f10k2008ex10xviii_fund.htm


    Exhibit 10.18

     

    
      REVOLVING
CREDIT LOAN AGREEMENT

       

      This Revolving Credit Loan
Agreement (this “Agreement”) dated as of April
30, 2009 (the “Execution
Date”) and effective as of May 1, 2009 (the “Effective Date”), is made and
entered into by and among IP
GLOBAL INVESTORS LTD., a Nevada corporation (the “Lender”), located at 499 N.
Canon, Beverly Hills, CA 90210; and FUND.COM INC., a Delaware
corporation (the “Borrower”), located at 14
Wall Street, New York, New York 10005; and certain of the Subsidiaries of the
Borrower who have executed this Agreement on the signature page hereof (the
“Subsidiaries”).  The
Lender,  the Borrower and the Subsidiaries are hereinafter sometimes
referred to individually as a “Party” and collectively as
“Parties”.

       

      RECITALS

       

      A.           The
Borrower desires to receive loans and advances from the Lender (the “Advances”) for the purpose of
obtaining additional working capital for its business; and

       

      B.           The
Lender is willing to make Advances to the Borrower of up to “Maximum Advances” (as
hereinafter defined) all upon the terms and subject to the conditions
hereinafter set forth.

       

      NOW, THEREFORE, in
consideration of the foregoing recitals, the following mutual and respective
covenants and agreements of the Parties, intending to be legally bound, the
Parties agree as follows:

       

      1.           Definitions. Except as
otherwise specifically indicated, the following terms shall have the following
meanings in this Agreement (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):

       

      “Accounts” shall mean all
“accounts” (as defined in the UCC) of Borrower and its Subsidiaries (or, if
referring to another Person, of such other Person) that relates to the operation
of the businesses of Borrower and each of its Subsidiaries, as now conducted or
may hereafter be conducted until all of the Obligations shall have been paid and
satisfied, including without limitation, accounts, accounts receivables, monies
due or to become due and obligations in any form (whether arising in connection
with contracts, contract rights, Instruments, General Intangibles or Chattel
Paper), in each case whether arising out of goods sold or services rendered or
from any other transaction and whether or not earned by performance, now or
hereafter in existence, and all documents of title or other documents
representing any of the foregoing, and all collateral security and guaranties of
any kind, now or hereafter in existence, given by any Person with respect to any
of the foregoing; provided
however that the definition of Accounts shall not include any of the
securities or collateral as is contemplated by (i) that certain Securities
Purchase Agreement dated as of April 7, 2009 by and between the Borrower and
National Holdings Corporation and all related documents thereto (the “SPA”);
(ii) that certain Demand Promissory Note dated as of April 7, 2009 by and
between the Borrower and Global Asset Fund Limited (“GAF”) and all related
documents thereto, and (iii) that certain securities purchase agreement by and
between the Borrower, Amalphis Group, Inc. and GAF (the “Amalphis Transaction
Documents” and together with the SPA and the GAF Note, the “NHC-GAF
Collateral”).

       

      “Account Debtor” shall mean any
Person who is obligated under an Account.

       

                    
 “AdvisorShares”
means AdvisorShares LLC, a partially owned subsidiary of the Borrower which is
not a party to this Agreement or the other Transaction Documents.

       

       

      
        
          
          

        

        
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      “Affiliate” means, with respect
to any particular Person means any other Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by or under
common control with such Person.  For purposes of this definition, “control” (including
the terms “ controlling,” “ controlled by ” and “
under common control
with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.

      


      “Advances” means periodic loans
and advances made from time to time by the Lender under this Agreement to the
Borrower following the receipt of a Borrowing Report.

       

      “Business Day” means a day,
other than a Saturday, Sunday or holiday, on which banks in New York City are
open for the general transaction of business.

       

      “Borrowing Report” means a
report, in substantially the form of Exhibit
A annexed hereto and made a part hereof,  to be delivered to
the Lender by the Borrower prior to or in connection with each request for an
Advance under this Agreement, setting forth, inter alia (a) the date by which
the Borrower needs the Funds, which must be a Business Day, (b) the requested
Advance amount (c) the purpose and use of the Funds to be received from the
Advance, including the name of the Person to whom payments will be made by the
Borrower, (d) delivery instructions for the Advance, and (e) such other
information as the Lender may, from time to time, reasonably request as is
necessary for the Lender to issue the Advance to the Borrower.

