Exhibit 10.1

WMLM
101695/226
Execution

 
LOAN # 1271744-9001

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LOAN AND SECURITY AGREEMENT
 

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‘MKTG, INC.’

and

TD BANK, N.A.

Dated as of November 23rd, 2011
 
 
 

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TABLE OF CONTENTS

 

     
Page
       
SECTION I. DEFINITIONS AND INTERPRETATION
 
1
1.2.
Accounting Principles
 
8
1.3.
Construction
 
8
SECTION II. THE LOANS
 
9
2.1.
Revolving Credit Description:
 
9
2.2.
Intentionally Omitted.
 
10
2.3.
Intentionally Omitted.
 
10
2.4.
Advances and Payments:
 
10
2.5.
Interest:
 
11
2.6.
Additional Interest Provisions:
 
11
2.7.
Fees and Charges:
 
12
2.8.
Prepayments:
 
12
2.9.
Use of Proceeds
 
12
2.10.
Capital Adequacy
 
12
SECTION III. COLLATERAL
 
13
3.1.
Collateral
 
13
3.2.
Lien Documents
 
14
3.3.
Other Actions:
 
14
3.4.
Searches, Certificates:
 
15
3.5.
Landlord’s and Warehouseman’s Waivers
 
15
3.6.
Filing Security Agreement
 
15
3.7.
Power of Attorney
 
15
SECTION IV. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES
 
16
4.1.
Resolutions, Opinions, and Other Documents
 
16
4.2.
Absence of Certain Events
 
17
4.3.
Warranties and Representations at Closing
 
17
4.4.
Compliance with this Agreement
 
17
4.5.
Officer’s Certificate
 
17
4.6.
Closing
 
17
4.7.
Waiver of Rights
 
17
4.8.
Intentionally Omitted.
 
17
4.9.
Conditions for Future Advances
 
18
SECTION V. REPRESENTATIONS AND WARRANTIES
 
18
5.1.
Organization and Validity:
 
18
5.2.
Places of Business
 
19
5.3.
Pending Litigation
 
19
5.4.
Title to Properties
 
19
5.5.
Governmental Consent
 
20
5.6.
Taxes
 
20
5.7.
Financial Statements
 
20
5.8.
Full Disclosure
 
20
5.9.
Subsidiaries
 
20
5.10.
Investments, Guarantees, Contracts, etc.:
 
20

 
 
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5.11.
Government Regulations, etc.:
 
21
5.12.
Business Interruptions
 
22
5.13.
Names and Intellectual Property:
 
22
5.14.
Other Associations
 
22
5.15.
Environmental Matters
 
22
5.16.
Regulation O
 
23
5.17.
Intentionally Omitted
 
23
5.18.
Solvency
 
23
5.19.
Perfection and Priority
 
24
5.20.
Commercial Tort Claims
 
24
5.21.
Letter of Credit Rights
 
24
5.22.
Deposit Accounts
 
24
5.23.
Anti-Terrorism Laws:
 
24
SECTION VI. BORROWER’S AFFIRMATIVE COVENANTS
 
25
6.1.
Payment of Taxes and Claims
 
25
6.2.
Maintenance of Properties and Corporate Existence:
 
25
6.3.
Business Conducted
 
26
6.4.
Litigation
 
27
6.5.
Issue Taxes
 
27
6.6.
Bank Accounts
 
27
6.7.
Employee Benefit Plans
 
27
6.8.
Financial Covenants
 
27
6.9.
Financial and Business Information
 
28
6.10.
Officer’s Certificates
 
29
6.11.
Audits and Inspection
 
29
6.12.
Intentionally Omitted.
 
30
6.13.
Information to Participant
 
30
6.14.
Material Adverse Developments
 
30
6.15.
Places of Business
 
30
6.16.
Commercial Tort Claims
 
30
6.17.
Letter of Credit Rights
 
30
SECTION VII. BORROWER’S NEGATIVE COVENANTS:
 
31
7.1.
Merger, Consolidation, Dissolution or Liquidation:
 
31
7.2.
Acquisitions
 
31
7.3.
Liens and Encumbrances
 
31
7.4.
Transactions With Affiliates or Subsidiaries:
 
31
7.5.
Guarantees
 
31
7.6.
Restricted Payments, Bonuses and Other Indebtedness
 
31
7.7.
Loans and Investments
 
32
7.8.
Use of Lender’s Name
 
32
7.9.
Miscellaneous Covenants:
 
32
7.10.
Jurisdiction of Organization
 
32
SECTION VIII. DEFAULT
 
32
8.1.
Events of Default
 
32
8.2.
Cure
 
35
8.3.
Rights and Remedies on Default:
 
35

 
 
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8.4.
Nature of Remedies
 
36
8.5.
Set-Off
 
36
SECTION IX. MISCELLANEOUS
 
37
9.1.
Governing Law
 
37
9.2.
Integrated Agreement
 
37
9.3.
Waiver
 
37
9.4.
Indemnity:
 
37
9.5.
Time
 
38
9.6.
Expenses of Lender
 
38
9.7.
Brokerage
 
38
9.8.
Notices
 
39
9.9.
Headings
 
39
9.10.
Survival
 
40
9.11.
Successors and Assigns
 
40
9.12.
Duplicate Originals
 
40
9.13.
Modification
 
40
9.14.
Signatories
 
40
9.15.
Third Parties
 
40
9.16.
Discharge of Taxes, Borrower’s Obligations, Etc.
 
40
9.17.
Withholding and Other Tax Liabilities
 
41
9.18.
Consent to Jurisdiction
 
41
9.19.
Additional Documentation
 
41
9.20.
Advertisement:
 
41
9.21.
Waiver of Jury Trial
 
42
9.22.
Consequential Damages
 
42

 
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LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement (“Agreement”) is dated this 23rd day of
November, 2011, by and between ‘MKTG, INC.’ (“Borrower”), a Delaware
corporation, and TD BANK, N.A., a national banking association (“Lender”).

BACKGROUND

A.           Borrower desires to establish financing arrangements with Lender
and Lender is willing to make loans and extensions of credit to Borrower under
the terms and provisions hereinafter set forth.

B.           The parties desire to define the terms and conditions of their
relationship in writing.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:

SECTION I. DEFINITIONS AND INTERPRETATION

Terms Defined: As used in this Agreement, the following terms have the following
respective meanings:

Account - All of the “accounts” (as that term is defined in the UCC) of
Borrower, whether now existing or hereafter arising.

Account Debtor - Any Person obligated on any Account owing to Borrower.

Adjusted Net Income - with respect to any fiscal Year of Borrower, the
consolidated net income of Borrower, plus the sum of (i) Borrower’s tax expense,
(ii) Borrower’s depreciation and amortization charges, (iii) Borrower’s interest
expense, and (iv) Borrower’s Non-Recurring Charges, minus Borrower’s
Non-Recurring Gains, in each case, calculated in accordance with GAAP
consistently applied.

Advance(s) - Any monies advanced or credit extended to Borrower by Lender under
the Revolving Credit.

Advance Request – Section 2.4(b)(ii).

Affiliate - With respect to any Person, (a) any Person which, directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such Person, or (b) any Person who is a director
or officer (i) of such Person, (ii) of any Subsidiary of such Person, or (iii)
any person described in clause (a) above. For purposes of this definition,
control of a Person shall mean the power, direct or indirect, (x) to vote 5% or
more of the Capital Stock having ordinary voting power for the election of
directors (or comparable equivalent) of such Person, or (y) to direct or cause
the direction of the management and policies of such Person whether by contract
or otherwise. Control may be by ownership, contract, or otherwise.
 
 
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Anti-Terrorism Laws - Any statute, treaty, law (including common law),
ordinance, regulation, rule, order, opinion, release, injunction, writ, decree
or award of any Governmental Authority relating to terrorism or money
laundering, including Executive Order No. 13224 and the USA Patriot Act.

Asset Sale - The sale, transfer, lease, license or other disposition, by
Borrower or by any Subsidiary of Borrower to any Person other than Borrower of
any Property now owned or hereafter acquired, of any nature whatsoever in any
transaction or series of related transactions other than the sale of Inventory
in the ordinary course of business. An Asset Sale includes, without limitation,
a division.

Authorized Officer - Any officer (or comparable equivalent) of Borrower
authorized by specific resolution of Borrower to request Advances or execute
Compliance Certificates as set forth in the authorization certificate delivered
to Lender substantially in the form of Exhibit “A” attached hereto.

Bank Affiliate -With respect to Lender, any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
Lender. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (x) to vote 25% or more of any class of Capital Stock
having ordinary voting power for the election of directors of such Person or
other Persons performing similar functions for any such Person, or (y) to direct
or cause the direction of the management and policies of such Person whether by
ownership of Capital Stock, contract or otherwise.

Bankruptcy Code – Title 11 of the United States Code entitled “Bankruptcy”, as
now or hereinafter in effect, or any successor statute.

Base Rate – The higher of (i) four percent (4.00%), and (ii) the rate published
from time to time in The Wall Street Journal as the “U.S. Prime Rate” or, in the
event The Wall Street Journal ceases to be published, goes on strike, is
otherwise not published or ceases publication of “Prime Rates”, the base,
reference or other rate then designated by Lender, in its sole discretion, for
general commercial loan reference, plus one percent (1.00%). The Base Rate is
not necessarily the lowest or best rate of interest offered by Lender to any
borrower or class of borrowers.

Blocked Person- Section 5.23.

Borrowing Base Certificate - The certificate to be delivered monthly by Borrower
to Lender in order to confirm Borrower’s eligibility to request Advances, which
certificate is in the form of Exhibit “D” attached hereto.

Business Day – A day other than Saturday or Sunday when Lender is open for
business in New York, New York.

Capitalized Lease Obligations - Any Indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP, consistently applied.
 
 
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Capital Expenditures – Without duplication, for any period, the aggregate value
attributed in accordance with GAAP, consistently applied, to acquisitions during
such period of any assets, tangible or intangible, or replacement or
substitutions therefor or additions thereto (including Capitalized Lease
Obligations) which are treated as a non-current asset on the Borrower’s
financial statement prepared in accordance with GAAP, consistently applied.

Capital Stock - Any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
other ownership interests in a Person (other than a corporation) and any and all
warrants or options to purchase any of the foregoing.
 
Certificate of Designations – The Borrower’s Certificate of Designations,
Preferences and Rights of Series D Convertible Participating Preferred Stock
filed with the Delaware Secretary of State on December 15, 2009.
 
Closing - Section 4.6.

Closing Date - Section 4.6.

Collateral - All of the Property and interests in Property described in Section
3.1 of this Agreement and all other Property, and interests in Property that now
or hereafter secure payment of the Obligations and satisfaction by Borrower of
all covenants and undertakings contained in this Agreement and the other Loan
Documents.

Commitment Fee – Section 2.7(a).

Compliance Certificate - Section 6.10.

Default - Any event, act, condition or occurrence which with notice, or lapse of
time or both, would constitute an Event of Default hereunder.

Deposit Account Security Agreement - The Deposit Account Security Agreement,
dated as of even date herewith, made by Borrower in favor of Lender, as the same
may be hereafter amended, modified or extended.

Disqualified Stock - Any Capital Stock which by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable) or
upon the happening of any event (i) matures or is mandatorily redeemable for any
reason, (ii) is convertible or exchangeable for Indebtedness or Capital Stock
that meets the requirements of clauses (i) and (ii), or (iii) is redeemable at
the option of the holder thereof, in whole or in part, in each case on or prior
to the Revolving Credit Maturity Date.

Dollar, Dollars and U.S. Dollars and the Symbol $ - Lawful money of the United
States of America.

Environmental Laws - Any and all Federal, foreign, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees and any
and all common law requirements, rules and bases of liability regulating,
relating to or imposing liability or standards of conduct concerning pollution,
protection of the environment, or the impact of pollutants, contaminants or
toxic or hazardous substances on human health or the environment, as now or may
at any time hereafter be in effect from time to time.
 
 
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ERISA - The Employee Retirement Income Security Act of 1974, as the same may be
in effect, from time to time.

Event of Default - Section 8.1.

Executive Order No. 13224 - The Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same may be in effect from time
to time.

Expenses - Section 9.6.

Formula – Section 2.1.

GAAP - Generally accepted accounting principles as in effect on the Closing Date
applied in a manner consistent with the most recent audited financial statements
of Borrower furnished to Lender and described in Section 5.7 herein.

Governmental Authority - Any federal, state or local government or political
subdivision, or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury, or
arbitration.

Guarantor - Optimum Group LLC, U.S. Concepts, LLC, Inmark Services LLC and
Digital Intelligence Group LLC, each a Delaware limited liability company, and
any Person who may hereafter guaranty all or a portion of the Obligations.

Guaranty - The Guaranty of Payment dated the date hereof and executed by
Guarantors in favor of Lender, as may be supplemented, restated, superseded,
amended or replaced from time to time.

