Exhibit 10.6 Business Loan Agreement with California United Bank

 

Exhibit 10.6 BUSINESS LOAN AGREEMENT with California United Bank

 

        Borrower:

PCS LINK, INC.
1936 E DEERE AVE STE 120
SANTA ANA, CA 92705-5732

Lender:

CALIFORNIA UNITED BANK
ENCINO HEADQUARTERS
15821 VENTURA BOULEVARD
SUITE 100
ENCINO, CA 91436-5203 

 

 

THIS BUSINESS LOAN AGREEMENT dated October 21, 2010, is made and executed
between PCS LINK, INC. (“Borrower”) and CALIFORNIA UNITED BANK (“Lender”) on the
following terms and conditions. Borrower has received prior commercial loans
from Lender or has applied to Lender for a commercial loan or loans or other
financial accommodations, including those which may be described on any exhibit
or schedule attached to this Agreement. Borrower understands and agrees that:
(A) in granting, renewing, or extending any Loan, Lender is relying upon
Borrower’s representations, warranties, and agreements as set forth in this
Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all
times shall be subject to Lender’s sole judgment and discretion; and (C) all
such Loans shall be and remain subject to the terms and conditions of this
Agreement.

 

TERM. This Agreement shall be effective as of October 21, 2010, and shall
continue in full force and effect until such time as all of Borrower’s Loans in
favor of Lender have been paid in full, including principal, interest, costs,
expenses, attorneys’ fees, and other fees and charges, or until such time as the
parties may agree in writing to terminate this Agreement.

 

ADVANCE AUTHORITY. The following person or persons are authorized, except as
provided in this paragraph, to request advances and authorize payments under the
line of credit until Lender receives from Borrower, at Lender’s address shown
above, written notice of revocation of such authority: JOHN R. HALL III, CHIEF
EXECUTIVE OFFICER OR ZANTINE GREENWOOD, CHIEF OPERATING OFFICER. Each Advance
under the line of credit must be requested by 12:00 PM Pacific Standard Time,
subject to a minimum Advance of $1,000.00 with subsequent Advances in increments
of at least $1,000.00.

 

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the Initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender’s satisfaction of all of the conditions set forth in this
Agreement and in the Related Documents.

 

Loan Documents. Borrower shall provide to Lender the following documents for the
Loan: (1) the Note; (2) Security Agreements granting to Lender security
interests in the Collateral; (3) financing statements and all other documents
perfecting Lender’s Security Interests; (4) evidence of insurance as required
below; (5) guaranties; (6) together with all such Related Documents as Lender
may require for the Loan; all in form and substance satisfactory to Lender and
Lender’s counsel.

 

Borrower’s Authorization. Borrower shall have provided in form and substance
satisfactory to Lender properly certified resolutions, duly authorizing the
execution and delivery of this Agreement, the Note and the Related Documents. In
addition, Borrower shall have provided such other resolutions, authorizations,
documents and instruments as Lender or its counsel, may require.

 

Payment of Fees and Expenses. Borrower shall have paid to Lender all fees,
charges, and other expenses which are then due and payable as specified in this
Agreement or any Related Document.

 

Representations and Warranties. The representations and warranties set forth in
this Agreement, in the Related Documents, and in any document or certificate
delivered to Lender under this Agreement are true and correct.

 

No Event of Default. There shall not exist at the time of any Advance a
condition which would constitute an Event of Default under this Agreement or
under any Related Document.

 

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

 

Organization. Borrower is a corporation for profit which is, and at all times
shall be, duly organized, validly existing, and in good standing under and by
virtue of the laws of the State of California. Borrower is duly authorized to
transact business in all other states in which Borrower is doing business,
having obtained all necessary filings, governmental licenses and approvals for
each state in which Borrower is doing business. Specifically, Borrower is, and
at all times shall be, duty qualified as a foreign corporation in all states in
which the failure to so qualify would have a material adverse effect on its
business or financial condition. Borrower has the full power and authority to
own its properties and to transact the business in which it is presently engaged
or presently proposes to engage. Borrower maintains an office at 1936 E DEERE
AVE STE 120, SANTA ANA, CA 92705-5732. Unless Borrower has designated otherwise
in writing, the principal office is the office at which Borrower keeps its books
and records including its records concerning the Collateral. Borrower will
notify Lender prior to any change in the location of Borrower’s state of
organization or any change in Borrower’s name. Borrower shall do all things
necessary to preserve and to keep in full force and effect its existence, rights
and privileges, and shall comply with all regulations, rules, ordinances,
statutes, orders and decrees of any governmental or quasi-governmental authority
or court applicable to Borrower and Borrower’s business activities.

 

 

 

  

  BUSINESS LOAN AGREEMENT   Loan No. 010800807 (Continued) Page 2

 

Assumed Business Names. Borrower has filed or recorded all documents or filings
required by law relating to all assumed business names used by Borrower.
Excluding the name of Borrower, the following is a complete list of all assumed
business names under which Borrower does business:

 

Borrower

  Assumed Business Name   Filing Location   Date               PCS LINK, INC.  
GREENWOOD & HALL   ORANGE COUNTY   07-02-2008

 

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

 

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

 

Legal Effect. This Agreement constitutes, and any instrument or agreement
Borrower is required to give under this Agreement when delivered will constitute
legal, valid, and binding obligations of Borrower enforceable against Borrower
in accordance with their respective terms.

 

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

 

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

 

Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against Borrower
is pending or threatened, and no other event has occurred which may materially
adversely effect Borrower’s financial condition or properties, other than
litigation, claims, or other events, if any, that have been disclosed to and
acknowledged by Lender in writing.

 

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

 

Lien Priority. Unless otherwise previously disclosed to Lender in writing,
Borrower has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the
Collateral directly or indirectly securing repayment of Borrower’s Loan and
Note, that would be prior or that may in any way be superior to Lender’s
Security Interests and rights in and to such Collateral.

 

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

 

 

 

 

  BUSINESS LOAN AGREEMENT   Loan No. 010800807 (Continued) Page 3

 

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

 

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

 

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

 

Financial Statements. Furnish Lender with the following:

 

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

 

Interim Statements. As soon as available, but in no event later than sixty (60)
days after the end of each fiscal quarter, Borrower’s balance sheet and profit
and loss statement for the period ended, prepared by Borrower.

 

Tax Returns. As soon as available, but in no event later than thirty (30) days
after the applicable filing date for the tax reporting period ended, Federal and
other governmental tax returns, prepared by Borrower.

 

Additional Requirements. Accounts Receivable and Accounts Payable Aging Reports.
As soon as available, but in no event later than sixty (60) days after the end
of each fiscal quarter, (a) a current detailed aging, by total and by customer,
of Borrower’s accounts receivable, and (b) a current detailed aging, by total
and by vendor, of Borrower’s accounts payable, both of which shall be set forth
in a form and shall contain such information as is acceptable to Lender.

 

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

 

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

 

Financial Covenants and Ratios. Comply with the following covenants and ratios:

 

Additional Requirements. Current Ratio. Borrower shall maintain a Current Ratio
(defined as total current assets divided by total current liabilities) of not
less than 1.00 to 1.00, to be determined as of the end of each fiscal quarter.

 

Ratio of Total Debt to Effective Tangible Net Worth. Borrower shall maintain a
Ratio of Total Debt to Effective Tangible Net Worth (defined as the sum of
current liabilities and non-current liabilities divided by Effective Tangible
Net Worth) of not more than 2.50 to 1.00, to be determined as of the end of each
fiscal quarter. For purposes of calculating the above ratio, Effective Tangible
Net Worth is defined as the aggregate net worth, less intangible assets, less
investments in affiliates, and less any amount due from employees, shareholders,
officers, guarantors and affiliates of Borrower, shareholders, officers, or
guarantors.

 

Debt Service Coverage Ratio. Borrower shall maintain a Debt Service Coverage
Ratio (defined as earnings before interest, taxes, depreciation and amortization
[“EBITDA”] minus distributions divided by the sum of aggregate current portion
of long-term debt plus interest expense) of not less than 1.25 to 1.00, to be
determined as of the end of each fiscal quarter.

