the policies of Borrower, and pay any part
of and all of the premiums therefor, without waiving any default by Borrower.

Section 7.8.  Payment of Taxes and Assessments.  Borrower shall duly pay and
discharge (1) all taxes (including federal and state withholding and other
employee related taxes), assessments and governmental charges upon and against
either or both Borrower and any of the Collateral prior to the date on which
penalties attach thereto, unless and to the extent that such matters are being
diligently contested in good faith and by appropriate proceedings and

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appropriate reserves therefor have been established in accordance with GAAP, and
(2) all lawful claims, including claims related to tort damages, labor,
materials, supplies, services, repairs and wages, which might or could, if
unpaid, become a lien or charge upon the Collateral, unless and to the extent
only that the same are being diligently contested in good faith and by
appropriate proceedings and appropriate reserves therefor have been established
in accordance with GAAP.

Section 7.9.  Conduct of Business and Maintenance of Existence.  Borrower shall
continue to engage in business of the same general type as now conducted and
notify the Bank of any significant change in management. If Borrower is an
Organization, Borrower shall preserve, renew and keep in full force and effect
its organizational existence.   Borrower shall take all reasonable action to
maintain all rights, privileges, franchises, patents, copyrights, trademarks and
tradenames necessary or desirable in the normal conduct of its business and all
licenses and permits necessary to continue to operate its business as it is
currently being operated.   Except in those limited instances where the failure
to comply could not have a material adverse effect on one or more of the
business, operations, property and financial condition of Borrower, and
otherwise could not substantially impair the Collateral and the Bank’s position
with respect to the Collateral, Borrower shall comply with all Contractual
Obligations and Requirements of Law and Borrower shall maintain capital
sufficient to carry on its business and transactions and, at any time, all
businesses and transactions in which it then proposes to engage.

Section 7.10.  Maintenance of Property.  Borrower shall keep and maintain the
Collateral consisting of real property and tangible personal property in good
working order and condition (ordinary wear and tear excepted) and make all
needful and proper repairs, replacements, additions and improvements thereto as
are necessary.

Section 7.11.  Maintain Security Interest.  Borrower shall maintain, protect and
preserve the security interest of Bank in the Collateral and the lien position
of Bank in the Collateral, including, without limitation, the filing of “claims”
under insurance policies within the time periods required under such policies
and the filing of appropriate notices, claims and pleadings in any condemnation
actions.

Section 7.12.  Notices.   Borrower shall promptly give notice to Bank of (1) the
occurrence of any Default Condition or Event of Default, (2) any governmental
investigation, any litigation, any arbitration and any other proceeding
affecting Borrower in which the amount involved is or could have a material
adverse effect on one or more of the business, operations, properties and
financial condition of Borrower, (3) any event affecting Borrower and any change
in the financial condition of Borrower occurring since the date of the last
financial statements delivered to Bank, which individually or cumulatively when
viewed in light of prior financial statements, may result in a material adverse
change in the financial condition of  Borrower and (4) any change in the
location or address of the principal office and place of business of  Borrower.
 Each notice pursuant to this subsection shall be accompanied by a statement
setting forth details of the occurrence referred to therein and stating what
action, if any, is proposed to be taken with respect thereto.

Section 7.13.  Further Assurances.  On demand of Bank, Borrower shall do any act
and execute and deliver any additional documents consistent with the Loan
Documents reasonably required by Bank to secure the Loan, confirm and perfect
the lien and security interest of Bank in the Collateral and to comply with the
Loan Documents, including, but not limited to, any items listed on Attachment 5,
additional Financing Statements, new and replacement notes, security documents
and agreements supplementing, extending and otherwise modifying the Note, this
Loan Agreement and any of the other Loan Documents, and certificates as to the
amount of the Indebtedness evidenced by the Note from time to time.

Section 7.14.  Reorganization.   Borrower shall notify Bank of any plan of
merger, consolidation or liquidation of assets.  Bank may elect to terminate
this Loan and demand repayment of all outstanding Loan advances.  Such Loan
termination and repayment of all outstanding Loan advances shall take place no
later than 120 days after Bank notifies Borrower of Bank’s election to terminate
the Loan under this Section.

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Article VIII.  Negative Covenants.

Borrower covenants and agrees with Bank that until the later of (1) payment in
full of the Loan and all other amounts owing to Bank under the Loan Documents or
(2) termination of Bank’s obligation to make disbursements under the Loan,
Borrower shall not do and Borrower shall not permit others to do, either
directly or indirectly, without the prior written consent of Bank unless such
consent is not necessary because of exceptions set forth on Attachment 5, any of
the matters listed in this Article VIII; and Borrower acknowledges to Bank that
the breach or default by Borrower of any of said covenants and agreements is and
the same shall be material.

Section 8.1.  Indebtedness.  Except Indebtedness in respect of the Note and
other Indebtedness with Bank, Borrower shall not do any one or more or the
following: create any Indebtedness; incur or otherwise become obligated on any
Indebtedness; assume any Indebtedness; refinance any Indebtedness; suffer to
exist any Indebtedness against it; and draw upon any Indebtedness.  For the
purposes of this section only, Indebtedness does not include (x) short-term
unsecured trade credit incurred in the ordinary course of business to maintain
or acquire (1) normal levels of inventory and supplies, and (2) maintenance and
service contracts for services necessary or appropriate to Borrower and (y)
Permitted Encumbrances.

Section 8.2.  Liens and Security Interests.  Except for Permitted Encumbrances,
Borrower shall not and Borrower shall not permit others to encumber the
Collateral, and any part thereof and interest therein, with any one or more of
the following: a lien (inclusive of real property, personal property and mixed
real and personal property liens), a security interest, a governmental
assessment, a charge, a levy, an attachment, an order of seizure and any other
similar or dissimilar claim.

Section 8.3.  Judgments.  Borrower shall not permit a judgment for the payment
of money in excess of $250,000.00 to be entered against it which judgment
Borrower permits to remain unsatisfied or unstayed for a period the shorter of
thirty (30) days after the same is entered against Borrower or the date on which
an execution is issued on such judgment;

Section 8.4.  Guaranty.  Borrower shall not directly agree to and Borrower shall
not indirectly agree to, and Borrower shall not directly or indirectly assume,
guarantee, endorse and otherwise in any way be responsible or liable for or
become responsible or liable for the Indebtedness and other obligations of any
person (all such transactions being herein called “guarantees”), except
guarantees in the ordinary course of business, including, without limitation,
guarantees by endorsement of instruments for deposit or collection in the
ordinary course of business.

Section 8.5.  Loan.  Except as provided in Section 8.7 below or in the ordinary
course of business, Borrower shall not make and Borrower shall not commit to
make any one or more of the following with respect to any person not
consolidated in its financial statements, whether done directly by Borrower or
indirectly through someone else: an advance, a loan, an extension of credit, a
deferral of payment on goods sold or to be sold, a deferral of payment on goods
leased or to be leased, a deferral of payment on services rendered or to be
rendered, a capital contribution, a purchase of bonds, a purchase of notes, a
purchase of debentures, and a purchase of warrants, stock, securities and any
other investment.

Section 8.6.  Leases and Capital Expenditures.  Except in the ordinary course of
business, Borrower shall not become liable directly and Borrower shall not
become liable indirectly, in the capacity of a lessee or tenant, and Borrower
shall not become liable as aforesaid in the capacity of a guarantor or other
surety, with respect to any lease of real, personal or mixed real and personal
property; and Borrower shall not directly and Borrower shall not indirectly
enter into any transaction on account of the purchase or other acquisition of
capital assets.

Section 8.7.  Loans to Officers.  Except for employee relocation loans, employee
bridge loans and other incidental loans to employees such as those in connection
with cashless stock option exercise procedures consistent with applicable Legal
Requirements, all in the ordinary course of Borrower’s business, Borrower shall
not directly make any loan or other extension of credit and Borrower shall not
indirectly make any loan or other extension of credit to any of the following
persons and Borrower shall not do any of the foregoing for the benefit of any of
the following persons: shareholders, directors, officers, executives, managers,
members, partners and employees of Borrower, and

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members of the immediate family of any of the foregoing who are individuals and
not Organizations (“Related Persons”).  The prohibitions in this Section
relating to loans and other extensions of credit to Related Persons apply to
past Related Persons, present Related Persons and to future Related Persons.

Section 8.8.  Intentionally Omitted.

Section 8.9.  Name Change.  Borrower shall not change its name and Borrower
shall not operate under a name other than its current name.

Section 8.10.  Sales.  Except as otherwise permitted in this Loan Agreement or
in any of the other Loan Documents, Borrower shall not voluntarily and Borrower
shall not involuntarily through its direct actions or inactions, or indirectly
through the actions or inactions of others, do any one or more of the following:
sell, transfer, lease, liquidate, franchise, license, dispose of and part with
possession or control of all or any part of or interest in (whether legal or
equitable) any of the Collateral or all of the Collateral.  The prohibitions in
this Section do not extend to or include (1) the sale of inventory in the
ordinary course of business, (2) the sale of equipment in the ordinary and
normal replacement program for equipment under which Bank’s first priority lien
and security interest continues in the replacement equipment and (3) the sale of
obsolete equipment generally.

Section 8.11.  Acquisitions.  Borrower shall not acquire any stock or other
equity in any other person, other than a Subsidiary; Borrower shall not acquire
any debt or other similar interest in any other person, other than a Subsidiary;
and Borrower shall not acquire a material part of the assets of any other person
other than a Subsidiary.  