Hazardous Substances - Any substances defined or designated as hazardous or
toxic waste, hazardous or toxic material, hazardous or toxic substance or
similar term, under any Environmental Law.

Hedging Agreements - Any Interest Hedging Instrument or any other interest rate
protection agreement, foreign currency exchange agreement, commodity purchase or
option agreement, or any other interest rate hedging device or swap agreement
(as defined in 11 U.S.C. § 101 et. seq.).

Indebtedness - Of any Person at any date, without duplication, (i) all
indebtedness of such Person for borrowed money (including with respect to
Borrower, the Obligations) or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices), (ii) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (iii) all Capitalized Lease Obligations of such Person, (iv)
the face amount of all letters of credit issued for the account of such Person
and all drafts drawn thereunder, (v) all obligations of other Persons which such
Person has guaranteed, (vi) Disqualified Stock, (vii) all net obligations of
such Person under Hedging Agreements, and (viii) all liabilities secured by any
Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.
 
 
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Interest Hedging Instrument - Any documentation evidencing any interest rate
swap, interest “cap” or “collar” or any other interest rate hedging device or
swap agreement (as defined in 11 U.S.C. § 101 et. seq.) between Borrower and
Lender (or any Affiliate of Lender).

Inventory - All of the “inventory” (as that term is defined in the UCC) of
Borrower, whether now existing or hereafter acquired or created.

IRS - Internal Revenue Service.

Lien - Any interest of any kind or nature in property securing an obligation
owed to, or a claim of any kind or nature in property by, a Person other than
the owner of the Property, whether such interest is based on the common law,
statute, regulation or contract, and including, but not limited to, a security
interest or lien arising from a mortgage, encumbrance, pledge, conditional sale
or trust receipt, a lease, consignment or bailment for security purposes, a
trust, or an assignment. For the purposes of this Agreement, Borrower shall be
deemed to be the owner of any Property which it has acquired or holds subject to
a conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.

Loans – Collectively, the unpaid balance of cash Advances under the Revolving
Credit.

Loan Documents – Collectively, this Agreement, the Note, the Guaranty, the
Perfection Certificate, the Deposit Account Security Agreement, the Standstill
Agreement, and all agreements, instruments and documents executed and/or
delivered in connection therewith, all as may be supplemented, restated,
superseded, amended or replaced from time to time.

Material Adverse Effect - A material adverse effect with respect to (a) the
business, assets, properties, financial condition or results of operations of
Borrower, or (b) Borrower’s ability to pay the Obligations in accordance with
the terms hereof, or (c) the validity or enforceability of this Agreement or any
of the other Loan Documents or the rights and remedies of Lender hereunder or
thereunder.

Minimum Liquidity – Borrower’s immediately available cash.

Maximum Revolving Credit Amount - The sum of Four Million and 00/100 Dollars
($4,000,000.00).

Non-Recurring Charges – Borrower’s non-recurring charges, which shall include,
but not be limited to (i) non-cash compensation charges, (ii) charges resulting
from fair value adjustments to compound embedded derivatives on Borrower’s
balance sheet, and (iii) such other non-recurring charges agreed to by Lender in
its reasonable discretion.
 
 
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Non-Recurring Gains – Borrower’s non-recurring items of income, which shall
include, but not be limited to (i) income resulting from fair value adjustments
to compound embedded derivatives on Borrower’s balance sheet, and (ii) such
other non-recurring items of income determined by Lender in its reasonable
discretion.

Note – The Revolving Credit Note, as may be supplemented, restated, superseded,
amended or replaced from time to time.

Obligations - All existing and future debts, liabilities and obligations of
every kind or nature at any time owing by Borrower to Lender or any other
subsidiary of Lender or Bank Affiliate under this Agreement or any other Loan
Documents, whether joint or several, related or unrelated, primary or secondary,
matured or contingent, due or to become due (including debts, liabilities and
obligations obtained by assignment), and whether principal, interest, fees,
indemnification obligations hereunder or Expenses (specifically including
interest accruing after the commencement of any bankruptcy, insolvency or
similar proceeding with respect to Borrower, whether or not a claim for such
post-commencement interest is allowed), including, without limitation, debts,
liabilities and obligations in respect of the Revolving Credit and any
extensions, modifications, substitutions, increases and renewals thereof; any
amount payable by Borrower or any Subsidiary of Borrower pursuant to an Interest
Hedging Instrument; the payment of all amounts advanced by Lender or any other
subsidiary of Lender or Bank Affiliate to preserve, protect and enforce rights
hereunder and in the Collateral; and all Expenses incurred by Lender or any
other subsidiary of Lender or Bank Affiliate.

Overadvance - Section 2.1.

PBGC - The Pension Benefit Guaranty Corporation.

Perfection Certificate - The Perfection Certificate provided by Borrower to
Lender on or prior to the Closing Date in form and substance satisfactory to
Lender.

Permitted Indebtedness – (a) Indebtedness to Lender in connection with the
Revolving Credit or otherwise pursuant to the Loan Documents; (b) Indebtedness
under Hedging Agreements, provided such Hedging Agreements are entered into in
the ordinary course of business and not for speculative purposes; (c) trade
payables incurred in the ordinary course of Borrower’s business including,
without limitation, payables to credit card issuers; (d) purchase money
Indebtedness (including Capitalized Lease Obligations) hereafter incurred by
Borrower to finance the purchase of fixed assets; provided that, (i) such
Indebtedness incurred in any fiscal year shall not exceed $100,000.00, (ii) such
Indebtedness shall not exceed the purchase price of the assets funded and (iii)
no such Indebtedness may be refinanced for a principal amount in excess of the
principal amount outstanding at the time of such refinancing, (e) Indebtedness
to any Guarantor subordinated to the Obligations; (f) Indebtedness subordinated
to the Obligations on terms and conditions satisfactory to Lender; and (g)
Indebtedness existing on the Closing Date that is identified and described on
Schedule “1.1(a)” attached hereto and made part hereof.
 
 
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Permitted Investments - (a) investments and advances existing on the Closing
Date that are disclosed on Schedule “5.10(a)”, (b) (i) obligations issued or
guaranteed by the United States of America or any agency thereof, (ii)
commercial paper with maturities of not more than 180 days and a published
rating of not less than A-1 or P-1 (or the equivalent rating) by a nationally
recognized investment rating agency, (iii) certificates of time deposit and
bankers” acceptances having maturities of not more than 180 days and repurchase
agreements backed by United States government securities of a commercial bank if
(A) such bank has a combined capital and surplus of at least $500,000,000, or
(B) its debt obligations, or those of a holding company of which it is a
Subsidiary, are rated not less than A (or the equivalent rating) by a nationally
recognized investment rating agency, and (iv) U.S. money market funds that
invest solely in obligations issued or guaranteed by the United States of
America or an agency thereof.

Permitted Liens - (a) Liens securing taxes, assessments or governmental charges
or levies not delinquent; (b) Liens incurred or deposits made in the ordinary
course of business in connection with workers” compensation, unemployment
insurance, social security and other like laws; (c) Liens on fixed assets
securing purchase money Indebtedness permitted under clause (d) of the
definition of “Permitted Indebtedness”; provided that such Lien attaches to such
assets concurrently, or within 20 days of the acquisition thereof, and only to
the assets so acquired; (d) Liens existing on the Closing Date and shown on
Schedule “1.1(b)” attached hereto and made part hereof; (e) Liens imposed by
law, such as carriers’, warehousemen’s, mechanics’, materialmen’s and other
similar Liens arising in the ordinary course of business and securing
obligations (other than Indebtedness for borrowed money) that are not overdue by
more than sixty (60) days; and (f) Liens in favor of Lender securing the
Obligations and other Liens in favor of Lender.

Person - An individual, partnership, corporation, trust, limited liability
company, limited liability partnership, unincorporated association or
organization, joint venture or any other entity.

Post-Distribution Debt Service Coverage Ratio – As of the last day of the
Borrower’s Fiscal Year, the Adjusted Net Income of Borrower for such Fiscal
Year, divided by the sum of current portions of long-term Indebtedness as of
such date plus interest expense of the current twelve month period plus current
portion of capital leases for the previous twelve month period.

Property - Any interest of Borrower in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.

Requirement of Law – Collectively, all international, foreign, federal, state
and local laws, statutes, treaties, rules, guidelines, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

Restricted Payment -

a.           Cash dividends or other cash distributions (including Permitted Tax
Distributions) on any now or hereafter outstanding Capital Stock of Borrower;

b.           The redemption, repurchase, defeasance or acquisition of such
Capital Stock or of warrants, rights or other options to purchase such Capital
Stock; and
 
 
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c.           Any loans or advances (other than salaries), to any shareholder(s),
partner(s) or member(s) of Borrower.

Revolving Credit - Section 2.1(a).

Revolving Credit Maturity Date – November 23, 2012, subject to extension in
Lender’s sole discretion as provided in and subject to the provisions of Section
2.1.

Revolving Credit Note - Section 2.1(b).

Standstill Agreement – The Standstill Agreement dated the date hereof by and
among the Lender, the Borrower and the Series D preferred stockholders of the
Borrower, as may be supplemented, restated, superseded, amended or replaced from
time to time.

Subsidiary - With respect to any Person at any time, (i) any corporation more
than fifty percent (50%) of whose voting stock is legally and beneficially owned
by such Person or owned by a corporation more than fifty percent (50%) of whose
voting stock is legally and beneficially owned by such Person; (ii) any trust of
which a majority of the beneficial interest is at such time owned directly or
indirectly, beneficially or of record, by such Person or one or more
Subsidiaries of such Person; and (iii) any partnership, joint venture, limited
liability company or other entity of which ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at such time owned directly or indirectly,
beneficially or of record, by, or which is otherwise controlled directly,
indirectly or through one or more intermediaries by, such Person or one or more
Subsidiaries of such Person.

UCC - The Uniform Commercial Code as adopted in the State of New York, as in
effect from time to time.

Other Capitalized Terms - Any other capitalized terms used without further
definition herein shall have the respective meaning set forth in the UCC.

1.2.           Accounting Principles: Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, this shall be done in accordance with GAAP as in
effect on the Closing Date, to the extent applicable, except as otherwise
expressly provided in this Agreement. If there are any changes in GAAP after the
Closing Date that would affect the computation of the financial covenants in
Section 6.8, such changes shall only be followed, with respect to such financial
covenants, from and after the date this Agreement shall have been amended to
take into account any such changes.

1.3.           Construction: No doctrine of construction of ambiguities in
agreements or instruments against the interests of the party controlling the
drafting shall apply to any Loan Documents.
 
 
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SECTION II. THE LOANS

2.1.           Revolving Credit Description:

a.           Subject to the terms and conditions of this Agreement, Lender
hereby establishes for the benefit of Borrower a revolving credit facility (the
“Revolving Credit”) which shall include cash Advances extended by Lender to or
for the benefit of Borrower from time to time hereunder. The aggregate principal
amount of unpaid cash Advances, shall not at any time exceed the lesser of (i)
the Maximum Revolving Credit Amount or (ii) the Formula set forth in the most
recent Borrowing Base Certificate. Subject to such limitation, the outstanding
balance of Advances under the Revolving Credit may fluctuate from time to time,
to be reduced by repayments made by Borrower, to be increased by future Advances
which may be made by Lender, to or for the benefit of Borrower, and, subject to
the provisions of Section 8 below, shall be due and payable on the Revolving
Credit Maturity Date.

b.           During the term of this Agreement, Borrower shall be required to
furnish Lender, on a monthly basis, a Borrowing Base Certificate in the form of
the Borrowing Base Certificate annexed as Exhibit “D”, which shall be due no
later than fifteen (15) days subsequent to the prior month’s end. The Borrowing
Base Certificate shall confirm Borrower’s compliance with all the terms,
conditions, representations and warranties set forth in this Agreement and
shall: (i) document Borrower’s availability to draw down Advances based upon the
Formula set forth in the Borrowing Base Certificate; and (ii) provide that each
Advance under this Agreement and the total of all the Advances hereunder shall
not exceed eighty percent (80%) of the principal amount of the net collectible
value of accounts receivable of Borrower and the Guarantors less than ninety
(90) days (foreign, intra-company and affiliate accounts and pre-billings being
expressly excluded from such calculation); provided that customer concentrations
in excess of fifty percent (50%) shall be limited to a fifty percent (50%)
Advance rate hereunder (“Formula”).

c.           If the aggregate principal amount of unpaid cash Advances, at any
time exceeds the Maximum Revolving Credit Amount or the Formula (such excess
referred to as “Overadvance”), Borrower shall immediately repay the Overadvance
in full.

d.           At Closing, Borrower shall execute and deliver a promissory note to
Lender for the Maximum Revolving Credit Amount (“Revolving Credit Note”). The
Revolving Credit Note shall evidence Borrower’s unconditional obligation to
repay Lender for all Advances made under the Revolving Credit, with interest as
herein provided. Each Advance under the Revolving Credit shall be deemed
evidenced by the Revolving Credit Note, which is deemed incorporated herein by
reference and made part hereof. The Revolving Credit Note shall be in form and
substance satisfactory to Lender.

e.           The term of the Revolving Credit shall expire on the Revolving
Credit Maturity Date. On such date, unless having been sooner accelerated by
Lender pursuant to the terms hereof, and without impairing any rights under
Section 3.1, all sums owing under the Revolving Credit shall be due and payable
in full, and as of and after such date Borrower shall not request and Lender
shall not make any further Advances under the Revolving Credit. The Borrower
shall have the right to request, from time to time, one (1) year extensions of
the Revolving Credit Maturity Date, provided that such requests shall be made in
writing to the Bank no earlier than sixty (60) days prior to the applicable
Revolving Credit Maturity Date for each such one (1) year extension. The
decision with respect to the extension of the Revolving Credit Maturity Date
will be at the Bank’s sole discretion, it being understood that the Bank shall
have no obligation to so extend the Revolving Credit Maturity Date. Failure of
the Bank to affirmatively approve in writing the Borrower’s request for such
extension prior to the applicable Revolving Credit Maturity Date shall be deemed
to mean that such request has been denied.
 
