AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT

     

    This AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (this “Agreement”) dated as of the Effective Date is
between SILICON VALLEY
BANK, a California corporation (“Bank”), with its principal place of
business at 3003 Tasman Drive, Santa Clara, California 95054 (FAX (408)
654-1099) and US DATAWORKS,
INC., a Nevada corporation (“Borrower”), with its principal place of
business at One Sugar Creek Center Blvd., 5th Floor, Sugarland, TX 77478 (FAX
(281) 504-8101), amends and restates in its entirety that certain Loan and
Security Agreement between Borrower and Bank dated as of February 9, 2010 (as
subsequently amended prior to the date hereof, the “Original Agreement”) and
provides the terms on which Bank shall lend to Borrower, and Borrower shall
repay Bank.  The parties agree as follows:

     

    1            ACCOUNTING AND OTHER
TERMS

     

    Accounting
terms not defined in this Agreement shall be construed following
GAAP.  Calculations and determinations must be made following
GAAP.  The term “financial statements” includes the notes and
schedules thereto.  The terms “including” and “includes” always mean
“including (or includes) without limitation,” in this or any Loan
Document.  Capitalized terms not otherwise defined in this Agreement
shall have the meanings set forth in Section 13.  All other terms
contained in this Agreement, unless otherwise indicated, shall have the meanings
provided by the Code, to the extent such terms are defined therein.

     

    2            LOAN AND TERMS OF
PAYMENT

     

    2.1      
  Promise
to Pay.  Borrower hereby unconditionally promises to pay Bank
the unpaid principal amount of all Advances hereunder with all interest, fees
and finance charges due thereon as and when due in accordance with this
Agreement.

     

    2.1.1  
   Financing
of Accounts.

     

    (a)           Availability.  Subject
to the terms of this Agreement, Borrower may request that Bank finance specific
Eligible Accounts.  Bank may, in its good faith business discretion,
finance such Eligible Accounts by extending credit to Borrower in an amount
equal to the result of the Advance Rate multiplied by the face amount of the
Eligible Account, or such lesser amount as is requested by Borrower (the
“Advance”).  Bank may, in its sole discretion, change the percentage
of the Advance Rate for a particular Eligible Account on a case by case
basis.  When Bank makes an Advance, the Eligible Account becomes a
“Financed Receivable.”

     

    (b)           Maximum
Advances.  The aggregate face amount of all Financed
Receivables outstanding at any time may not exceed the Facility
Amount.

     

    (c)           Borrowing
Procedure.  Borrower will deliver an Invoice Transmittal for
each Eligible Account it offers.  Bank may rely on information set
forth in or provided with the Invoice Transmittal.

     

    (d)           Credit Quality;
Confirmations.  Bank may, at its option, conduct a credit check
of the Account Debtor for each Account requested by Borrower for financing
hereunder in order to approve any such Account Debtor’s credit before agreeing
to finance such Account.  Bank may also verify directly with the
respective Account Debtors the validity, amount and other matters relating to
the Accounts (including confirmations of Borrower’s representations in Section
5.3) by means of mail, telephone or otherwise, either in the name of Borrower or
Bank from time to time in its sole discretion.

     

    (e)           Accounts
Notification/Collection.  Bank may notify any Person owing
Borrower money of Bank’s security interest in the funds and verify and/or
collect the amount of the Account.

     

    
      
         


      

      
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    (f)           Early
Termination.  This Agreement may be terminated prior to the
Maturity Date or the Refinance Term Loan Maturity Date as follows: (i) by
Borrower, effective three (3) Business Days after written notice of termination
is given to Bank; or (ii) by Bank at any time after the occurrence of an Event
of Default, without notice, effective immediately.  If this Agreement
is terminated (A) by Bank in accordance with clause (ii) in the foregoing
sentence, or (B) by Borrower for any reason, Borrower shall pay to Bank a
termination fee in an amount equal to (i) Ten Thousand Dollars ($10,000) plus
(ii) if such termination occurs on or prior to the Maturity Date, an amount
equal to Four Thousand Twenty Seven and 50/100 Dollars ($4,027.50) (collectively
with the fee referred to in clause (i), the “Early Termination
Fee”).  The Early Termination Fee shall be due and payable on
the effective date of such termination and thereafter shall bear interest at a
rate equal to the highest rate applicable to any of the
Obligations.

     

    (g)           Maturity.  All
Obligations outstanding hereunder as of the Maturity Date (other than with
respect to the Refinance Term Loan) shall be immediately due and payable on the
Maturity Date.  All Obligations outstanding hereunder as of the
Refinance Term Loan Maturity Date with respect to the Refinance Term Loan shall
be immediately due and payable on the Refinance Term Loan Maturity
Date.

     

    (h)           Suspension of
Advances.  Bank’s obligation, if any, to finance Eligible
Accounts hereunder will terminate if, in Bank’s sole discretion, there has been
a material adverse change in the general affairs, management, results of
operation, condition (financial or otherwise) or the prospect of repayment of
the Obligations, or there has been any material adverse deviation by Borrower
from Borrower’s Plan.

     

    2.1.2      Refinance Term
Loan.

     

    (a)           Availability.  Bank
previously made the Term Loan to Borrower pursuant to the Original
Agreement.  As of the Effective Date, the outstanding principal amount
of the Term Loan is Eight Hundred Five Thousand Five Hundred Dollars
($805,500).  Subject to the terms and conditions of this Agreement, on
the Effective Date (i) Borrower shall repay Four Hundred Two Thousand Seven
Hundred Fifty Dollars ($402,750) of the outstanding principal amount of the Term
Loan, through a combination of a cash payment and/or with the proceeds of the
first Advance and (ii) Bank shall be deemed to have made a loan to Borrower in
the amount of Four Hundred Two Thousand Seven Hundred Fifty Dollars ($402,750)
(the “Refinance Term
Loan”) which shall be used to refinance the other half of the principal
amount outstanding with respect to the Term Loan.

     

    (b)           Repayment.  The
Refinance Term Loan shall immediately amortize and be payable in equal payments
of principal, plus all accrued and unpaid interest, beginning on November 1,
2010 and continuing on the first (1st) day of each month thereafter through the
Refinance Term Loan Maturity Date.

     

    (c)           Prepayment.  Borrower
shall have the option to prepay all, but not less than all, of the Refinance
Term Loan advanced by Bank under this Agreement, provided Borrower
(a) provides written notice to Bank of its election to prepay the Refinance
Term Loan at least ten (10) days prior to such prepayment, and (b) pays, on
the date of the prepayment (i) all accrued and unpaid interest with respect
to the Refinance Term Loan through the date the prepayment is made;
(ii) all unpaid principal with respect to the Refinance Term Loan; (iii) if
applicable, the Early Termination Fee, and (iv) all other sums, if any,
that shall have become due and payable hereunder with respect to this
Agreement.

     

    (e)           Interest Rate for Refinance
Term Loan.  The principle amount outstanding with respect to
the Refinance Term Loan shall accrue interest at a per annum rate equal seven
percentage points (7.00%), fixed as of the Effective
Date.  Notwithstanding the foregoing, immediately upon the occurrence
and during the continuance of an Event of Default, the Refinance Term Loan shall
bear interest at a rate per annum which is five percentage points (5.00%) above
the rate that is otherwise applicable thereto (the “Default
Rate”).  Payment or acceptance of the increased interest rate
provided in this Section is not a permitted alternative to timely payment
and shall not constitute a waiver of any Event of Default or otherwise prejudice
or limit any rights or remedies of Bank.

     

    2.2         Collections,
Finance Charges, Remittances and Fees.  The Obligations with
respect to the Advances shall be subject to the following fees and Finance
Charges.  Unpaid fees and Finance Charges may, in Bank’s discretion,
accrue interest and fees as described in Section 9.2 hereof.

     

    
      
         


      

      
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    2.2.1      Collections.  Collections
will be credited to the Financed Receivable Balance for such Financed
Receivable, but if there is an Event of Default, Bank may apply Collections to
the Obligations in any order it chooses.  If Bank receives a payment
for both a Financed Receivable and a non-Financed Receivable, the funds will
first be applied to the Financed Receivable and, if there is no Event of Default
then existing, the excess will be remitted to Borrower, subject to Section
2.2.7.

     

    2.2.2      Facility
Fee.  A fully earned, non-refundable facility fee of Two
Thousand Five Hundred Dollars ($2,500) is due upon execution of this Agreement
(the “Facility
Fee”).

     

    2.2.3      Finance
Charges.  In computing Finance Charges on the Obligations with
respect to the Advances under this Agreement, all Collections received by Bank
shall be deemed applied by Bank on account of such Obligations on the same
Business Day as receipt of the Collections.  Borrower will pay a
finance charge (the “Finance Charge”) on the Financed Receivable Balance which
Finance Charge shall be equal to the Applicable Rate divided by 360 multiplied by the
number of days each such Financed Receivable is outstanding multiplied by the
outstanding Financed Receivable Balance. The Finance Charge is
payable when the Advance made based on such Financed Receivable is payable in
accordance with Section 2.3 hereof.  After an Event of Default, the
Applicable Rate will increase an additional five percent (5.0%) per annum
effective immediately upon the occurrence of such Event of Default.

     

    2.2.4      Collateral
Handling Fee.  Borrower will pay to Bank a collateral handling fee
equal to one quarter of one percent (0.25%) per month of the Financed Receivable
Balance for each Financed Receivable outstanding based upon a 360 day year (the
“Collateral Handling Fee”);
provided, however, for any Subject Month (as of the first calendar day of
such month), to the extent that Borrower maintained an Adjusted Quick Ratio of
greater than 1.30 to 1.00 at all times during the applicable Testing Month, the
Collateral Handling Fee shall be equal to one tenth of one percent (0.10%) per
month of the Financed Receivable Balance for each Financed Receivable
outstanding based upon a 360 day year.  This fee is charged on a daily
basis which is equal to the Collateral Handling Fee divided by 30, multiplied by
the number of days each such Financed Receivable is outstanding, multiplied by
the outstanding Financed Receivable Balance.  The Collateral Handling Fee
is payable when the Advance made based on such Financed Receivable is payable in
accordance with Section 2.3 hereof.  In computing Collateral Handling Fees
under this Agreement, all Collections received by Bank shall be deemed applied
by Bank on account of Obligations on the same Business Day as receipt of the
Collections.  After an Event of Default, the Collateral Handling Fee will
increase an additional 0.50% effective immediately upon such Event of
Default.

     

    2.2.5      Accounting.  After
each Reconciliation Period, Bank will provide an accounting of the transactions
for that Reconciliation Period, including the amount of all Financed
Receivables, all Collections, Adjustments, Finance Charges, Collateral Handling
Fees and, for the first Reconciliation Period, the Facility Fee.  If
Borrower does not object to the accounting in writing within thirty (30) days it
shall be considered accurate and binding on both parties, absent subsequent
written notice to Borrower.  All Finance Charges and other interest
and fees are calculated on the basis of a 360 day year and actual days
elapsed.

     

    2.2.6      Deductions.  Bank
may deduct fees, Finance Charges, Advances which become due pursuant to Section
2.3, and other amounts due pursuant to this Agreement from any Advances made or
Collections received by Bank.