Section 8.12.  Dividends and Distributions.   If, but only if, there is any
outstanding Deposit Account Advance, Borrowing Base Advance or Purchase/Sale
Advance (as defined under Attachment 2A, Section B, Item 2), Borrower shall not
declare any dividends (other than dividends payable in stock of the Borrower)
on, and Borrower shall not make any payment or other distribution on account of,
and Borrower shall not set apart assets for a sinking or other analogous fund
for the purchase, redemption, retirement and other similar or dissimilar
acquisition of, any stock or other equity interest in Borrower if such payment,
distribution, purchase, redemption or retirement would cause a violation of any
financial maintenance covenant set forth under Attachment 5; and Borrower shall
not do any of the foregoing with respect to a debt or similar interest in
Borrower other than debts owed to Bank and trade debt incurred in the normal and
ordinary course of Borrower’s business.

Section 8.13.  Speculate.  Borrower shall not directly and Borrower shall not
indirectly purchase or otherwise acquire, and Borrower shall not directly and
Borrower shall not through another person carry or otherwise hold any “margin
stock” within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System and any  interpretations or rulings thereunder; and
Borrower shall not “speculate” in or “hedge” in any stock, futures, commodity,
index and other similar markets, or undertake any other activity that is not in
the ordinary course of business of Borrower as that business has been disclosed
to Bank in connection with the making of the Loan.

Section 8.14.  Charter, etc.  If Borrower is an Organization, Borrower shall not
allow and Borrower shall not cause the organizational documents of Borrower to
be amended in any manner that would have a materially adverse impact on
Borrower’s ability to perform its obligations under this Loan Agreement, nor
shall Borrower make or permit any significant change in accounting treatment and
reporting practices except as permitted or required by GAAP, or applicable Legal
Requirements, nor change its fiscal year.

Section 8.15.  Third Party Agreements.  Borrower shall not enter into any
agreement containing any provision that would be violated or breached by the
performance of the obligations of Borrower under this Loan Agreement, the Note
and any other Loan Document to be delivered hereunder or in connection herewith.

Section 8.16.  Additional Contracts.  Borrower shall not enter into any contract
and incur any Contractual Obligation to any Affiliate or other related person,
other than with a Subsidiary or at arms’ length and in a manner and on terms in
the best interest of Borrower, and immediately upon the execution of any such
contract, a copy thereof will be provided to Bank.

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Section 8.17.  Foreign Corrupt Practices. Borrower shall not use any of the Loan
proceeds, directly or indirectly, for any payments to any governmental official
or employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.

Article IX.  Financial Maintenance Covenants.

Commencing with the Closing Date and continuing until the later of (1) payment
in full of the Loan and all other amounts owing to Bank under the Loan Documents
or (2) termination of Bank’s obligation to make disbursements under the Loan,
Borrower shall fully and timely comply in all material respects with each and
every one of the financial maintenance covenants set forth on Attachment 5; and
Borrower acknowledges to Bank that the breach or default by Borrower of any of
said financial maintenance covenants is and the same shall be material.

Article X.  Events of Default; Remedies.

Section 10.1.  Events of Default.  The occurrence of any one or more of the
following events shall constitute an “Event of Default” hereunder, if, but only
if there are any outstanding Deposit Account Advance, Borrowing Base Advance or
Purchase/Sale Advance (as defined under Attachment 2A, Section B, Item 2):

(a)  the occurrence of any event of default or default condition under the Note
or any of the Notes if more than one, including, without limitation, Borrower’s
failure to pay when due, within five (5) days of written notice from the Bank,
the principal of or interest on the Note or any of the Notes if more than one,
or any other sums due thereunder, whether fees, charges, premiums or costs and
expenses;

(b)  Borrower’s material breach of or default under any of the terms, conditions
or covenants contained in this Loan Agreement;

(c)  the actual or threatened demolition, injury or waste to all of the
Collateral, or any material part thereof, which, in the sole opinion of Bank,
may impair its value, or the actual or threatened decline in value of all of the
Collateral or any material part thereof;

(d)  Borrower’s assets in their entirety, or any material part or portion
thereof, are attached, seized, subjected to a writ or distress warrant, or are
levied upon, or come into the possession of any trustee, receiver or person
acting in a similar capacity and such attachment, seizure, writ or distress
warrant or levy has not been removed, discharged or rescinded within sixty (60)
days, or if Borrower is enjoined, restrained or in any way prevented by court
order from continuing to conduct all or any material part of its business
affairs, or if a judgment or other claim becomes a lien or encumbrance upon any
material portion of Borrower’s assets, or if a notice of lien, levy or
assessment is filed of record with respect to any of Borrower’s assets by any
Governmental Authority, and the same is not paid within ten (10) days after
Borrower receives notice thereof, provided that none of the foregoing shall
constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower;

(e)  commencement of any proceeding under any bankruptcy or insolvency laws
against Borrower and such proceeding is not dismissed within sixty (60) days of
its initiation;

(f)  the filing of a petition of bankruptcy by Borrower or any person obligated
for payment of the Loan or any parts or portions thereof;

(g) the insolvency of Borrower or any person obligated for payment of the Loan
or any parts or portions thereof, or the appointment of a receiver for Borrower,
provided that none of the foregoing shall constitute an Event of Default where
such action or event is stayed or an adequate bond has been posted pending a
good faith contest by Borrower;

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(h) Borrower’s material default under the terms of any material instrument or
other agreement to which this Loan Agreement or any of the other Loan Documents
is subordinate or which is subordinate to this Loan Agreement or any of the
other Loan Documents;

(i) the occurrence of any event of default or default condition under any other
Loan Document, including, without limitation, any deeds of trust, mortgages,
security deeds, deeds to secure debts, assignments, security agreements, pledge
agreements, guaranty agreements, indemnification agreements, control agreements
or blocked account agreements;  

(j) any material false statement, misrepresentation or withholding of facts by
Borrower or any other person in any loan application or other document provided
by Borrower or any other person to Bank or its agents, or in any presentation
made by Borrower or any other person to Bank or its agents, as to any matter
relied upon by Bank in evaluating whether to extend financing to Borrower in
connection with this Loan;

(k) default by Borrower under any other Indebtedness or other obligation now
owing or which hereafter arises and is owing to Bank, or default by any of
Borrower’s Affiliates or Subsidiaries under any Indebtedness or other obligation
now owing or which hereafter arises and is owing to Bank; or

(l) a material adverse change in the financial condition of Borrower or any
person obligated for payment of the Loan or any parts or portions thereof has
occurred since the date of this Loan Agreement.

Section 10.3.  Rights and Remedies.  If a Default Condition or an Event of
Default shall occur under this Loan Agreement, in addition to any other right
and remedy which may be available to Bank and without limiting any other right
and remedy granted to Bank in the Loan Documents, which rights and remedies are
fully exercisable by Bank as and when provided in such other Loan Documents,
Bank shall have the rights and remedies set forth below in this Section 10.2.,
any and all of which it may exercise at its election, without notice of its
election and without demand – subject, however, to applicable notice or grace
periods, if any.

10.1.2.  Acceleration of Maturity.  Bank may, at its option, accelerate and
declare immediately due and payable the Note, as well as any of and all of the
other Indebtedness and obligations owing under this Loan Agreement and the other
Loan Documents that are not already due hereunder and that are not already due
thereunder.  If there is more than one Note, Bank may accelerate and declare
immediately due and payable all of the Notes, or Bank may from time to time and
at any number of times after the occurrence of a Default Condition or an Event
of Default, accelerate and declare immediately due and payable any one or more
of the Notes as Bank in its discretion elects to accelerate.  In addition to the
foregoing, Bank may from time to time and at any time proceed to protect and
enforce its rights and remedies under the Loan Documents (including its absolute
and unconditional right to recover full payment of any and all of the
obligations owing by Borrower, as well as those owing by other persons to Bank)
by any one or more of the following: judicial and non-judicial foreclosure
proceedings as against all and any part of the Collateral, without regard to the
situs of such Collateral; suits in equity; actions at law; and other appropriate
legal, equitable and administrative proceedings to enforce full payment.

10.1.3.  Bank’s Power of Enforcement.  Bank may by appropriate actions and
proceedings seek to do and have done any and all of the following: (1) to
enforce through actions at law and proceedings in equity, or both, payment of
all and any part or parts of the obligations owing by Borrower to Bank under the
Loan Documents, the performance of any of the terms in any of the Loan
Documents, and any other rights and remedies available to Bank; (2) to foreclose
and to authorize the foreclosure of all and any part or parts of the Collateral,
or interests therein, and to sell and have sold, as an entirety or in separate
lots or parcels, at one or more sales, the Collateral, or parts thereof or
interests therein, under the power of sale granted in the Loan Documents (to the
extent permitted by law) or the judgment or decree of a court or courts of
competent jurisdiction; and (3) to pursue any other right and remedy available
to it under the Loan Documents, at law and in equity.  Bank may proceed either
by such actions and proceedings or by the exercise of its powers with respect to
entry and taking possession, or both, as Bank may determine in its discretion;
and the same may be taken without regard to whether the Note (or any and all of
the Notes if more than one) or any and all of the obligations owing to Bank
under this Loan Agreement and the other Loan Documents shall be due and payable
and without prejudice to the right of Bank thereafter to bring actions and

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proceedings for any default existing at the time any earlier action or
proceeding was commenced.  The taking of any action does not preclude Bank from
taking subsequent action and Bank may continue taking subsequent actions at such
time or times as it elects until the Loan and all other amounts owing to Bank
under the Loan Documents are paid in full.