 

Except as provided above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance with
generally accepted accounting principles, applied on a consistent basis, and
certified by Borrower as being true and correct.

 

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

 

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

 

Guaranties. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of Lender, executed by the guarantors named
below, on Lender’s forms, and in the amounts and under the conditions set forth
in those guaranties.

 

 

 

  

  BUSINESS LOAN AGREEMENT   Loan No. 010800807 (Continued) Page 4

 

Names of Guarantors   Amounts       JOHN R. HALL III   Unlimited ZANTINE
GREENWOOD   Unlimited HALL 2007 FAMILY TRUST   Unlimited

 

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

 

Loan Proceeds. Use all Loan proceeds solely for Borrower’s business operations,
unless specifically consented to the contrary by Lender in writing.

 

Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and
obligations, including without limitation all assessments, taxes, governmental
charges, levies and liens, of every kind and nature, imposed upon Borrower or
its properties, income, or profits, prior to the date on which penalties would
attach, and all lawful claims that, if unpaid, might become a lien or charge
upon any of Borrower’s properties, income, or profits. Provided however,
Borrower will not be required to pay and discharge any such assessment, tax,
charge, levy, lien or claim so long as (1) the legality of the same shall be
contested in good faith by appropriate proceedings, and (2) Borrower shall have
established on Borrower’s books adequate reserves with respect to such contested
assessment, tax, charge, levy, lien, or claim in accordance with GAAP.

 

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

 

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

 

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

 

Compliance with Governmental Requirements. Comply with all laws, ordinances, and
regulations, now or hereafter in affect, of all governmental authorities
applicable to the conduct of Borrower’s properties, businesses and operations,
and to the use or occupancy of the Collateral, including without limitation, the
Americans With Disabilities Act. Borrower may contest in good faith any such
law, ordinance, or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Borrower has notified Lender in
writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s
interests in the Collateral are not jeopardized. Lender may require Borrower to
post adequate security or a surety bond, reasonably satisfactory to Lender, to
protect Lender’s interest.

 

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

 

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

 

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

 

Required Deposit Accounts. Maintain its principal deposit relationship with
Lender, including but not limited to a demand deposit account.

 

Guarantor’s Financial Statements. Borrower shall cause each Guarantor to furnish
Lender with the following: (A) Financial Statements. As soon as available, but
in no event later than ninety (90) days prior to the maturity date of the line
of credit or if the Indebtedness is renewed or extended no later than such other
date as specified by Lender in writing (but in any case no more frequently than
annually, providing there has been no Event of Default under the Loan), a copy
of each Guarantor’s current financial statements, together with a copy of each
such Guarantor’s bank account statements and brokerage statements, which shall
present fairly and thoroughly the financial condition of each such Guarantor as
of the date shown on the statements. (B) Tax Returns. As soon as available, but
in no event later than thirty (30) days after the applicable filing date for the
tax reporting period ended, a copy of each Guarantor’s federal tax returns and
any amendments thereto, together with a copy of Schedule K-1 statements.
Notwithstanding anything to the contrary under this Agreement, the financial
reports of each Guarantor required to be furnished to Lender need not be
prepared in accordance with GAAP and shall be certified by each such Guarantor
as being true and correct.

 

 

 

  

  BUSINESS LOAN AGREEMENT   Loan No. 010800807 (Continued) Page 5

 

Right to Audit and Inspect. Permit Lender to conduct an audit of books and
records of Borrower (including books and records maintained with any third
party), business operations and inventory and to check and test the same as to
quality, quantity, value and condition, as Lender may reasonably require, at
intervals to be determined by Lender. Borrower shall pay all audit fees, costs
and expenses incurred by Lender in connection with each audit and the amount
charged shall be deemed included in the “Indebtedness” when incurred. Lender
will debit the account of Borrower for such audit charges.

 

RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law,
rule, regulation or guideline, or the interpretation or application of any
thereof by any court or administrative or governmental authority (including any
request or policy not having the force of law) shall impose, modify or make
applicable any taxes (except federal, state or local income or franchise taxes
imposed on Lender), reserve requirements, capital adequacy requirements or other
obligations which would (A) increase the cost to Lender for extending or
maintaining the credit facilities to which this Agreement relates, (B) reduce
the amounts payable to Lender under this Agreement or the Related Documents, or
(C) reduce the rate of return on Lender’s capital as a consequence of Lender’s
obligations with respect to the credit facilities to which this Agreement
relates, then Borrower agrees to pay Lender such additional amounts as will
compensate Lender therefor, within five (5) days after Lender’s written demand
for such payment, which demand shall be accompanied by an explanation of such
imposition or charge and a calculation in reasonable detail of the additional
amounts payable by Borrower, which explanation and calculations shall be
conclusive in the absence of manifest error.

 

LENDER’S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender’s interest in the Collateral or if Borrower fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Borrower’s failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Borrower. All such expenses will become a
part of the Indebtedness and, at Lender’s option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable al the Note’s
maturity.

 

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

 

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

 

Continuity of Operations. (1) Engage in any business activities substantially
different than those in which Borrower is presently engaged, (2) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other
entity, change its name, dissolve or transfer or sell Collateral out of the
ordinary course of business, or (3) pay any dividends on Borrower’s stock (other
than dividends payable in its stock), provided, however that notwithstanding the
foregoing, but only so long as no Event of Default has occurred and is
continuing or would result from the payment of dividends, if Borrower is a
“Subchapter S Corporation” (as defined in the Internal Revenue Code of 1986, as
amended), Borrower may pay cash dividends on its stock to its shareholders from
time to time in amounts necessary to enable the shareholders to pay income taxes
and make estimated income tax payments to satisfy their liabilities under
federal and state law which arise solely from their status as Shareholders of a
Subchapter S Corporation because of their ownership of shares of Borrower’s
stock, or purchase or retire any of Borrower’s outstanding shares or alter or
amend Borrower’s capital structure.

 

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

 

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

 

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

 

 

 

 

  BUSINESS LOAN AGREEMENT   Loan No. 010800807 (Continued) Page 6

 

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower’s accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts, and, at Lender’s option, to
administratively freeze all such accounts to allow Lender to protect Lender’s
charge and setoff rights provided in this paragraph.

 

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

 

Payment Default. Borrower fails to make any payment when due under the Loan.

 

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

 

Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor or any other creditor or person that may
materially affect any of Borrower’s or any Grantor’s property or Borrower’s or
any Grantor’s ability to repay the Loans or perform their respective obligations
under this Agreement or any of the Related Documents.

 

False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower’s behalf under this Agreement or the Related
Documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time thereafter.

 

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

 

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

 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by Judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the Loan. This includes a garnishment of any of
Borrower’s accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

 

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

 

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

 

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

 

Right to Cure. If any default, other than a default on indebtedness, is curable
and If Borrower or Grantor, as the case may be, has not been given a notice of a
similar default within the preceding twelve (12) months, it may be cured if
Borrower or Grantor, as the case may be, after Lender sends written notice to
Borrower or Grantor, as the case may be, demanding cure of such default: (1)
cure the default within fifteen (15) days; or (2) if the cure requires more than
fifteen (15) days, immediately Initiate steps which Lender deems in Lender’s
sole discretion to be sufficient to cure the default and thereafter continue and
complete all reasonable and necessary steps sufficient to produce compliance as
soon as reasonably practical.

 

Adverse Change in Guarantor’s Financial Condition. A material adverse change
occurs in Guarantor’s financial condition, or Lender believes the prospect of
payment or performance of the Guaranty is impaired.

 

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

 

IMAGING. Lender may create microfilms or optical disks or other electronic
Images of this Agreement and any Related Documents that are authoritative copies
as defined in applicable law relating to electronic transactions. Lender may
store the authoritative copies of such Agreement end any Related Documents in
their electronic forms and then destroy the paper originals as part of Lender’s
normal business practices. Lender may control and transfer such authoritative
copies as permitted by such law.