 
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2.2.           Intentionally Omitted.

2.3.           Intentionally Omitted.

2.4.           Advances and Payments:

a.           Except to the extent otherwise set forth in this Agreement (or in
the case of an Interest Hedging Instrument under the applicable agreements), all
payments of principal and of interest on the Revolving Credit and all Expenses,
fees, indemnification obligations and all other charges and any other
Obligations of Borrower, shall be made to Lender at its banking office, at PO
Box 5600, Lewiston, ME 04243-5600, or such other office as Lender may designate
in writing, in United States Dollars, in immediately available funds. Borrower
hereby authorizes Lender to charge deposit account number 4266262412 maintained
at Lender and further agrees that Lender shall have the unconditional right and
discretion (and Borrower hereby authorizes Lender) to charge any of Borrower’s
operating and/or deposit account(s), in any event for all of Borrower’s
Obligations as they become due from time to time under this Agreement including,
without limitation, interest, principal, fees, indemnification obligations and
reimbursement of Expenses. Alternatively, Lender may in its discretion (and
Borrower hereby authorizes Lender to) make a cash Advance under the Revolving
Credit in a sum sufficient to pay all interest accrued and payable on the
Obligations and to pay all costs, fees and Expenses owing hereunder. Borrower
acknowledges that Borrower’s failure to maintain sufficient funds in any
checking, operating or deposit account for payment of any of the Obligations, or
Lender’s failure to charge any such account shall not relieve Borrower of any
payment obligation under this Agreement or any other Loan Document. Any payments
received prior to 2:00 p.m. Eastern time on any Business Day shall be deemed
received on such Business Day. Any payments (including any payment in full of
the Obligations), received after 2:00 p.m. Eastern time on any Business Day
shall be deemed received on the immediately following Business Day.

b.           Cash Advances which may be made by Lender from time to time under
the Revolving Credit shall be made available by crediting such proceeds to
Borrower’s operating account with Lender.

i.           All cash Advances requested by Borrower under the Revolving Credit
must be in the minimum amount of Twenty Five Thousand Dollars ($25,000.00) and
integrated multiples of Twenty Five Thousand Dollars ($25,000.00) in excess
thereof.
 
 
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ii.           All cash Advances requested by Borrower under the Revolving Credit
are to be in writing pursuant to a written request (“Advance Request”) executed
by an Authorized Officer in the form of Exhibit ”B” attached hereto. Requests
for Advances must be requested by 11:00 A.M., Eastern time, on the date such
Advance is to be made.

iii.           Upon receiving a request for an Advance in accordance with
subparagraph (ii) above, and subject to the conditions set forth in this
Agreement, Lender shall make the requested Advance available to Borrower as soon
as is reasonably practicable thereafter on the day the requested Advance is to
be made.

2.5.           Interest:

a.           The unpaid principal balance of cash Advances under the Revolving
Credit shall bear interest, subject to the terms hereof at a per annum rate
equal to the Base Rate.

b.           Changes in the interest rate applicable to Advances shall become
effective on the same day there is a change in the Base Rate.

c.           Interest on Advances shall be payable monthly, in arrears, on the
first day of each month, beginning on the first day of the first full calendar
month after the Closing Date, and on the Revolving Credit Maturity Date.

2.6.           Additional Interest Provisions:

a.           Interest on the Loans shall be calculated on the basis of a year of
three hundred sixty five or three hundred sixty six (365/366) days, as
applicable, but charged for the actual number of days elapsed.

b.           After the occurrence and during the continuance of an Event of
Default hereunder, the per annum effective rate of interest on all outstanding
principal under the Loans, shall be increased by four hundred (400) basis
points. All such increases may be applied retroactively to the date of the
occurrence of the Event of Default. Borrower agrees that the default rate
payable to Lender is a reasonable estimate of Lender’s damages and is not a
penalty.

c.           All contractual rates of interest chargeable on outstanding
principal under the Loans shall continue to accrue and be paid even after
Default, an Event of Default, maturity, acceleration, judgment, bankruptcy,
insolvency proceedings of any kind or the happening of any event or occurrence
similar or dissimilar.

d.           In no contingency or event whatsoever shall the aggregate of all
amounts deemed interest hereunder and charged or collected pursuant to the terms
of this Agreement exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such court determines Lender has charged or received
interest hereunder in excess of the highest applicable rate, Lender shall apply,
in its sole discretion, and set off such excess interest received by Lender
against other Obligations due or to become due and such rate shall automatically
be reduced to the maximum rate permitted by such law.
 
 
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2.7.           Fees and Charges:

a.           At Closing, Lender shall have fully earned and Borrower shall
unconditionally pay to Lender, a non-refundable fee with respect to the
Revolving Credit (“Commitment Fee”) in the amount of $30,000.00, against which
the $5,000 deposit previously paid by Borrower to Lender shall be applied.

b.           Borrower shall unconditionally pay to Lender a late charge equal to
five percent (5%) of any and all payments of principal or interest on the Loans
that are not paid within fifteen (15) days of the due date. Such late charge
shall be due and payable regardless of whether Lender has accelerated the
Obligations. Borrower agrees that any late fee payable to Lender is a reasonable
estimate of Lender’s damages and is not a penalty.

2.8.           Prepayments:

Borrower may prepay the Revolving Credit in whole or in part at any time or from
time to time, without penalty or premium. Any prepayment shall be accompanied by
all accrued and unpaid interest.

2.9.           Use of Proceeds: The extensions of credit under and proceeds of
the Revolving Credit shall be used to retire outstanding Indebtedness, for
working capital and general corporate purposes.

2.10.         Capital Adequacy: If any present or future law, governmental rule,
regulation, policy, guideline, directive or similar requirement (whether or not
having the force of law) imposes, modifies, or deems applicable any capital
adequacy, capital maintenance or similar requirement which affects the manner in
which Lender allocates capital resources to its commitments (including any
commitments hereunder), and as a result thereof, in the opinion of Lender, the
rate of return on Lender’s capital with regard to the Loans is reduced to a
level below that which Lender could have achieved but for such circumstances,
then in such case and upon notice from Lender to Borrower, from time to time,
Borrower shall pay Lender such additional amount or amounts as shall compensate
Lender for such reduction in Lender’s rate of return. Such notice shall contain
the statement of Lender with regard to any such amount or amounts which shall,
in the absence of manifest error, be binding upon Borrower. In determining such
amount, Lender may use any reasonable method of averaging and attribution that
it deems applicable. Any rules, regulations, policies, guidelines, directives or
similar requirements adopted, promulgated or implemented in connection with (a)
the Dodd-Frank Wall Street Reform and Consumer Protection Act and (b) the Bank
for International Settlements, the Basel Committee on Banking Supervision (or
any successor or similar authority) or any United States Governmental Authority,
in each case pursuant to Basel III, shall in all events are deemed to have been
imposed, introduced and adopted after the date of this Agreement.
 
 
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SECTION III. COLLATERAL

3.1.           Collateral: As security for the payment of the Obligations, and
satisfaction by Borrower of all covenants and undertakings contained in this
Agreement and the other Loan Documents:

a.           Personal Property: Borrower hereby assigns and grants to Lender, a
continuing Lien on and security interest in, upon and to all assets of Borrower,
including but not limited to the following Property, all whether now owned or
hereafter acquired, created or arising and wherever located:

i.           Accounts - All Accounts;

ii.          Chattel Paper - All Chattel Paper;

iii.         Documents - All Documents;

iv.        Instruments - All Instruments;

v.         Inventory - All Inventory;

vi.        General Intangibles - All General Intangibles;

vii.       Equipment - All Equipment,

viii.      Fixtures - All Fixtures;

ix.        Deposit Accounts - All Deposit Accounts (including any Permitted
Investments that constitute Deposit Accounts);

x.          Goods - All Goods;

xi.         Letter of Credit Rights – All Letter of Credit Rights;

xii.        Supporting Obligations – All Supporting Obligations;

xiii.       Investment Property - All Investment Property (including any
Permitted Investments that constitute Investment Property);
 
 
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xiv.       Commercial Tort Claims – All Commercial Tort Claims identified and
described on Schedule “5.20” (as amended or supplemented from time to time);

xv.        Property in Lender’s Possession - All Property of Borrower, now or
hereafter in Lender’s possession; and

xvi.       Proceeds - The Proceeds (including, without limitation, insurance
proceeds), whether cash or non-cash, of all of the foregoing property described
in clauses (i) through (xv).

3.2.           Lien Documents: At Closing and thereafter as Lender deems
necessary, Borrower shall execute and/or deliver to Lender, or have executed and
delivered (all in form and substance satisfactory to Lender and its counsel):

a.           Financing statements pursuant to the UCC, which Lender may file in
the jurisdiction where Borrower is organized and in any other jurisdiction that
Lender deems appropriate;

b.           Any other agreements, documents, instruments and writings,
including, without limitation, intellectual property security agreements,
required by Lender to evidence, perfect or protect the Liens and security
interests in the Collateral or as Lender may reasonably request from time to
time; and
 
3.3.           Other Actions:

a.           In addition to the foregoing, Borrower shall do anything further
that may be reasonably required by Lender to secure Lender and effectuate the
intentions and objects of this Agreement, including, without limitation, the
execution and delivery of security agreements, contracts and any other documents
required hereunder and the delivery of motor titles with Lender’s lien noted
thereon. At Lender’s reasonable request, Borrower shall also immediately deliver
(with execution by Borrower of all necessary documents or forms to reflect,
implement or enforce the Liens described herein), or cause to be delivered to
Lender all items for which Lender must receive possession to obtain a perfected
security interest, including without limitation, all notes, stock powers,
letters of credit, certificates and documents of title, Chattel Paper, Warehouse
Receipts, Instruments, and any other similar instruments constituting
Collateral.

b.           Lender is hereby authorized to file financing statements and
amendments to financing statements without Borrower’s signature, in accordance
with the UCC. Borrower hereby authorizes Lender to file all such financing
statements and amendments to financing statements describing the Collateral in
any filing office as Lender, in its sole discretion may determine, including
financing statements listing “All Assets” in the collateral description therein.
Borrower agrees to comply with the requests of Lender in order for Lender to
have and maintain a valid and perfected first security interest in the
Collateral including, without limitation, executing and causing any other Person
to execute such documents as Lender may require to obtain Control (as defined in
the UCC) over all Deposit Accounts, Letter of Credit Rights and Investment
Property.
 
 
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3.4.           Searches, Certificates:

a.           Lender shall, prior to or at Closing, and thereafter as Lender may
determine from time to time, at Borrower’s expense, obtain the following
searches (the results of which are to be consistent with the warranties made by
Borrower in this Agreement):

i.           UCC searches with the Secretary of State and local filing office of
each state where Borrower is organized, maintains its executive office, a place
of business, or assets; and

ii.           Judgment, state and federal tax lien and corporate tax lien
searches, in all applicable filing offices of each state searched under
subparagraph (i) above.

b.           Borrower shall, prior to or at Closing and at its expense, obtain
and deliver to Lender good standing certificates showing Borrower to be in good
standing in its state of organization and in each other state in which it is
doing and presently intends to do business for which qualification is required.

3.5.           Landlord’s and Warehouseman’s Waivers: At Lender’s request,
Borrower will cause each owner of any premises occupied by Borrower or to be
occupied by Borrower and each warehouseman of any warehouse, where, in either
event Collateral is held, to execute and deliver to Lender an instrument, in
form and substance satisfactory to Lender, under which such owner(s) or
warehouseman subordinates its/his/their interests in and waives its/his/their
right to distrain on or foreclose against the Collateral and agrees to allow
Lender to remain on such premises to dispose of or deal with any Collateral
located thereon.