10.1.4.  Bank’s Rights to Enter and Take Possession, Operate and Apply Income.  

10.1.4.1.  Right to Possession.  Borrower, upon demand of Bank, shall forthwith
surrender to Bank the actual possession of all, or such part or parts of the
Collateral, or interests therein, as Bank may direct; and if and to the extent
permitted by law, Bank, through its own actions and through those of its agents,
without any prior notice to Borrower and demand on Borrower, may enter and take
possession of any and all of the Collateral, or interests therein, and may
exclude Borrower, its Related Persons and any other persons wholly or partly
therefrom – as Bank elects.  If Bank takes possession of the Collateral or parts
thereof or interests therein as aforesaid, Bank and Borrower shall have joint
access to the books and records of Borrower – such joint access to be under and
pursuant to procedures established by Bank, which procedures may call for Bank
to possess the books and records with Borrower having access to them under the
supervision of Bank.

10.1.4.2.  Action for Possession.  If Borrower should fail for any reason to
surrender possession or if Borrower should fail for any reason to deliver
possession of the Collateral, or any part or parts thereof or interests therein,
to Bank after the earlier of Bank’s demand therefor or Bank’s attempt to gain
possession without prior demand, Bank may obtain a judgment or decree conferring
on Bank and Bank’s agents the right to immediate possession of all of the
Collateral, or such part or parts thereof or interests therein, as Bank may
elect, and a judgment or decree requiring Borrower to surrender and deliver
immediate possession of all of the Collateral to Bank, or such part or parts
thereof or interests therein, as Bank may elect.  Borrower shall pay to Bank,
upon demand, all costs and expenses of obtaining such judgment or decree,
including reasonable compensation to Bank, its attorneys and agents; and all
such costs and expenses shall, until paid, be secured by the lien and security
interest of Bank in the Collateral, and shall be payable on demand with interest
from date of demand at the highest contract rate payable under the Note.

10.1.4.3.  Management of Collateral.  Upon each and every entering into and
taking of possession of the Collateral, or part or parts thereof or interests
therein, by the Bank through its own actions and by the Bank through those of
its agents and other persons, Bank may directly and through its agents and other
persons, hold, store, use, operate, repair, restore, preserve, protect, manage
and control all and any part or parts of, and interests in the Collateral, and
conduct the business related thereto; and, without limiting the foregoing, from
time to time and at any time, the Bank may do and the Bank may have done or
direct the doing of any one or more of the following through itself, its agents
and such other persons as Bank deems appropriate under the circumstances:

(a)  make all necessary and proper maintenance, repairs, renewals, replacements,
additions, betterments and improvements to the Collateral and parts thereof, and
in connection therewith, purchase and otherwise acquire fixtures, personal
property and other types of property;

(b)  insure and keep the Collateral and parts thereof insured;

(c)  manage and operate the Collateral and parts thereof, and exercise all the
rights and powers of Borrower in its name and otherwise with respect to the
same;

(d)  enter into agreements with others to exercise the powers herein granted
Bank, all as Bank from time to time may determine; and

(e)  collect and receive all the rents, income, proceeds and other benefits
from, related to and arising out of the Collateral and each and all parts
thereof and interests therein, including those past due, those currently due and
those thereafter becoming due.

In connection with its management of the Collateral as aforesaid, Bank shall
apply any monies received by Bank in such priority as Bank may determine, or
such priority as may be required under any Requirement of Law, to: (1)

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payment of any and all of the obligations owing to Bank under the Loan
Documents, including the Loan; (2) payment of any deposits for taxes,
assessments and insurance premiums; (3) payment of the cost of insurance, taxes,
assessments and other expenses and charges upon the Collateral or any parts
thereof or interest therein, (4) payment of any amounts due and payable on any
other Indebtedness of Borrower, whether prior or subsequent to the liens and
security interest of Bank, (5) payment of the compensation, disbursements and
costs and expenses of the agents, attorneys and other representatives of Bank,
(6) payment of any amounts deemed necessary by Bank to otherwise protect and
preserve the Collateral and the lien and security interest of Bank and (7)
payment of such other amounts as Bank deems necessary to assure to Bank the
repayment of the Loan and all other obligations owing to Bank under the Loan
Documents.

10.1.4.4.  Payments to Preserve Collateral.  Bank, at its election, and without
notice to Borrower, may, to protect and preserve its interest in the Collateral,
and to assure repayment of the Loan and all other obligations owing under the
Loan Documents, make any payments which Borrower has failed to make and any sum
so paid shall be deemed an obligation secured by Bank’s security interest and be
immediately due and payable from Borrower upon demand with interest thereon at
the highest contract rate applicable under the Note, but such payment by Bank
shall not release Borrower from its obligations or constitute a waiver of a
default hereunder.

10.1.5.  Receiver.  Bank, to the extent permitted by law and without regard to
the value, adequacy and occupancy of all or any part of the Collateral, or any
interests therein, shall be entitled as a matter of right, if it so elects, to
the appointment of a receiver or other similar official to: (1) enter upon and
take possession of any and all of the Collateral and any interests therein, (2)
preserve, protect, manage and control the Collateral or those parts or interests
over which it takes possession; and (3) collect all rents, income, proceeds and
other benefits thereof and apply the same as Bank directs, or if so required, as
the court which appointed such receiver or other similar official may direct.
 The costs and expenses, including receiver’s fees, attorneys’ fees and agent’s
compensation, incurred pursuant to the powers herein contained shall be deemed
an obligation of Borrower owing to Bank under this Loan Agreement and the same
shall be secured by Bank’s lien and security interest in the Collateral and
shall be payable upon demand with interest from the date of demand at the
highest contract rate under the Note.  Bank and any receiver or similar official
appointed as provided herein shall be liable to account only for such rents,
income, proceeds and other benefits actually received by Bank or such other
person, whether received pursuant to this Section or under other provisions of
this Loan Agreement.  Notwithstanding the appointment of any receiver or other
similar official, Bank shall be entitled as pledgee to the possession and
control of any money, deposits, accounts, account receivables, documents,
chattel paper, documents of title, instruments, payment intangibles and other
general intangibles and other property and property rights and interests at the
present and any future time held by, or payable or deliverable under the terms
of the Loan Documents to Bank.

10.1.6.  Set-off and Recoupment.  Bank may, at its option and at any time or
times without prior notice to Borrower, set-off and apply toward payment of the
Loan and other amounts now owing and amounts which may become owing by Borrower
under the Loan Documents, and otherwise exercise its rights of recoupment, as to
any and all (1) balances and deposits of Borrower held by Bank, (2) Indebtedness
and other obligations at any time owing to or for the credit and account of
Borrower by Bank and (3) Indebtedness and other obligations at any time owing to
or for the credit and account of Borrower by any of Bank’s Affiliates.

Section 10.3.  Suits to Protect the Collateral.  Bank shall have the power and
authority, at any time and from time to time, to institute and maintain any
suits and proceedings as Bank may deem advisable in its judgment (1) to prevent
the impairment or threatened impairment of the Collateral, or any part or parts
thereof or interests therein, by any acts and inactions which may be unlawful or
which may be in breach of this Loan Agreement and any of the other Loan
Documents, (2) to preserve and protect its interest in the Collateral and each
and all parts thereof and interests therein, including its liens and security
interests therein, and (3) to restrain the enforcement of or compliance with any
legislation and any other governmental enactment, rule and order that may be
unconstitutional or otherwise invalid, if the enforcement of or compliance with
such enactment, rule and order might impair Bank’s lien and security interest in
the Collateral, or be prejudicial to Bank’s interest in any other manner.

Section 10.4.  Proofs of Claim. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition and other
judicial proceedings affecting Borrower, any person obligated on any of
Borrower’s obligations, any of Borrower’s creditors and any of Borrower’s
property, Bank, to the extent

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permitted by law and at any time or times, shall be entitled to file such proofs
of claim and other documents as may be necessary or advisable in order to have
its claims allowed in such proceedings for the entire amount due and payable by
Borrower under the Loan Documents, at the date of the institution of such
proceedings, and for any additional amounts which may become due and payable by
Borrower after such date.

Section 10.5.  Discontinuance of Proceedings; Position of Parties Restored.  If
Bank shall have proceeded to enforce any right and remedy under the Loan
Documents by foreclosure, entry or otherwise and such proceedings shall have
been discontinued or abandoned for any reason, or such proceedings shall have
resulted in a final determination adverse to Bank, then and in every such case
Borrower and Bank shall be restored to their former positions and rights
hereunder, and all rights, powers and remedies of Bank shall continue as if no
such proceedings had occurred or had been taken.

Section 10.6.  Demand Note.  Notwithstanding anything else in this Loan
Agreement to the contrary, if any Note is payable on demand by Bank, then, in
such event, there are no conditions precedent to Bank’s right to demand payment
of such Note, in whole or in part, at any time and from time to time, without
prior notice, until the entire unpaid balance outstanding under such Note,
including principal, interest, fees, premiums, charges and costs and expenses,
are paid in full.  And, except as provided for in this Loan Agreement, there are
no conditions precedent to Bank exercising any of and all of its other rights
and remedies at such time or times as it deems necessary or appropriate to
recover full payment of the Note, including, without limitation, the exercise of
any of and all of its rights and remedies set forth in this Article X, the
exercise of any of and all of its other rights and remedies granted to it under
the Loan Documents and the exercise of any of and all of its rights and remedies
at law and in equity.