     

    2.2.7      Lockbox;
Account Collection Services.

     

    (a)           As
and when directed by Bank from time to time, at Bank’s option and at the sole
and exclusive discretion of Bank (regardless of whether an Event of Default has
occurred), Borrower shall direct each Account Debtor (and each depository
institution where proceeds of Accounts are on deposit) to remit payments with
respect to the Accounts to a lockbox account established with Bank or to wire
transfer payments to a cash collateral account that Bank controls (collectively,
the “Lockbox”).  It will
be considered an immediate Event of Default if the Lockbox is not set-up and
operational on the Effective Date.

     

    
      
         


      

      
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    (b)           Until
such Lockbox is established, the proceeds of the Accounts shall be paid by the
Account Debtors to an address consented to by Bank.  Upon receipt by
Borrower of such proceeds, Borrower shall immediately transfer and deliver same
to Bank, along with a detailed cash receipts journal.  Provided no
Event of Default exists or an event that with notice or lapse of time will be an
Event of Default, within three (3) days of receipt of such amounts by Bank, Bank
will turn over to Borrower (i) the proceeds of the Accounts other than
Collections with respect to Financed Receivables and (ii) the amount of
Collections in excess of the amounts for which Bank has made an Advance to
Borrower, less any amounts due to Bank, such as the Finance Charge, the Facility
Fee, payments due to Bank, other fees and expenses, or otherwise; provided,
however, Bank may hold such excess amount with respect to Financed Receivables
as a reserve until the end of the applicable Reconciliation Period if Bank, in
its discretion, determines that other Financed Receivable(s) may no longer
qualify as an Eligible Account at any time prior to the end of the subject
Reconciliation Period.  This Section does not impose any affirmative
duty on Bank to perform any act other than as specifically set forth
herein.  All Accounts and the proceeds thereof are Collateral and if
an Event of Default occurs, Bank may apply the proceeds of such Accounts to the
Obligations.

     

    2.2.8      Bank
Expenses.  Borrower shall pay all Bank Expenses (including
reasonable attorneys’ fees and expenses, plus expenses, for documentation and
negotiation of this Agreement) incurred through and after the Effective Date,
when due.

     

    2.3         Repayment of Obligations;
Adjustments.

     

    2.3.1      Repayment.  Borrower
will repay each Advance on the earliest of: (a) the date on which payment is
received of the Financed Receivable with respect to which the Advance was made,
(b) the date on which the Financed Receivable is no longer an Eligible Account,
(c) the date on which any Adjustment is asserted to the Financed Receivable (but
only to the extent of the Adjustment if the Financed Receivable remains
otherwise an Eligible Account), (d) the date on which there is a breach of any
warranty or representation set forth in Section 5.3 with respect to a particular
Financed Received (as referenced therein) or (e) the Maturity Date (including
any early termination). Each payment will also include all accrued Finance
Charges and Collateral Handling Fees with respect to such Advance and all other
amounts then due and payable hereunder.

     

    2.3.2      Repayment
on Event of Default.  When there is an
Event of Default, Borrower will, if Bank demands (or, upon the occurrence of an
Event of Default under Section 8.5, immediately without notice or demand from
Bank) repay all of the Advances.  The demand may, at Bank’s option,
include the Advance for each Financed Receivable then outstanding and all
accrued Finance Charges, the Early Termination Fee,  Collateral
Handling Fee, attorneys’ and professional fees, court costs and expenses, and
any other Obligations.

     

    2.3.3      Debit of
Accounts.  Bank may debit
any of Borrower’s deposit accounts for payments or any amounts Borrower owes
Bank hereunder.  Bank shall promptly notify Borrower when it debits
Borrower’s accounts.  These debits shall not constitute a
set-off.

     

    2.3.4      Adjustments.  If, at any time
during the term of this Agreement, any Account Debtor asserts an Adjustment,
Borrower issues a credit memorandum, or any of the representations and
warranties in Section 5.3 with respect to the Financed Receivable of such
Account Debtor are no longer true in all material respects, Borrower will
promptly advise Bank.

     

    2.4         Power of
Attorney.  Borrower irrevocably appoints Bank and its
successors and assigns as attorney-in-fact and authorizes Bank, to: (a)
following the occurrence of an Event of Default, (i) sell, assign, transfer,
pledge, compromise, or discharge all or any part of the Financed Receivables;
(ii) demand, collect, sue, and give releases to any Account Debtor for monies
due and compromise, prosecute, or defend any action, claim, case or proceeding
about the Financed Receivables, including filing a claim or voting a claim in
any bankruptcy case in Bank’s or Borrower’s name, as Bank chooses; and (iii)
prepare, file and sign Borrower’s name on any notice, claim, assignment, demand,
draft, or notice of or satisfaction of lien or mechanics’ lien or similar
document; and (b) regardless of whether there has been an Event of
Default,  (i) notify all Account Debtors to pay Bank directly; (ii)
receive, open, and dispose of mail addressed to Borrower; (iii) endorse
Borrower’s name on checks or other instruments (to the extent necessary to pay
amounts owed pursuant to this Agreement); and (iv) execute on Borrower’s behalf
any instruments, documents, financing statements to perfect Bank’s interests in
the Financed Receivables and Collateral and do all acts and things necessary or
expedient, as determined solely and exclusively by Bank, to protect
or  preserve, Bank’s rights and remedies under this Agreement, as
directed by Bank.

     

    
      
         


      

      
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    3   
        CONDITIONS OF
LOANS

     

    3.1         Conditions
Precedent to Initial Advance.  Bank’s agreement to make the
initial Advance is subject to the condition precedent that Bank shall have
received, in form and substance satisfactory to Bank, such documents, and
completion of such other matters, as Bank may reasonably deem necessary or
appropriate, including, without limitation:

     

    (a)           a
certificate of the Secretary of Borrower with respect to articles, bylaws,
incumbency and resolutions authorizing the execution and delivery of this
Agreement;

     

    (b)           the
Amended and Restated Intellectual Property Security Agreement;

     

    (c)           the
Amended and Restated Subordination Agreement by all holders of Subordinated
Debt;

     

    (d)           Perfection
Certificate by Borrower;

     

    (e)           evidence
satisfactory to Bank that the insurance policies required by Section 6.4 hereof
are in full force and effect, together with appropriate evidence showing lender
loss payable and/or additional insured clauses or endorsements in favor of
Bank;

     

    (f)     
      payment of the fees (including but not
limited to the Facility Fee) and Bank Expenses then due and payable;
and

     

    (g)           such
other documents, and completion of such other matters, as Bank may reasonably
deem necessary or appropriate.

     

    3.2         Conditions
Precedent to all Advances.  Bank’s agreement to make each
Advance, including the initial Advance, is subject to the
following:

     

    (a)           receipt
of the Invoice Transmittal;

     

    (b)           Bank
shall have (at its option) conducted the confirmations and verifications as
described in Section 2.1.1 (d); and

     

    (c)           each
of the representations and warranties in Section 5 shall be true in all material
respects on the date of the Invoice Transmittal and on the effective date of
each Advance and no Event of Default shall have occurred and be continuing, or
result from the requested Advance.  Each request for an Advance is
Borrower’s representation and warranty on that date that the representations and
warranties in Section 5 remain true.

     

    4         
  CREATION
OF SECURITY INTEREST

     

    4.1         Grant of
Security Interest.  Borrower hereby grants Bank, to secure the
payment and performance in full of all of the Obligations, a continuing security
interest in, and pledges to Bank, the Collateral, wherever located, whether now
owned or hereafter acquired or arising, and all proceeds and products
thereof.  Borrower represents, warrants, and covenants that the
security interest granted herein shall be a first priority security interest in
the Collateral (subject only to Permitted Liens that may have superior priority
to Bank’s Liens).  If Borrower shall at any time, acquire a commercial
tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower
of the general details thereof and grant to Bank in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance reasonably satisfactory
to Bank.

     

    If this
Agreement is terminated, Bank’s Lien in the Collateral shall continue until the
Obligations (other than inchoate indemnity obligations) are repaid in full in
cash.  Upon payment in full in cash of the Obligations and at such
time as Bank’s obligation to make Advances has terminated, Bank shall, at
Borrower’s sole cost and expense, release its Liens in the Collateral and all
rights therein shall revert to Borrower.

     

    
      
         


      

      
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    4.2         Authorization
to File Financing Statements.  Borrower hereby authorizes Bank
to file financing statements, without notice to Borrower, with all appropriate
jurisdictions to perfect or protect Bank’s interest or rights hereunder,
including a notice that any disposition of the Collateral, by either Borrower or
any other Person, in violation of this Agreement, shall be deemed to violate the
rights of Bank under the Code.  Any such financing statements may
indicate the Collateral as “all assets of the Debtor” or words of similar
effect, or as being of an equal or lesser scope, or with greater detail, all in
Bank’s discretion.

     

    5         
  REPRESENTATIONS AND
WARRANTIES

     

    Borrower
represents and warrants as follows:

     

    5.1         Due
Organization and Authorization.  Borrower and each of its
Subsidiaries are duly existing and in good standing as a Registered Organization
in their respective jurisdictions of formation and are qualified and licensed to
do business and are in good standing in any jurisdiction in which the conduct of
their respective business or ownership of property requires that they be
qualified except where the failure to do so could not reasonably be expected to
have a material adverse effect on Borrower’s business.  In connection
with this Agreement, Borrower has delivered to Bank a completed certificate signed by Borrower,
entitled “Perfection Certificate”.  Borrower represents and warrants
to Bank that (a) Borrower’s exact legal name is that indicated on the Perfection
Certificate and on the signature page hereof; (b) Borrower is an
organization of the type and is organized in the jurisdiction set forth in the
Perfection Certificate; (c) the Perfection Certificate accurately sets forth
Borrower’s organizational identification number or accurately states that
Borrower has none; (d) the Perfection Certificate accurately sets forth
Borrower’s place of business, or, if more than one, its chief executive office
as well as Borrower’s mailing address (if different than its chief executive
office); (e) Borrower (and each of its predecessors) has not, in the past
five (5) years, changed its jurisdiction of formation, organizational structure
or type, or any organizational number assigned by its jurisdiction; and (f) all
other information set forth on the Perfection Certificate pertaining to Borrower
and each of its Subsidiaries is accurate and complete (it being understood and
agreed that Borrower may from time to time update certain information in the
Perfection Certificate after the Effective Date to the extent permitted by one
or more specific provisions in this Agreement).  If Borrower is not
now a Registered Organization but later becomes one, Borrower shall promptly
notify Bank of such occurrence and provide Bank with Borrower’s organizational
identification number.

     

    The
execution, delivery and performance by Borrower of the Loan Documents to which
it is a party have been duly authorized, and do not (i) conflict with any of
Borrower’s organizational documents, (ii) contravene, conflict with,
constitute a default under or violate any material Requirement of Law,
(iii) contravene, conflict or violate any applicable order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority by
which Borrower or any its Subsidiaries or any of their property or assets may be
bound or affected, (iv) require any action by, filing, registration, or
qualification with, or Governmental Approval from, any Governmental Authority
(except such Governmental Approvals which have already been obtained and are in
full force and effect or (v) constitute an event of default under any
material agreement by which Borrower is bound.  Borrower is not in
default under any agreement to which it is a party or by which it is bound in
which the default could reasonably be expected to have a material adverse effect
on Borrower’s business.