3.6.           Filing Security Agreement: A carbon, photographic or other
reproduction or other copy of this Agreement or of a financing statement is
sufficient as and may be filed in lieu of a financing statement.

3.7.           Power of Attorney: Each of the officers of Lender is hereby
irrevocably made, constituted and appointed the true and lawful attorney for
Borrower (without requiring any of them to act as such) with full power of
substitution to do the following: (a) endorse the name of Borrower upon any and
all checks, drafts, money orders and other instruments for the payment of monies
that are payable to Borrower and constitute collections on Borrower’s Accounts
or proceeds of other Collateral; (b) execute and/or file in the name of Borrower
any financing statements, schedules, assignments, instruments, documents and
statements that Borrower is obligated to give Lender hereunder or is necessary
to perfect (or continue or evidence the perfection of such security interest or
Lien) Lender’s security interest or Lien in the Collateral; and (c) do such
other and further acts and deeds in the name of Borrower that Lender may
reasonably deem necessary or desirable to enforce any Account or other
Collateral.
 
 
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SECTION IV. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES

Closing under this Agreement is subject to the following conditions precedent
(all instruments, documents and agreements to be in form and substance
satisfactory to Lender and Lender’s counsel):

4.1.           Resolutions, Opinions, and Other Documents: Borrower shall have
delivered, or caused to be delivered to Lender the following:

a.           this Agreement, the Note and each of the other Loan Documents all
properly executed;

b.           each of the other documents to be executed and/or delivered by
Borrower or any other Person pursuant to this Agreement;

c.           certified copies of (i) resolutions of Borrower’s and Guarantor’s
board of directors or managing members (as applicable) authorizing the
execution, delivery and performance of this Agreement, the Notes to be issued
hereunder and each of the other Loan Documents required to be delivered by any
Section hereof and (ii) Borrower’s and Guarantor’s articles or certificate of
incorporation and by-laws or certificate of formation and operating agreement,
as applicable;

d.           an incumbency certificate for Borrower and Guarantor identifying
all Authorized Officers, with specimen signatures;

e.           a written opinion of Borrower’s and Guarantor’s independent counsel
addressed to Lender and opinions of such other counsel as Lender deems
reasonably necessary;

f.           a collateral audit of Borrower’s assets, liabilities, books and
records, satisfactory in all respects to Lender;

g.           such financial statements, reports, certifications and other
operational information as Lender may reasonably require, satisfactory in all
respects to Lender;

h.           certification by the president of Borrower that there has not
occurred any material adverse change in the operations and condition (financial
or otherwise) of Borrower since the date on which Borrower delivered to Lender
such information regarding the operations and condition of Borrower in
connection with the underwriting of the Loan;

i.           payment by Borrower of all fees including, without limitation,
Commitment Fee and Expenses associated with the Loans;
 
 
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j.           searches and certificates required under Section 3.4;

k.           insurance certificates and policies as required under Section 6.2;

l.           instruments and agreements required under Section 3.5;

m.           the Borrowing Base Certificate;

n.           payoff letter and all lien termination documents with respect to
the loan held by UCC-mktg Investment, LLC, as agent for itself and other
lenders; and

o.           such other documents reasonably required by Lender.

4.2.           Absence of Certain Events: At the Closing Date, no Default or
Event of Default hereunder shall have occurred and be continuing.

4.3.           Warranties and Representations at Closing: The warranties and
representations contained in Section 5 as well as any other Section of this
Agreement shall be true and correct in all respects on the Closing Date with the
same effect as though made on and as of that date. Borrower shall not have taken
any action or permitted any condition to exist which would have been prohibited
by any Section hereof.

4.4.           Compliance with this Agreement: Borrower shall have performed and
complied with all agreements, covenants and conditions contained herein
including, without limitation, the provisions of Sections 6 and 7 hereof, which
are required to be performed or complied with by Borrower before or at the
Closing Date.

4.5.           Officer’s Certificate: Lender shall have received a certificate
dated the Closing Date and signed by the chief financial officer of Borrower
certifying that all of the conditions specified in this Section have been
fulfilled.

4.6.           Closing: Subject to the conditions of this Section, the Loans
shall be made available on such date (the “Closing Date”) and at such time as
may be mutually agreeable to the parties contemporaneously with the execution
hereof (“Closing”) at the offices of Lender’s counsel.

4.7.           Waiver of Rights: By completing the Closing hereunder, or by
making Advances hereunder, Lender does not thereby waive a breach of any
warranty or representation made by Borrower hereunder or under any agreement,
document, or instrument delivered to Lender or otherwise referred to herein, and
any claims and rights of Lender resulting from any breach or misrepresentation
by Borrower are specifically reserved by Lender.

4.8.           Intentionally Omitted.
 
 
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4.9.           Conditions for Future Advances: The making of Advances under the
Revolving Credit in any form following the Closing Date is subject to the
following conditions precedent (all instruments, documents and agreements to be
in form and substance satisfactory to Lender and its counsel) following the
Closing Date:

a.           This Agreement and each of the other Loan Documents shall be
effective;

b.           No event or condition shall have occurred or become known to
Borrower, or would result from the making of any requested Advance, which could
reasonably be expected to have a Material Adverse Effect;

c.           No event or condition shall have occurred or become known to
Borrower, or would result from the making of any requested Advance, which could
reasonably be expected to have a Material Adverse Effect;

d.           No Default or Event of Default then exists or after giving effect
to the making of the Advance would exist;

e.           Each Advance is within and complies with the terms and conditions
of this Agreement including, without limitation, the notice provisions contained
in Section 2.4 hereof;

f.           No Lien (other than a Permitted Lien) has been imposed on Borrower;

g.           The Lender shall have received the Borrowing Base Certificate; and

h.           Each representation and warranty set forth in Section 5 and any
other Loan Document in effect at such time (as amended or modified from time to
time) is then true and correct in all material respects as if made on and as of
such date except to the extent such representations and warranties are made only
as of a specific earlier date.

SECTION V. REPRESENTATIONS AND WARRANTIES

To induce Lender to complete the Closing and make the initial Advances under the
Revolving Credit and Loans to Borrower, Borrower warrants and represents to
Lender that:

5.1.           Organization and Validity:

a.           Borrower (i) is a publicly-held corporation, duly organized and
validly existing under the laws of the State of Delaware, (ii) has the
appropriate power and authority to operate its business and to own its Property
and (iii) is duly qualified, is validly existing and in good standing and has
lawful power and authority to engage in the business it conducts in each state
where the nature and extent of its business requires qualification, except where
the failure to so qualify does not and could not reasonably be expected to have
a Material Adverse Effect. A list of all states and other jurisdictions where
Borrower is qualified to do business is shown on Schedule ”5.1” attached hereto
and made part hereof.
 
 
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b.           The making and performance of this Agreement and the other Loan
Documents will not violate any Requirement of Law, or the charter, minutes or
bylaw provisions of Borrower, or of Borrower’s operating agreement or
partnership agreement, as applicable, or violate or result in a default
(immediately or with the passage of time) under any contract, agreement or
instrument to which Borrower is a party, or by which Borrower is bound. Borrower
is not in violation of any term of any agreement or instrument to which it is a
party or by which it may be bound which violation has or could reasonably be
expected to have a Material Adverse Effect, or of its charter, minutes or bylaw
provisions, or of Borrower’s operating agreement or partnership agreement, as
applicable.

c.           Borrower has all requisite power and authority to enter into and
perform this Agreement and to incur the obligations herein provided for, and has
taken all proper and necessary action to authorize the execution, delivery and
performance of this Agreement, and the other Loan Documents as applicable.

d.           This Agreement, the Notes to be issued hereunder, and all of the
other Loan Documents, when delivered, will be valid and binding upon Borrower,
and enforceable in accordance with their respective terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors” rights generally and by general equitable principles.

5.2.           Places of Business: The only places of business of Borrower, and
the places where Borrower keeps and intends to keep its Property, are at the
addresses shown on Schedule “5.2” attached hereto and made part hereof.

5.3.           Pending Litigation: There are no judgments or judicial or
administrative orders or proceedings pending, or to the knowledge of Borrower,
threatened, against Borrower in any court or before any Governmental Authority
except as shown on Schedule “5.3” attached hereto and made part hereof. To the
knowledge of Borrower, there are no investigations (civil or criminal) pending
or threatened against Borrower in any court or before any Governmental
Authority. Borrower is not in default with respect to any order of any
Governmental Authority. To the knowledge of Borrower, no shareholder or
executive officer of Borrower has been indicted in connection with or convicted
of engaging in any criminal conduct, or is currently subject to any lawsuit or
proceeding or under investigation in connection with any anti-racketeering or
other conduct or activity which may result in the forfeiture of any property to
any Governmental Authority.

5.4.           Title to Properties: Borrower has good and marketable title in
fee simple (or its equivalent under applicable law) to all the Property it
purports to own, free from Liens and free from the claims of any other Person,
except for Permitted Liens.
 
 
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5.5.           Governmental Consent: Neither the nature of Borrower or of its
business or Property, nor any relationship between Borrower and any other
Person, nor any circumstance affecting Borrower in connection with the issuance
or delivery of this Agreement, the Notes or any other Loan Documents is such as
to require a consent, approval or authorization of, or filing, registration or
qualification with, any Governmental Authority on the part of Borrower.

5.6.           Taxes: All tax returns required to be filed by Borrower in any
jurisdiction have been filed, and all material taxes, assessments, fees and
other governmental charges upon Borrower, or upon any of its Property, income or
franchises, which are shown to be due and payable on such returns have been
paid, except for those taxes being contested in good faith with due diligence by
appropriate proceedings for which appropriate reserves have been maintained
under GAAP and as to which no Lien has been entered. Borrower is not aware of
any proposed additional tax assessment or tax to be assessed against or
applicable to Borrower.

5.7.           Financial Statements: The annual audited consolidated (if
applicable) balance sheet of Borrower as of March 31, 2011, and the related
statements of operations, stockholder’s equity and cash flow as of such date
accompanied by reports thereon from Borrower’s independent certified public
accountants (complete copies of which have been delivered to Lender), and the
interim consolidated (if applicable) balance sheet of Borrower as of September
30, 2011, and the related statements of operations and cash flow as of such date
have been prepared in accordance with GAAP and present fairly the financial
position of Borrower as of such dates and the results of its operations for such
periods. The fiscal year for Borrower currently ends on March 31. Borrower’s
federal tax identification number and state organizational identification number
for UCC purposes are as shown on Schedule “5.7” attached hereto and made part
hereof.

5.8.           Full Disclosure: The financial statements referred to in Section
5.7 of this Agreement do not, nor does any other written statement of Borrower
to Lender in connection with the negotiation of the Loans, contain any untrue
statement of a material fact. Such statements do not omit a material fact, the
omission of which would make the statements contained therein misleading. There
is no fact known to Borrower which has not been disclosed in writing to Lender
which has or could reasonably be expected to have a Material Adverse Effect.

5.9.           Subsidiaries: Borrower does not have any Subsidiaries, except as
shown on Schedule “5.9” attached hereto and made part hereof.

5.10.           Investments, Guarantees, Contracts, etc.:

a.           Borrower does not own or hold equity or long term debt investments
in, or have any outstanding advances to, any other Person, except as shown on
Schedule “5.10(a),” attached hereto and made part hereof.

b.           Borrower has not entered into any leases for real or personal
Property (whether as landlord or tenant or lessor or lessee), except as shown on
Schedule “5.10(b),” attached hereto and made part hereof.
 
 
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c.           Borrower is not a party to any contract or agreement, or subject to
any charter or other corporate restriction, which has or could reasonably be
expected to have a Material Adverse Effect.

d.           Except as otherwise specifically provided in this Agreement,
Borrower has not agreed or consented to cause or permit any of its Property
whether now owned or hereafter acquired to be subject in the future (upon the
happening of a contingency or otherwise), to a Lien not permitted by this
Agreement.