 

 

 

 

  BUSINESS LOAN AGREEMENT   Loan No. 010800807 (Continued) Page 7

 

TERMINATION AND ACCELERATION OF THIS CREDIT FACILITY UPON TERMINATION OR
ACCELERATION OF ANY OTHER CREDIT FACILITY. Borrower (which, as used in this
paragraph, means each Borrower if more than one) hereby acknowledges that Lender
may have extended or may hereafter extend other credit facilities to Borrower or
any Guarantor (hereinafter collectively referred to as “Other Credit
Facilities”) which are or will be evidenced, secured and guaranteed by certain
loan agreements, letter of credit agreements, promissory notes, security
agreements, deeds of trust, guaranties and other similar or related agreements
(hereinafter collectively referred to as “Other Loan Documents”).
Notwithstanding anything to the contrary in this Agreement, any other documents
or agreements from time to time evidencing, securing, guaranteeing or otherwise
relating to the credit facility provided hereunder (hereinafter, together with
this Agreement, collectively referred to as the “Loan Documents”) or the Other
Loan Documents, Borrower hereby agrees that if at any time any of the Other
Credit Facilities is for any reason terminated, repaid in full, refinanced or
accelerated, then (a) Lender’s obligation or commitment, if any, to extend any
further additional credit hereunder shall immediately terminate, without notice,
and (b) all Indebtedness (including all outstanding principal, interest, fees,
coats and expenses) of Borrower to Lender under this Agreement and the other
Loan Documents shall become immediately due and payable without notice and
Borrower agrees to immediately repay to Lender all such Indebtedness and to
cash-collateralize (the “Cash Collateral”) any outstanding letters of credit
issued by Lender for the account of Borrower hereunder. Borrower hereby agrees
to deposit such Cash Collateral in a suspense account held by Lender or another
financial institution selected by Lender. Borrower hereby grants to Lender a
security interest in such Cash Collateral and all other funds in such suspense
account from time to time. Borrower hereby authorizes Lender to use the Cash
Collateral and such other funds to reimburse it for any amounts drawn under or
otherwise due with respect to any letters of credit issued and outstanding
hereunder. Failure by Borrower to comply with the provisions set forth above
shall constitute an Event of Default under this Agreement and shall entitle
Lender to exercise any and all rights and remedies available to it.

 

TERMINATION AND ACCELERATION OF THE LOANS UPON TERMINATION OF ANY PRINCIPAL
DEPOSIT ACCOUNTS. Borrower agrees that If at any time any of the principal
deposit accounts with Lender is for any reason terminated, then (a) Lender’s
obligation or commitment, if any, to extend any further or additional credit
hereunder shall immediately terminate, without notice, end (b) all Indebtedness
(including all outstanding principal, interest, fees, costs and expenses) of
Borrower to Lender under this Agreement and the Related Documents shall become
immediately due and payable without notice and Borrower agrees to immediately
repay to Lender all such indebtedness. Failure by Borrower to comply with the
provisions set forth above shall constitute an Event of Default under this
Agreement and shall entitle Lender to exercise any and all rights and remedies
available to it.

 

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

 

Amendments. This Agreement, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in
this Agreement. No alteration of or amendment to this Agreement shall be
effective unless given in writing and signed by the party or parties sought to
be charged or bound by the alteration or amendment.

 

Arbitration. Lender and Borrower agree that ell disputes, claims and
controversies between them whether individual, joint) or class in nature,
arising from this Agreement or otherwise, including without limitation contract
and tort disputes, shall be arbitrated pursuant to the financial services rules
of J.A.M.S. or its successor in effect at the time the claim is filed, upon
request of either party. No act to take or dispose of any Collateral shall
constitute a waiver of this arbitration agreement or be prohibited by this
arbitration agreement. This Includes, without limitation, obtaining injunctive
relief or a temporary restraining order; invoking a power of sale under any deed
of trust or mortgage; obtaining a writ of attachment or imposition of a
receiver; or exercising any rights relating to personal property, including
taking or disposing of such property with or without Judicial process pursuant
Article 9 of the Uniform Commercial Code. Any disputes, claims, or controversies
concerning the lawfulness or reasonableness of any act, or exercise of any
right, concerning any Collateral, including any claim to rescind, reform, or
otherwise modify any agreement relating to the Collateral, shall also be
arbitrated, provided however that no arbitrator shall have the right or the
power to enjoin or restrain any act of any party. Borrower and Lander agree that
in the event of an action for judicial foreclosure pursuant to California Code
of Civil Procedure Section 726, or any similar provision in any other state, the
commencement of such an action will not constitute a waiver of the right to
arbitrate and the court shall refer to arbitration as much of such action,
including counterclaims, as lawfully may be referred to arbitration. Judgment
upon any award rendered by any arbitrator may be entered in any court having
Jurisdiction. Nothing in this Agreement shall preclude any party from seeking
equitable relief from a court of competent Jurisdiction. The statute of
limitations, estoppel, waiver, laches, and similar doctrines which would
otherwise be applicable in an action brought by a party shall be applicable in
any Arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of an action for these purposes. The Federal
Arbitration Act shall apply to the construction, interpretation, and enforcement
of this arbitration provision.

 

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

 

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

 

 

 

 

  BUSINESS LOAN AGREEMENT   Loan No. 010800807 (Continued) Page 8

 

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

 

Governing Law. This Agreement will be governed by federal law applicable to
Lender and, to the extent not preempted by federal law, the laws of the State of
California without regard to its conflicts of law provisions. This Agreement has
been accepted by Lender in the State of California.

 

Choice of Venue. If there is a lawsuit. Borrower agrees upon Lender’s request to
submit to the jurisdiction of the courts of LOS ANGELES County, State of
California.

 

No Waiver by Lender. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall operate as
a waiver of such right or any other right. A waiver by Lender of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender’s right
otherwise to demand strict compliance with that provision or any other provision
of this Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Borrower, or between Lender and any Grantor, shall constitute a
waiver of any of Lender’s rights or of any of Borrower’s or any Grantor’s
obligations as to any future transactions. Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender in any
instance shall not constitute continuing consent to subsequent instances where
such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.

 

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

 

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

 

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

 

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

 

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

 

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

 

Waive Jury. To the extent permitted by applicable law, all parties to this
Agreement hereby waive the right to any Jury trial in any action, proceeding, or
counterclaim brought by any party against any other party.

 

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

 

 

 

 

  BUSINESS LOAN AGREEMENT   Loan No. 010800807 (Continued) Page 9

 

Advance. The word “Advance” means a disbursement of Loan funds made, or to be
made, to Borrower or on Borrower’s behalf on a line of credit or multiple
advance basis under the terms and conditions of this Agreement.

 

Agreement. The word “Agreement” means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time, together
with all exhibits and schedules attached to this Business Loan Agreement from
time to time.

 

Borrower. The word “Borrower” means PCS LINK, INC. and includes all co-signers
end co-makers signing the Note and all their successors and assigns.

 

Collateral. The word “Collateral” means all property and assets granted as
collateral security for a Loan, whether real or personal property, whether
granted directly or indirectly, whether granted now or in the future, and
whether granted in the form of a security interest, mortgage, collateral
mortgage, deed of trust, assignment, pledge crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor’s lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention contract,
lease or consignment Intended as a security device, or any other security or
lien interest whatsoever, whether created by law, contract, or otherwise.

 

Environmental Laws. The words “Environmental Laws” mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments
arid Reauthorization Act of 1986, Pub. L. No, 99-499 (“SARA”), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5
through 7.7 of Division 20 of the California Health and Safety Code, Section
25100, et seq., or other applicable state or federal laws, rules, or regulations
adopted pursuant thereto.

 

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

 

GAAP. The word “GAAP” means generally accepted accounting principles.

 

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

 

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

 

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

 

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

 

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

 

Lender. The word “Lender” means CALIFORNIA UNITED BANK, its successors and
assigns.