     

    5.2         Collateral.  Borrower
has good title, has rights in, and the power to transfer each item of the
Collateral upon which it purports to grant a Lien hereunder, free and clear of
any and all Liens except Permitted Liens.   Borrower has no
deposit accounts other than the deposit accounts with Bank, the deposit
accounts, if any, described in the Perfection Certificate delivered to Bank in
connection herewith, or of which Borrower has given Bank notice and taken such
actions as are necessary to give Bank a perfected security interest
therein.  The Accounts are bona fide, existing obligations of the
Account Debtors.

     

    The
Collateral is not in the possession of any third party bailee (such as a
warehouse) except as otherwise provided in the Perfection
Certificate.  None of the components of the Collateral shall be
maintained at locations other than as provided in the Perfection Certificate or
as permitted pursuant to Section 7.2; provided, however, that Bank consents to
Borrower, from time to time, (i) depositing copies of its source code in escrow
in the ordinary course of business and (ii) providing copies of confidential
information concerning Borrower to third parties subject to standard
non-disclosure agreements.

     

    
      
         


      

      
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    Borrower
is the sole owner of the Intellectual Property which it owns or purports to own
except for (a) non-exclusive licenses granted to its customers in the ordinary
course of business, (b) over-the-counter software that is commercially available
to the public, and (c) material Intellectual Property licensed to Borrower and
noted on the Perfection Certificate.  Each Patent which it owns or
purports to own and which is material to Borrower’s business is valid and
enforceable, and no part of the Intellectual Property which Borrower owns or
purports to own and which is material to Borrower’s business has been judged
invalid or unenforceable, in whole or in part.  To the best of
Borrower’s knowledge, no claim has been made that any part of the Intellectual
Property violates the rights of any third party except to the extent such claim
would not reasonably be expected to have a material adverse effect on Borrower’s
business.  Except as noted on the Perfection Certificate, Borrower is
not a party to, nor is bound by, any Restricted License.

     

    5.3         Financed
Receivables.  Borrower represents and warrants for each
Financed Receivable:

     

    (a)           Such
Financed Receivable is an Eligible Account;

     

    (b)           Borrower
is the owner of and has the legal right to sell, transfer, assign and encumber
such Financed Receivable;

     

    (c)           The
correct face amount of such Financed Receivable is reflected on the Invoice
Transmittal and, to the best of Borrower’s knowledge, is not
disputed;

     

    (d)           Payment
of such Financed Receivable is not conditioned or otherwise contingent on any
action of Borrower;

     

    (e)           Such
Financed Receivable is based on an actual sale and delivery of goods and/or
services rendered, is due to Borrower, is not past due or in default as of the
date of the Invoice Transmittal with respect thereto, has not been previously
sold, assigned, transferred, or pledged and is free of any liens, security
interests and encumbrances other than Permitted Liens;

     

    (f)           There
are no Adjustments for which the Account Debtor of such Financed Receivable may
claim any deduction or discount other than those which have been reported to
Bank and the amount of which has been repaid in accordance with Section 2.3.1
hereof;

     

    (g)           Borrower
reasonably believes that the Account Debtor for such Financed Receivable is not
insolvent or subject to any Insolvency Proceedings; and

     

    (h)           Bank
has the right to endorse and/ or require Borrower to endorse all payments
received on such Financed Receivable and all proceeds of Collateral received
thereon.

     

    5.4         Litigation.  Except
as disclosed in the Perfection Certificate, there are no actions or proceedings
pending or, to the knowledge of Borrower’s Responsible Officers, threatened in
writing by or against Borrower or any Subsidiary in which an adverse decision
could reasonably be expected to cause a Material Adverse Change.

     

    5.5         No
Material Deviation in Financial Statements.  All consolidated
financial statements for Borrower and any Subsidiaries delivered to Bank fairly
present in all material respects Borrower’s consolidated financial condition and
Borrower’s consolidated results of operations (subject to normal year-end
adjustments).  There has not been any material deterioration in
Borrower’s consolidated financial condition since the date of the most recent
financial statements submitted to Bank.

     

    5.6         Solvency.  The
fair salable value of Borrower’s assets (including goodwill minus disposition
costs) exceeds the fair value of its liabilities; Borrower is not left with
unreasonably small capital after the transactions in this Agreement; and
Borrower is able to pay its debts (including trade debts) as they
mature.

     

    
      
         


      

      
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    5.7         Regulatory
Compliance.  Borrower is not an “investment company” or a
company “controlled” by an “investment company” under the Investment Company Act
of 1940, as amended.  Borrower is not engaged as one of its important
activities in extending credit for margin stock (under Regulations X, T and U of
the Federal Reserve Board of Governors).  Neither Borrower nor any of
its Subsidiaries is a “holding company” or an “affiliate” of a “holding company”
or a “subsidiary company” of a “holding company” as each term is defined and
used in the Public Utility Holding Company Act of 2005.  Borrower has
complied in all material respects with the Federal Fair Labor Standards
Act.  Borrower has not violated any laws, ordinances or rules, the
violation of which could reasonably be expected to cause a Material Adverse
Change.  None of Borrower’s or any Subsidiary’s properties or assets
has been used by Borrower or any Subsidiary or, to the best of Borrower’s
knowledge, by previous Persons, in disposing, producing, storing, treating, or
transporting any hazardous substance other than legally.  Borrower and
each of its Subsidiaries have obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given all notices
to, all Government Authorities that are necessary to continue their respective
businesses as currently conducted, except for such failures to perform the
foregoing that would not reasonably be expected to result in a Material Adverse
Change.

     

    5.8         Subsidiaries.  Borrower
does not own any stock, partnership interest or other equity securities except
for Permitted Investments.

     

    5.9         Tax
Returns and Payments; Pension Contributions.  Borrower and each
Subsidiary have timely filed all required tax returns and reports, and Borrower
and each Subsidiary have timely paid all foreign, federal, state and local
taxes, assessments, deposits and contributions owed by Borrower and each
Subsidiary, except for such failures to perform the foregoing that would not
reasonably be expected to result in a Material Adverse
Change.  Borrower may defer payment of any contested taxes, provided
that Borrower (a) in good faith contests its obligation to pay the taxes by
appropriate proceedings promptly and diligently instituted and conducted, (b)
notifies Bank in writing of the commencement of, and any material development
in, the proceedings, (c) posts bonds or takes any other steps required to
prevent the governmental authority levying such contested taxes from obtaining a
Lien upon any of the Collateral that is other than a “Permitted
Lien.”  Borrower is unaware of any claims or adjustments proposed for
any of Borrower's prior tax years which could result in additional taxes
becoming due and payable by Borrower other than as disclosed to Bank in
writing.  Borrower has paid all amounts necessary to fund all present
pension, profit sharing and deferred compensation plans in accordance with their
terms (except for such failures to perform the foregoing that would not
reasonably be expected to result in a Material Adverse Change), and Borrower has
not withdrawn from participation in, and has not permitted partial or complete
termination of, or permitted the occurrence of any other event with respect to,
any such plan which could reasonably be expected to result in any liability of
Borrower, including any liability to the Pension Benefit Guaranty Corporation or
its successors or any other governmental agency.

     

    5.10       Full
Disclosure.  No written representation, warranty or other
statement of Borrower in any certificate or written statement given to Bank, as
of the date such representation, warranty, or other statement was made, taken
together with all such written certificates and written statements given to
Bank, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained in the certificates or
statements not misleading (it being recognized by Bank that (i) the projections
and forecasts provided by Borrower in good faith and based upon reasonable
assumptions are not viewed as facts and that actual results during the period or
periods covered by such projections and forecasts may differ from the projected
or forecasted results and (ii) in the case of a Compliance Certificate, any
minor inaccuracies in the calculation of the financial covenants will not be
deemed to be material unless such inaccuracies cause the calculations to
indicate compliance with a financial covenant when, in fact, Borrower was not in
compliance with such financial covenant).

     

    6         
  AFFIRMATIVE
COVENANTS

     

    Borrower
shall do all of the following:

     

    6.1         Government
Compliance.

     

    (a)           Maintain
its and all its Subsidiaries’ legal existence and good standing in their
respective jurisdictions of formation and maintain qualification in each
jurisdiction in which the failure to so qualify would reasonably be expected to
have a material adverse effect on Borrower’s business or
operations.  Borrower shall comply, and have each Subsidiary comply,
with all laws, ordinances and regulations to which it is subject, noncompliance
with which could have a material adverse effect on Borrower’s
business.

     

    
      
         


      

      
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    (b)           Obtain
all of the Governmental Approvals necessary for the performance by Borrower of
its obligations under the Loan Documents to which it is a party and the grant of
a security interest to Bank in all of its property except for such failures to
perform the foregoing that would not reasonably be expected to result in a
Material Adverse Change.

     

    6.2         Financial
Statements, Reports, Certificates.

     

    (a)           Deliver
to Bank:  (i) as soon as available, but no later than thirty (30) days
after the last day of each month, a company prepared consolidated and
consolidating balance sheet and income statement covering Borrower and each of
its Subsidiary’s operations during such month certified by a Responsible Officer
and in a form acceptable to Bank (the “Monthly Financial
Statements”); (ii) within five (5) Business Days of filing, copies of all
statements, reports and notices made available to Borrower’s common stock
holders as a group and all reports on Form 10-K, 10-Q and 8 K filed with the
Securities and Exchange Commission; (iii) a prompt report of any legal actions
pending or threatened against Borrower or any Subsidiary that could result in
damages or costs to Borrower or any Subsidiary of One Hundred Thousand Dollars
($100,000.00) or more; (iv) prompt notice of (A) any material change in the
composition of the Intellectual Property, (B) the registration of any copyright,
including any subsequent ownership right of Borrower in or to any copyright,
patent or trademark not previously disclosed in writing to the Bank, and (C)
Borrower’s knowledge of an event that could reasonably be expected to materially
and adversely affect the value of the Intellectual Property; and (v) budgets,
sales projections, operating plans or other financial information reasonably
requested by Bank.

     

    (b)           Within
thirty (30) days
after the last day of each month, deliver to Bank with the Monthly Financial
Statements a Compliance Certificate signed by a Responsible Officer in the form
of Exhibit
B.

     

    (c)           Allow
Bank, at reasonable times on one Business Days’ notice (unless an Event of
Default has occurred) to audit Borrower’s Collateral, including, but not limited
to, Borrower’s Accounts, at Borrower’s expense (with the charge therefor being
$850 per person per day plus reasonable out-of-pocket expenses); provided,
however, prior to the occurrence of an Event of Default, Borrower shall be
obligated to pay for not more than one (1) audit per year.  After the
occurrence of an Event of Default, Bank may audit Borrower’s Collateral,
including, but not limited to Borrower’s Accounts, at Borrower’s expense and at
Bank’s sole and exclusive discretion and without notification and authorization
from Borrower.

     

    (d)           Upon
Bank’s request, provide a written report respecting any Financed Receivable, if
payment of any Financed Receivable does not occur by its due date and include
the reasons for the delay.

     

    (e)           Provide
Bank with, as soon as available, but no later than twenty (20) days following each
Reconciliation Period, an aged listing of accounts receivable and accounts
payable by invoice date, in form acceptable to Bank.