5.11.           Government Regulations, etc.:

a.           The use of the proceeds of and Borrower’s issuance of the Notes
will not directly or indirectly violate or result in a violation of Section 7 of
the Securities Exchange Act of 1934, as amended, or any regulations issued
pursuant thereto, including, without limitation, Regulations U, T and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.
Borrower does not own or intend to carry or purchase any “margin stock” within
the meaning of said Regulation U.

b.           Borrower has obtained all material licenses, permits, franchises or
other governmental authorizations necessary for the ownership of its Property
and for the conduct of its business.

c.           As of the date hereof, no employee benefit plan (“Pension Plan”),
as defined in Section 3(2) of ERISA, maintained by Borrower or under which
Borrower could have any liability under ERISA (i) has failed to meet the minimum
funding standards established in Section 302 of ERISA, (ii) has failed to comply
in a material respect with all applicable requirements of ERISA and of the
Internal Revenue Code, including all applicable rulings and regulations
thereunder, (iii) has engaged in or been involved in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Internal Revenue Code which
would subject Borrower to any material liability, or (iv) has been terminated if
such termination would subject Borrower to any material liability. Borrower has
not assumed, or received notice of a claim asserted against Borrower for,
withdrawal liability (as defined in Section 4207 of ERISA) with respect to any
multi employer pension plan and is not a member of any Controlled Group (as
defined in ERISA). Borrower has timely made all contributions when due with
respect to any multi employer pension plan in which it participates and no event
has occurred triggering a claim against Borrower for withdrawal liability with
respect to any multi employer pension plan in which Borrower participates. All
Pension Plans and multi employer pension plans in which Borrower participates
are shown on Schedule ”5.11(c)” attached hereto and made part hereof.

d.           Borrower is not in violation of or receipt of written notice that
it is in violation of any Requirement of Law (including, without limitation,
Environmental Laws), a violation of which causes or could cause a Material
Adverse Effect.
 
 
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e.           Borrower is current with all reports and documents required to be
filed with any state or federal securities commission or similar agency and is
in full compliance in all material respects with all applicable rules and
regulations of such commissions.

5.12.           Business Interruptions: Within five (5) years prior to the date
hereof, none of the business, Property or operations of Borrower have been
materially and adversely affected in any way by any casualty, strike, lockout,
combination of workers, order of the United States of America, or any state or
local government, or any political subdivision or agency thereof, directed
against Borrower. There are no pending or, to Borrower’s knowledge, threatened
labor disputes, strikes, lockouts or similar occurrences or grievances affecting
Borrower. No labor contract of Borrower is scheduled to expire prior to the
Revolving Credit Maturity Date.

5.13.           Names and Intellectual Property:

a.           Within five (5) years prior to the Closing Date, Borrower has not
conducted business under or used any other name (whether corporate or assumed)
except for the names shown on Schedule “5.13(a)” attached hereto and made part
hereof. Borrower is the sole owner of all names listed on such Schedule
“5.13(a)” and any and all business done and all invoices issued in such trade
names are Borrower’s sales, business and invoices. Each trade name of Borrower
represents a division or trading style of Borrower and not a separate Subsidiary
or Affiliate or independent entity.

b.           All trademarks, service marks, patents or copyrights of Borrower
which Borrower uses or plans to use are shown on Schedule “5.13(b)” attached
hereto and made part hereof and Borrower is the sole owner of such Property
except to the extent any other Person has claims or rights in such Property, as
such claims and rights are shown on Schedule “5.13(b)”. Borrower is not in
violation of any rights of any other Person with respect to such Property.

c.           Except as shown on Schedule “5.13(c)” attached hereto and made part
hereof, (i) Borrower does not require any copyrights, patents, trademarks or
other intellectual property, or any license(s) to use any patents, trademarks or
other intellectual property in order to provide services to its customers in the
ordinary course of business; and (ii) Lender will not require any copyrights,
patents, trademarks or other intellectual property or any licenses to use the
same in order to provide such services after the occurrence of an Event of
Default.

5.14.           Other Associations: Borrower is not engaged and has no interest
in any joint venture or partnership with any other Person except as shown on
Schedule “5.14,” attached hereto and made part hereof.

5.15.           Environmental Matters: Except as shown on Schedule “5.15,”
attached hereto and made part hereof:

a.           To the best of Borrower’s knowledge, no Property presently owned,
leased or operated by Borrower contains, or has previously contained, any
Hazardous Substances in amounts or concentrations which (i) constitute or
constituted a violation of, or (ii) could give rise to liability under, any
Environmental Law.
 
 
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b.           To the best of Borrower’s knowledge, Borrower is in compliance,
and, for the duration of all applicable statutes of limitations periods, has
been in compliance with all applicable Environmental Laws, and there is no
contamination at, under or about any properties presently owned, leased, or
operated by Borrower or violation of any Environmental Law with respect to such
properties which could reasonably be expected to interfere with any of their
continued operations or reasonably be expected to impair the fair saleable value
thereof.

c.           Borrower has not received any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance assessment with Environmental Laws and
Borrower has no knowledge that any such notice will be received or is being
threatened.

d.           Hazardous Substances have not been transported or disposed of in a
manner or to a location which are reasonably likely to give rise to liability of
Borrower under any Environmental Law.

e.           No judicial proceeding or governmental or administrative action is
pending , or to the knowledge of Borrower, threatened under any Environmental
Law to which Borrower is, or to Borrower’s knowledge will be, named as a party,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding, the implementation of which is reasonably likely to
have a Material Adverse Effect on any natural resources or on Borrower’s
business, financial condition, Property or prospects under any Environmental
Law.

5.16.           Regulation O: No director, executive officer or principal
shareholder of Borrower is a director, executive officer or principal
shareholder of Lender. For the purposes hereof the terms “director” “executive
officer” and “principal shareholder” (when used with reference to Lender), have
the respective meanings assigned thereto in Regulation O issued by the Board of
Governors of the Federal Reserve System.

5.17.           Intentionally Omitted:

5.18.           Solvency: After giving effect to the transactions contemplated
under this Agreement, Borrower is solvent, is able to pay its debts as they
become due, and has capital sufficient to carry on its business and all
businesses in which it is about to engage, and now owns Property having a value
both at fair valuation and at present fair salable value greater than the amount
required to pay Borrower’s debts. Borrower will not be rendered insolvent by the
execution and delivery of this Agreement or any of the other Loan Documents
executed in connection with this Agreement or by the transactions contemplated
hereunder or thereunder.
 
 
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5.19.           Perfection and Priority: This Agreement and the other Loan
Documents are effective to create in favor of Lender legal, valid and
enforceable Liens in all right, title and interest of Borrower in the
Collateral, and when financing statements have been filed in the offices of the
jurisdictions shown on Schedule “5.19,” attached hereto and made part hereof
under Borrower’s name, Borrower will have granted to Lender, and Lender will
have perfected first priority Liens in the Collateral under the UCC, superior in
right to any and all other Liens.

5.20.           Commercial Tort Claims: As of the Closing Date, Borrower is not
a party to any Commercial Tort Claims, except as shown on Schedule “5.20”
attached hereto and made part hereof.

5.21.           Letter of Credit Rights: As of the Closing Date, Borrower has no
Letter of Credit Rights, except as shown on Schedule “5.21,” attached hereto and
made part hereof.

5.22.           Deposit Accounts: All Deposit Accounts of Borrower are shown on
Schedule “5.22,” attached hereto and made part hereof.

5.23.           Anti-Terrorism Laws:

a.           General. Neither Borrower nor any Subsidiary of Borrower is in
violation of any Anti-Terrorism Law or engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.

b.           Executive Order No. 13224. Neither Borrower nor any Subsidiary of
Borrower, or to Borrower’s knowledge, any of its respective agents acting or
benefiting in any capacity in connection with the Loans or other transactions
hereunder, is any of the following (each a “Blocked Person”):

i.           a Person that is listed in the annex to, or is otherwise subject to
the provisions of, the Executive Order No. 13224;

ii.          a Person owned or controlled by, or acting for or on behalf of, any
Person that is listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order No. 13224;

iii.         a Person with which Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

iv.         a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order No. 13224;
 
 
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v.         a Person that is named as a ‘specially designated national” on the
most current list published by the U.S. Treasury Department Office of Foreign
Asset Control at its official website or any replacement website or other
replacement official publication of such list; or

vi.        a Person who is affiliated with a Person listed above.

vii.       a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order No. 13224;

viii.      a Person that is named as a ‘specially designated national” on the
most current list published by the U.S. Treasury Department Office of Foreign
Asset Control at its official website or any replacement website or other
replacement official publication of such list; or

ix.         a Person who is affiliated with a Person listed above.

SECTION VI. BORROWER’S AFFIRMATIVE COVENANTS

Borrower covenants that until all of the Obligations are paid and satisfied in
full and the Revolving Credit has been terminated, that:

6.1.           Payment of Taxes and Claims: Borrower shall pay, before they
become delinquent, all taxes, assessments and governmental charges, or levies
imposed upon it, or upon Borrower’s Property, and all claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and other Persons,
entitled to the benefit of statutory or common law Liens which, in any case, if
unpaid, would result in the imposition of a Lien upon its Property; provided
however, that Borrower shall not be required to pay any such tax, assessment,
charge, levy, claim or demand if the amount, applicability or validity thereof,
shall at the time, be contested in good faith and by appropriate proceedings by
Borrower, and if Borrower shall have set aside on its books adequate reserves in
respect thereof, if so required in accordance with GAAP; which deferment of
payment is permissible so long as no Lien other than a Permitted Lien has been
entered and Borrower’s title to, and its right to use, its Property are not
materially adversely affected thereby.

6.2.           Maintenance of Properties and Corporate Existence:

a.           Property - Borrower shall maintain its Property in good condition
(normal wear and tear excepted) make all necessary renewals, replacements,
additions, betterments and improvements thereto and will pay and discharge when
due the cost of repairs and maintenance to its Property, and will pay all
rentals when due for all real estate leased by Borrower.
 
 
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b.           Property Insurance, Public and Products Liability Insurance -
Borrower shall maintain insurance (i) on all insurable tangible Property against
fire, flood, casualty and such other hazards (including, without limitation,
extended coverage, workmen’s compensation, boiler and machinery) and (ii)
against public liability and business interruption, in each case in such
amounts, with such deductibles and with such insurers as are customarily used by
companies operating in the same industry as Borrower. At or prior to Closing,
Borrower shall furnish Lender with duplicate original policies of insurance or
such other evidence of insurance as Lender may require, and any certificates of
insurance shall be issued on Acord Form-27. In the event Borrower fails to
procure or cause to be procured any such insurance or to timely pay or cause to
be paid the premium(s) on any such insurance, Lender may do so for Borrower, but
Borrower shall continue to be liable for the same. The policies of all such
casualty insurance shall contain standard Lender’s Loss Payable Clauses (and,
with respect to liability and interruption insurance, additional insured
clauses) issued in favor of Lender under which all losses thereunder shall be
paid to Lender as Lender’s interest may appear. Such policies shall expressly
provide that the requisite insurance cannot be altered or canceled without
thirty (30) days prior written notice to Lender and shall insure Lender
notwithstanding the act or neglect of Borrower. Borrower hereby appoints Lender
as Borrower’s attorney-in-fact, exercisable at Lender’s option to endorse any
check which may be payable to Borrower in order to collect the proceeds of such
insurance and any amount or amounts collected by Lender pursuant to the
provisions of this Section may be applied by Lender, in its sole discretion, to
any Obligations or to repair, reconstruct or replace the loss of or damage to
Collateral as Lender in its discretion may from time to time determine. Borrower
further covenants that all insurance premiums owing under its current policies
have been paid. Borrower shall notify Lender, immediately, upon Borrower’s
receipt of a notice of termination, cancellation, or non-renewal from its
insurance company of any such policy.

c.           Financial Records - Borrower shall keep current and accurate books
of records and accounts in which full and correct entries will be made of all of
its business transactions, and will reflect in its financial statements adequate
accruals and appropriations to reserves, all in accordance with GAAP. Borrower
shall not change its fiscal year end date without the prior written consent of
Lender.

d.           Corporate Existence and Rights - Borrower shall do (or cause to be
done) all things necessary to preserve and keep in full force and effect its
existence, good standing, rights and franchises. Borrower shall obtain and
maintain all material licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its Property or to the conduct of
its businesses.

e.           Compliance with Laws - Borrower shall be in compliance in all
material respects with any and all Requirements of Law to which it is subject,
whether federal, state or local, (including, without limitation, Environmental
Laws). Borrower shall timely satisfy all assessments, fines, costs and penalties
imposed (after exhaustion of all appeals, provided a stay has been put in effect
during such appeal) by any Governmental Authority against Borrower or any
Property of Borrower.

6.3.           Business Conducted: Borrower shall continue in the business
presently operated by it using its best efforts to maintain its customers and
goodwill. Borrower shall not engage, directly or indirectly, in any material
respect in any line of business substantially different from the businesses
conducted by Borrower immediately prior to the Closing Date.
 
 
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6.4.           Litigation: Borrower shall give prompt notice to Lender of any
litigation claiming in excess of Fifty Thousand Dollars ($50,000.00) from
Borrower, or which may otherwise reasonably be expected to have a Material
Adverse Effect.

6.5.           Issue Taxes: Borrower shall pay all taxes (other than taxes based
upon or measured by any Lender’s income or revenues or any personal property
tax), if any, in connection with the issuance of the Notes and the recording of
any lien documents. The obligations of Borrower hereunder shall survive the
payment of Borrower’s Obligations hereunder and the termination of this
Agreement.