       

      “Certificate of
Deposit”  means the restricted certificate of deposit maturing
in approximately eighteen months (the “CD Maturity Date”) in the
amount of Twenty Million Dollars ($20,000,000) issued by Global Bank of Commerce
Limited and constituting as asset of the Borrower.

       

      “CD Release Fee” means that
number of shares of the authorized and previously unissued shares of Common
Stock of the Borrower determined by dividing (a) $1,343,000, by (b) the
Conversion Price.

       

                    
 “Closing Date”
means the date of execution and delivery of this Agreement and all other
Transaction Documents and the funding of the initial Advance by the
Lender.

       

      “Collateral” shall have the
meaning defined in Section 6 of this Agreement.

       

      “Common Stock” means the shares
of common stock of the Borrower, $0.001 par value per share.

       

      “Conversion Price” means sixty
cent ($0.60) per share, subject to adjustment as provided in the
Note.

       

      “Conversion Shares” means the
number of shares of Common Stock of the Borrower issuable upon conversion of any
or all of the Note.

       

      “Exercise Price” means sixty
cent ($0.60) per share, subject to adjustment as provided in the
Warrant.

       

      “Funds” means the United States
Dollars that the Lender provides to the Borrower as Advances.

       

      “GAF Note” means the Borrower’s
$18,000 note, issued in December 2008, originally payable to Global Asset Fund,
Ltd. (“GAF”), but which
Lender purchased from Global Asset Fund, Ltd.

       

       

      
        
          
          

        

        
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      “Governmental Authority” shall
mean any federal, state, municipal, national, local or other governmental
department, court, commission, board, bureau, agency or instrumentality or
political subdivision thereof, or any entity or officer exercising executive,
legislative or judicial, regulatory or administrative functions of or pertaining
to any government or any court, in each case, whether of the United States or a
state, territory or possession thereof, a foreign sovereign entity or country or
jurisdiction or the District of Columbia.

       

      “Guarantors” means each of the
Subsidiaries of the Borrower.

       

      “Guaranty Agreement” means the
guaranty of each of the Guarantors of the Obligations, as set forth in the
guaranty agreement annexed hereto as Exhibit
B and made a part hereof.

       

      “Insolvency Event” occurs, with
respect to the Borrower or any Guarantor, when such Entity: (a) is dissolved,
becomes insolvent, generally fails to pay or admits in writing, its inability
generally to pay its debts as they become due; (b) makes a general assignment,
arrangement or composition agreement with or for the benefit of its creditors;
or (c) files a petition in bankruptcy or institutes any action under federal or
state law for relief from debts or seeks or consents to the appointment of an
administrator, receiver, custodian, or similar entity for the winding up of its
business (or has such a petition or action filed against it and such petition,
action or appointment is not dismissed or stayed within 50 days).

       

      “Intellectual Property” shall
mean all present and future:  trade secrets, know-how and other
proprietary information; Trademarks, internet domain names (including, without
limitation, the domain name “www.fund.com”), service marks, trade dress, trade
names, business names, designs, logos, slogans (and all translations,
adaptations, derivations and combinations of the foregoing) indicia and other
source and/or business identifiers, and the goodwill of the business relating
thereto and all registrations or applications for registrations which have
heretofore been or may hereafter be issued thereon throughout the world;
Copyrights (including Copyrights for computer programs) and all tangible and
intangible property embodying the Copyrights, unpatented inventions (whether or
not patentable); Patents; industrial design applications and registered
industrial designs; license agreements related to any of the foregoing and
income therefrom; books, records, writings, computer tapes or disks, flow
diagrams, specification sheets, computer software, source codes, object codes,
executable code, data, databases and other physical manifestations, embodiments
or incorporations of any of the foregoing; the right to sue for all past,
present and future infringements of any of the foregoing; all other intellectual
property; and all common law and other rights throughout the world in and to all
of the foregoing.

       

       “Interest Rate” means an amount
equal to nine percent (9%) per annum on the outstanding amount of all Advances
made by the Lender pursuant to this Agreement.

       

      “Investment” means the
aggregate dollar amount of all Advances made by the Lender to the Borrower
during the Term.

       

      “Lenders Shares” means the
collective reference to the (a) Conversion Shares; (b) the Warrant Shares; and
(c) the shares of Common Stock payable in respect of the CD Release
Fee.