Article XI.  Miscellaneous.

Section 11.1.  Incorporation of Exhibits and Recitals; Customer and Loan
Numbers.  All exhibits, supplements, schedules, addenda and other attachments to
this Loan Agreement are by this reference incorporated herein and made a part
hereof as if fully set forth in the body of this Loan Agreement; provided,
however, the failure to correctly complete any exhibit, supplement, schedule,
addenda or attachment hereto shall not affect Borrower’s duties and Bank’s
rights hereunder if such corrected information can be obtained from any of the
other Loan Documents.  The recitals set forth in this Loan Agreement are also a
part of this Loan Agreement.  The Customer and Loan Numbers, if any, stated in
this Loan Agreement are for Bank’s internal business use and reference only and
do not and shall not limit the scope and extent of Bank’s security interest or
the Indebtedness and other obligations evidenced hereby, referenced herein and
secured hereby. The captions herein are inserted only as a matter of convenience
and for reference and in no way define, limit or describe the scope of this Loan
Agreement nor the intent of any provision hereof.

Section 11.2.  Amendments.  Subject to the exercise by Bank of its rights and
remedies as set forth in this Loan Agreement and without limiting any of such
rights and remedies, this Loan Agreement may not be modified, amended, waived,
extended, changed, discharged and terminated orally or by any act or failure to
act on the part of Borrower or Bank, but only by an agreement in writing signed
by the party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge and termination is sought.  

Section 11.3.  Assignment.  The terms, provisions and conditions in this Loan
Agreement shall be binding upon and inure to the benefit of the heirs,
successors, assigns and personal representatives of the parties hereto;
provided, however, Borrower shall not assign this Loan Agreement and any of its
rights, interests, duties and obligations hereunder (inclusive of the proceeds
of the Loan and other moneys to be advanced under or on account of this Loan
Agreement) in whole or in part without the prior written consent of Bank, and
any such assignment (whether voluntary or by operation of law) without said
consent shall be void.  It is expressly recognized and agreed that Bank may
assign or transfer this Loan Agreement, the Note or any of the Notes if more
than one, and any other Loan Documents, in whole or in part, to any person and,
in the event of such assignment, Bank shall thereafter be relieved of all
liability hereunder to the extent of the assignment or transfer.  Borrower
waives and will not assert against any transferee or assignee of Bank any
claims, defenses, set-offs and rights of recoupment which Borrower could assert
against Bank, except defenses which Borrower cannot waive.

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Section 11.4.  Conflict.  It is the intention of the parties that this Loan
Agreement and the other Loan Documents be interpreted in a consistent manner;
provided, however, in the event of any irreconcilable conflict in the provisions
of this Loan Agreement and the provisions of any of the other Loan Documents,
the provisions of this Loan Agreement shall control.

Section 11.5.  No Partnership, Joint Venture or Agency.  This Loan Agreement and
the other Loan Documents shall not in any respect be interpreted, deemed or
construed as making Bank a partner or joint venturer with Borrower, nor shall
they or any of them be interpreted, deemed or construed as making Bank the agent
or representative of Borrower.  The relationship of Bank to Borrower is that of
a creditor to an obligor or debtor; and in furtherance thereof and in
explanation thereof, Bank has no fiduciary, trust, guardian, representative,
partnership, joint venturer and other similar relationship to or with Borrower
and no such relationship shall be drawn and implied from any of the Loan
Documents or any of Bank’s actions and inactions hereunder or with respect
hereto – and, Bank has no obligation to Borrower and any other person relative
to administration of the Loan and administration of the Collateral, or any part
or parts thereof or interests therein.   In no event shall Bank be liable for
debts and claims accruing or arising against Borrower.

Section 11.6.  Power of Attorney.  Borrower does hereby irrevocably constitute
and appoint Bank its true and lawful attorney with full power of substitution,
for it and in its name, place and stead, to execute, deliver and file such
agreements, documents, notices, statements and records, to include, without
limitation, Financing Statements, and to do and undertake such other acts as
Bank, in its sole discretion, deems necessary or advisable to effect the terms
and conditions of this Loan Agreement and to otherwise protect and preserve the
security of the lien and security interests in the Collateral, and Bank’s
interests therein.  The foregoing appointment is and the same shall be coupled
with an interest in favor of Bank.

Section 11.7.  Indemnity.  Borrower hereby agrees to defend, protect, indemnify
and hold harmless Bank and each and all of Bank’s shareholders, directors,
officers, employees, attorneys, agents and Affiliates (individually and
collectively, “Indemnified Parties”), from and against any and all claims,
actions, liabilities, damages, costs and expenses (including, without
limitation, all costs and expenses incurred in the investigation and defense of
any matter) (“Indemnified Liabilities”) asserted against, imposed upon and
incurred by the Indemnified Parties, both direct and indirect and regardless of
the basis of the Indemnified Liabilities (i.e.,  whether based on federal, state
or local laws, rules, regulations and ordinances, common law, an equitable
cause, contract, tort or otherwise), as a result of or arising from or relating
to any one or more of (1) this Loan Agreement, (2) the other Loan Documents, (3)
the transactions contemplated by this Loan Agreement, (4) any credit extended or
used hereunder, (5) any act done or omitted by any person, or any event
occurring in connection therewith, and (6) the exercise of any rights and
remedies under this Loan Agreement and the exercise of any rights and remedies
under any of the other Loan Documents, including, without limitation, the
acquisition of the Collateral by Bank by way of foreclosure of the lien and
security interests thereon, deed in lieu of such foreclosure or otherwise,
except in all of the instances enumerated in (1) through (6), by reason of the
gross negligence or willful misconduct of the person otherwise to be indemnified
hereunder.  In the event this indemnity is unenforceable as a matter of law as
to a particular matter or consequence referred to herein, it shall be
enforceable to the full extent permitted by law.  The obligations of Borrower
under this Section are independent of all other rights and obligations set forth
herein and shall survive the payment of the Loan and the termination of this
Loan Agreement.

Section 11.8.  Payment of Expenses.  Without limiting any other provision of
this Loan Agreement relating to Borrower’s payment of costs and expenses
incurred by Bank and those incurred by others on behalf of Bank, but in addition
thereto, whether or not the Loan is made and all of the Loan proceeds disbursed,
Borrower shall pay to Bank, on demand, each and all of any costs and expenses
incurred by Bank, incurred by others on behalf of Bank and incurred by Bank for
Borrower: (1) in order to meet Bank’s requirements in connection with the Loan,
(2) in connection with the making of the Loan and (3) in connection with the
enforcement of Bank’s rights and remedies under the Loan Documents, including,
payments to third persons of amounts Borrower is required to pay to such third
persons under and pursuant to the terms of any of the Loan Documents, protecting
Bank’s interest in the Collateral, collecting any amount owing by Borrower and
owing by other persons under the Loan Documents and in enforcing its rights
under any of the Loan Documents with respect to the Collateral.  All of the
foregoing costs and expenses shall be paid with interest thereon at the highest
contract rate prescribed in the Note from the date paid or incurred by or on
behalf of Bank until such costs and expenses are paid by Borrower.  All sums so
paid and

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expended by Bank, and the interest thereon, shall be added to and be secured by
Bank’s lien and security interests in the Collateral.  

Section 11.9.  Documentary and Intangible Taxes; Additional Costs.  To the
extent not prohibited by law and notwithstanding who is liable for payment of
the taxes or fees, Borrower shall pay, on Bank’s demand, (1) all intangible
personal property taxes, documentary stamp taxes, excise taxes and other similar
taxes assessed, charged and required to be paid in connection with the Loan and
any extension, renewal and modification thereof, and (2) all intangible personal
property taxes, documentary stamp taxes, excise taxes and other similar taxes
assessed, charged and required to be paid in connection with this Loan Agreement
and any of the other Loan Documents, and any extension, renewal and modification
of any of the foregoing.  If, with respect to this Loan Agreement and the
transactions hereunder, any Requirement of Law (x) subjects Bank to any tax
(except federal, state and local income taxes on the overall net income of
Bank), (y) imposes, modifies or deems applicable any deposit insurance, reserve,
special deposit and other similar requirement against assets held by, deposits
in, and loans by Bank, or (z) imposes upon Bank any other condition, and the
result of any of the foregoing is to increase the cost to Bank, reduce the
income receivable by Bank or impose any expense upon Bank with respect to the
Loan, Borrower agrees to pay to Bank the amount of such increase in cost,
reduction in income or additional expense within thirty (30) days following
presentation by Bank of a statement of the amount and setting forth Bank’s
calculation thereof (including the applicable Requirement of Law causing such
increase in cost, reduction in income or additional expense), all in reasonable
detail, which statement shall be deemed true and correct absent manifest error.