6.6.           Bank Accounts: Borrower shall maintain its major depository and
disbursement account(s) with Lender; provided, however, that except for those
deposits to be made with Lender on the date of this Agreement pursuant to the
Deposit Account Security Agreement, Borrower shall have 60 days from the date of
this Agreement to comply with this Section 6.6.

6.7.           Employee Benefit Plans: Borrower shall (a) fund all of its
Pension Plan(s) in a manner that will satisfy the minimum funding standards of
Section 302 of ERISA, (b) furnish Lender, promptly upon Lender’s request, with
copies of all reports or other statements filed with the United States
Department of Labor, the PBGC or the IRS with respect to all Pension Plan(s), or
which Borrower, or any member of a Controlled Group, may receive from the United
States Department of Labor, the IRS or the PBGC, with respect to all such
Pension Plan(s), and (c) promptly advise Lender of the occurrence of any
reportable event (as defined in Section 4043 of ERISA, other than a reportable
event for which the thirty (30) day notice requirement has been waived by the
PBGC) or prohibited transaction (under Section 406 of ERISA or Section 4975 of
the Internal Revenue Code) with respect to any such Pension Plan(s) and the
action which Borrower proposes to take with respect thereto. Borrower will make
all contributions when due with respect to any multi employer pension plan in
which it participates and will promptly advise Lender upon (x) its receipt of
notice of the assertion against Borrower of a claim for withdrawal liability,
(y) the occurrence of any event which, to the best of Borrower’s knowledge,
would trigger the assertion of a claim for withdrawal liability against
Borrower, and (z) upon the occurrence of any event which, to the best of
Borrower’s knowledge, would place Borrower in a Controlled Group as a result of
which any member (including Borrower) thereof may be subject to a claim for
withdrawal liability, whether liquidated or contingent.

6.8.           Financial Covenants: Borrower shall maintain and comply with the
following financial covenants:

a.           Borrower shall at all times maintain Minimum Liquidity equal to or
in excess of Three Million and 00/100 Dollars ($3,000,000) in an account with
Lender, which amount shall not include undrawn Advances under the Revolving
Credit, but shall include amounts on deposit pursuant to the Deposit Account
Security Agreement.

b.           Borrower shall at all times maintain a Post-Distribution Debt
Service Coverage Ratio of 1.25:1.00.
 
 
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6.9.           Financial and Business Information: Borrower shall deliver or
cause to be delivered to Lender the following:

a.           Financial Statements and Collateral Reports: such data, reports,
statements and information, financial or otherwise, as Lender may reasonably
request, including, without limitation:

i.           within one hundred twenty (120) days after the end of each Fiscal
Year of Borrower, its annual financial statements (which shall include, but are
not limited to, a balance sheet, statement of operations, and statement of cash
flows for such year), which statements shall state in comparative form the
respective figures for the corresponding date and period in the prior Fiscal
Year, audited by independent certified public accountants of Borrower reasonably
acceptable to Lender, in reasonable detail and prepared in accordance with GAAP,
applied on a consistent basis, and accompanied by an audit report from such
independent certified public accountants reasonably acceptable to Lender
together with management letters relating to such annual financial statements;

ii.           within forty-five (45) days after the end of each fiscal quarter
period of Borrower, interim financial statements prepared in accordance with
GAAP (which shall include, but are not limited to, a balance sheet and statement
of operations), which statements shall also include a statement of activities
for the prior three (3) month period and stating in comparative form the
respective figures for the corresponding date and period in the prior Fiscal
Year, reasonably acceptable to Lender and certified as true and correct by
Borrower’s chief financial officer;

iii.           within fifteen (15) days of the end of each calendar month,
Borrower’s accounts receivable aging report and accounts payable aging report as
of the second Business Day of the current month, and such other reports as
Lender reasonably deems necessary, certified by Borrower’s chief financial
officer as true and correct, all in form and substance reasonably satisfactory
to Lender;

iv.           within fifteen (15) days of the end of each calendar month, a
Borrowing Base Certificate as of the second Business Day of the current month;

v.           any other financial or business information concerning the Borrower
or the Guarantors as Lender may reasonably request from time to time. Lender is
hereby authorized by the Borrower to make available a copy of any financial
statement or any other information relating to the business operations,
Property, assets, condition (financial or otherwise) or prospects of the
Borrower or Guarantors which may be furnished to it hereunder or otherwise, to
any court or other Governmental Authority having jurisdiction over Lender.

b.           Notice of Event of Default - promptly upon becoming aware of the
existence of any condition or event which constitutes a Default or an Event of
Default under this Agreement, a written notice specifying the nature and period
of existence thereof and what action Borrower is taking (and proposes to take)
with respect thereto;
 
 
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c.           Notice of Claimed Default - promptly upon receipt by Borrower,
notice of default, oral or written, given to Borrower by any creditor for
Indebtedness for borrowed money, otherwise holding long term Indebtedness of
Borrower, in either case, in excess of Twenty Five Thousand Dollars
($25,000.00); and

d.           Securities and Other Reports - if Borrower shall be required to
file reports with the Securities and Exchange Commission pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, promptly upon
its becoming available, one copy of each financial statement, report, notice or
proxy statement sent by Borrower to stockholders generally, and, a copy of each
regular or periodic report, and any registration statement, or prospectus in
respect thereof, filed by Borrower with any securities exchange or with federal
or state securities and exchange commissions or any successor agency.

e.           Additional Reports - Borrower shall, if requested by Lender,
promptly furnish Lender with copies of all reports filed with any federal, state
or local Governmental Authority.

6.10.           Officer’s Certificates: Along with the set of quarterly and
annual financial statements delivered to Lender at the end of each applicable
reporting period pursuant to Section 6.9 hereof and the annual financial
statements delivered pursuant to Section 6.9 hereof, Borrower shall deliver to
Lender a certificate (“Compliance Certificate”) (in the form of Exhibit “C,”
attached hereto and made part hereof) from the chief financial officer, chief
executive officer or president of Borrower setting forth:

a.           Event of Default - that the signer has reviewed the relevant terms
of this Agreement, and has made (or caused to be made under his/her supervision)
a review of the transactions and conditions of Borrower from the beginning of
the accounting period covered by the financial statements being delivered
therewith to the date of the certificate, and that such review has not disclosed
the existence during such period of any condition or event which constitutes a
Default or an Event of Default or, if any such condition or event exists,
specifying the nature and period of existence thereof and what action Borrower
has taken or proposes to take with respect thereto.

b.           Covenant Compliance - the information (including detailed
calculations) required in order to establish that Borrower is in compliance with
the requirements of Section 6.8 of this Agreement, as of the end of the period
covered by the financial statements delivered.

6.11.           Audits and Inspection: Borrower shall permit any of Lender’s
officers or other representatives to visit and inspect upon reasonable notice
during business hours any of the locations of Borrower (provided that, while an
Event of Default exists, Lender may make such visits and inspections at any time
without prior notice), to examine and audit all of Borrower’s Collateral, books
of account, records, reports and other papers, to make copies and extracts
therefrom and to discuss its affairs, finances and accounts with its officers,
employees and independent certified public accountants all at Borrower’s expense
at the standard rates charged by Lender for such activities, plus Lender’s
reasonable out-of-pocket expenses (all of which amounts shall be Expenses);
provided that absent an Event of Default, Lender shall conduct no more than two
(2) field audits in any 12-month period.
 
 
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6.12.           Intentionally Omitted.

6.13.           Information to Participant: Lender may divulge to any
participant, assignee or co-lender or prospective participant, assignee or
co-lender it may obtain in the Revolving Credit or any portion thereof, all
information, and furnish to such Person copies of any reports, financial
statements, certificates, and documents obtained under any provision of this
Agreement, or related agreements and documents.

6.14.           Material Adverse Developments: Borrower agrees that immediately
upon becoming aware of any development or other information outside the ordinary
course of business and excluding matters of a general economic, financial or
political nature which would reasonably be expected to have a Material Adverse
Effect it shall give to Lender telephonic notice specifying the nature of such
development or information and such anticipated effect. In addition, such verbal
communication shall be confirmed by written notice thereof to Lender on the same
day such verbal communication is made or the next Business Day thereafter.

6.15.           Places of Business: Borrower shall give thirty (30) days prior
written notice to Lender of any changes in the location of any of its respective
places of business, of the places where records concerning its Accounts or where
its Inventory are kept, or the establishment of any new, or the discontinuance
of any existing place of business; provided that Borrower may not establish any
place of business outside of the United States following the date hereof without
prior written notice to Lender.

6.16.           Commercial Tort Claims: Borrower will immediately notify Lender
in writing in the event that Borrower becomes a party to or obtains any rights
with respect to any Commercial Tort Claim. Such notification shall include
information sufficient to describe such Commercial Tort Claim, including, but
not limited to, the parties to the claim, the court in which the claim was
commenced, the docket number assigned to such claim, if any, and a detailed
explanation of the events that gave rise to the claim. Borrower shall execute
and deliver to Lender all documents and/or agreements necessary to grant Lender
a security interest in such Commercial Tort Claim to secure the Obligations.
Borrower authorizes Lender to file (without Borrower’s signature) initial
financing statements or amendments, as Lender deems necessary to perfect its
security interest in the Commercial Tort Claim.

6.17.           Letter of Credit Rights: Borrower shall provide Lender with
written notice of any letters of credit for which Borrower is the beneficiary.
Borrower shall execute and deliver (or cause to be executed or delivered) to
Lender, all documents and agreements as Lender may require in order to obtain
and perfect its security interest in such Letter of Credit Rights.
 
 
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SECTION VII. BORROWER’S NEGATIVE COVENANTS:

Borrower covenants that until all of the Obligations are paid and satisfied in
full and the Revolving Credit has been terminated, that without the prior
written consent of Lender:

7.1.           Merger, Consolidation, Dissolution or Liquidation:

a.           Borrower shall not engage in any Asset Sale other than equipment
that is replaced by other equipment of comparable or superior quality and value
within ninety (90) days of such Asset Sale.

b.           Borrower shall not merge or consolidate with any other Person or
engage in a division, conversion, dissolution or liquidation.

7.2.           Acquisitions: Borrower shall not acquire all or a material
portion of the Capital Stock or assets of any Person in any transaction or in
any series of related transactions or enter into any sale and leaseback
transaction, other than (i) repurchases of Borrower’s Capital Stock from
employees as provided under Section 7.6, and (ii) in connection with the
formation of a wholly-owned Subsidiary of Borrower to engage in Borrower’s
business in the United Kingdom.

7.3.           Liens and Encumbrances: Borrower shall not: (i) execute a
negative pledge agreement with any Person covering any of its Property, or (ii)
cause or permit or agree or consent to cause or permit in the future (upon the
happening of a contingency or otherwise), its Property (including, without
limitation, the Collateral), whether now owned or hereafter acquired, to be
subject to a Lien or be subject to any claim except for Permitted Liens.

7.4.           Transactions With Affiliates or Subsidiaries:

a.           Borrower shall not enter into any transaction with any Subsidiary
or other Affiliate, including, without limitation, the purchase, sale, or
exchange of Property, or the loaning or giving of funds to any Affiliate or any
Subsidiary unless: (i) such Subsidiary or Affiliate is engaged in a business
substantially related to the business conducted by Borrower, is a Borrower or
Guarantor hereunder and the transaction is in the ordinary course of and
pursuant to the reasonable requirements of Borrower’s business and upon terms
substantially the same and no less favorable to Borrower as it would obtain in a
comparable arm’s length transactions with any Person not an Affiliate or a
Subsidiary, and so long as such transaction is not prohibited hereunder; or (ii)
such transaction is intended for incidental administrative purposes.

b.           Other than as provided in Section 7.2(ii), Borrower shall not
create or acquire any Subsidiary.

7.5.           Guarantees: Excepting the endorsement in the ordinary course of
business of negotiable instruments for deposit or collection, Borrower shall not
become or be liable, directly or indirectly, primary or secondary, matured or
contingent, in any manner, whether as guarantor, surety, accommodation maker, or
otherwise, for the existing or future Indebtedness of any kind of any Person
other than a Guarantor.

7.6.           Restricted Payments, Bonuses and Other Indebtedness: Borrower
shall not: (a) declare or pay or make any forms of Restricted Payment to holders
of Borrower’s Capital Stock, other than repurchases of securities pursuant to,
and in accordance with, the Borrower’s equity compensation plans; provided, that
such repurchases shall not exceed $50,000 in the aggregate in any Fiscal Year;
(b) hereafter incur or become liable for any Indebtedness other than Permitted
Indebtedness; or (c) make any prepayments on any existing or future Indebtedness
(other than the Obligations).
 
 
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7.7.           Loans and Investments: Borrower shall not make or have
outstanding loans, advances, extensions of credit or capital contributions to,
or investments in, any Person that is not a Subsidiary of Borrower, other than
Permitted Investments.