     

    6.3         Taxes.  Borrower
shall make, and cause each Subsidiary to make, timely payment of all federal,
state, and local taxes or assessments (other than taxes and assessments which
Borrower is contesting in good faith, with adequate reserves maintained in
accordance with GAAP) and will deliver to Bank, on demand, appropriate
certificates attesting to such payments.

     

    6.4         Insurance.  Keep
its business and the Collateral insured for risks and in amounts standard for
companies in Borrower’s industry and location and as Bank may reasonably
request.  Insurance policies shall be in a form, with insurance
providers, and in amounts that are satisfactory to Bank.  All property
policies shall have a lender’s loss payable endorsement showing Bank as lender
loss payee and waive subrogation against Bank.  All liability policies
shall show, or have endorsements showing, Bank as an additional
insured.  All policies (or the loss payable and additional insured
endorsements) shall provide that the insurer shall give Bank at least twenty
(20) days notice before canceling, amending, or declining to renew its
policy.  At Bank’s request, Borrower shall deliver certified copies of
policies and evidence of all premium payments.  Proceeds payable under
any policy shall, at Bank’s option, be payable to Bank on account of any
Obligations due and owing at the time of such payment.  If Borrower
fails to obtain insurance as required under this Section 6.4 or to pay any
amount or furnish any required proof of payment to third persons and Bank, Bank
may make all or part of such payment or obtain such insurance policies required
in this Section 6.4, and take any action under the policies Bank deems
prudent.

     

    
      
         


      

      
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    6.5         Accounts.  Maintain all of
its operating and other deposit accounts and securities accounts with
Bank.

     

    6.6         Intentionally
Omitted.

     

    6.7         Financial
Covenant.  Meet the
following financial covenant:

     

    (a)           EBITDA Performance to
Plan.  Borrower’s EBITDA for the month ending August 31, 2010
shall be at least one hundred twenty five percent (125%) of Borrower’s projected
performance for such month as outlined in Borrower’s Plan.  For the
two months ended September 30, 2010, Borrower’s EBITDA shall be at least seventy
five percent (75%) of Borrower’s projected performance for such two (2) month
period as outlined in Borrower’s Plan.  As of each subsequent month
beginning with the month ending October 31, 2010, Borrower’s EBITDA for the
three (3) months ending on such measurement date shall be at least seventy five
percent (75%) of Borrower’s projected performance for such three (3) month
period as outlined in Borrower’s Plan.

     

    6.8         Protection
and Registration of Intellectual Property Rights.

     

    (a)           (i)
Protect, defend and maintain the validity and enforceability of its Intellectual
Property; (ii) promptly advise Bank in writing of material infringements of its
Intellectual Property; and (iii) not allow any Intellectual Property material to
Borrower’s business to be abandoned, forfeited or dedicated to the public
without Bank’s written consent.

     

    (b)           If,
after the Effective Date, Borrower (i) obtains any Patent, registered Trademark,
registered Copyright, registered mask work, or any pending application for any
of the foregoing, whether as owner, licensee or otherwise, or (ii) applies for
any Patent or the registration of any Trademark, then Borrower shall immediately
provide written notice thereof to Bank and shall execute such intellectual
property security agreements and other documents and take such other actions as
Bank shall request in its good faith business judgment to perfect and maintain a
first priority perfected security interest in favor of Bank in such
property.  If Borrower decides to register any Copyrights or mask
works in the United States Copyright Office, Borrower shall: (x) provide
Bank with at least fifteen (15) days prior written notice of Borrower’s intent
to register such Copyrights or mask works together with a copy of the
application it intends to file with the United States Copyright Office
(excluding exhibits thereto); (y) execute an intellectual property security
agreement and such other documents and take such other actions as Bank may
request in its good faith business judgment to perfect and maintain a first
priority perfected security interest in favor of Bank in the Copyrights or mask
works intended to be registered with the United States Copyright Office; and
(z) record such intellectual property security agreement with the United
States Copyright Office contemporaneously with filing the Copyright or mask work
application(s) with the United States Copyright Office.  Borrower
shall promptly provide to Bank copies of all applications that it files for
Patents or for the registration of Trademarks, Copyrights or mask works,
together with evidence of the recording of the intellectual property security
agreement necessary for Bank to perfect and maintain a first priority perfected
security interest in such property.

     

    (c)           Provide
written notice to Bank within ten (10) days of entering or becoming bound by any
Restricted License (other than over-the-counter software that is commercially
available to the public).  Borrower shall take such steps as Bank
requests to obtain the consent of, or waiver by, any person whose consent or
waiver is necessary for (i) any Restricted License to be deemed
“Collateral” and for Bank to have a security interest in it that might otherwise
be restricted or prohibited by law or by the terms of any such Restricted
License, whether now existing or entered into in the future, and (ii) Bank
to have the ability in the event of a liquidation of any Collateral to dispose
of such Collateral in accordance with Bank’s rights and remedies under this
Agreement and the other Loan Documents.

     

    
      
         


      

      
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    6.9         Litigation
Cooperation.  From the Effective Date and continuing through
the termination of this Agreement, make available to Bank, without expense to
Bank, Borrower and its officers, employees and agents and Borrower’s books and
records, to the extent that Bank may deem them reasonably necessary to prosecute
or defend any third-party suit or proceeding instituted by or against Bank with
respect to any Collateral or relating to Borrower.

     

    6.10       Further
Assurances.  Execute any further instruments and take further
action as Bank reasonably requests to perfect or continue Bank’s Lien in the
Collateral or to effect the purposes of this Agreement.  Deliver to
Bank, within five
(5) Business Days after the same are sent or received, copies of all
correspondence, reports, documents and other filings with any Governmental
Authority regarding compliance with or maintenance of Governmental Approvals or
Requirements of Law or that could reasonably be expected to have a material
effect on any of the Governmental Approvals or otherwise on the operations of
Borrower or any of its Subsidiaries.

     

    7         
  NEGATIVE
COVENANTS

     

    Borrower
shall not do any of the following without Bank’s prior written
consent:

     

    7.1         Dispositions.  Convey,
sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”), or permit any of
its Subsidiaries to Transfer, all or any part of its business or property,
except for Transfers (a) of Inventory in the ordinary course of business;
(b) of worn-out or obsolete Equipment; (c) in connection with Permitted Liens
and Permitted Investments; (d) involving the grant of a
non-exclusive license to its customers in the ordinary course of business; and
(e) other assets with a value not to exceed Twenty Five Thousand Dollars
($25,000).

     

    7.2         Changes in Business, Management or
Business Locations.  (a) Engage in or permit any of its
Subsidiaries to engage in any business other than the businesses currently
engaged in by Borrower and such Subsidiary, as applicable, or reasonably related
thereto; or reasonable extensions thereof; or (b) liquidate or dissolve; or
(c) have a change in CEO.

     

    Borrower
shall not, without at least thirty (30) days prior written notice to Bank: (1)
add any new offices or business locations, including warehouses (unless such new
offices or business locations contain less than Ten Thousand Dollars ($10,000)
in the Collateral) or deliver any portion of the Collateral valued, individually
or in the aggregate, in excess of Ten Thousand Dollars ($10,000) to a bailee at
a location other than to a bailee and at a location already disclosed in the
Perfection Certificate, (2) change its jurisdiction of organization, (3) change
its organizational structure or type, (4) change its legal name, or (5) change
any organizational number (if any) assigned by its jurisdiction of
organization.  If Borrower intends to deliver any portion of the
Collateral valued, individually or in the aggregate, in excess of Ten Thousand
Dollars ($10,000) to a bailee, and Bank and such bailee are not already parties
to a bailee agreement governing both the Collateral and the location to which
Borrower intends to deliver the Collateral, then Borrower will first receive the
written consent of Bank, and such bailee shall execute and deliver a bailee
agreement in form and substance satisfactory to Bank in its sole
discretion.

     

    7.3         Mergers or
Acquisitions.  Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person.  A Subsidiary may merge
or consolidate into another Subsidiary or into Borrower.

     

    7.4         Indebtedness.  Create,
incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do
so, other than Permitted Indebtedness.

     

    7.5         Encumbrance.  Create,
incur, allow, or suffer any Lien on any of the Collateral or assign or convey
any right to receive income, including the sale of any Accounts, or permit any
of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral
not to be subject to the first priority security interest granted herein, or
enter into any agreement, document, instrument or other arrangement (except with
or in favor of Bank) with any Person which directly or indirectly prohibits or
has the effect of prohibiting Borrower or any Subsidiary from assigning,
mortgaging, pledging, granting a security interest in or upon, or encumbering
any of Borrower’s or any Subsidiary’s Intellectual Property, except as is
otherwise permitted in Section 7.1 hereof and the definition of “Permitted
Liens” herein.

     

    
      
         


      

      
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    7.6         Maintenance of Collateral
Accounts.  Maintain any Collateral Account except pursuant to
the terms of Section 6.5.

     

    7.7         Distributions;
Investments.  (a) Pay any cash dividends or make any cash
distribution or payment or redeem, retire or purchase for cash any capital
stock; or (b) directly or indirectly make any Investment other than Permitted
Investments, or permit any of its Subsidiaries to do so.

     

    7.8         Transactions with
Affiliates.  Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of Borrower, except for (i)
transactions that are in the ordinary course of Borrower’s business, upon fair
and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm’s length transaction with a non-affiliated Person and
transactions permitted pursuant to the terms of Section 7.3; (ii) employment and
similar agreements and other compensation arrangements with members of
Borrower’s management and members of Borrower’s board of directors; and (iii)
the Nicholson/Ramey Subordinated Debt.

     

    7.9         Subordinated
Debt.  (a) Make or permit any payment on any Subordinated Debt,
except under the terms of the Amended and Restated Subordination Agreement and
any other subordination, intercreditor, or other similar agreement to which such
Subordinated Debt is subject, or (b) amend any provision in any document
relating to the Subordinated Debt which would increase the amount thereof or
adversely affect the subordination thereof to Obligations owed to
Bank.

     

    7.10       Compliance.  Become
an “investment company” or a company controlled by an “investment company”,
under the Investment Company Act of 1940, as amended, or undertake as one of its
important activities extending credit to purchase or carry margin stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve
System), or use the proceeds of any Credit Extension for that purpose; fail to
meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the
Federal Fair Labor Standards Act or violate any other law or regulation, if the
failure to comply or violation could reasonably be expected to have a material
adverse effect on Borrower’s business, or permit any of its Subsidiaries to do
so; withdraw or permit any Subsidiary to withdraw from participation in, permit
partial or complete termination of, or permit the occurrence of any other event
with respect to, any present pension, profit sharing and deferred compensation
plan which could reasonably be expected to result in any liability of Borrower,
including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other governmental agency.