Section 11.10.  Marshalling of Assets.  Borrower hereby waives, to the extent
permitted by law, the benefit of all appraisal, homestead, valuation, stay,
extension, reinstatement and redemption laws now in force and any which may in
the future come to be in force and all rights of marshalling in the event of any
sale under the Loan Documents of the Collateral, or any part or parts thereof or
any interests therein. Further, Borrower hereby expressly waives on behalf of
Borrower, and on behalf of each and every person acquiring any interest in or
title to the Collateral or any part thereof subsequent to the date of this Loan
Agreement and on behalf of all other persons to the extent permitted by law, any
or all rights of redemption from sale under any order or decree of foreclosure
of this Loan Agreement.

Section 11.11.  Waiver of Statutory Rights.  Borrower waives any right to
require Bank to bring any action against any other person and to require that
resort be had to any security and to any balances of any deposit or other
accounts on the books of Bank in favor of any other person; and, without
limiting the foregoing, but in furtherance thereof, Borrower waives any rights
Borrower otherwise might have or may have in the future under the statutory
provisions identified in the Information Schedule (by referencing this Section),
and any other laws that require or may require Bank to recover against some
other person, or to realize upon any security which Bank holds for the Loan.
 Borrower also waives any and all right of subrogation, contribution,
reimbursement and indemnity whatsoever and any right of recourse to and with
respect to the assets and property of any person that is or may be security for
the Loan.

Section 11.12.  Jury, Venue, Jurisdiction.  This Loan Agreement and the other
Loan Documents shall be governed by and construed in accordance with the
substantive laws of the jurisdiction listed on the Information Schedule as the
jurisdiction whose laws govern this Loan Agreement, excluding, however, the
conflict of law and choice of law provisions thereof.  Notwithstanding the
foregoing, to the extent any of the Collateral is located in another
jurisdiction or other jurisdictions, the laws of the jurisdictions in which the
Collateral is located shall govern with respect to Bank’s and Borrower’s rights
in and to Collateral located in such other jurisdictions and Bank’s remedies
relative thereto.  Borrower: (1) to the extent permitted by law, waives any
right to a trial by jury in any action arising from or related to this Loan
Agreement and any of the other Loan Documents; (2) irrevocably submits to the
jurisdiction of either (i) the state courts of the jurisdiction whose laws
govern this Loan Agreement as identified on the Information Schedule or (ii) a
United States District Court for any federal district in such jurisdiction over
any action or proceeding arising from or related to this Loan Agreement and any
of the other Loan Documents – subject to the exception regarding location of the
Collateral as provided hereinabove; and (3) irrevocably waives, to the fullest
extent Borrower may effectively do so, the defense of improper venue or an
inconvenient forum to the maintenance of any such action or proceeding.  Nothing
in this Section shall affect or impair Bank’s right to serve legal process in
any manner permitted by law or Bank’s right to bring any action or proceeding
against Borrower or Borrower’s property in the courts of any other jurisdiction.

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Section 11.13.  Cumulative Rights, etc. The rights, powers and remedies of Bank
under this Loan Agreement shall be in addition to all rights, powers and
remedies given to Bank by virtue of any applicable laws and regulations, those
given in equity, or those given to Bank under the other Loan Documents and those
given under any other agreement, all of which rights, powers and remedies shall
be cumulative and may be exercised by Bank from time to time and at any number
of times successively, concurrently and alternatively without impairing Bank’s
rights under this Loan Agreement and under any of the other Loan Documents.

Section 11.14.  No Waiver; No Course of Dealing; No Invalidity.  No delay or
forbearance by Bank in exercising any and all of its rights and remedies under
this Loan Agreement and those under any of the other Loan Documents, and no
delay or forbearance of Bank in exercising any and all rights and remedies
otherwise afforded by law and in equity, shall operate as a waiver thereof or
preclude the exercise thereof during the continuance of any Default Condition or
Event of Default as set forth herein or in the event of any subsequent Default
Condition or Event of Default hereunder. If Bank is requested to waive a Default
Condition or an Event of Default or forbear taking action relative thereto, Bank
may condition any waiver or forbearance it elects to grant Borrower on payment
by Borrower of such fees to Bank as Bank deems appropriate under the
circumstances and may condition any such waiver or forbearance on Borrower
reimbursing Bank for all costs and expenses Bank incurs in connection with such
waiver or forbearance.  Also, no act or inaction of Bank under this Loan
Agreement and under any of the other Loan Documents shall be deemed to
constitute or establish a “course of performance or dealing” that would require
Bank to so act or refrain from acting in any particular manner at a later time
under similar or dissimilar circumstances.  Wherever possible each provision of
this Loan Agreement and the other Loan Documents shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Loan Agreement and if any provision of any of the other Loan Documents
shall be prohibited or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Loan
Agreement and those of the other Loan Documents, or the application thereof
shall be in a manner and to an extent permissible under applicable law.

Section 11.15.  Maintenance of Bank’s Records.  Borrower acknowledges and agrees
that Bank is authorized to maintain, store and otherwise retain the Loan
Documents in their original, inscribed tangible form or a record thereof in an
electronic medium or other non-tangible medium which permits such record to be
retrieved in a perceivable form; that a record of any of the Loan Documents in a
non-tangible medium which is retrievable in a perceivable form shall be the
agreement of Borrower to the same extent as if such Loan Document was in its
original, inscribed tangible medium and such a record shall be binding on and
enforceable against Borrower notwithstanding the same is in a non-tangible form
and notwithstanding the signatures of the signatories hereof or thereof are
electronic, typed, printed, computer generated, facsimiles or other
reproductions, representations and forms; and that Bank’s certification that a
non-tangible record of any of the Loan Documents is an accurate and complete
copy or reproduction of the original, inscribed tangible form shall be
conclusive, absent clear and convincing evidence of the incorrectness of said
certification, and such non-tangible record or a reproduction thereof shall be
deemed an original and have the same force and effect as the original, inscribed
tangible form.

Section 11.16.  Credit Investigations; Sharing of Information; Control
Agreements.  Bank is irrevocably authorized by Borrower to make and have made
such credit investigations as it deems appropriate to evaluate Borrower’s credit
and financial standing, and Borrower authorizes Bank to share with consumer
reporting agencies and creditors its experiences with Borrower and other
information in Bank’s possession relative to Borrower.  Bank shall not have any
obligation and responsibility to (1) provide information to any third persons
relative to Bank’s security interest in the Collateral, this Loan Agreement and
otherwise with respect to Borrower, (2) subordinate its liens and security
interests in the Collateral to the interests of any person, and (3) enter into
control agreements relative to the Collateral.

Section 11.17.  Bank’s Liability for Collateral.  Notwithstanding anything in
this Loan Agreement and any of the other Loan Documents to the contrary, Bank
may at any time or times during the term of this Loan Agreement make such
payments and do or cause to be done such acts as Bank considers necessary or
advisable to protect the Collateral and to preserve, protect and perfect or
continue the perfection of its security interest in the Collateral.  So long as
Bank complies with reasonable banking practices and absent the Bank’s gross
negligence or willful misconduct, Bank shall not be liable and responsible for
the Collateral, or any part thereof or interest therein, and without limiting
the foregoing, Bank shall not have any responsibility for any one or more of the
following: (1) the

22

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safekeeping of the Collateral, (2) any loss and damage occurring to the
Collateral, regardless of the cause for such loss and damage, (3) any diminution
in the value of the Collateral, and (4) any act or default of any carrier,
warehouseman, bailee, forwarding agency and other person whomsoever.  All risk
of loss, damage and destruction of the Collateral shall be borne by Borrower.

Section 11.18.  Execution in Counterparts.  This Loan Agreement may be executed
in two or more counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement (subject always to
the provisions of Section 11.15 relating to maintenance of records).

Section 11.19.  Notices.  All notices, certificates and other communication
require or permitted hereby shall be in writing and shall be delivered
personally or sent by certified mail, return receipt requested, or reputable
overnight courier with receipt (e.g. Federal Express) addressed to the parties
as set forth in the Informant Schedule (or to such other address as a party
shall specify to the other parties in a notice).  Any notice given hereunder
shall be deemed given on the same day if delivered by hand, or on the following
business day if sent by overnight courier, or the third business day after
deposit in a United States general or branch post office, enclosed in a
registered, prepaid wrapper, addressed as hereinbefore provided.
 Notwithstanding anything to the contrary contained in this Section, any notice
of change of address shall be effective only upon receipt thereof.

Section 11.20.  Time of Essence.  Time is of the essence for the performance of
all of Borrower’s covenants and agreements set forth in this Loan Agreement and
in each of the other Loan Documents.

Section 11.21.  Term of Loan Agreement.  This Loan Agreement shall become
effective on the Closing Date and shall continue in full force and effect until
the last to occur of (1) payment in full of the Loan and all other amounts now
owing and which may in the future be owing to Bank under the Loan Documents, or
(2) termination of Bank’s obligation to make disbursements of Loan proceeds
under this Loan Agreement or the Note.  Notwithstanding the foregoing, Bank
shall have the right to limit, declare a moratorium on and terminate its
obligation to make disbursement of Loan proceeds immediately and without notice
upon the occurrence and during the continuance of a Default Condition or an
Event of Default and such action by Bank shall not constitute a termination of
this Loan Agreement and Borrower’s obligations under this Loan Agreement and the
other Loan Documents; and shall not adversely affect or impair Bank’s lien or
security interests in the Collateral.