 

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

 

Note. The word “Note” means Borrower’s promissory notes or credit agreements, if
any, evidencing Borrower’s Indebtedness to Lender, together with all renewals
of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the promissory notes or credit agreements-

 

Permitted Liens. The words “Permitted Liens” mean (1) liens and security
Interests securing Indebtedness owed by Borrower to Lender; (2) liens for taxes,
assessments, or similar charges either net yet due or being contested in good
faith; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other
like liens arising in the ordinary course of business and securing obligations
which are not yet delinquent; (4) purchase money Hens or purchase money security
Interests upon or in any property acquired or held by Borrower in the ordinary
course of business to secure Indebtedness outstanding on the date of this
Agreement or permitted to be incurred under the paragraph of this Agreement
titled “Indebtedness and Liens”; (5) liens and security interests which, as of
the date of this Agreement, have been disclosed to and approved by the Lender in
writing; and (6) those liens and security interests which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to the
net value of Borrower’s assets.

 

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

 

 

 

 

  BUSINESS LOAN AGREEMENT   Loan No. 010800807 (Continued) Page 10

 

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

 

Security Interest. The words “Security Interest” mean, without limitation, any
and all types of collateral security, present and future, whether in the form of
a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment,
pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel
trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien or
title retention contract, lease or consignment intended as a security device, or
any other security or lien interest whatsoever whether created by law, contract,
or otherwise.

 

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS
DATED OCTOBER 21, 2010.

 

BORROWER:                 PCS LINK, INC.                 By: /S/ John R. Hall  
By: /S/Zantine Greenwood   John R. HALL III, CHIEF EXECUTIVE OFFICER of PCS
LINK, INC.     ZANTINE GREENWOOD, CHIEF
OPERATING OFFICER of PCS LINK, INC.           LENDER:               CALIFORNIA
UNITED BANK                 By: /S/Stephanie A. Juneau         STEPHANIE A.
JUNEAU, VICE PRESIDENT      

  

 

 

 

AMENDMENT NUMBER ONE TO BUSINESS LOAN
AGREEMENT

 

THIS AMENDMENT NUMBER ONE TO BUSINESS LOAN AGREEMENT (this “Amendment”), dated
as of September 16, 2011, is entered into between PCS LINK, INC., a California
corporation, and CALIFORNIA UNITED BANK, a California banking corporation,
(“Lender”), in light of the following facts:

 

RECITALS

 

WHEREAS, Borrower and Lender have previously entered into that certain Business
Loan Agreement, dated as of October 21, 2010, (the “Agreement”).

 

WHEREAS, Borrower and Lender have agreed to amend certain terms and conditions
of the Agreement in certain respects.

 

NOW, THEREFORE, the parties agree as follows:

 

1.RECITALS. Each of the Recitals set forth above are true and correct and is
incorporated by reference and made a part hereof.

 

2.DEFINITIONS. All terms which are defined in the Agreement shall have the same
definition when used herein unless a different definition is ascribed to such
term under this Amendment, in which case, the definition contained herein shall
govern.

 

3.AMENDMENTS. The Agreement is amended as follows:

 

(a)Change in Requirements Regarding Financial Covenants and Ratios. The
requirements regarding Financial Covenants and Ratios are deleted in their
entireties and are replaced with new requirements as follows:

 

Financial Covenants and Ratios. Comply with the following covenants and ratios:

 

Current Ratio. Borrower shall maintain a Current Ratio (defined as total current
assets divided by total current liabilities) of not less than 1.00 to 1.00, to
be determined as of the end of each fiscal year.

 

Ratio of Total Debt to Effective Tangible Net Worth. Borrower shall maintain a
Ratio of Total Debt to Effective Tangible Net Worth defined as the sum of
current liabilities and non-current liabilities divided by Effective Tangible
Net Worth) of not more than 3.25 to 1.00, to be determined as of the end of each
fiscal year. For purposes of calculating the above ratio, Effective Tangible Net
Worth is defined as the aggregate net worth, less intangible assets, less
investments in affiliates, and less any amount due from employees, shareholders,
officers, guarantors and affiliates of Borrower, shareholders, officers, or
guarantors.

 

 

 

 

 

Debt Service Coverage Ratio. Borrower shall maintain a Debt Service Coverage
Ratio (defined as Borrower’s earnings, before interest, taxes, depreciation, and
amortization [“EBITDA”] minus distributions divided by the sum of Borrower’s
aggregate current portion of long-term debt plus interest expense) of 1.00 to
1.00 as of fiscal quarter ending December 31, 2011 and each and every fiscal
quarter thereafter.

 

Profitability. Borrower shall generate a net profit after tax from operations of
not less than $1.00 at the end of each fiscal year.

 

Except as provided above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance with GAAP,
applied on a consistent basis, and certified by Borrower as being true and
correct.

 

4.CONDITIONS PRECEDENT. Each of the following is a condition precedent to the
effectiveness of this Amendment:

 

(a)Lender shall have received fully executed original copy of this Amendment.

 

5.LIMITED EFFECT. Except for the specific amendment contained in this Amendment,
the Agreement shall remain unchanged and in full force and effect.

 

6.REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Lender that all of
Borrower’s representations and warranties set forth in the Agreement are true,
complete and accurate in all respects as of the date hereof.

 

7.COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed and delivered shall be deemed to be an original. All such
counterparts, taken together, shall constitute but one and the same Amendment.
This Amendment shall become effective upon the execution of this Amendment by
each of the parties hereto.

 

IN WITNESS WHEREOF, Lender and Borrower have executed this Amendment.

 

BORROWER:       PCS Link, Inc.         By: /S/ John R. Hall     John R. Hall,
III, Chief Executive Officer         By: /S/ Zantine Greenwood     Zantine
Greenwood, Chief Operating Officer  

 

2

 

  

LENDER:       California United Bank         By: /S/ Daniel M. Palmquist    
Daniel M. Palmquist, Senior Vice President  

  

3

 

 

THIS AMENDMENT NUMBER TWO TO BUSINESS LOAN
AGREEMENT

 

THIS AMENDMENT NUMBER TWO TO BUSINESS LOAN AGREEMENT (this “Amendment”), dated
as of November 7, 2011, is entered into between PCS Link, Inc, a California
corporation, and California United Bank, a California banking corporation,
(“Lender”), in light of the following facts:

 

RECITALS

 

WHEREAS, Borrower and Lender have previously entered into that certain Business
Loan Agreement, dated as of October 21, 2010, as amended by that certain Amended
Number One to Business Loan Agreement, dated as of September 16, 2011,
(collectively, the “Agreement”).

 

WHEREAS, Borrower and Lender have agreed to amend certain terms and conditions
of the Agreement in certain respects.

 

NOW, THEREFORE, the parties agree as follows:

 

1.RECITALS. Each of the Recitals set forth above are true and correct and is
incorporated by reference and made a part hereof.

 

2.DEFINITIONS. All terms which are defined in the Agreement shall have the same
definition when used herein unless a different definition is ascribed to such
term under this Amendment, in which case, the definition contained herein shall
govern.

 

3.AMENDMENTS. The Agreement is amended as follows:

 

(a)Change in Requirements Regarding Interim Statements and Accounts Receivable
and Accounts Payable Aging Reports. The requirements regarding Interim
Statements and Accounts Receivable and Accounts Payable Aging Reports are
deleted in their entireties and are replaced with new requirements as follows:

 

Interim Statements. As soon as available, but in no event later than twenty (20)
days after the end of each month, Borrower’s balance sheet and income statement
for the period ended, prepared by Borrower.

 

Accounts Receivable and Accounts Payable Aging Reports. As soon as available,
but in no event later than twenty (20) days after the end of each month, (a) a
current detailed aging, by total and by customer, of Borrower’s accounts
receivable listing both the invoice date and the due date, and (b) a current
detailed aging, by total and by vendor, of Borrower’s accounts payable, both of
which shall be set forth in a form and shall contain such information as is
acceptable to Lender.

 

 

 

  

4.CONDITIONS PRECEDENT. Each of the following is a condition precedent to the
effectiveness of this Amendment:

 

(a)Lender shall have received fully executed original copies of this Amendment,
Promissory Note, Acknowledgment of Guarantors and Disbursement Request and
Authorization.

 

5.LIMITED EFFECT. Except for the specific amendment contained in this Amendment,
the Agreement shall remain unchanged and in full force and effect.