     

    8         
  EVENTS OF
DEFAULT

     

    Any one
of the following shall constitute an event of default (an “Event of Default”)
under this Agreement:

     

    8.1         Payment
Default.  Borrower fails to (a) make any payment of principal
or interest on any Credit Extension on its due date, or (b) pay any other
Obligations within three (3) Business Days after such Obligations are due and
payable (which three (3) Business Day cure period shall not apply to payments
due on the Maturity Date or the Refinance Term Loan Maturity
Date).  During the cure period, the failure to make or pay any payment
specified under clause (a) or (b) hereunder is not an Event of Default (but no
Credit Extension will be made during the cure period);

     

    8.2         Covenant
Default.

     

    (a)           Borrower
fails or neglects to perform any obligation in Sections 6.2, 6.3, 6.4, 6.5 or
6.7, or violates any covenant in Section 7; or

     

    
      
         


      

      
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    (b)           Borrower
fails or neglects to perform, keep, or observe any other term, provision,
condition, covenant or agreement contained in this Agreement or any Loan
Documents, and as to any default (other than those specified in this Section 8)
under such other term, provision, condition, covenant or agreement that can be
cured, has failed to cure the default within ten (10) days after the occurrence
thereof; provided, however, that if the default cannot by its nature be cured
within the ten (10) day period or cannot after diligent attempts by Borrower be
cured within such ten (10) day period, and such default is likely to be cured
within a reasonable time, then Borrower shall have an additional period (which
shall not in any case exceed thirty (30) days) to attempt to cure such default,
and within such reasonable time period the failure to cure the default shall not
be deemed an Event of Default (but no Credit Extensions shall be made during
such cure period).  Cure periods provided under this section shall not
apply, among other things, to financial covenants or any other covenants set
forth in clause (a) above, or to financial covenants or any other covenants that
are required to be satisfied, completed or tested by a date
certain;

     

    8.3         Material
Adverse Change.  A Material Adverse Change occurs;

     

    8.4         Attachment;
Levy; Restraint on Business.  (a) (i) The service of process
seeking to attach, by trustee or similar process, any funds in excess of Ten
Thousand Dollars ($10,000) of Borrower or of any entity under control of
Borrower (including a Subsidiary) on deposit with Bank or any Bank Affiliate, or
(ii) a notice of lien, levy, or assessment is filed against any of Borrower’s
assets by any government agency, and the same under subclauses (i) and (ii)
hereof are not, within ten (10) days after the occurrence thereof, discharged or
stayed (whether through the posting of a bond or otherwise); provided, however,
no Credit Extensions shall be made during any ten (10) day cure period; and (b)
(i) any material portion of Borrower’s assets is attached, seized, levied on, or
comes into possession of a trustee or receiver, or (ii) any court order
enjoins, restrains, or prevents Borrower from conducting any part of its
business;

     

    8.5         Insolvency.  (a)
Borrower is unable to pay its debts (including trade debts) as they become due
or otherwise becomes insolvent; (b) Borrower initiates an Insolvency Proceeding;
or (c) an Insolvency Proceeding is initiated against Borrower and not dismissed
or stayed within thirty (30) days (but no Credit Extensions shall be made while
of any of the conditions described in clause (a) exist and/or until any
Insolvency Proceeding is dismissed);

     

    8.6         Other
Agreements.  There is a default in any agreement to which
Borrower is a party with a third party or parties resulting in a right by such
third party or parties, whether or not exercised, to accelerate the maturity of
any Indebtedness in an amount in excess of One Hundred Thousand Dollars
($100,000) or that could result in a Material Adverse Change;

     

    8.7         Judgments.  One
or more final judgments, orders, or decrees for the payment of money in an
amount, individually or in the aggregate, of at least One Hundred Thousand
Dollars ($100,000) (not covered by independent third-party insurance as to which
liability has been accepted by such insurance carrier) shall be rendered against
Borrower and the same are not, within ten (10) days after the entry thereof,
discharged or execution thereof stayed or bonded pending appeal, or such
judgments are not discharged prior to the expiration of any such stay (provided
that no Credit Extensions will be made prior to the discharge, stay, or bonding
of such judgment, order, or decree);

     

    8.8         Misrepresentations.  Borrower
or any Person acting for Borrower makes any representation, warranty, or other
statement now or later  in this Agreement, any Loan Document or in
writing delivered to Bank or to induce Bank to enter this Agreement or any Loan
Document, and such representation, warranty, or other statement is incorrect in
any material respect when made;

     

    8.9         Subordinated
Debt.  Any document, instrument, or agreement evidencing any
Subordinated Debt shall for any reason be revoked or invalidated or otherwise
cease to be in full force and effect, any Person shall be in breach thereof or
contest in any manner the validity or enforceability thereof or deny that it has
any further liability or obligation thereunder, or the Obligations shall for any
reason be subordinated or shall not have the priority contemplated by this
Agreement;

     

    
      
         

      

      
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    9         
  BANK’S
RIGHTS AND REMEDIES

     

    9.1         Rights
and Remedies.  While an Event of Default occurs and is
continuing, Bank may, without notice or demand, do any or all of the
following:

     

    (a)           Declare
all Obligations immediately due and payable (but if an Event of Default
described in Section 8.5 occurs all Obligations are immediately due and payable
without any action by Bank);

     

    (b)           Stop
advancing money or extending credit for Borrower’s benefit under this Agreement
or under any other agreement between Borrower and Bank;

     

    (c)           Demand
that Borrower (i) deposit cash with Bank in an amount equal to the aggregate
amount of any Letters of Credit remaining undrawn, as collateral security for
the repayment of any future drawings under such Letters of Credit, and Borrower
shall forthwith deposit and pay such amounts, and (ii) pay in advance all Letter
of Credit fees scheduled to be paid or payable over the remaining term of any
Letters of Credit;

     

    (d)           Settle
or adjust disputes and claims directly with Account Debtors for amounts, on
terms and in any order that Bank considers advisable and notify any Person owing
Borrower money of Bank’s security interest in such funds and verify the amount
of such account and, if applicable, Borrower shall collect all payments in trust
for Bank and, if requested by Bank, immediately deliver the payments to Bank in
the form received from the Account Debtor, with proper endorsements for
deposit;

     

    (e)           Make
any payments and do any acts it considers necessary or reasonable to protect its
security interest in the Collateral.  Borrower shall assemble the
Collateral if Bank requests and make it available as Bank
designates.  Bank may enter premises where the Collateral is located,
take and maintain possession of any part of the Collateral, and pay, purchase,
contest, or compromise any Lien which appears to be prior or superior to its
security interest and pay all expenses incurred.  Borrower grants Bank
a license to enter and occupy any of its premises, without charge, to exercise
any of Bank’s rights or remedies;

     

    (f)           Apply
to the Obligations any (i) balances and deposits of Borrower it holds, or (ii)
any amount held by Bank owing to or for the credit or the account of
Borrower;

     

    (g)           Ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise
for sale, and sell the Collateral.  Bank is hereby granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower’s labels, Patents, Copyrights, mask works, rights of use of any name,
trade secrets, trade names, Trademarks, and advertising matter, or any similar
property as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and, in connection with Bank’s
exercise of its rights under this Section, Borrower’s rights under all licenses
and all franchise agreements inure to Bank’s benefit;

     

    (h)           Place
a “hold” on any account maintained with Bank and/or deliver a notice of
exclusive control, any entitlement order, or other directions or instructions
pursuant to any control agreement or similar agreements providing control of any
Collateral;

     

    (i)           Demand
and receive possession of Borrower’s Books; and

     

    (j)           Exercise
all rights and remedies available to Bank under the Loan Documents or at law or
equity, including all remedies provided by the Code (including disposal of the
Collateral pursuant to the terms thereof).

     

    9.2         Protective
Payments.  If Borrower fails to obtain insurance called for by
Section 6.4 or fails to pay any premium thereon or fails to pay any other amount
which Borrower is obligated to pay under this Agreement or by any other Loan
Document, Bank may obtain such insurance or make such payment, and all amounts
so paid by Bank are Bank Expenses and immediately due and payable, bearing
interest at the then highest applicable rate, and secured by the
Collateral.  Bank will make reasonable effort to provide Borrower with
notice of Bank obtaining such insurance at the time it is obtained or within a
reasonable time thereafter. No payments by Bank are deemed an agreement to make
similar payments in the future or Bank’s waiver of any Event of
Default.

     

    9.3         Bank’s
Liability for Collateral.  So long as Bank complies with
reasonable banking practices and applicable provisions of the Code regarding the
safekeeping of Collateral in possession or under the control of Bank, Bank shall
not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any
loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or
other Person.  Except as otherwise provided by the Code, Borrower
bears all risk of loss, damage or destruction of the Collateral.

     

    
      
         


      

      
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    9.4         Remedies
Cumulative.  Bank’s failure, at any time or times, to require
strict performance by Borrower of any provision of this Agreement or any other
Loan Document shall not waive, affect, or diminish any right of Bank thereafter
to demand strict performance and compliance herewith or therewith.  No
waiver hereunder shall be effective unless signed by the party granting the
waiver and then is only effective for the specific instance and purpose for
which it is given.  Bank’s rights and remedies under this Agreement
and the other Loan Documents are cumulative.  Bank has all rights and
remedies provided under the Code, by law, or in equity.  Bank’s
exercise of one right or remedy is not an election, and Bank’s waiver of any
Event of Default is not a continuing waiver.  Bank’s delay in
exercising any remedy is not a waiver, election, or acquiescence.

     

    9.5         Demand
Waiver.  Borrower waives demand, notice of default or dishonor,
notice of payment and nonpayment, notice of any default, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Bank on which Borrower is
liable.

     

    10          NOTICES.

     

    All
notices, consents, requests, approvals, demands, or other communication by any
party to this Agreement or any other Loan Document must be in writing and shall
be deemed to have been validly served, given, or delivered: (a) upon the earlier
of actual receipt and three (3) Business Days after deposit in the U.S. mail,
first class, registered or certified mail return receipt requested, with proper
postage prepaid; (b) upon transmission, when sent by facsimile transmission; (c)
one (1) Business Day after deposit with a reputable overnight courier with all
charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of
which shall be addressed to the party to be notified and sent to the address or
facsimile number provided at the beginning of this Agreement.  Bank or
Borrower may change its address or facsimile number by giving the other party
written notice thereof in accordance with the terms of this Section
10.

     

    11          CHOICE OF LAW, VENUE, JURY
TRIAL WAIVER AND JUDICIAL REFERENCE

     

    California
law governs the Loan Documents without regard to principles of conflicts of
law.  Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in Santa Clara County, California; provided,
however, that nothing in this Agreement shall be deemed to operate to preclude
Bank from bringing suit or taking other legal action in any other jurisdiction
to realize on the Collateral or any other security for the Obligations, or to
enforce a judgment or other court order in favor of Bank.  Borrower
expressly submits and consents in advance to such jurisdiction in any action or
suit commenced in any such court, and Borrower hereby waives any objection that
it may have based upon lack of personal jurisdiction, improper venue, or forum
non conveniens and hereby consents to the granting of such legal or equitable
relief as is deemed appropriate by such court.  Borrower hereby waives
personal service of the summons, complaints, and other process issued in such
action or suit and agrees that service of such summons, complaints, and other
process may be made by registered or certified mail addressed to Borrower at the
address set forth in Section 10 of this Agreement and that service so made shall
be deemed completed upon the earlier to occur of Borrower’s actual receipt
thereof or three (3) days after deposit in the U.S. mails, proper postage
prepaid.

     

    TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN
DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF
DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES
TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER
WITH ITS COUNSEL.