Section 11.22.  Joinder by Guarantor.  If any of the guarantors identified on
the Information Schedule and if any of the other guarantors of the Loan and any
of the other obligations of Borrower under this Loan Agreement, if any, have
executed this Loan Agreement, such persons, by their execution of this Loan
Agreement, agree to the terms, covenants, conditions and provisions contained in
this Loan Agreement, agree to perform as and when they are so required to
perform under this Loan Agreement and agree that they each are subjecting
themselves to each and all of the obligations of Borrower set forth in this Loan
Agreement.  The aforesaid agreements of those guarantors executing this Loan
Agreement shall be in addition to and not in lieu of the covenants, agreements
and obligations of such guarantors set forth in their respective guaranty
agreements.  If less than all of the guarantors of Borrower’s obligations under
this Loan Agreement and the other Loan Documents have executed this Loan
Agreement, such fact (1) shall not release the non-executing guarantors from
their covenants, agreements and obligations as set forth in their respective
guaranty agreements and shall not negate and otherwise adversely affect their
obligations under their respective guaranty agreements and Bank’s rights and
remedies thereunder, and (2) shall not release those guarantors executing this
Loan Agreement from any of their covenants, agreements and obligations as set
forth herein and those set forth in their separate guaranty agreements and shall
not negate and otherwise adversely affect their obligations under their
respective guaranty agreements and hereunder, and Bank’s rights and remedies
thereunder and hereunder.  

(Signatures Begin on Next Page, Followed by Information Schedule and
Attachments)

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The undersigned have executed this Loan Agreement as of the effective date set
forth on the Information Schedule.

BANK:

 

RBC CENTURA BANK

 

By:

/s/ Rebecca Collura

 

Print Name:

Rebecca Collura

 

Title

Vice President

BORROWER:

RELM WIRELESS CORPORATION,

a Nevada corporation

By: /s/ William P. Kelly

      William P. Kelly, Chief Financial Officer

Witness:

/s/Tina Boucher

Print Name: Tina Boucher

 

 

24

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Loan Agreement Supplement
and

Information Schedule

Subject

Information

 

 

Customer Number:

NEW

Loan Number:

1.01

Effective Date of Loan Agreement

December 6, 2007

Borrower:

Full Legal Name:

RELM Wireless Corporation

 

Street Address:

7100 Technology Drive

 

P.O. Box:

 

 

City:

West Melbourne

 

State:

Florida

 

Zip Code:

32904

 

State of Organization:

Nevada

 

Tax Identification No.:

 

 

Social Security No.:

 

 

Contact Person:

William P. Kelly

 

Telephone Number:

 

 

Facsimile Number:

 

 

Email Address:

 

Bank:

Full Name:

RBC Centura Bank

 

Street Address:

6769 North Wickham Road

 

P.O. Box:

 

 

City:

Melbourne

 

State:

Florida

 

Zip Code:

32940

 

Contact Person:

Rebecca Collura

 

Telephone Number:

321-752-2710

 

Facsimile Number:

321-752-2705

 

Email Address:

Rebecca.collura@rbc.com

Type of Loan:

 

Term Loan

 

 

Non-Revolving Line of Credit

 

√

Revolving Line of Credit

 

Purpose of Loan:

 

Term Loan

Describe:

 

 

 

Non-Revolving Line of Credit

Describe:

 

 

√

Revolving Line of Credit

Describe:

Fund Borrower’s working capital

Loan Amount:

 

Term Loan

$ , as evidenced by a promissory note dated:

 

 

Non-Revolving Line of Credit

$ , as evidenced by a promissory note dated:

 

√

Revolving Line of Credit

$10,000,000.00 as evidenced by a promissory note dated of even date herewith.

25

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Commitment Letter:

Date:  October 18, 2007

Security Documents

The security documents which secure the Loan include, without limitation, those
listed in this part.

1.

Pledge & Security Agreement dated of even date herewith made by Borrower, as
“Grantor” in favor of Bank.

Subsidiaries:

Full Legal Name:

RELM Communications, Inc.

 

Street Address:

 

 

P.O. Box:

 

 

City:

 

 

State:

 

 

Zip Code:

 

 

Full Legal Name:

 

 

Street Address:

 

 

P.O. Box:

 

 

City:

 

 

State:

 

 

Zip Code:

 

Jurisdiction whose Laws Govern Loan Agreement

State: Florida

Jurisdiction Specific Provisions

1.

None

Additional Information:

None

 

 

Borrower’s Acknowledgment:

RELM WIRELESS CORPORATION,

a Nevada corporation

By:________________________________________

      William P. Kelly, Chief Financial Officer

 

 

Bank’s Acknowledgment:

________________________________________________

26

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Attachment 1
to
Loan Agreement
(Description of Collateral)

All Assets.  All accounts, as-extracted collateral, cash proceeds, chattel
paper, commercial tort claims, deposit accounts, documents, equipment, farm
products, fixtures, financial assets, general intangibles, goods, instruments,
inventory, investment property, letter of credit rights, letters of credit,
money, non-cash proceeds, proceeds, software, supporting obligations and other
personal property, both now existing and hereafter existing, acquired and
arising, owned by Grantor and in which Grantor has any property rights and
benefits, of whatsoever kind and description, wheresoever located and inclusive
of property in Grantor’s constructive possession and control, property in the
Grantor’s actual possession and control and property in the possession and
control of a third person for and on behalf of Grantor; and, without limiting
the foregoing but in furtherance thereof, the following now existing and
hereafter acquired and arising property and property rights and benefits,
together with all replacements, substitutions, additions, accessions, products
and proceeds thereof and of anything described herein.

Accounts, Etc.  All accounts (as such term is defined in Article 9 of the
Uniform Commercial Code in effect from time to time in the State of Florida)
owned by the Grantor and all accounts in which the Grantor has any rights
(including, without limitation, rights to grant a security interest in accounts
owned by other persons), both now existing and hereafter owned, acquired and
arising; and, to the extent not included in the term accounts as so defined
after ascribing a broad meaning thereto, all accounts receivable,
health-care-insurance receivables, credit and charge card receivables, bills,
acceptances, documents, chooses in action, chattel paper  (both tangible and
electronic), promissory notes and other instruments, deposit accounts, license
fees payable for use of software, lease payments for use of Grantor’s goods or
services, commercial tort claims, letter of credit rights and letters of credit,
rights to payment for money or funds advanced or sold other than through use of
a credit card, lottery winnings, rights to payment with respect to investment
property, general intangibles and other forms of obligations and rights to
payment of any nature, now owing to the Grantor and hereafter arising and owing
to the Grantor, together with (i) the proceeds of all of the accounts and other
property and property rights described hereinabove, including all of the
proceeds of Grantor’s rights with respect to any of its goods and services
represented thereby, whether delivered or returned by customers, and all rights
as an unpaid vendor and lienor, including rights of stoppage in transit and of
recovering possession by any proceedings, including replevin and reclamation,
and (ii) all customer lists, books and records, ledgers, account cards, and
other records including those stored on computer or electronic media, whether
now in existence or hereafter created, relating to any of the foregoing.

Inventory, Etc.  All inventory (as such term is defined in Article 9 of the
Uniform Commercial Code in effect from time to time in the State of Florida)
owned by the Grantor and all inventory in which the Grantor has any rights
(including, without limitation, rights to grant a security interest in inventory
owned by other persons), both now existing and hereafter owned, acquired and
arising, including, without limitation, inventory in transit, inventory in the
constructive possession and control of Grantor, inventory in the actual
possession and control of Grantor and inventory held  by others for Grantor’s
account; and, to the extent not included in the term inventory as so defined
after ascribing a broad meaning thereto, all now existing and hereafter acquired
goods manufactured or acquired for sale or lease, and any piece goods, raw
materials, as extracted collateral, work in process and finished merchandise,
component materials, and all supplies, goods, incidentals, office supplies,
packaging materials and any and all items used or consumed in the operation of
the business of Grantor or which may contribute to the finished product or to
the sale, promotion and shipment thereof by Grantor and by others on the account
of Grantor, together with (i) the proceeds and products of all of the inventory
and other property and property rights described hereinabove, (ii) all additions
and accessions thereto and replacements and substitutions therefor, (iii) all
documents related thereto and (iv) all customer lists, books and records,
ledgers, account cards, and other records including those stored on computer or
electronic media, whether now in existence or hereafter created, relating to any
of the foregoing.

General Intangibles, Etc.  All general intangibles (as such term is defined in
Article 9 of the Uniform Commercial Code in effect from time to time in the
State of Florida) owned by the Grantor and in which the Grantor has any rights
and interest, both now existing and hereafter owned, acquired and arising; and,
to the extent not included in

27

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the term general intangibles as so defined after ascribing a broad meaning
thereto, all now existing and hereafter acquired things in action, payment
intangibles, rights to payment of loan funds not evidenced by chattel paper or
an instrument, contract rights, causes of action, business records, inventions,
designs, patents, patent applications, software, trademarks, trademark
registrations and applications therefor, goodwill, trade names, trade secrets,
trade processes, copyrights, copyright registrations and applications therefor,
licenses, permits, franchises, customer lists, computer programs, all claims
under guaranties and other supporting obligations, tax refund claims, claims
under letters-of-credit and all letter-of-credit rights, rights and claims
against carriers and shippers, leases, claims under insurance policies,
condemnation proceeds, all rights to indemnification and all other intangible
personal property of every kind and nature, together with (i) the proceeds of
all of the general intangibles and other property and property rights described
hereinabove and (ii) all customer lists, books and records, ledgers, account
cards, and other records including those stored on computer or electronic media,
whether now in existence or hereafter created, relating to any of the foregoing.