 

6.REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Lender that all of
Borrower’s representations and warranties set forth in the Agreement are true,
complete and accurate in all respects as of the date hereof.

 

7.COUNTERPARTS: EFFECTIVENESS. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed and delivered shall be deemed to be an original. All such
counterparts, taken together, shall constitute but one and the same Amendment.
This Amendment shall become effective upon the execution of this Amendment by
each of the parties hereto.

 

[Signature page follows]

 

2

 

 

IN WITNESS WHEREOF, Lender and Borrower have executed this Amendment. BORROWER:

 

BORROWER:       PCS Link, Inc.         By: /S/ John R. Hall     John R. Hall,
III, Chief Executive Officer         By: /S/ Zantine Greenwood     Zantine
Greenwood, Chief Operating Officer  

 

LENDER:       California United Bank         By: /S/ Daniel M. Palmquist    
Daniel M. Palmquist, Senior Vice President        

 

 

 

 

AMENDMENT NUMBER THREE TO BUSINESS LOAN
AGREEMENT

 

THIS AMENDMENT NUMBER THREE TO BUSINESS LOAN AGREEMENT (this “Amendment”), dated
as of February 13, 2012, is entered into between PCS Link, Inc, a California
coloration, and California United Bank, a California banking corporation,
(“Lender”), in light of the following facts:

 

RECITALS

 

WHEREAS, Borrower and Lender have previously entered into that certain Business
Loan Agreement, dated as of October 21, 2010, as amended by those certain
Amended Number One to Business Loan Agreement, dated as of September 16, 2011,
and Amended Number Two to Business Loan Agreement, dated as of November 7, 2011,
(collectively, the “Agreement”).

 

WHEREAS, Borrower and Lender have agreed to amend certain terms and conditions
of the Agreement in certain respects.

 

NOW, THEREFORE, the parties agree as follows:

 

1.RECITALS. Each of the Recitals set forth above are true and correct and is
incorporated by reference and made a part hereof.

 

2.DEFINITIONS. All terms which are defined in the Agreement shall have the same
definition when used herein unless a different definition is ascribed to such
term under this Amendment, in which case, the definition contained herein shall
govern.

 

3.AMENDMENTS. The Agreement is amended as follows:

 

(a)Additional Requirements Regarding Cash Flow Projections. The following
requirements regarding Cash Flow Projections is added to the subsection entitled
Financial Statements:

 

Cash Flow Projections. As soon as available, but in no event later than every
Tuesday of each week, commencing February 14, 2012, Borrower’s weekly cash flow
projections presented in comparison to actual cash flows.

 

(b)Loan Fee. Borrower agrees that upon the execution of this Amendment, the Note
and any Related Documents, Borrower shall be obligated to pay to Lender a loan
fee in the amount of $30,000.00. The loan fee shall be payable on the maturity
date of the $350,000.00 line of credit; provided, however, that if the balance
on the Note is zero and the commitment is canceled on or prior to March 30, 2012
such fee will be reduced to $25,000.00.

 

(c)Term Sheet or Primitive Agreement. As soon as available, but in no event
later than March 5, 2012, Borrower shall furnish Lender with a term sheet of a
definitive agreement for a new equity.

 

 

 

  

4.CONDITIONS PRECEDENT. Each of the following is a condition precedent to the
effectiveness of this Amendment:

 

(a)Lender shall have received fully executed original copies of this Amendment,
Promissory Note, Acknowledgment of Guarantors and Disbursement Request and
Authorization.

 

5.LIMITED EFFECT. Except for the specific amendment contained in this Amendment,
the Agreement shall remain unchanged and in full force and effect.

 

6.REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Lender that all of
Borrower’s representations and warranties set forth in the Agreement are true,
complete and accurate in all respects as of the date hereof.

 

7.COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed and delivered shall be deemed to be an original. All such
counterparts, taken together, shall constitute but one and the same Amendment.
This Amendment shall become effective upon the execution of this Amendment by
each of the parties hereto.

 

[Signature page follows]

 

2

 

 

IN WITNESS WHEREOF, Lender and, Borrower have executed this Amendment:

 

BORROWER:       PCS Link, Inc.         By: /S/ John R. Hall     John R. Hall,
III, Chief Executive Officer         By: /S/ Zantine Greenwood     Zantine
Greenwood, Chief Operating Officer         LENDER:       California United Bank
        By: /S/ Daniel M. Palmquist     Daniel M. Palmquist, Senior Vice
President  

 

 

 

 

AMENDMENT NUMBER FOUR TO BUSINESS LOAN
AGREEMENT

 

THIS AMENDMENT NUMBER FOUR TO BUSINESS LOAN AGREEMENT (this “Amendment”), dated
as of April 30, 2012, is entered into between PCS Link, Inc, a California
corporation, and California United Bank, a California banking corporation,
(“Lender”), in light of the following facts:

 

RECITALS

 

WHEREAS, Borrower and Lender have previously entered into that certain Business
Loan Agreement, dated as of October 21, 2010, as amended by those certain
Amended Number One to Business Loan Agreement, dated as of September 16, 2011,
Amended Number Two to Business Loan Agreement, dated as of November 7, 2011, and
Amended Number Three to Business Loan Agreement, dated as of February 13, 2012,
(collectively, the “Agreement”).

 

WHEREAS, Borrower and Lender have agreed to amend certain terms and conditions
of the Agreement in certain respects.

 

NOW, THEREFORE, the parties agree as follows:

 

1.RECITALS. Each of the Recitals set forth above are true and correct and is
incorporated by reference and made a part hereof.

 

2.DEFINITIONS. All terms which are defined in the Agreement shall have the same
definition when used herein unless a different definition is ascribed to such
term under this Amendment, in which case, the definition contained herein shall
govern.

 

3.AMENDMENTS. The Agreement is amended as follows:

 

(a)Loan Fee. Borrower agrees that upon the execution of this Amendment, the Note
and any Related Documents, Borrower shall be obligated to pay to Lender a loan
fee in the amount of $30,000.00 for overdraft protection revolving line of
credit. The loan fee shall be payable in three installments of $10,000.00 on the
fifteenth (15th) day of each month, beginning May 15, 2012, by an automatic
debit from DDA #80000789.

 

(b)Term Sheet or Definitive Agreement. As soon as available, but in no event
later than May 15, 2012, Borrower shall furnish Lender with a term sheet or a
definitive agreement for new equity of not less than $2,000,000.00.

 

(c)Change in Requirement Regarding “Change in Ownership”. The requirement
regarding Change in Ownership under the section entitled EVENT OF DEAFULT in the
Agreement and any Related Documents is deleted in its entirety and is replaced
with a new requirement as follows:

 

 

 

  

Change in Ownership. Any change in ownership of twenty-five percent (25%)
percent or more of the common stock of Borrower. Notwithstanding the foregoing,
Borrower shall obtain Lender’s approval if any such change in ownership will
occur.

 

4.CONDITIONS PRECEDENT. Each of the following is a condition precedent to the
effectiveness of this Amendment:

 

(a)Lender shall have received fully executed original copies of this Amendment,
Promissory Note, Acknowledgment of Guarantors, and Disbursement Request and
Authorization.

 

5.LIMITED EFFECT. Except for the specific amendment contained in this Amendment,
the Agreement shall remain unchanged and in full force and effect.

 

6.REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Lender that all of
Borrower’s representations and warranties set forth in the Agreement are true,
complete and accurate in all respects as of the date hereof.

 

7.COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed and delivered shall be deemed to be an original. All such
counterparts, taken together, shall constitute but one and the same Amendment.
This Amendment shall become effective upon the execution of this Amendment by
each of the parties hereto.

 

[Signature page follows]

 

2

 

 

IN WITNESS WHEREOF, Lender and Borrower have executed this Amendment.