       

      “Loan Servicing Fees” means the
sum of $16,500 per month to cover the servicing and monitory of all Advances
under this Agreement.

       

      “Material Adverse Effect” means
a material adverse effect on (a) the assets, liabilities, results of operations,
condition (financial or otherwise), business or prospects of the Borrower or any
of its Subsidiaries, whether individually or taken as a consolidated whole, or
(b) the ability of any of the Borrower or any of its Subsidiaries to perform
their respective obligations under the Transaction Documents.

       

       

      
        
          
          

        

        
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      “Maximum Advances” means the
sum of One Million Three Hundred and Forty Three Thousand United States Dollars
($1,343,000), which Maximum Advances may be increased only in the sole and
absolute discretion of the Lender.

       

      “Note” means the revolving
credit convertible note, dated as of the Effective Date, and in the form of
Exhibit
C annexed hereto and made a part hereof.

       

      “Obligations” means the
collective reference to (a) the obligation of the Borrower and each Guarantor to
repay Approved Advances, interest at the Interest Rate on all Advances made
under this Agreement, (b) all Loan Servicing Fees, (c) the CD Release Fee, and
(d) the respective obligations of the Borrower and its Subsidiaries under other
Transaction Documents.

       

      “Permitted Discretion” shall
mean a determination or judgment made by Lender in good faith in the exercise of
reasonable (from the perspective of a lender) business judgment.

       

      “Person” means an individual,
corporation, partnership, limited liability company, trust, business trust,
association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.

       

       “Prior Advances” means the
collective reference to the sum of approximately $723,000, representing (a) a
loan of $325,000 made by the Lender to the Borrower and evidenced by the Prior
Note, (b) the $18,000 loan from Global Asset Fund Ltd. (“GAF”) originally evidenced by
the GAF Note which was purchased by the Lender from GAF; and (c) approximately
$380,000 of other loans and Advances made by the Lender to the Borrower prior to
the Execution Date of this Agreement.

       

      “Prior Note” shall mean the
note from Borrower to Lender in the principal amount of $325,000 and payable
within 30 days of demand for payment by the Lender.

       

      “SEC Filings” means all
reports, schedules, forms, statements and other documents the Corporations are
required to file with the Securities and Exchange Commission pursuant to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), including material filed pursuant to Section 13(a) or 15(d) of the
Exchange Act.

       

      “Subsidiary” means any
corporation or other entity of which at least a majority of the securities or
other ownership interest having ordinary voting power (absolutely or
contingently) for the election of directors or other persons performing similar
functions are at the time owned directly or indirectly by the Borrower and/or
any of its other subsidiaries.  For purposes of this Agreement, as at
the date hereof and the Closing Date, the Subsidiaries of the Borrower are the
Persons who have executed this Agreement on the signature page hereof, but shall
not include AdvisorShares.

       

      “Term” shall mean one year from
the Execution Date, subject to extension by the Parties.

       

      “Trademarks” shall mean, with
respect to any Person, all of such Person’s now existing or hereafter acquired
right, title, and interest in and to: (i) trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos, other business identifiers, prints and labels on which any
of the foregoing have appeared or appear, all applications, registrations and
recordings relating to the foregoing as may at any time be filed in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof, any political subdivision thereof or in any
other country, and all research and development relating to the foregoing; (ii)
all renewals thereof; and (iii) all designs and general intangibles of a like
nature.

       

       

       

      
        
          
          

        

        
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      “Transaction Documents” means
the collective reference to this Agreement, the Note, the Warrant and the
Guaranty Agreement.

       

      “Warrant”  means a
warrant to be delivered to the Lender on the Closing Date entitling the Lender
to purchase to purchase that number of shares of Common Stock of the Borrower
determined by dividing: (a) $1,343,000, by (b) the Exercise Price, and in the
from of Exhibit
D annexed hereto and made a part hereof.

       

      “Warrant Shares” means the
number of shares of Common Stock of the Borrower issuable upon exercise of any
or all of the Warrant.

       

      2.           Advances

       

      (a)           Subject
to the provisions of this Agreement the Lender shall make Advances to the
Borrower from time to time during the Term; provided
that, notwithstanding any other provision of this Agreement, the
aggregate amount of all Advances at any one time outstanding under this
Agreement shall not exceed the (i) the Maximum Advances, less
(ii) the sum of (A) the Prior Advances, and (B) the outstanding amount of
all additional Advances made under this Agreement (the “Availability”).