7.8.           Use of Lender’s Name: Borrower shall not use Lender’s name in
connection with any of its business operations. Nothing herein contained is
intended to permit or authorize Borrower to make any contract on behalf of
Lender.

7.9.           Miscellaneous Covenants:

a.           Borrower shall not become or be a party to any contract or
agreement which at the time of becoming a party to such contract or agreement
materially impairs Borrower’s ability to perform under this Agreement, or under
any other instrument, agreement or document to which Borrower is a party or by
which it is or may be bound.

b.           Borrower shall not carry or purchase any “margin stock” within the
meaning of Regulations U, T or X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter II.

c.           Borrower shall not engage in a “Change of Control” as such term is
defined in the Certificate of Designations.

d.           Borrower shall not amend or otherwise modify or enter into any
other agreement regarding the Certificate of Designations without the prior
written consent of Lender.

7.10.           Jurisdiction of Organization: If a Registered Organization,
Borrower shall not change its jurisdiction of organization.

SECTION VIII. DEFAULT

8.1.           Events of Default: Each of the following events shall constitute
an event of default (“Event of Default”):

a.           Payments - if Borrower fails to make any payment of principal or
interest, including any Overadvance, under the Obligations on the date such
payment is due and payable; or
 
 
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b.           Other Charges - if Borrower fails to pay any other charges, fees,
Expenses or other monetary obligations owing to Lender arising out of or
incurred in connection with this Agreement within three (3) Business Days
following demand therefore by Lender; or

c.           Particular Covenant Defaults - if Borrower fails to perform, comply
with or observe any covenant or undertaking contained in this Agreement and
(other than with respect to the covenants contained in Sections 6.2(b), 6.8,
6.9, 6.10 and 6.11 and Section VII for which no cure period shall exist), such
failure continues for thirty (30) days after notice from Lender of the
occurrence thereof; or

d.           Financial Information - if any statement, report, financial
statement, or certificate made or delivered by Borrower or any of its officers,
employees or agents, to Lender is not true and correct, in all material
respects, when made; or

e.           Intentionally Omitted;

f.           Warranties or Representations - if any warranty, representation or
other statement by or on behalf of Borrower contained in or pursuant to this
Agreement, the other Loan Documents or in any document, agreement or instrument
furnished in compliance with, relating to, or in reference to this Agreement, is
false, erroneous, or misleading in any material respect when made; or

g.           Agreements with Others - (i) if Borrower shall default beyond any
grace period in the payment of principal or interest of any Indebtedness of
Borrower in excess of Fifty Thousand Dollars ($50,000.00) in the aggregate; or
(ii) if Borrower otherwise defaults under the terms of any such Indebtedness if
the effect of such default is to enable the holder of such Indebtedness to
accelerate the payment of Borrower’s obligations, which are the subject thereof,
prior to the maturity date or prior to the regularly scheduled date of payment;

h.           Other Agreements with Lender - if Borrower breaches or violates the
terms of, or if a default (and expiration of any applicable cure period), or an
Event of Default, occurs under, any Interest Hedging Instrument or any other
existing or future agreement (related or unrelated) (including, without
limitation, the other Loan Documents) between Borrower and Lender, and such
breach or violation is not cured within thirty (30) days after notice from
Lender; or

i.           Judgments - if any final judgment for the payment of money in
excess of Fifty Thousand Dollars ($50,000.00) in the aggregate (i) which is not
fully and unconditionally covered by insurance or (ii) for which Borrower has
not established a cash or cash equivalent reserve in the full amount of such
judgment, shall be rendered by a court of record against Borrower and such
judgment shall continue unsatisfied and in effect for a period of thirty (30)
consecutive days without being vacated, discharged, satisfied or bonded pending
appeal; or

j.           Assignment for Benefit of Creditors, etc. - if Borrower makes or
proposes in writing, an assignment for the benefit of creditors generally,
offers a composition or extension to creditors, or makes or sends notice of an
intended bulk sale of any business or assets now or hereafter owned or conducted
by Borrower; or
 
 
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k.           Bankruptcy, Dissolution, etc. - upon the commencement of any action
for the dissolution or liquidation of Borrower, or the commencement of any
proceeding to avoid any transaction entered into by Borrower, or the
commencement of any case or proceeding for reorganization or liquidation of
Borrower’s debts under the Bankruptcy Code or any other state or federal law,
now or hereafter enacted for the relief of debtors, whether instituted by or
against Borrower; provided however, that Borrower shall have thirty (30) days to
obtain the dismissal or discharge of involuntary proceedings filed against it,
it being understood that during such thirty (30) day period, Lender shall not be
obligated to make Advances hereunder and Lender may seek adequate protection in
any bankruptcy proceeding; or

l.           Receiver - upon the appointment of a receiver, liquidator,
custodian, trustee or similar official or fiduciary for any Borrower or for
Borrower’s Property; or

m.           Intentionally Omitted;

n.           Termination of Business - if Borrower ceases any material portion
of its business operations as presently conducted; or

o.           Pension Benefits, etc. - if Borrower fails to comply with ERISA so
that proceedings are commenced to appoint a trustee under ERISA to administer
Borrower’s employee plans or the PBGC institutes proceedings to appoint a
trustee to administer such plan(s), or a Lien is entered to secure any
deficiency or claim or a “reportable event” as defined under ERISA occurs; or

p.           Intentionally Omitted.

q.           Guaranty - if any breach or default occurs under the Guaranty and
such breach or default is not cured within thirty (30) days after notice from
Lender, or if the Guaranty, or any material obligation to perform thereunder is
terminated; or

r.           Liens - if any Lien in favor of Lender on material Property shall
cease to be valid, enforceable and perfected and prior to all other Liens other
than Permitted Liens or if Borrower or any Governmental Authority shall assert
any of the foregoing; or

s.           Material Adverse Effect – if there is any change in Borrower’s
financial condition which, in Lender’s reasonable opinion, has or would be
reasonably likely to have a Material Adverse Effect, or

t.           Other Loan Documents - if any other Person (other than Lender)
party to a Loan Document, breaches or violates any term, provision or condition
of such Loan Document and such breach or violation is not cured within thirty
(30) days after notice from Lender.
 
 
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u.           Class D Preferred Stock – if the Class D preferred stock of
Borrower shall be redeemed;

8.2.           Cure: Nothing contained in this Agreement or the Loan Documents
shall be deemed to compel Lender to accept a cure of any Event of Default
hereunder.

8.3.           Rights and Remedies on Default:

a.           In addition to all other rights, options and remedies granted or
available to Lender under this Agreement or the Loan Documents (each of which is
also then exercisable by Lender), or otherwise available at law or in equity,
upon or at any time after the occurrence and during the continuance of a Default
or an Event of Default, Lender may, in its discretion, withhold or cease making
Advances under the Revolving Credit.

b.           In addition to all other rights, options and remedies granted or
available to Lender under this Agreement or the Loan Documents (each of which is
also then exercisable by Lender), or otherwise available at law or in equity,
upon or at any time after the occurrence and during the continuance of an Event
of Default Lender may, in its discretion, terminate the Revolving Credit and
declare the Obligations (other than any Obligations arising under an Interest
Hedging Instrument), immediately due and payable, all without demand, notice,
presentment or protest or further action of any kind (it also being understood
that the occurrence of any of the events or conditions set forth in Sections
8.1(j),(k) or (l) shall automatically cause an acceleration of the Obligations
(other than any Obligations arising under an Interest Hedging Instrument)).

c.           In addition to all other rights, options and remedies granted or
available to Lender under this Agreement or the Loan Documents (each of which is
also then exercisable by Lender), or otherwise available at law or in equity,
upon or at any time after the acceleration of the Obligations following the
occurrence of an Event of Default (other than the rights with respect to clause
(iv) below which Lender may exercise at any time after an Event of Default and
regardless of whether there is an acceleration), Lender may, in its discretion,
exercise all rights under the UCC and any other applicable law or in equity, and
under all Loan Documents permitted to be exercised after the occurrence of an
Event of Default, including the following rights and remedies (which list is
given by way of example and is not intended to be an exhaustive list of all such
rights and remedies):

i.           The right to take possession of, send notices regarding and collect
directly the Collateral, with or without judicial process (including without
limitation the right to notify the United States postal authorities to redirect
mail addressed to Borrower to an address designated by Lender); or

ii.           By its own means or with judicial assistance, enter Borrower’s
premises and take possession of the Collateral, or render it unusable, or
dispose of the Collateral on such premises in compliance with subsection (e)
below, without any liability for rent, storage, utilities or other sums, and
Borrower shall not resist or interfere with such action; or
 
 
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iii.           Require Borrower at Borrower’s expense to assemble all or any
part of the Collateral (other than real estate or fixtures) and make it
available to Lender at any place designated by Lender; or

iv.           The right to modify the terms and conditions upon which Lender may
be willing to consider making Advances under the Revolving Credit or to take
reserves against the Revolving Credit; or

v.           To the extent permitted by applicable law, the right to enjoin any
violation of Section 7.1, it being agreed that Lender’s remedies at law are
inadequate.

d.           Borrower hereby agrees that a notice received by it at least seven
(7) days before the time of any intended public sale or of the time after which
any private sale or other disposition of the Collateral is to be made, shall be
deemed to be reasonable notice of such sale or other disposition. If permitted
by applicable law, any perishable inventory or Collateral which threatens to
speedily decline in value or which is sold on a recognized market may be sold
immediately by Lender without prior notice to Borrower. Borrower covenants and
agrees not to interfere with or impose any obstacle to Lender’s exercise of its
rights and remedies with respect to the Collateral, after the occurrence of an
Event of Default hereunder. Lender shall have no obligation to clean up or
prepare the Collateral for sale. If Lender sells any of the Collateral upon
credit, Borrower will only be credited with payments actually made by the
purchaser thereof, that are received by Lender. Lender may, in connection with
any sale of the Collateral specifically disclaim any warranties of title or the
like.

8.4.           Nature of Remedies: All rights and remedies granted Lender
hereunder and under the Loan Documents, or otherwise available at law or in
equity, shall be deemed concurrent and cumulative, and not alternative remedies,
and Lender may proceed with any number of remedies at the same time until all
Obligations are satisfied in full. The exercise of any one right or remedy shall
not be deemed a waiver or release of any other right or remedy, and Lender, upon
or at any time after the occurrence of an Event of Default, may proceed against
Borrower, at any time, under any agreement, with any available remedy and in any
order.

8.5.           Set-Off:
 
In addition to all other rights, options and remedies granted or available to
Lender under this Agreement or the Loan Documents (each of which is also then
exercisable by Lender), upon or at any time after the occurrence and during the
continuance of an Event of Default, Lender (and any participant) shall have and
be deemed to have, without notice to Borrower, the immediate right of set-off
against any bank account of Borrower with Lender, or of Borrower with any other
subsidiary of Lender or Bank Affiliate or any participant and may apply the
funds or amount thus set-off against any of Borrower’s Obligations hereunder.

If any bank account of Borrower with Lender, any other subsidiary of Lender or
Bank Affiliate or any participant is attached or otherwise liened or levied upon
by any third party, Lender (and such participant) shall have and be deemed to
have, without notice to Borrower, the immediate right of set-off and may apply
the funds or amount thus set-off against any of Borrower’s Obligations
hereunder.
 
 
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SECTION IX. MISCELLANEOUS

9.1.           Governing Law: THIS AGREEMENT, AND ALL MATERS ARISING OUT OF OR
RELATING TO THIS AGREEMENT, AND ALL RELATED AGREEMENTS AND DOCUMENTS, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE
OF NEW YORK. THE PROVISIONS OF THIS AGREEMENT AND ALL OTHER AGREEMENTS AND
DOCUMENTS REFERRED TO HEREIN ARE TO BE DEEMED SEVERABLE, AND THE INVALIDITY OR
UNENFORCEABILITY OF ANY PROVISION SHALL NOT AFFECT OR IMPAIR THE REMAINING
PROVISIONS WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT.

9.2.           Integrated Agreement: The Note, the other Loan Documents, all
related agreements, and this Agreement shall be construed as integrated and
complementary of each other, and as augmenting and not restricting Lender’s
rights and remedies. If, after applying the foregoing, an inconsistency still
exists, the provisions of this Agreement shall constitute an amendment thereto
and shall control.

9.3.           Waiver: No omission or delay by Lender in exercising any right or
power under this Agreement or any related agreements and documents will impair
such right or power or be construed to be a waiver of any Default, or Event of
Default or an acquiescence therein, and any single or partial exercise of any
such right or power will not preclude other or further exercise thereof or the
exercise of any other right, and as to Borrower no waiver will be valid unless
in writing and signed by Lender and then only to the extent specified.