 

BORROWER:       PCS Link, Inc.         By: /S/ John R. Hall     John R. Hall,
III, Chief Executive Officer         By: /S/ Zantine Greenwood     Zantine
Greenwood, Chief Operating Officer         LENDER:       California United Bank
        By: /S/ Leticia F. Hernandez     Leticia F. Hernandez, Vice President  

 

 

 

 

AMENDMENT NUMBER FIVE TO BUSINESS LOAN
AGREEMENT

 

THIS AMENDMENT NUMBER FOUR TO BUSINESS LOAN AGREEMENT (this “Amendment”), dated
as of September 25, 2012, is entered into between PCS Link, Inc, a California
corporation, and California United Bank, a California banking corporation,
(“Lender”), in light of the following facts:

 

RECITALS

 

WHEREAS, Borrower and Lender have previously entered into that certain Business
Loan Agreement, dated as of October 21, 2010, as amended by those certain
Amended Number One to Business Loan Agreement, dated as of September 16, 2011,
and Amended Number Two to Business Loan Agreement, dated as of November 7, 2011,
and Amended Number Three to Business Loan Agreement, dated as of February 13,
2012, (collectively, the “Agreement”),

 

WHEREAS, Borrower and Lender have agreed to amend certain terms and conditions
of the Agreement in certain respects.

 

NOW, THEREFORE, the parties agree as follows:

 

1.RECITALS. Each of the Recitals set forth above are true and correct and is
incorporated by reference and made a part hereof.

 

2.DEFINITIONS. All terms which are defined in the Agreement shall have the same
definition when used herein unless a different definition is ascribed to such
term under this Amendment, in which case, the definition contained herein shall
govern.

 

3.AMENDMENTS. The Agreement is amended as follows:

 

(a)Change in Requirements Regarding Financial Statements. The subsection
entitled Financial Statements is deleted in its entirety and is replaced with a
new subsection as follows:

 

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

 

Interim Statements. As soon as available, but in no event later than thirty (30)
days after the end of each month, Borrower’s balance sheet and income statement
for the period ended, prepared by Borrower.

 

Annual Projections. As soon as available, but in no event later than thirty (30)
days after the end of each fiscal year, Borrower’s complete financial
projections for the succeeding fiscal year, including but not limited to a
balance sheet, an income statement and a statement of cash flows.

 

 

 

  

Cash Flow Projections. As soon as available, but in no event later than every
Wednesday of each week, commencing October 3, 2012, Borrower’s weekly cash flow
projections presented in comparison to actual cash flows.

 

Tax Returns. As soon as available, but in no event later than thirty (30)
calendar days after the applicable filing date for the tax reporting period
ended, a copy of Borrower’s federal tax returns and any amendments thereto.

 

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

 

(b)Elimination of Requirements Regarding Financial Covenants and Ratios. The
subsection entitled Financial Covenants and Ratios is deleted in its entirety
and is replaced as new subsection as follows:

 

[Intentionally Omitted]

 

4.CONDITIONS PRECEDENT. Each of the following is a condition precedent to the
effectiveness of this Amendment:

 

(a)Lender shall have received fully executed original copies of this Amendment,
Promissory Note (2), Acknowledgment of Guarantors and Disbursement Request and
Authorization (2).

 

5.LIMITED EFFECT. Except for the specific amendment contained in this Amendment,
the Agreement shall remain unchanged and in full force and effect.

 

6.REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Lender that all of
Borrower’s representations and warranties set forth in the Agreement are true,
complete and accurate in all respects as of the date hereof.

 

7.COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed and delivered shall be deemed to be an original. All such
counterparts, taken together, shall constitute but one and the same Amendment.
This Amendment shall become effective upon the execution of this Amendment by
each of the parties hereto.

 

2

 

 

IN WITNESS WHEREOF, Lender and Borrower have executed this Amendment.

 

BORROWER:       PCS Link, Inc.         By: /S/ John R. Hall     John R. Hall,
III, Chief Executive Officer         By: /S/ Zantine Greenwood     Zantine
Greenwood, Chief Operating Officer         LENDER:       California United Bank
        By: /S/ Shirley E. Wentzel     Shirley E. Wentzel, Senior Vice President
       

 

3

 

AMENDMENT NUMBER SIX TO BUSINESS LOAN
AGREEMENT

 

THIS AMENDMENT NUMBER SIX TO BUSINESS LOAN AGREEMENT (this “Amendment”), dated
as of December 19, 2012, is entered into between PCS Link, Inc, a California
corporation, and California United Bank, a California banking corporation,
(“Lender”), in light of the following facts:

 

RECITALS

 

WHEREAS, Borrower and Lender have previously entered into that certain Business
Loan Agreement, dated as of October 21, 2010, as amended by those certain
Amendment Number One to Business Loan Agreement, dated as of September 16, 2011,
Amendment Number Two to Business Loan Agreement, dated as of November 7, 2011,
Amendment Number Three to Business Loan Agreement, dated as of February 13,2012,
Amendment Number Four to Business Loan Agreement, dated as of April 30, 2012,
and Amendment Number Five to Business Loan Agreement, dated as of September 25,
2012, (collectively, the “Agreement”).

 

WHEREAS, Borrower and Lender have previously entered into that certain Amendment
Number Four to Business Loan Agreement, dated as of September 25, 2012, Such
Amendment should have been named as Amendment Number Five to Business Loan
Agreement and is hereby referred as such on the first paragraph of these
Recitals. Amendment Number Four to Business Loan Agreement, dated as of April
30, 2012 was also omitted per amendment dated as of September 25, 2012 and is
also hereby referred on the first paragraph of these Recitals.

 

WHEREAS, Borrower and Lender have agreed to amend certain terms and conditions
of the Agreement in certain respects.

 

NOW, THEREFORE, the parties agree as follows:

 

1.RECITALS. Each of the Recitals set forth above are true and correct and is
incorporated by reference and made a part hereof.

 

2.DEFINITIONS. All terms which are defined in the Agreement shall have the same
definition when used herein unless a different definition is ascribed to such
term under this Amendment, in which case, the definition contained herein shall
govern.

 

3.AMENDMENT. The Agreement is amended as follows:

 

(a)Change in Requirements Regarding Financial Statements. The subsection
entitled Financial Statements is deleted in its entirety and is replaced with a
new subsection as follows:

 

Financial Statements. Furnish Lender with the following:

 

 

 

 

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

 

Interim Statements. As soon as available, but in no event later than twenty (20)
days after the end of each month, Borrower’s balance sheet and income statement
for the period ended, prepared by Borrower.

 

Annual Projections. As soon as available, but in no event later than thirty (30)
days after the end of each fiscal year, Borrower’s complete financial
projections for the succeeding fiscal year, including but not limited to a
balance sheet, an income statement and a statement of cash flows.

 

Fifteen-Week Cash Flow Projections. As soon as available, but in no event later
than every Tuesday of each week, commencing January 2, 2013, Borrower’s weekly
cash flow projections presented in comparison to actual cash flows.

 

Accounts Receivable and Accounts Payable Aging Reports. As soon as available,
but in no event later than twenty (20) days after the end of each month, (a) a
current detailed aging, by total and by customer, of Borrower’s Accounts listing
both the invoice date and the due date, and (b) a current detailed aging, by
total and by vendor, of Borrower’s accounts payable, both of which shall be set
forth in a form and shall contain such information as is acceptable to Lender.

 

Tax Returns. As soon as available, but in no event later than thirty (30)
calendar days after the applicable filing date for the tax reporting period
ended, a copy of Borrower’s federal tax returns and any amendments thereto.

 

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

 

4.CONDITIONS PRECEDENT. Each of the following is a condition precedent to the
effectiveness of this Amendment:

 

(a)Lender shall have received fully executed original copies of this Amendment,
Promissory Note, Acknowledgment of Guarantors and Disbursement Request and
Authorization.

 

5.LIMITED EFFECT. Except for the specific amendment contained in this Amendment,
the Agreement shall remain unchanged and in full force and effect

 

6.REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Lender that all of
Borrower’s representations and warranties set forth in the Agreement are true,
complete and accurate in all respects as of the date hereof.

 

2

 

 

7.COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed and delivered shall be deemed to be an original, All such
counterparts, taken together, shall constitute but one and the same Amendment.
This Amendment shall become effective upon the execution of this Amendment by
each of the parties hereto.

 

IN WITNESS WHEREOF, Lender and Borrower have executed this Amendment.