     

    
      
         


      

      
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    WITHOUT
INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is
not enforceable, the parties hereto agree that any and all disputes or
controversies of any nature between them arising at any time shall be decided by
a reference to a private judge, mutually selected by the parties (or, if they
cannot agree, by the Presiding Judge of the Santa Clara County, California
Superior Court) appointed in accordance with California Code of Civil Procedure
Section 638 (or pursuant to comparable provisions of federal law if the dispute
falls within the exclusive jurisdiction of the federal courts), sitting without
a jury, in Santa Clara County, California; and the parties hereby submit to the
jurisdiction of such court.  The reference proceedings shall be
conducted pursuant to and in accordance with the provisions of California Code
of Civil Procedure §§ 638 through 645.1, inclusive.  The private judge
shall have the power, among others, to grant provisional relief, including
without limitation, entering temporary restraining orders, issuing preliminary
and permanent injunctions and appointing receivers.  All such
proceedings shall be closed to the public and confidential and all records
relating thereto shall be permanently sealed.  If during the course of
any dispute, a party desires to seek provisional relief, but a judge has not
been appointed at that point pursuant to the judicial reference procedures, then
such party may apply to the Santa Clara County, California Superior Court for
such relief.  The proceeding before the private judge shall be
conducted in the same manner as it would be before a court under the rules of
evidence applicable to judicial proceedings.  The parties shall be
entitled to discovery which shall be conducted in the same manner as it would be
before a court under the rules of discovery applicable to judicial
proceedings.  The private judge shall oversee discovery and may
enforce all discovery rules and order applicable to judicial proceedings in the
same manner as a trial court judge.  The parties agree that the
selected or appointed private judge shall have the power to decide all issues in
the action or proceeding, whether of fact or of law, and shall report a
statement of decision thereon pursuant to the California Code of Civil Procedure
§ 644(a).  Nothing in this paragraph shall limit the right of any
party at any time to exercise self-help remedies, foreclose against collateral,
or obtain provisional remedies.  The private judge shall also
determine all issues relating to the applicability, interpretation, and
enforceability of this paragraph.

     

    12          GENERAL
PROVISIONS

     

    12.1       Successors
and Assigns.  This Agreement binds and is for the benefit of
the successors and permitted assigns of each party.  Borrower may not
assign this Agreement or any rights or obligations under it without Bank’s prior
written consent which may be granted or withheld in Bank’s
discretion.  Bank has the right, without the consent of or notice to
Borrower, to sell, transfer, negotiate, or grant participation in all or any
part of, or any interest in, Bank’s obligations, rights and benefits under this
Agreement, the Loan Documents or any related agreement.

     

    12.2       Indemnification.  Borrower
agrees to indemnify, defend and hold Bank and its directors, officers,
employees, agents, attorneys, or any other Person affiliated with or
representing Bank (each, an “Indemnified Person”) harmless
against:  (a) all obligations, demands, claims, and liabilities
(collectively, “Claims”)
claimed or asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or expenses (including
Bank Expenses) in any way suffered, incurred, or paid by such Indemnified Person
as a result of, following from, consequential to, or arising from transactions
between Bank and Borrower (including reasonable attorneys’ fees and expenses),
except in each case for Claims and/or losses directly caused by any Indemnified
Person’s gross negligence or willful misconduct.

     

    12.3       Right of
Set-Off.   Borrower hereby grants to Bank, a lien,
security interest and right of setoff as security for all Obligations to Bank,
whether now existing or hereafter arising upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of Bank
(including a Bank subsidiary) or in transit to any of them.  At any
time after the occurrence and during the continuance of an Event of Default,
without demand or notice, Bank may set off the same or any part thereof and
apply the same to any liability or obligation of Borrower even though unmatured
and regardless of the adequacy of any other collateral securing the
Obligations.  ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE
OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH
DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.

     

    12.4       Time of
Essence.  Time is of the essence for the performance of all
Obligations in this Agreement.

     

    12.5       Severability
of Provisions.  Each provision of this Agreement is severable
from every other provision in determining the enforceability of any
provision.

     

    
      
         


      

      
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    12.6       Correction
of Loan Documents.  Bank may correct patent errors and fill in
any blanks in this Agreement and the other Loan Documents consistent with the
agreement of the parties, so long as Bank provides Borrower with written notice
of such correction and allows Borrower at least ten (10) days to object to such
correction.  In the event of such objection, such correction shall not
be made except by an amendment signed by both Bank and Borrower.

     

    12.7       Amendments
in Writing; Integration.  All amendments to this Agreement must
be in writing signed by both Bank and Borrower.  This Agreement and
the Loan Documents represent the entire agreement about this subject matter, and
supersede prior negotiations or agreements.  All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement and the Loan Documents merge
into this Agreement and the Loan Documents.

     

    12.8       Counterparts.  This
Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, are an
original, and all taken together, constitute one Agreement.

     

    12.9       Survival.  All
covenants, representations and warranties made in this Agreement continue in
full force until this Agreement has terminated pursuant to its terms and all
Obligations (other than inchoate indemnity obligations and any other obligations
which, by their terms, are to survive the termination of this Agreement) have
been satisfied.  The obligation of Borrower in Section 12.2 to
indemnify Bank shall survive until the statute of limitations with respect to
such claim or cause of action shall have run.

     

    12.10    Confidentiality.  In
handling any confidential information, Bank shall exercise the same degree of
care that it exercises for its own proprietary information, but disclosure of
information may be made: (a) to Bank’s Subsidiaries or Affiliates; (b) to
prospective transferees or purchasers of any interest in the Credit Extensions
(provided, however, Bank shall use its best efforts to obtain such prospective
transferee’s or purchaser’s agreement to the terms of this provision);
(c) as required by law, regulation, subpoena, or other order; (d) to
Bank’s regulators or as otherwise required in connection with Bank’s examination
or audit; (e) as Bank considers appropriate in exercising remedies under the
Loan Documents (provided, however, Bank shall use its best efforts to obtain any
prospective transferee’s or purchaser’s agreement to the terms of this
provision); and (f) to third-party service providers of Bank so long as such
service providers have executed a confidentiality agreement with Bank with terms
no less restrictive than those contained herein.  Confidential
information does not include information that either: (i) is in the public
domain or in Bank’s possession when disclosed to Bank, or becomes part of the
public domain after disclosure to Bank; or (ii) is disclosed to Bank by a third
party, if Bank does not know that the third party is prohibited from disclosing
the information.

     

    Bank may
use confidential information for the development of databases, reporting
purposes, and market analysis so long as such confidential information is
aggregated and anonymized prior to distribution unless otherwise expressly
permitted by Borrower.  The provisions of the immediately preceding
sentence shall survive the termination of this Agreement.

    


    12.11    Attorneys’
Fees, Costs and Expenses.   In any
action or proceeding between Borrower and Bank arising out of or relating to the
Loan Documents, the prevailing party shall be entitled to recover its reasonable
attorneys’ fees and other costs and expenses incurred, in addition to any other
relief to which it may be entitled.

     

    12.12    Effect of
Amendment and Restatement.  Except as
otherwise set forth herein, this Agreement is intended to and does completely
amend and restate, without notation, the Original Agreement.  All
security interests granted under the Original Agreement are hereby confirmed and
ratified and shall continue to secure all Obligations under this
Agreement.

     

    12.13    Waiver.  Bank
hereby waives (i) Borrower’s violation of Section 6.7(a) of the Original
Agreement for the April 2010, May 2010, June 2010, July 2010 and August 2010
measuring periods, (ii) Borrower’s violation of Section 6.7(b) of the Original
Agreement for the May 2010, June 2010, July 2010 and August 2010 measuring
periods, and (iii) Borrower’s violations of Section 7.9 and 8.9 of the Original
Agreement and Section 3 of the Original Subordination Agreement, for making
interest payments to its subordinated creditors during the period in which the
Events of Default described in clauses (i) and (ii) of this Section 12.13 had
occurred and were continuing, through the Effective Date.

     

    
      
         


      

      
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    13          DEFINITIONS

     

    13.1       Definitions.  In
this Agreement:

     

    “Account” is any “account” as
defined in the Code with such additions to such term as may hereafter be made,
and includes, without limitation, all accounts receivable and other sums owing
to Borrower.

     

    “Account Debtor” is as defined
in the Code and shall include, without limitation, any person liable on any
Financed Receivable, such as, a guarantor of the Financed Receivable and any
issuer of a letter of credit or banker’s acceptance.

     

    “Adjusted Quick Ratio” is the
ratio of (i) Quick Assets to (ii) Current Liabilities minus Deferred Revenue
minus the current portion of Subordinated Debt.

     

    “Adjustments” are all
discounts, allowances, returns, disputes, counterclaims, offsets, defenses,
rights of recoupment, rights of return, warranty claims, or short payments,
asserted by or on behalf of any Account Debtor for any Financed
Receivable.

     

    “Advance” is defined in
Section 2.1.1.

     

    “Advance Rate” is eighty percent (80%),
net of any offsets related to each specific Account Debtor (as permitted in
accordance with this Agreement), or such other percentage as Bank establishes
under Section 2.1.1.

     

    “Affiliate” of any Person is a
Person that owns or controls directly or indirectly the Person, any Person that
controls or is controlled by or is under common control with the Person, and
each of that Person’s senior executive officers, directors, partners and, for
any Person that is a limited liability company, that Person’s managers and
members.

     

    “Amended and Restated IP
Agreement” is the agreement entered into on the Effective Date by which
that certain Intellectual Property Security Agreement executed and delivered by
Borrower to Bank dated as of February 9, 2010 is being amended and restated in
its entirety.

     

    “Amended and Restated Subordination
Agreement” is the agreement entered into on the Effective Date by which
that certain Subordination Agreement by and among Charles E. Ramey, John L.
Nicholson, M.D. and Bank dated as of February 9, 2010 is being amended and
restated in its entirety.

     

    “Applicable Rate” is a per
annum rate equal to the Prime Rate plus one and one quarter percent
(1.25%).

     

    “Bank Expenses” are all audit
fees and expenses, costs, and expenses (including reasonable attorneys’ fees and
expenses) for preparing, amending, negotiating, administering, defending and
enforcing the Loan Documents (including, without limitation, those incurred in
connection with appeals or Insolvency Proceedings) or otherwise incurred with
respect to Borrower.

     

    “Borrower’s Books” are all
Borrower’s books and records including ledgers, federal and state tax returns,
records regarding Borrower’s assets or liabilities, the Collateral, business
operations or financial condition, and all computer programs or storage or any
equipment containing such information.

     

    “Borrower’s Plan” is Borrower’s
business plan dated ________ which has been delivered to and approved in writing
by Bank.

     

    “Business Day” is any day that
is not a Saturday, Sunday or a day on which Bank is closed.

     

    
      
         


      

      
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    “Cash Equivalents” means
(a) marketable direct obligations issued or unconditionally guaranteed by
the United States or any agency or any State thereof having maturities of not
more than one (1) year from the date of acquisition; (b) commercial paper
maturing no more than one (1) year after its creation and having the highest
rating from either Standard & Poor’s Ratings Group or Moody’s Investors
Service, Inc.; (c) Bank’s certificates of deposit issued maturing no more than
one (1) year after issue; and (d) money market funds at least ninety-five
percent (95%) of the assets of which constitute Cash Equivalents of the kinds
described in clauses (a) through (c) of this definition.