Equipment, Etc.  All equipment (as such term is defined in Article 9 of the
Uniform Commercial Code in effect from time to time in the State of Florida)
owned by the Grantor and in which the Grantor has any property rights and
interest, both now existing and hereafter owned, acquired and arising,
including, without limitation, equipment in Grantor’s possession and control,
equipment in transit, equipment in storage and equipment hereafter acquired by
way of replacement, substitution, addition and otherwise; and, to the extent not
included in the term equipment as so defined after ascribing a broad meaning
thereto, all now existing and hereafter acquired furniture, furnishings,
fixtures (including, without limitation, those located at, upon and about, and
those attached to, the real estate described herein), machinery, parts,
supplies, apparatus, appliances, patterns, molds, dies, blueprints, fittings and
computer systems and related hardware and software of every description,
together with (i) the proceeds and products of all of the equipment and other
property and property rights described hereinabove, including, without
limitation, insurance proceeds and condemnation proceeds, (ii) all books and
records, abstracts of title, leases and all other contracts and agreements
relating thereto or used in connection therewith and (iii) all customer lists,
books and records, ledgers, account cards, and other records including those
stored on computer or electronic media, whether now in existence or hereafter
created, relating to any of the foregoing.

28

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Attachment 2
to
Loan Agreement
(Conditions to Closing)

Estoppel Certificates and Agreements.  Bank shall have received Estoppel
Certificates and Agreements from the Borrower’s Landlord, all in a form and
substance satisfactory to Bank.

Insurance.  Borrower shall have delivered to Bank evidence that Borrower has
obtained each of the insurance policies required under Article VII, together
with satisfactory evidence of premium payments.

Current Financial Statements.  Borrower and any other person obligated for
payment of the Loan or Borrower’s performance shall have delivered to Bank
complete and current financial statements, all in a form satisfactory to Bank.

Taxpayer Identification Number.  Borrower and any other person obligated for
payment of the Loan or Borrower’s performance shall have supplied to Bank their
respective federal taxpayer identification numbers or social security numbers,
as applicable.

Authority Documents.  Bank shall have received from Borrower documents
evidencing Borrower’s and such other persons’ respective authority to enter into
this Loan, together with certificates of authority or good standing and
borrowing certifications as Bank and its counsel deem appropriate.

Attorney’s Opinion.  Borrower’s counsel shall have delivered to Bank its written
opinion regarding the organization and authority of Borrower, the enforceability
of the Loan Documents and such other matters as Bank may reasonably request,
such opinion to be in form and substance satisfactory to Bank.

Compliance with Laws.  Bank shall have received evidence that Borrower’s
business, property and operations are in compliance with all material
Requirements of Law.

Borrowing Base Report.  Bank shall have received a Borrowing Base Report in form
and substance satisfactory to Bank.

Draw Request.  Bank shall have received a Draw Request for the amount to be
disbursed.

UCC-11 Search Results.  Bank shall have received current UCC-11 search results
from such local and state filing offices as Bank may request, each showing no
liens or encumbrances against any of the Collateral other than Permitted
Encumbrances.

29

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Attachment 2A
to
Loan Agreement
(Additional Terms and Conditions)

A.

Additional Conditions.  The following additional conditions must be satisfied
before Bank is obligated to make any disbursements and each of the conditions
must be and remain satisfied at the time of each disbursement subsequent to the
first disbursement:

1.  None

2.  None

B.

Terms and Provisions Regarding Disbursements.   Bank’s obligation to make
disbursements and Borrower’s right to receive disbursements shall be subject to
the following terms and provisions:

Revolving Line of Credit.

1.

Disbursement may be requested by Borrower up to 30 days before the maturity date
of the Note evidencing the Revolving Line of Credit.

2.

Provided that the aggregate amount of outstanding disbursements shall not exceed
the Loan Amount for the Revolving Line of Credit, Borrower may request Loan
advances for any of the following reasons:  

(a)  Deposit Account Advance.  So long as Borrower maintains in Borrower’s
deposit account kept with Bank cash of at least $5,000,000.00, Borrower shall be
entitled to draw up to $5,000,000 of outstanding indebtedness. 

(b)  Borrowing Base Advance.  Borrower shall be entitled to draw an amount not
exceeding the Borrowing Base, so long as the aggregate of such outstanding
Borrowing Base Advance(s) do(es) not exceed the then Borrowing Base.    

(c)  Purchase/Sale Advance.  Borrower shall be entitled to draw an amount not
exceeding 75% of the deposit requirements of suppliers, as evidenced by a
legitimate and valid purchase order or in connection with a legitimate and valid
government order, so long as the aggregate of such outstanding Purchase/Sale
Advance(s) do(es) not exceed 75% of the deposit requirements of suppliers per
order.  As a condition of any Purchase/Sale Advance requested by Borrower,
Borrower will provide Bank with a copy of the government contract and related
purchase order along with documentation setting forth the deposit requirements
of suppliers.  Any such Purchase/Sale Advance shall be repaid to Bank within 60
days of such Purchase/Sale Advance unless, on such 60th day, such Purchase/Sale
Avance can, on such 60th day, also be made as a Borrowing Base Advance

Whenever Borrower desires an advance under the Revolving Line of Credit,
Borrower shall submit a Draw Request by facsimile transmission or telephone no
later than 10:00 a.m. eastern time, on the business day on which Borrower
desires the advance to be made.  Each Draw Request shall be signed by an
authorized representative of Borrower, or a designee thereof.  Each notification
by telephone must be followed within one business day by a facsimile
transmission which meets the criteria regarding a facsimile transmission.  Bank
shall be entitled to rely on any telephonic notice given by a person who Bank
reasonably believes to be an authorized representative of Borrower, or a
designee thereof.  Bank shall not have any liability to Borrower or any other
person for its failure to make a disbursement on the date requested by Borrower,
unless such failure is the result of willful misconduct or gross negligence of
Bank; and if Bank’s failure is a result of willful misconduct or gross
negligence, its liability shall be limited to actual damages only – Bank shall
not be liable for indirect, speculative, consequential or punitive damages or
losses.  If Borrower maintains its operating deposit account with Bank, Bank
will credit the amount of the disbusement to such account. If Borrower does not
maintain its operating deposit account with Bank, Bank will issue to

30

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Borrower for deposit in its operating deposit account a Bank check or other
negotiable instrument drawn on Bank in the amount of the advance immediately
available funds.

3.

If, at any time, the aggregate amount of the outstanding principal under the
Revolving Line of Credit exceeds the Loan Amount for the Revolving Line of
Credit, the Borrower shall immediately pay to Bank, in cash, the amount of such
excess.

4.

The following definitions shall apply to the Revolving Line of Credit:  

“Accounts” means accounts (as such term is defined in Article 9 of the Uniform
Commercial Code in effect from time to time in the State of Florida) owned by
the Borrower and all accounts in which the Borrower has any rights (including,
without limitation, rights to grant a security interest in accounts owned by
other persons), both now existing and hereafter owned, acquired and arising;
and, to the extent not included in the term accounts as so defined after
ascribing a broad meaning thereto, all accounts receivable,
health-care-insurance receivables, credit and charge card receivables, bills,
acceptances, documents, choses in action, chattel paper  (both tangible and
electronic), promissory notes and other instruments, deposit accounts, license
fees payable for use of software, lease payments for use of Borrower’s goods or
services, commercial tort claims, letter of credit rights and letters of credit,
rights to payment for money or funds advanced or sold other than through use of
a credit card, lottery winnings, rights to payment with respect to investment
property, general intangibles and other forms of obligations and rights to
payment of any nature, now owing to the Borrower and hereafter arising and owing
to the Borrower, together with (i) the proceeds of all of the accounts and other
property and property rights described hereinabove, including all of the
proceeds of Borrower’s rights with respect to any of its goods and services
represented thereby, whether delivered or returned by customers, and all rights
as an unpaid vendor and lienor, including rights of stoppage in transit and of
recovering possession by any proceedings, including replevin and reclamation,
and (ii) all customer lists, books and records, ledgers, account cards, and
other records including those stored on computer or electronic media, whether
now in existence or hereafter created, relating to any of the foregoing.

“Borrowing Base” means an amount equal to 75% of Eligible Accounts  plus 50% of
 Eligible Inventory, as determined by Bank with reference to the most recent
Borrowing Base Report delivered by Borrower.

“Borrowing Base Report” means the certification delivered to Bank by Borrower at
the times required under this Loan Agreement or such other times as Bank may
request. The report shall contain such information as may be requested by Bank,
including, among other things, information relative to Borrower’s Eligible
Accounts and Eligible Inventory. The report shall be certified by an authorized
officer of Borrower and shall be in a format acceptable to Bank.