 

BORROWER:       PCS Link, Inc.         By: /S/ John R. Hall     John R. Hall,
III, Chief Executive Officer         By: /S/ Zantine Greenwood     Zantine
Greenwood, Chief Operating Officer         LENDER:       California United Bank
        By: /S/ Leticia F. Hernandez     Leticia F. Hernandez, Vice President  

 

3

 

AMENDMENT NUMBER SEVEN TO BUSINESS LOAN
AGREEMENT

 

THIS AMENDMENT NUMBER SEVEN TO BUSINESS LOAN AGREEMENT (this “Amendment”), dated
as of May 28, 2013, is entered into between PCS Link, Inc, a California
corporation, and California United Bank, a California banking corporation,
(“Lender”), in light of the following facts:

 

RECITALS

 

WHEREAS, Borrower and Lender have previously entered into that certain Business
Loan Agreement, dated as of October 21, 2010, as amended by those certain
Amendment Number One to Business Loan Agreement, dated as of September 16, 2011,
Amendment Number Two to Business Loan Agreement, dated as of November 7, 2011,
Amendment Number Three to Business Loan Agreement, dated as of February 13,
2012, Amendment Number Four to Business Loan Agreement, dated as of April 30,
2012, Amendment Number Five to Business Loan Agreement, dated as of September
25, 2012, and Amendment Number Six to Business Loan Agreement, dated as of
December 19, 2012, (collectively, the “Agreement”).

 

WHEREAS, Borrower and Lender have agreed to amend certain terms and conditions
of the Agreement in certain respects.

 

NOW, THEREFORE, the parties agree as follows:

 

1.RECITALS. Each of the Recitals set forth above are true and correct and is
incorporated by reference and made a part hereof.

 

2.DEFINITIONS. All terms which are defined in the Agreement shall have the same
definition when used herein unless a different definition is ascribed to such
term under this Amendment, in which case, the definition contained herein shall
govern.

 

3.AMENDMENTS. The Agreement is amended as follows:

 

(a)Change in Requirements Regarding Financial Statements. The subsection
entitled Financial Statements is deleted in its entirety and is replaced with a
new subsection as follows:

 

Financial Statements. Furnish Lender with the following:

 

Annual Statements. As soon as available, but in no event later than one hundred
twenty (120) days after the end of each fiscal year, Borrower and University
Financial Aid Solutions, LLC’s (“UFAS”) consolidated balance sheet and profit
and loss statement for the year ended, audited by a certified public accountant
satisfactory to Lender.

 

 

 

 

Interim Statements. As soon as available, but in no event later than thirty (30)
days after the end of each quarter, Borrower and UFAS’ consolidated balance
sheet and income statement for the period ended, prepared by Borrower.

 

Annual Projections. As soon as available, but in no event later than sixty (60)
days after the end of each fiscal year, Borrower’s complete financial
projections for the succeeding fiscal year, including but not limited to a
balance sheet, an income statement and a statement of cash flows.

 

Accounts Receivable and Accounts Payable Aging Reports. As soon as available,
but in no event later than thirty (30) days after the end of each quarter, (a) a
current detailed aging, by total and by customer, of Borrower’s Accounts listing
both the invoice date and the due date, and (b) a current detailed aging, by
total and by vendor, of Borrower’s accounts payable, both of which shall be set
forth in a form and shall contain such information as is acceptable to Lender.

 

Tax Returns. As soon as available, but in no event later than thirty (30)
calendar days after the applicable filing date for the tax reporting period
ended, a copy of Borrower and UFAS’s federal tax returns and any amendments
thereto.

 

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

 

(b)Additional Guaranty. The following Guarantor is added to the Guaranties
subsection:

 

Name of Guarantor   Amount       UFAS   Unlimited

 

UFAS shall furnish executed guaranty of the Loans in favor of Lender, executed
by the guarantor named above, on Lender’s form, and in the amount and under the
conditions set forth in that guaranty.

 

(c)Loan Fee. Borrower agrees that upon the execution of this Amendment, the Note
and any Related Documents, Borrower shall be obligated to pay to Lender a loan
fee in the amount of $12,500 for the renewal of the revolving line of credit.
The loan fee shall be payable in two (2) installments of $6,250.00 on the
execution of this Amendment and any Related Documents and on July 5, 2013, by an
automatic debit from DDA #80000789.

 

(d)Change in Requirements Regarding Right to Audit and Inspect. The subsection
entitled Right to Audit and Inspect is deleted in its entirety and is replaced
with a new subsection as follows:

 

2

 

 

Right to Audit and Inspect. Permit Lender to conduct an audit of books and
records of Borrower (including books and records maintained with any third
party), business operations and inventory and to check and test the same as to
quality, quantity, value and condition, once a year, commencing June 10, 2013
and annually thereafter, or as Lender may reasonably require, at intervals to be
determined by Lender. Borrower shall pay all audit fees, costs and expenses
incurred by Lender in connection with each audit and the amount charged shall be
deemed included in the “Indebtedness” when incurred. Lender will debit the
account of Borrower for such audit charges.

 

(e)Cross Default; Notice of Default. The following provisions are added as
follows:

 

Cross Default and Notice of Default shall be governed by the following
provisions set forth in the Intercreditor Agreement, dated as of March 18, 2013,
by and between California United Bank (“CUB”) and TCA Global Credit Master Fund,
LP (“TCA”), which states as follows “The Creditors and the Company agree that a
default by the Company not cured within any applicable cure period under any of
the Creditor Loan Documents shall be a default under all of the Creditor Loan
Documents. In that regard: (i) upon the occurrence of a default by the Company
not cured within any applicable cure period under the CUB Loan Documents, CUB
shall use best efforts to notify TCA in writing of the occurrence of any such
default within five (5) business days after the occurrence thereof, or earlier
if practicable; and (ii) upon the occurrence of a default by the Company not
cured within any applicable cure period under the TCA Loan Documents, TCA shall
use best efforts to notify CUB in writing of the occurrence of any such default
within five (5) business days after the occurrence thereof, or earlier if
practicable.”

 

4.CONDITIONS PRECEDENT. Each of the following is a condition precedent to the
effectiveness of this Amendment:

 

(a)Lender shall have received fully executed original copies of this Amendment,
Promissory Note, Limited Liability Company Resolution to Grant
Collateral/Guarantee, Commercial Guaranty, Acknowledgment of Guarantors,
Commercial Security Agreement, Agreement to Provide Insurance, Notice of
Insurance Requirements, Disbursement Request and Authorization, and Notice of
Final Agreement.

 

5.LIMITED EFFECT. Except for the specific amendment contained in this Amendment,
the Agreement shall remain unchanged and in full force and effect.

 

6.REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Lender that all of
Borrower’s representations and warranties set forth in the Agreement are true,
complete and accurate in all respects as of the date hereof.

 

3

 

 

 

7.COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed and delivered shall be deemed to be an original. All such
counterparts, taken together, shall constitute but one and the same Amendment.
This Amendment shall become effective upon the execution of this Amendment by
each of the parties hereto.

 

IN WITNESS WHEREOF, Lender and Borrower have executed this Amendment.

 

BORROWER:       PCS Link, Inc.         By:   /S/ John R. Hall     John R. Hall,
III, Chief Executive Officer         By:   /S/ Zantine Greenwood     Zantine
Greenwood, Chief Operating Officer         LENDER:       California United Bank
        By:   /S/ Leticia F. Hernandez     Leticia F. Hernandez, Vice President
 

 

4

 

AMENDMENT NUMBER EIGHT TO BUSINESS LOAN
AGREEMENT

 

THIS AMENDMENT NUMBER EIGHT TO BUSINESS LOAN AGREEMENT (this “Amendment”), dated
as of May 22, 2014, is entered into between PCS Link, Inc, a California
corporation (“Borrower”), and California United Bank, a California banking
corporation, (“Lender”), with regard to the following facts:

 

RECITALS

 

A.Borrower and Lender have previously entered into that certain Business Loan
Agreement, dated as of October 21, 2010, as amended by those certain Amendment
Number One to Business Loan Agreement, dated as of September 16, 2011, Amendment
Number Two to Business Loan Agreement, dated as of November 7, 2011, Amendment
Number Three to Business Loan Agreement, dated as of February 13, 2012,
Amendment Number Four to Business Loan Agreement, dated as of April 30, 2012,
Amendment Number Five to Business Loan Agreement, dated as of September 25,
2012, Amendment Number Six to Business Loan Agreement, dated as of December 19,
2012, and Amendment Number Seven to Business Loan Agreement, dated as of May 28,
2013 (collectively, the “Agreement”).