     

    “Code” is the Uniform
Commercial Code, as the same may, from time to time, be enacted and in effect in
the State of California; provided, that, to the extent that the Code is used to
define any term herein or in any Loan Document and such term is defined
differently in different Articles or Divisions of the Code, the definition of
such term contained in Article or Division 9 shall govern; provided further,
that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection, or priority of, or remedies with respect to, Bank’s
Lien on any Collateral is governed by the Uniform Commercial Code in effect in a
jurisdiction other than the State of California, the term “Code” shall mean the Uniform
Commercial Code as enacted and in effect in such other jurisdiction solely for
purposes on the provisions thereof relating to such attachment, perfection,
priority, or remedies and for purposes of definitions relating to such
provisions.

     

    “Collateral” is any and all
properties, rights and assets of Borrower described on Exhibit
A.

     

    “Collateral Handling Fee” is
defined in Section 2.2.4.

     

    “Collections” are all funds
received by Bank from or on behalf of an Account Debtor for Financed
Receivables.

     

    “Compliance Certificate” is
attached as Exhibit
B.

     

    “Contingent Obligation” is, for
any Person, any direct or indirect liability, contingent or not, of that Person
for (a) any indebtedness, lease, dividend, letter of credit or other obligation
of another Person such as an obligation directly or indirectly guaranteed,
endorsed, co-made, discounted or sold with recourse by that Person, or for which
that Person is directly or indirectly liable; (b) any obligations for undrawn
letters of credit for the account of that Person; and (c) all obligations from
any interest rate, currency or commodity swap agreement, interest rate cap or
collar agreement, or other agreement or arrangement designated to protect a
Person against fluctuation in interest rates, currency exchange rates or
commodity prices; but “Contingent Obligation” does not include endorsements in
the ordinary course of business.  The amount of a Contingent
Obligation is the stated or determined amount of the primary obligation for
which the Contingent Obligation is made or, if not determinable, the maximum
reasonably anticipated liability for it determined by the Person in good faith;
but the amount may not exceed the maximum of the obligations under any guarantee
or other support arrangement.

     

    “Copyrights” are any and all
copyright rights, copyright applications, copyright registrations and like
protections in each work or authorship and derivative work thereof, whether
published or unpublished and whether or not the same also constitutes a trade
secret.

     

    “Credit Extension” is any
Advance, the Refinance Term Loan, or any other extension of credit by Bank for
Borrower’s benefit.

     

    “Current Liabilities” are all
obligations and liabilities of Borrower to Bank, plus, without duplication, the
aggregate amount of Borrower’s Total Liabilities, in each case, that mature
within one (1) year from any date of determination.

     

    “Deferred Revenue” is all
amounts received or invoiced, as appropriate, by Borrower, in advance of
performance under contracts and not yet recognized as revenue.

     

    “Early Termination Fee” is
defined in Section 2.1.1.

     

    
      
         


      

      
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    “EBITDA” means earnings before
interest, taxes, depreciation and amortization in accordance with GAAP, plus
equity-based compensation expense.

     

    “Effective Date” is the date
Bank executes this Agreement as indicated on the signature page
hereof.

     

    “Effective Date Advance” is
defined in Section 2.1.2.

     

    “Eligible Accounts” are billed
Accounts in the ordinary course of Borrower’s business that meet all Borrower’s
representations and warranties in Section 5.3, have been, at the option of Bank,
confirmed in accordance with Section 2.1.1 (d), and are due and owing from
Account Debtors deemed creditworthy by Bank in its sole
discretion.  Without limiting the fact that the determination of which
Accounts are eligible hereunder is a matter of Bank discretion in each instance,
Eligible Accounts shall not include the following Accounts (which listing may be
amended or changed in Bank’s discretion with notice to Borrower):

     

    (a)           Accounts
that the Account Debtor has not paid within ninety (90) days of invoice date
regardless of invoice payment period terms;

     

    (b)           Accounts
billed and payable outside of the United States unless the Bank has a first
priority, perfected security interest or other enforceable Lien in such
Accounts;

     

    (c)           Accounts
owing from an Account Debtor to the extent that Borrower is indebted or
obligated in any manner to the Account Debtor (as creditor, lessor, supplier or
otherwise - sometimes called “contra” accounts, accounts payable, customer
deposits or credit accounts), with the exception of customary credits,
adjustments and/or discounts given to an Account Debtor by Borrower in the
ordinary course of its business;

     

    (d)           Accounts
for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent;

     

    (e)           Accounts
owing from an Account Debtor which is a United States government entity or any
department, agency, or instrumentality thereof unless Borrower has assigned its
payment rights to Bank and the assignment has been acknowledged under the
Federal Assignment of Claims Act of 1940, as amended;

     

    (f)           
Accounts for demonstration or promotional equipment, or in which goods are
consigned, or sold on a “sale guaranteed”, “sale or return”, “sale on approval”,
or other terms if Account Debtor’s payment may be conditional;

     

    (g)           Accounts
owing from an Account Debtor that has not been invoiced or where goods or
services have not yet been rendered to the Account Debtor (sometimes called memo
billings or pre-billings);

     

    (h)           Accounts
subject to contractual arrangements between Borrower and an Account Debtor where
payments shall be scheduled or due according to completion or fulfillment
requirements where the Account Debtor has a right of offset for damages suffered
as a result of Borrower’s failure to perform in accordance with the contract
(sometimes called contracts accounts receivable, progress billings, milestone
billings, or fulfillment contracts);

     

    (i)           Accounts
owing from an Account Debtor the amount of which may be subject to withholding
based on the Account Debtor’s satisfaction of Borrower’s complete performance
(but only to the extent of the amount withheld; sometimes called retainage
billings);

     

    (j)           Accounts
subject to trust provisions, subrogation rights of a bonding company, or a
statutory trust;

     

    (k)           Accounts
owing from an Account Debtor that has been invoiced for goods that have not been
shipped to the Account Debtor unless Bank, Borrower, and the Account Debtor have
entered into an agreement acceptable to Bank in its sole discretion wherein the
Account Debtor acknowledges that (i) it has title to and has ownership of the
goods wherever located, (ii) a bona fide sale of the goods has occurred, and
(iii) it owes payment for such goods in accordance with invoices from Borrower
(sometimes called “bill and hold” accounts);

     

    
      
         


      

      
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    (l)      
     Accounts for which the Account Debtor has not been
invoiced;

     

    (m)          Accounts
that represent non-trade receivables or that are derived by means other than in
the ordinary course of Borrower’s business;

     

    (n)           Accounts
subject to chargebacks or others payment deductions taken by an Account Debtor
(but only to the extent the chargeback is determined invalid and subsequently
collected by Borrower);

     

    (o)           Accounts
owing from an Account Debtor with respect to which Borrower has recognized
Deferred Revenue (but only to the extent of such Deferred Revenue), it being
understood that when Borrower is able to record such Deferred Revenue as actual
revenue, the amount of such recordable actual revenue shall become an Eligible
Account;

     

    (p)           Accounts
in which the Account Debtor disputes liability or makes any claim (but only up
to the disputed or claimed amount), or if the Account Debtor is subject to an
Insolvency Proceeding, or becomes insolvent, or goes out of business;
and

     

    (q)           Accounts
for which Bank in its good faith business judgment after inquiry and
consultation with Borrower determines collection to be doubtful.

     

    “Equipment” is all “equipment”
as defined in the Code with such additions to such term as may hereafter be
made, and includes without limitation all machinery, fixtures, goods, vehicles
(including motor vehicles and trailers), and any interest in any of the
foregoing.

     

    “ERISA” is the Employee
Retirement Income Security Act of 1974, and its regulations.

     

    “Events of Default” are set
forth in Article 8.

     

    “Facility Amount” is One
Million Two Hundred Fifty Thousand Dollars ($1,250,000).

     

    “Facility Fee” is defined in
Section 2.2.2.

     

    “Finance Charges” is defined in
Section 2.2.3.

     

    “Financed Receivables” are all
those Eligible Accounts, including their proceeds which Bank finances and makes
an Advance, as set forth in Section 2.1.1.  A Financed Receivable
stops being a Financed Receivable (but remains Collateral) when the Advance made
for the Financed Receivable has been fully paid.

     

    “Financed Receivable
Balance” is
the total outstanding gross face amount, at any time, of any Financed
Receivable.

     

    “GAAP” is generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other Person as may be
approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.

     

    
      
         


      

      
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    “General Intangibles” is all
“general intangibles” as defined in the Code in effect on the date hereof with
such additions to such term as may hereafter be made, and includes without
limitation, all Intellectual Property (including all copyright rights, copyright
applications, copyright registrations and like protections in each work of
authorship and derivative work, whether published or unpublished, any patents,
trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, any trade secret rights,
including any rights to unpatented inventions), payment intangibles, royalties,
contract rights, goodwill, franchise agreements, purchase orders, customer
lists, route lists, telephone numbers, domain names, claims, income and other
tax refunds, security and other deposits, options to purchase or sell real or
personal property, rights in all litigation presently or hereafter pending
(whether in contract, tort or otherwise), insurance policies (including without
limitation key man, property damage, and business interruption insurance),
payments of insurance and rights to payment of any kind.

     

    “Governmental Approval” is any
consent, authorization, approval, order, license, franchise, permit,
certificate, accreditation, registration, filing or notice, of, issued by, from
or to, or other act by or in respect of, any Governmental
Authority.

     

    “Governmental Authority” is any
nation or government, any state or other political subdivision thereof, any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government, any securities exchange
and any self-regulatory organization.

     

    “Indebtedness” is (a)
indebtedness for borrowed money or the deferred price of property or services,
such as reimbursement and other obligations for surety bonds and letters of
credit, (b) obligations evidenced by notes, bonds, debentures or similar
instruments, (c) capital lease obligations and (d) Contingent
Obligations.

     

    “Indemnified Person” is defined
in Section 12.2.

     

    “Insolvency Proceeding” is any
proceeding by or against any Person under the United States Bankruptcy Code, or
any other bankruptcy or insolvency law, including assignments for the benefit of
creditors, compositions, extensions generally with its creditors, or proceedings
seeking reorganization, arrangement, or other relief.

     

    “Intellectual Property” means
all of Borrower’s right, title, and interest in and to the
following:

     

    (a)           its
Copyrights, Trademarks and Patents;

     

    (b)           any
and all trade secrets and trade secret rights, including, without limitation,
any rights to unpatented inventions, know-how, operating manuals;

     

    (c)           any
and all source code;

     

    (d)           any
and all design rights which may be available to a Borrower;

     

    (e)           any
and all claims for damages by way of past, present and future infringement of
any of the foregoing, with the right, but not the obligation, to sue for and
collect such damages for said use or infringement of the Intellectual Property
rights identified above; and

     

    (f)           all
amendments, renewals and extensions of any of the Copyrights, Trademarks or
Patents.

     

    “Inventory” is all “inventory”
as defined in the Code in effect on the date hereof with such additions to such
term as may hereafter be made, and includes without limitation all merchandise,
raw materials, parts, supplies, packing and shipping materials, work in process
and finished products, including without limitation such inventory as is
temporarily out of Borrower’s custody or possession or in transit and including
any returned goods and any documents of title representing any of the
above.