“Eligible Accounts” means only those Accounts that are within the meaning of the
term “account” as defined under the Code, that arise in the ordinary course of
Borrower’s business and that comply with all of Borrower’s representations and
warranties to Bank set forth in this Agreement and the other Loan Documents.
 Unless otherwise agreed to by Bank, Eligible Accounts shall not include the
following:  (i) Accounts that the account debtor has failed to pay within ninety
(90) days of invoice date; (ii)  any Account with respect to an account debtor,
ten percent (10%) of whose Accounts the account debtor has failed to pay within
ninety (90) days of invoice date; (iii) Accounts with respect to which the
account debtor is a director, officer, executive, manager, member, employee or
agent of Borrower; (iv) Accounts with respect to which goods are placed on
consignment, guaranteed sale, sale or return, sale on approval, bill and hold,
or other terms by reason of which the payment by the account debtor may be
conditional; (v) Accounts with respect to which the account debtor is an
Affiliate of Borrower; (vi) Accounts with respect to which the account debtor
does not have its principal place of business in the United States, except for
Eligible Foreign Accounts; (vii) [intentionally omitted]; (viii) Accounts with
respect to which Borrower is liable to the account debtor for goods sold or
services rendered by the account debtor to Borrower, but only to the extent of
any amounts owing to the account debtor against amounts owed to Borrower; (ix)
Accounts with respect to an account debtor, including Subsidiaries and
Affiliates, but excluding federal and state government account debtors, whose
total obligations to Borrower exceed twenty-percent (20%) of all Accounts, to
the extent such obligations exceed the aforementioned percentage, except as
approved in writing by Bank; (x) Accounts with respect to which the account
debtor disputes liability or makes any claim with respect thereto as to which
Bank believes, in its sole discretion, that there may be a basis for dispute
(but only to the extent of the amount subject to such dispute or

31

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claim), or is subject to any Insolvency Proceeding, or becomes insolvent, or
goes out of business; and (xi) Accounts the collection of which Bank reasonably
determines after inquiry to be doubtful.

“Eligible Foreign Accounts” means Accounts with respect to which the account
debtor does not have its principal place of business in the United States and
that (i) are supported by one or more letters of credit in an amount and of a
tenor, and issued by a financial institution, acceptable to Bank, or (ii) that
Bank approves on a case-by-case basis.

“Eligible Inventory” means, as applied to any person, goods, as defined under
the Code, which are owned and held for sale or lease by that person in the
ordinary course of that person’s business and in which the Bank has a perfected
security interest, but excludes the following, unless otherwise specifically
approved in writing as being eligible by Bank:  (i) goods being held for lease
that have not been procured for a valid lease arrangement; (ii) goods that are
to be furnished under a contract of service not within the purview of clause
(i); (iii) raw materials; (iv) work in process; (v) materials used or consumed
in that person’s business; (vi) farm products; (vii) goods which have been held
for sale by that person for a period of 180 or more days; (viii) damaged,
broken, flawed, imperfect, inoperable, discounted, returned, repossessed or
reclaimed goods; (ix) goods held for sale to an Affiliate or a Subsidiary; (x)
goods being sold by others on “sale or return” or under some other consignment
arrangement with that person; (xi) goods of another being sold on consignment by
that person; (xii) goods located outside of the borders of the United States of
America; (xiii) goods located in the borders of the United States of America but
in the possession of someone else without that person having appropriate
warehouse receipts or other negotiable documentation evidencing a valid bailment
and the ownership of the goods by that person; and (xiv) goods which are subject
to a lien or security interest in favor of someone other than Bank, whether a
superior lien or security interest or an inferior lien or security interest,
except for Permitted Encumbrances.

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Attachment 3
to
Loan Agreement
(Financial Reports)

Annual Reports.  As soon as available and not more than 120 days after the end
of each fiscal year, balance sheets, statements of income and retained earnings
for the period ended and a statement of changes in the financial position, all
in reasonable detail, and all prepared in accordance with GAAP consistently
applied.  The financial statements must be audited by an independent certified
accountant acceptable to Bank (it being agreed that Borrower’s independent
certified public accountant as of the Closing Date is satisfactory to Bank).

Quarterly Reports.  As soon as available and not more than 45 days after the end
of each quarter other than the fourth quarter of each fiscal year, beginning the
first quarter next following the Closing Date, balance sheets, statements of
income and retained earnings for the period ended and a statement of changes in
the financial position, all in reasonable detail, and all prepared in accordance
with GAAP consistently applied except as otherwise noted therein, and subject to
the absence of notes and normal and recurring yearend adjustments that are not
expected to be material in amount, and certified as true and correct by the
chief financial officer of Borrower or other officer of Borrower approved by
Bank.

Compliance Certifications.  Concurrently with the delivery of the quarterly
financial statements required to be delivered by Borrower to Bank, a certificate
of the Person preparing such quarterly financial statements, whether an
independent certified accountant, an officer of Borrower or some other person
acceptable to Bank, stating that, in making the examination necessary therefore,
no knowledge was obtained of any default condition or event of default.

Borrowing Base Report.  Should Borrower request a Borrowing Base Advance,
Borrower shall submit with such Borrower Base Advance draw request and on or
before the tenth (10th) calendar day of each month thereafter so long as any
Borrowing Base Advance is outstanding, Borrower shall deliver to Bank a
Borrowing Base Certificate dated and signed by a Borrower’s chief financial
officer or other officer approved by Bank, such Borrowing Base Certificate to be
in a form acceptable to Bank and which provides information required by Bank
that is current within one day of the report.

Budget/Forecast.  Concurrently with the delivery of annual financial statements
Borrower shall deliver to Bank such budgets, sales projections, operating plans
or other financial information generally prepared by Borrower in the ordinary
course of business as Bank may reasonably request from time to time.

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Attachment 4
to
Loan Agreement
(Insurance Requirements)

Hazard Insurance.  All risk replacement cost insurance with agreed amount
endorsement and such other hazard insurance as Bank may require with standard
noncontributing mortgagee clauses and standard waiver of subrogation clauses,
such insurance to be in such amounts and form and by such companies as shall be
approved by Bank, the originals of which policies (together with appropriate
endorsements thereto, evidence of payment of premiums thereon and written
agreement by the insurer or insurers therein to give Bank thirty (30) days’
prior written notice of intention to cancel) shall be promptly delivered to
Bank, with such insurance to be kept in full force and effect at all times until
the payment in full of the Loan.

Public Liability Insurance.  Public liability insurance in an amount standard
for the industry or business in which Borrower operates and otherwise
satisfactory to Bank, such insurance to be in the form and covering risks
customarily carried in similar properties issued by a company acceptable to Bank
and covering Bank as an additional insured.

Bank accepts the insurance coverage evidenced by the ACORD certificate attached
hereto so long as Borrower maintains such insurance coverage during the term of
the Loan.

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[exhibit101002.gif] [exhibit101002.gif]

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Attachment 5

To

Loan Agreement

(Additional Affirmative, Negative And Financial Covenants)

A.

Additional Affirmative Covenants (Article VII).

1.  Borrower shall pay to Bank, prior to or on each anniversary of the Effective
Date, an annual loan fee in the  amount of $15,000.00.

2.  None.

B.

Additional Negative Covenants (Article VIII).

1.  None.

2.  None.

C.

Exceptions to Negative Covenants (Article VIII – Reference Specific Section to
which Exception Applies).

1.  None.

2.  None.

D.

Financial Maintenance Covenants (Article IX).

Funded Debt to EBITDA.  A ratio of Funded Debt to EBITDA, calculated on a
rolling 4 quarters basis for the fiscal quarter then ended and the immediately
preceding 3 fiscal quarters, of not greater than 2.5:1.0.

Tangible Net Worth.  Tangible Net Worth of at least $22,000,000.00.

E.

Additional Definitions

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

“Contingent Obligation” or “Contingent Liabilities” means, as applied to any
person, any direct or indirect liability, contingent or otherwise, of that
person with respect to (i) any account, instrument, chattel paper, document,
general intangible, indebtedness, lease, dividend, letter of credit, letter of
credit right or other obligation of another person, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed,
co-made or discounted or sold with recourse by that person, or in respect of
which that person is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit issued for the account of
that person; and (iii) all obligations arising under any interest rate, currency
or commodity swap agreement, interest rate cap agreement, interest rate collar
agreement, or other agreement or arrangement designated to protect a person
against fluctuation in interest rates, currency exchange rates or commodity
prices; provided, however, that the term “Contingent Obligation” shall not
include endorsements for collection or deposit in the ordinary course of
business.  The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determined amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by such person in good faith; provided, however, that such amount
shall not in any event exceed the maximum amount of the obligations under the
guarantee or other support arrangement.

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“EBITDA” means the total of (i) net income from continuing operations (excluding
extraordinary gains or losses), and to the extent deducted in determining net
income, (ii) Interest Expense, (iii) income taxes, (iv) depreciation, depletion
and amortization expenses.

“Funded Debt” means, at any time, all obligations for borrowed money which bear
interest or to which interest is imputed plus, without duplication, all
obligations for the deferred payment of the purchase of property, all
Capitalized Lease obligations and all Indebtedness secured by purchase money
security interests, plus the amount of any Contingent Liabilities.

“Interest Expense” means the total of the costs of advances outstanding under
Indebtedness including (i) interest charges, (ii) capitalized interest, (iii)
the interest component of Capitalized Leases, (iv) fees payable in respect of
letters of credit and letters of guarantee, and (v) discounts incurred and fees
payable in respect of bankers’ acceptances.

“Shareholders’ Equity” means shareholders’ equity of the Borrower on a
consolidated basis as determined in accordance with GAAP and reported in the
Borrower’s financial statements delivered to the Bank from time to time under
this Loan Agreement.

“Tangible Net Worth” means the total of Shareholders’ Equity less (i)
intangibles (net of amortization), (ii) deferred charges (except for deferred
tax assets), (iii) leasehold improvements and (iv) loans receivable from related
parties.

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