9.4.           Indemnity:

a.           Borrower releases and shall indemnify, defend and hold harmless
Lender and its officers, employees and agents, of and from any claims, demands,
liabilities, obligations, judgments, injuries, losses, damages and costs and
expenses (including, without limitation, reasonable legal fees) resulting from
(i) acts or conduct of Borrower under, pursuant or related to this Agreement and
the other Loan Documents, (ii) Borrower’s breach or violation of any
representation, warranty, covenant or undertaking contained in this Agreement or
the other Loan Documents, (iii) Borrower’s failure to comply with any
Requirement of Law (including without limitation Environmental Laws, etc.), and
(iv) any claim by any other creditor of Borrower against Lender arising out of
any transaction whether hereunder or in any way related to the Loan Documents
and all costs, expenses, fines, penalties or other damages resulting therefrom,
unless resulting solely from acts or conduct of Lender constituting willful
misconduct or gross negligence.
 
 
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b.           Promptly after receipt by an indemnified party under subsection (a)
above of notice of the commencement of any action by a third party, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof. The omission so to notify the indemnifying
party shall relieve the indemnifying party from any liability which it may have
to any indemnified party under such subsection only if the indemnifying party is
unable to defend such actions as a result of such failure to so notify. In case
any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnified party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.

9.5.           Time: Whenever Borrower shall be required to make any payment, or
perform any act, on a day which is not a Business Day, such payment may be made,
or such act may be performed, on the next succeeding Business Day. Time is of
the essence in Borrower’s performance under all provisions of this Agreement and
all related agreements and documents.

9.6.           Expenses of Lender: At Closing and from time to time thereafter,
Borrower will pay upon demand of Lender all reasonable costs, fees and expenses
of Lender in connection with (i) the analysis, negotiation, preparation,
execution, administration, delivery and termination of this Agreement, and other
Loan Documents and the documents and instruments referred to herein and therein,
and any amendment, amendment and restatement, supplement, waiver or consent
relating hereto or thereto, whether or not any such amendment, amendment and
restatement, supplement, waiver or consent is executed or becomes effective,
search costs, the reasonable fees, expenses and disbursements of counsel for
Lender, any fees or expenses incurred by Lender under Section 6.11 for which
Borrower is obligated thereunder, and reasonable charges of any expert
consultant to Lender, (ii) the enforcement of Lender’s rights hereunder, or the
collection of any payments owing from Borrower under this Agreement and/or the
other Loan Documents or the protection, preservation or defense of the rights of
Lender hereunder and under the other Loan Documents, and (iii) any refinancing
or restructuring of the credit arrangements provided under this Agreement and
other Loan Documents in the nature of a “work-out” or of any insolvency or
bankruptcy proceedings, or otherwise (including the reasonable fees and
disbursements of counsel for Lender and, with respect to clauses (ii) and (iii),
reasonable allocated costs of internal counsel) (collectively, the “Expenses”);

9.7.           Brokerage: This transaction was brought about and entered into by
Lender and Borrower acting as principals and without any brokers, agents or
finders being the effective procuring cause hereof. Borrower represents that it
has not committed Lender to the payment of any brokerage fee, commission or
charge in connection with this transaction. If any such claim is made on Lender
by any broker, finder or agent or other person, Borrower hereby indemnifies,
defends and saves such party harmless against such claim and further will
defend, with counsel satisfactory to Lender, any action or actions to recover on
such claim, at Borrower’s own cost and expense, including such party’s
reasonable counsel fees. Borrower further agrees that until any such claim or
demand is adjudicated in such party’s favor, the amount demanded shall be deemed
an Obligation of Borrower under this Agreement.
 
 
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9.8.           Notices:

a.           Any notices or consents required or permitted by this Agreement
shall be in writing and shall be deemed given if delivered in person to the
person listed below or if sent by telecopy or by nationally recognized overnight
courier, as follows, unless such address is changed by written notice hereunder:
 

 
If to Lender to:
TD Bank, N.A.
   
317 Madison Avenue
   
New York, New York 10017
   
Attention: Christina L. Uleano, Vice President
   
Telecopy No.: (212) 299-5728
       
With copies to:
Windels Marx Lane & Mittendorf, LLP
   
156 West 56th Street
   
New York, New York 10019
   
Attention: Michele Arbeeny, Esq.
   
Telecopy No.: (212) 262-1215
       
If to Borrower to:
‘Mktg, Inc.’
   
75 Ninth Avenue
   
New York, New York 10011
   
Attention: Paul Trager, Chief Financial Officer
       
With copies to:
Alston & Bird LLP
         
90 Park Avenue
   
New York, New York 10016
   
Attention: Zev M. Bomrind, Esq.
   
Telecopy No.: (212) 922-3880

b.           Any notice sent by Lender, or Borrower by any of the above methods
shall be deemed to be given when so received; provided that Borrower may provide
any reports or notices to Lender pursuant to Sections 6.9 or 6.10 by email to
Christina.Uleano@td.com.

c.           Lender shall be fully entitled to rely upon any telecopy
transmission or other writing purported to be sent by any Authorized Officer
(whether requesting an Advance or otherwise) as being genuine and authorized.

9.9.           Headings: The headings of any paragraph or Section of this
Agreement are for convenience only and shall not be used to interpret any
provision of this Agreement.
 
 
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9.10.           Survival: All warranties, representations, and covenants made by
Borrower herein, or in any agreement referred to herein or on any certificate,
document or other instrument delivered by it or on its behalf under this
Agreement, shall be considered to have been relied upon by Lender, and shall
survive the delivery to Lender of the Notes, regardless of any investigation
made by Lender or on its behalf. All statements in any such certificate or other
instrument prepared and/or delivered for the benefit of Lender shall constitute
warranties and representations by Borrower hereunder. Except as otherwise
expressly provided herein, all covenants made by Borrower hereunder or under any
other agreement or instrument shall be deemed continuing until all Obligations
are satisfied in full. All indemnification obligations under this Agreement,
including under Section 6.5, 9.4 and 9.7, shall survive the termination of this
Agreement and payment of the Obligations for a period of two (2) years.

9.11.           Successors and Assigns: This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties. Borrower may not transfer, assign or delegate any of its duties or
obligations hereunder. Borrower acknowledges and agrees that Lender may at any
time, and from time to time, (a) sell participating interests in the Loans, and
Lender’s rights hereunder to other financial institutions, and (b) sell,
transfer, or assign the Loans and Lender’s rights hereunder, to any one or more
additional banks or financial institutions, subject (as to Lender’s rights under
this clause (b)) to Borrower’s written consent, which consent shall not be
unreasonably withheld; provided that, no consent under this clause (b) shall be
required if an Event of Default exists at the time of such sale, transfer or
assignment.

9.12.           Duplicate Originals: Two or more duplicate originals of this
Agreement may be signed by the parties, each of which shall be an original but
all of which together shall constitute one and the same instrument.

9.13.           Modification: No modification hereof or any agreement referred
to herein shall be binding or enforceable unless in writing and signed by
Borrower and Lender.

9.14.           Signatories: Each individual signatory hereto represents and
warrants that he is duly authorized to execute this Agreement on behalf of his
principal and that he executes the Agreement in such capacity and not as a
party.

9.15.           Third Parties: No rights are intended to be created hereunder,
or under any related agreements or documents for the benefit of any third party
donee, creditor or incidental beneficiary of Borrower. Nothing contained in this
Agreement shall be construed as a delegation to Lender of Borrower’s duty of
performance, including, without limitation, Borrower’s duties under any account
or contract with any other Person.

9.16.           Discharge of Taxes, Borrower’s Obligations, Etc.: Lender, in its
sole discretion, shall have the right at any time, and from time to time, with
at least ten (10) days prior notice to Borrower if Borrower fail to do so, to:
(a) pay for the performance of any of Borrower’s obligations hereunder, and (b)
discharge taxes or Liens, at any time levied or placed on Borrower’s Property in
violation of this Agreement unless Borrower is in good faith with due diligence
by appropriate proceedings contesting such taxes or Liens and maintaining proper
reserves therefor in accordance with GAAP. Expenses and advances shall be added
to the Revolving Credit, and bear interest at the rate applicable to the
Revolving Credit, until reimbursed to Lender. Such payments and advances made by
Lender shall not be construed as a waiver by Lender of a Default or Event of
Default under this Agreement.
 
 
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9.17.           Withholding and Other Tax Liabilities: Lender shall have the
right to refuse to make any Advances from time to time unless Borrower shall, at
Lender’s request, have given to Lender evidence, reasonably satisfactory to
Lender, that Borrower has properly deposited or paid, as required by law, all
withholding taxes and all federal, state, city, county or other taxes due up to
and including the date of the requested Advance. Copies of deposit slips showing
payment shall constitute satisfactory evidence for such purpose. In the event
that any Lien, assessment or tax liability against Borrower shall arise in favor
of any taxing authority, whether or not notice thereof shall be filed or
recorded as may be required by law, Lender shall have the right (but shall not
be obligated, nor shall Lender hereby assume the duty) to pay any such Lien,
assessment or tax liability by virtue of which such charge shall have arisen;
provided, however, that Lender shall not pay any such tax, assessment or Lien if
the amount, applicability or validity thereof is being contested in good faith
and by appropriate proceedings by Borrower. In order to pay any such Lien,
assessment or tax liability, Lender shall not be obliged to wait until such
lien, assessment or tax liability is filed before taking such action as
hereinabove set forth. Any sum or sums which Lender shall have paid for the
discharge of any such Lien shall be added to the Revolving Credit and shall be
paid by Borrower to Lender with interest thereon at the rate applicable to the
Revolving Credit, upon demand, and Lender shall be subrogated to all rights of
such taxing authority against Borrower.

9.18.           Consent to Jurisdiction: Borrower and Lender each hereby
irrevocably consent to the non-exclusive jurisdiction of the Courts of the City
and State of New York or the United States District Court for the District of
New York County in any and all actions and proceedings whether arising hereunder
or under any other agreement or undertaking. Borrower waives any objection which
Borrower may have based upon lack of personal jurisdiction, improper venue or
forum non conveniens. Borrower irrevocably agrees to service of process by
certified mail, return receipt requested to the address of the appropriate party
set forth herein.

9.19.           Additional Documentation: Borrower shall execute and/or
re-execute, and cause any Guarantor or other Person party to any Loan Document,
to execute and/or re-execute and to deliver to Lender or Lender’s counsel, as
may be deemed appropriate, any document or instrument signed in connection with
this Agreement which was incorrectly drafted and/or signed, as well as any
document or instrument which should have been signed at or prior to the Closing,
but which was not so signed and delivered. Borrower agrees to comply with any
written request by Lender within ten (10) days after receipt by Borrower of such
request.

9.20.           Advertisement:

a.           Lender, with Borrower’s consent not to be unreasonably withheld,
shall have the right to announce and publicize the financing established
hereunder, as it deems appropriate, by means and media selected by Lender. Such
publication shall include all pertinent information relating to such financing,
including without limitation, the term, purpose, pricing, loan amount, name of
Borrower and location of any Real Property.
 
 
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b.           The form and content of the published information shall be
considered the sole and exclusive property of Lender. All expenses related to
publicizing the financing shall be the sole responsibility of Lender.

9.21.           Waiver of Jury Trial: BORROWER AND LENDER EACH HEREBY WAIVE ANY
AND ALL RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION,
PROCEEDING OR COUNTERCLAIM ARISING WITH RESPECT TO RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO OR UNDER THE LOAN DOCUMENTS OR WITH RESPECT TO ANY CLAIMS ARISING
OUT OF ANY DISCUSSIONS, NEGOTIATIONS OR COMMUNICATIONS INVOLVING OR RELATED TO
ANY PROPOSED RENEWAL, EXTENSION, AMENDMENT, MODIFICATION, RESTRUCTURE,
FORBEARANCE, WORKOUT, OR ENFORCEMENT OF THE TRANSACTIONS CONTEMPLATED BY THE
LOAN DOCUMENTS.

9.22.           Consequential Damages: Neither Lender nor agent or attorney of
Lender, shall be liable for any consequential damages arising from any breach of
contract, tort or other wrong relating to the establishment, administration or
collection of the Obligations.

[SIGNATURES TO FOLLOW ON SEPARATE PAGE]
 
 
42

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WITNESS the due execution of this Agreement as a document under seal as of the
date first written above.
 

 
‘MKTG, INC.’,
 
a Delaware corporation
         
By:
/s/ Paul Trager
   
Name:
Paul Trager
   
Title:
Chief Financial Officer
         
TD BANK, N.A.
         
By:
/s/ Christina Uleano
   
Name:
Christina Uleano
   
Title:
Vice President

(Signature Page to Loan and Security Agreement)
 
 
 

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Exhibit “A”

FORM OF AUTHORIZATION CERTIFICATE
 
 
 

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EXHIBIT “B”

FORM OF REVOLVING CREDIT ADVANCE REQUEST
 
 
 

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EXHIBIT “C”

COMPLIANCE CERTIFICATE
 
 
 

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EXHIBIT “D”

BORROWING BASE CERTIFICATE
 
 
 

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