 

B.The September 25, 2012 amendment erroneously titled “Amendment Number Four to
Business Loan Agreement” should have been titled “Amendment Number Five to
Business Loan Agreement” and is hereby referred to herein as such.

 

C.Borrower and Lender have agreed to amend certain terms and conditions of the
Agreement as described herein, and therefore enter into this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.RECITALS. Each of the Recitals set forth above are true and correct and are
incorporated by reference and made a part hereof.

 

2.DEFINITIONS. All terms which are defined in the Agreement shall have the same
definition when used herein unless a different definition is ascribed to such
term under this Amendment, in which case, the definition contained herein shall
govern.

 

3.AMENDMENT. The Agreement is amended as follows:

 

(a)Lender agrees that upon satisfaction of the following conditions, and to the
extent provided below, Lender will subordinate its security interest to the lien
of a new lender, whether Opus Bank or other lender (“Opus”), conditioned upon
the following:

 

 

 

 

(i)The funding from Opus is not less than Five Million Dollars ($5,000,000.00),
which funding shall include a Two Million Dollars ($2,000,000.00) term loan
component (the “Opus Term Loan”) which will be funded at the closing on May 22,
2014 and a Three Million Dollars ($3,000,000.00) revolving line of credit
component (the “Opus RLOC”) which will not be funded at the original closing on
May 22, 2014;

 

(ii)The Subordination Agreement between Lender and Opus shall provide that
Lender retains its security interest in the assets of Borrower, but that such
security interest is subordinated to the security interests of Opus; provided,
however, that both the Subordination Agreement, and the Credit Agreement entered
into by Opus and Borrower, shall provide that there shall be no funding of the
Opus RLOC until and unless the Promissory Note in favor of Lender in the sum of
Three Hundred Fifty Thousand Dollars ($350,000.00) dated February 8, 2013, as
amended, replaced and modified from time to time (the “ODP Note”) and the
October 21, 2010 Promissory Note in favor of Lender in the sum of $1,250,000.00,
as amended, replaced and modified from time to time (the CUB RLOC”) have been
paid in full, or are paid in full by such funding of the Opus RLOC;

 

(iii)The Opus Term Loan funds shall be applied to pay off Borrower’s obligations
and obtain a release of all security interests held by TCA Global Credit Master
Fund, LP.

 

4.CONDITIONS PRECEDENT. Each of the following is a condition precedent to the
effectiveness of this Amendment:

 

(a)Lender shall have received fully executed original copies of this Amendment,
Change in Terms Agreement, Acknowledgment of Guarantors and Disbursement Request
and Authorization; and

 

(b)Lender shall have received all payments to be made by Borrower concurrently
with the execution of this Amendment, and concurrently with execution of the
Change in Terms Agreement relating to the ODP Note.

 

5.LIMITED EFFECT. Except for the specific modifications contained in this
Amendment, the Agreement shall remain unchanged and in full force and effect.

 

6.WAIVER OF PRIOR DEFAULT. Lender and Borrower hereby acknowledge and agree that
the Maturity Date of the CUB RLOC and ODP Note occurred on March 5, 2014, at
which time all indebtedness thereunder was due and payable (the “Loan Payment
Event”). Lender hereby unconditionally waives the Event of Default resulting
from the Loan Payment Event. This waiver is not a continuing waiver with respect
to any failure by Borrower to perform any obligation under the CUB RLOC or the
ODP Note after the date of this Amendment.

 

7.REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Lender that all of
Borrower’s representations and warranties set forth in the Agreement are true,
complete and accurate in all respects as of the date hereof.

 

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8.COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed and delivered shall be deemed to be an original. All such
counterparts, taken together, shall constitute but one and the same Amendment.
This Amendment shall become effective upon the execution of this Amendment by
each of the parties hereto.

 

IN WITNESS WHEREOF, Lender and Borrower have executed this Amendment.

 

BORROWER:  PCS Link, Inc.         By:   /S/ John R. Hall     John R. Hall, III,
Chief Executive Officer         LENDER:  California United Bank         By:  
/S/ Leticia F. Hernandez     Leticia F. Hernandez, Senior Vice President        

 

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AMENDMENT NUMBER NINE TO BUSINESS LOAN
AGREEMENT

 

THIS AMENDMENT NUMBER NINE TO BUSINESS LOAN AGREEMENT (this “Amendment”), dated
as July 2014, is entered into between PCS Link, Inc, a California corporation
(“Borrower”), and California United Bank, a California banking corporation,
(“Lender”), with regard to the following facts:

 

RECITALS

 

A.Borrower and Lender have previously entered into that certain Business Loan
Agreement, dated as of October 21, 2010, as amended by those certain Amendment
Number One to Business Loan Agreement, dated as of September 16, 2011, Amendment
Number Two to Business Loan Agreement, dated as of November 7, 2011, Amendment
Number Three to Business Loan Agreement, dated as of February 13, 2012,
Amendment Number Four to Business Loan Agreement, dated as of April 30, 2012,
Amendment Number Five to Business Loan Agreement, dated as of September 25,
2012, Amendment Number Six to Business Loan Agreement, dated as of December 19,
2012, Amendment Number Seven to Business Loan Agreement, dated as of May 28,
2013, and Amendment Number Eight to Business Loan Agreement dated as of May 22,
2014 (collectively, the “Agreement”), The September 25, 2012 amendment
erroneously titled “Amendment Number Four to Business Loan Agreement” should
have been titled “Amendment Number Five to Business Loan Agreement” and is
hereby referred to herein as such.

 

B.Borrower and Lender have agreed to amend certain terms and conditions of the
Agreement as described herein, and therefore enter into this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.RECITALS. Each of the Recitals set forth above are true and correct and are
incorporated by reference and made a part hereof.

 

2.DEFINITIONS. All terms which are defined in the Agreement shall have the same
definition when used herein unless a different definition is ascribed to such
term under this Amendment, in which case, the definition contained herein shall
govern.

 

3.AMENDMENT. The Agreement is amended as follows:

 

(a)Lender consents to a change in ownership of Borrower as follows: Borrower may
be acquired by Divio Holdings Corporation, or a wholly-owned subsidiary
(“Divio”) with the owners of Borrower owning not less than sixty percent (60%)
of the then outstanding shares of the surviving corporation (Divio to be renamed
Greenwood & Hall Inc) immediately following the consummation of the merger;
provided however, that such consent is conditioned upon Lender having received
payment in full of the Promissory Note in favor of Lender in the sum of Three
Hundred Fifty Thousand Dollars ($350,000,00) dated February 8, 2013, as amended,
replaced and modified from time to time (the “ODP Note”), including all
principal, interest, fees and costs no later than ten business days after the
filing of the Form 8-K with the Securities and Exchange Commission following
consummation of the merger transaction between Borrower and Divio.

 

 

 

  

4.LIMITED EFFECT. Except for the specific modifications contained in this
Amendment, the Agreement shall remain unchanged and in full force and effect.

 

5.REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Lender that all of
Borrower’s representations and warranties set forth in the Agreement are true,
complete and accurate in all respects as of the date hereof.

 

6.COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed and delivered shall be deemed to be an original. All such
counterparts, taken together, shall constitute but one and the same Amendment.
This Amendment shall become effective upon the execution of this Amendment by
each of the parties hereto.

 

IN WITNESS WHEREOF, Lender and Borrower have executed this Amendment.

 

BORROWER:  PCS Link, Inc.         By: /S/ John R. Hall     John R. Hall, III,
Chief Executive Officer         LENDER:  California United Bank         By: /S/
Leticia F. Hernandez     Leticia F. Hernandez, Senior Vice President  

 

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