     

    “Investment” is any beneficial
ownership in any Person (including stock, partnership interest or other
securities), or any loan, advance or capital contribution to any
Person.

     

    “Invoice Transmittal” is a
written request from Borrower to Bank that Bank make an Advance on one or more
Eligible Accounts, which written request shows such Eligible Accounts and, for
each such Eligible Account, includes the face amount of the Eligible Account as
well as the Account Debtor’s, name, address, invoice amount, invoice date and
invoice number.

     

    
      
         


      

      
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    “Letter of Credit” means a
standby letter of credit issued by Bank or another institution based upon an
application, guarantee, indemnity or similar agreement on the part of
Bank.

     

    “Lien” is a claim, mortgage,
deed of trust, levy, charge, pledge, security interest or other encumbrance of
any kind, whether voluntarily incurred or arising by operation of law or
otherwise against any property.

     

    “Loan Documents” are,
collectively, this Agreement, the Perfection Certificate, the Amended and
Restated IP Agreement, the Amended and Restated Subordination Agreement, any
note, or notes or guaranties executed by Borrower or any Guarantor, and any
other present or future agreement between Borrower any Guarantor and/or for the
benefit of Bank in connection with this Agreement, all as amended, restated, or
otherwise modified.

     

    “Lockbox” is defined in Section
2.2.7.

     

    “Material Adverse Change” is
(a) a material impairment in the perfection or priority of Bank’s Lien in the
Collateral or in the value of such Collateral; (b) a material adverse change in
the business, operations, or condition (financial or otherwise) of Borrower; or
(c) a material impairment of the prospect of repayment of any portion of the
Obligations.

     

    “Maturity Date” is February 8,
2011.

     

    “Monthly Financial Statements”
is defined in Section 6.2(a).

     

    “Nicholson/Ramey Subordinated
Debt” is that certain Subordinated Debt held by John L. Nicholson and
Charles E. Ramey that is the subject of the Amended and Restated Subordination
Agreement.

     

    “Obligations” are Borrower’s
obligation to pay when due any debts, principal, interest, Bank Expenses, and
other amounts Borrower owes Bank now or later, whether under this Agreement, the
Loan Documents, or otherwise, including, without limitation, any interest
accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank, and the performance of Borrower’s
duties under the Loan Documents.

     

    “Original Subordination
Agreement” is the agreement that was amended and restated by the Amended
and Restated Subordination Agreement.

     

    “Patents” means all patents,
patent applications and like protections including without limitation
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same.

     

    “Perfection Certificate” is a
certain Perfection Certificate completed and delivered by Borrower to Bank in
connection with this Agreement.

     

    “Permitted Indebtedness”
is:

     

    (a)           Borrower’s
Indebtedness to Bank under this Agreement and the other Loan
Documents;

     

    (b)           Indebtedness
of Borrower existing on the Effective Date and shown on the Perfection
Certificate;

     

    (c)           Subordinated
Debt of Borrower;

     

    (d)           unsecured
Indebtedness of Borrower to trade creditors incurred in the ordinary course of
business;

     

    
      
         


      

      
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    (e)    
       Indebtedness of Borrower incurred as a
result of endorsing negotiable instruments received in the ordinary course of
business;

     

    (f)        
   Indebtedness of Borrower secured by Permitted
Liens;

     

    (g)           extensions,
refinancings, modifications, amendments and restatements of any items of
Permitted Indebtedness (a) through (f) above, provided that the principal amount
thereof is not increased or the terms thereof are not modified to impose more
burdensome terms upon Borrower or its Subsidiary, as the case may be;
and

     

    (h)           unsecured
Indebtedness of Borrower that does not otherwise qualify as Permitted
Indebtedness pursuant to clauses (a) through (g) in an aggregate amount not
exceeding One Hundred Thousand Dollars ($100,000).

     

    “Permitted Investments”
are:

     

    (a)           Investments
of Borrower (including, without limitation, Subsidiaries) existing on the
Effective Date and shown on the Perfection Certificate;

     

    (b)           (i)
Investments of Borrower consisting of Cash Equivalents, and (ii) any Investments
of Borrower permitted by Borrower’s investment policy, as amended from time to
time, provided that such investment policy (and any such amendment thereto) has
been approved in writing by Bank;

     

    (c)           Investments
of Borrower consisting of the endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
Borrower;

     

    (d)           Investments
of Borrower consisting of deposit accounts in which Bank has a perfected
security interest;

     

    (e)           Investments
of Borrower accepted in connection with Transfers permitted by Section
7.1;

     

    (f)           Investments
of Borrower consisting of (i) travel advances and employee relocation loans and
other employee loans and advances in the ordinary course of business, and (ii)
loans to employees, officers or directors relating to the purchase of equity
securities of Borrower or its Subsidiaries pursuant to employee stock purchase
plans or agreements approved by Borrower’s Board of Directors;

     

    (g)           Investments
of Borrower (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of business;

     

    (h)           Investments
of Borrower consisting of notes receivable of, or prepaid royalties and other
credit extensions, to customers and suppliers who are not Affiliates, in the
ordinary course of business; provided that this paragraph (h) shall not apply to
Investments of Borrower in any Subsidiary; and

     

    (i)       
    Investments that do not otherwise qualify as a Permitted
Investment pursuant to clauses (a) through (h) in an aggregate amount not
exceeding One Hundred Thousand Dollars ($100,000).

     

    “Permitted Liens”
are:

     

    (a)           Liens
existing on the Effective Date and shown on the Perfection Certificate or
arising under this Agreement and the other Loan Documents;

     

    (b)           Liens
for taxes, fees, assessments or other government charges or levies, either (i)
not due and payable or (ii) being contested in good faith and for which Borrower
maintains adequate reserves on its Books, provided that no
notice of any such Lien has been filed or recorded under the Internal Revenue
Code of 1986, as amended, and the Treasury Regulations adopted
thereunder;

     

    
      
         


      

      
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    (c)           purchase
money Liens (i) on Equipment acquired or held by Borrower incurred for financing
the acquisition of the Equipment securing no more than One Hundred Thousand
Dollars ($100,000) in the aggregate amount outstanding, or (ii) existing on
Equipment when acquired, if the Lien is
confined to the property and improvements and the proceeds of the
Equipment;

     

    (d)           Liens
of carriers, warehousemen, suppliers, or other Persons that are possessory in
nature arising in the ordinary course of business so long as such Liens attach
only to Inventory, securing liabilities in the aggregate amount not to exceed
One Hundred Thousand Dollars ($100,000) and which are not delinquent or remain
payable without penalty or which are being contested in good faith and by
appropriate proceedings which proceedings have the effect of preventing the
forfeiture or sale of the property subject thereto;

     

    (e)           Liens
to secure payment of workers’ compensation, employment insurance, old-age
pensions, social security and other like obligations incurred in the ordinary
course of business (other than Liens imposed by ERISA);

     

    (f)       
    Liens incurred in the extension, renewal or refinancing
of the indebtedness secured by Liens described in (a) through (c), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase
other than as a result of accrued interest and penalties;

     

    (g)           leases
or subleases of real property granted in the ordinary course of Borrower’s
business (or, if referring to another Person, in the ordinary course of such
Person’s business), and leases, subleases, non-exclusive licenses or sublicenses
of personal property (other than Intellectual Property) granted in the ordinary
course of Borrower’s business (or, if referring to another Person, in the
ordinary course of such Person’s business), if the leases,
subleases, licenses and sublicenses do not prohibit granting Bank a security
interest therein;

     

    (h)           non-exclusive
licenses of Intellectual Property granted to third parties in the ordinary
course of business, and licenses of Intellectual Property that could not result
in a legal transfer of title of the licensed property that may be exclusive in
respects other than territory and that may be exclusive as to territory only as
to discreet geographical areas outside of the United States; and

     

    (i)   
        Liens arising from attachments
or judgments, orders, or decrees in circumstances not constituting an Event of
Default under Sections 8.4 and 8.7.

     

    “Person” is any individual,
sole proprietorship, partnership, limited liability company, joint venture,
company, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, firm, joint stock company, estate,
entity or government agency.

     

    “Prime Rate” is Bank’s most
recently announced “prime rate,” even if it is not Bank’s lowest
rate.

     

    “Quick Assets” is, as of any
date of determination, Borrower’s unrestricted cash held at Bank plus the face
amount of all Eligible Accounts as of such date.

     

    “Reconciliation Period” is each
calendar month.

     

    “Refinance Term Loan” is
defined in Section 2.1.2.

     

    “Refinance Term Loan Maturity
Date” is February 1, 2013.

     

    “Registered Organization” is
any “registered organization” as defined in the Code with such additions to such
term as may hereafter be made.

     

    
      
         


      

      
        25

        
          

        

      

      
         


      

    

     

    “Requirement of Law” is as to
any Person, the organizational or governing documents of such Person, and any
law (statutory or common), treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

     

    “Responsible Officer” is any of
the Chief Executive Officer, President, Chief Financial Officer and Controller
of Borrower.

     

    “Restricted License” is any
material license or other agreement with respect to which Borrower is the
licensee (a) that prohibits or otherwise restricts Borrower from granting a
security interest in Borrower’s interest in such license or agreement or any
other property, or (b) for which a default under or termination of could
interfere with the Bank’s right to sell any Collateral.

     

    “Subject Month” is the month
which is two (2) calendar months after any Testing Month.

     

    “Subordinated Debt” is
indebtedness incurred by Borrower subordinated to all of Borrower’s now or
hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or
other similar agreement in form and substance satisfactory to Bank entered into
between Bank and the other creditor), on terms acceptable to Bank.

     

    “Subsidiary” is, with respect
to any Person, any Person of which more than 50.0% of the voting stock or other
equity interests (in the case of Persons other than corporations) is owned or
controlled directly or indirectly by such Person or one or more of Affiliates of
such Person.

     

    “Term Loan” has the meaning
assigned in the Original Agreement.

     

    “Testing Month” is any month
with respect to which Bank has tested Borrower's Adjusted Quick Ratio in order
to determine Bank's method for calculating the Collateral Handling Fee in
Section 2.2.4 or the Applicable Rate.

     

    “Total Liabilities” is, as of any
date of determination, all obligations that should, under GAAP, be classified as
liabilities on Borrower’s consolidated balance sheet, including all
Indebtedness.

     

    “Trademarks” means any
trademark and servicemark rights, whether registered or not, applications to
register and registrations of the same and like protections, and the entire
goodwill of the business of Borrower connected with and symbolized by such
trademarks.

     

    “Transfer” is defined in
Section 7.1.

     

    [Signature
page follows.]

     

    
      
         


      

      
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    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the Effective Date.

     

    
      
        	
                BORROWER:

              
	 
      
	
                US
      DATAWORKS, INC.

              
	 
      
	
                By

              	
                /s/ Randall J. Frapart

              	 
      
	
                Name:

              	
                Randall J. Frapart

              	 
      
	
                Title:

              	
                Chief Financial Officer

              	 
      
	 
      
	
                BANK:

              
	 
      
	
                SILICON
      VALLEY BANK

              
	 
      
	
                By

              	
                /s/ Priya Iyer

              	 
      
	
                Name:

              	
                Priya Iyer

              	 
      
	
                Title:

              	
                Relationship Manager

              	 
      
	
                Effective Date:

              	
                10/27/10