       

      (b)           The
Advances made under this Agreement is in the nature of a revolving credit
facility, which may be drawn, repaid and redrawn, from time to time as permitted
under this Agreement.  Advances shall be made by the Lender under this
Agreement following delivery to the Lender of a Borrowing Report in form and
substance reasonably acceptable to the Lender, in the exercise of its Permitted
Discretion.

       

      (c)           Advances
shall be made during the Term.  Each Advance subsequent to the
Execution Date Advance, shall be in an amount of at least $10,000 and in
increments of $10,000 in excess thereof.  Subject to the provisions of
this Agreement, Borrower may request Advances under this Agreement up to and
including the Availability.

       

      (d)           All
Advances and all other Obligations under this Agreement shall be due and payable
in full in cash, if not earlier in accordance with this Agreement, on the
earlier of (i) the occurrence of an Event of Default if required pursuant hereto
or Lender’s demand upon the occurrence and during the continuation of an Event
of Default, and (ii) the last day of the Term (such earlier date being the “Maturity Date”).

       

      (e)           Interest
on all outstanding Advances under this Agreement shall be payable monthly in
arrears on the first day of each month, commencing June 1, 2009 (each an “Interest Calculation Period”)
at the Interest Rate, calculated on the basis of a 360-day year and for the
actual number of calendar days elapsed in each Interest Calculation
Period.  Interest accrued on each Advance under the this Agreement
shall be due and payable on the first day of each month, commencing June 1,
2009, and continuing until the later of the expiration of the Term and the full
performance and irrevocable payment in full in cash of the Obligations and
termination of this Agreement.  To the extent Advances are then
available under this Agreement, Advances shall be automatically made for the
payment of interest on the Obligations at the Interest Rate on the date when
such interest is due to the extent available and as provided for
herein.

       

       

      
        
          
          

        

        
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      (f)           For
so long as no Event of Default shall have occurred and be continuing, Borrower
may give Lender irrevocable written notice requesting an Advance under this
Agreement by delivering to Lender not later than 11:00 a.m. (New York City time)
at least three (3) Business Days before the Borrower requires such Advance (the
“Borrowing Date”), a
completed Borrowing Report in substantially the same form as Exhibit
A attached hereto, and relevant supporting documentation satisfactory to
Lender, in the exercise of its Permitted Discretion.  If specified by
the Borrower in the Borrowing Report, the Borrower irrevocably authorizes Lender
to disburse the proceeds of the requested Advance directly to the creditor of
the Borrower, in all cases for credit to the Borrower (or to such other account
as to which the Borrower shall instruct Lender) via Federal funds wire transfer
no later than 4:00 p.m. (New York City time).

       

      (g)           Subject
to its approval of the form and content of such Borrowing Report (which approval
shall be given in the exercise of Lender’s Permitted Discretion, which shall not
be unreasonably withheld or delayed), the Lender shall disburse the Advance as
set forth in the Borrowing Report within three (3) Business Days after receipt
of such Borrowing Report.

       

      (h)           Borrower
absolutely and unconditionally promises to pay principal, interest and all other
amounts and Obligations payable hereunder, or under any other Transaction
Document, without any right of rescission and without any deduction whatsoever,
including any deduction for any setoff, counterclaim or recoupment, and
notwithstanding any damage to, defects in or destruction of the Collateral or
any other event, including obsolescence of any property or
improvements.

       

      (i)           As
of the Effective Date, each of the Guarantors shall unconditionally and
irrevocably guaranty payment and performance of all outstanding Advances and
interest thereon at the Interest Rate, pursuant to the Guaranty
Agreement.

       

      (j)           As
of the Effective Date, the Prior Note shall be deemed cancelled and replaced by
the Note issued under this Agreement.

       

      (k)           Should
any amount required to be paid under any Transaction Document to the Lender be
unpaid, such amount may be paid by Lender, which payment shall be deemed a
request for an Advance under this Agreement as of the date such payment is due,
and Borrower irrevocably authorizes disbursement of any such funds to Lender by
way of direct payment of the relevant amount, interest or Obligations without
necessity of any demand.  No payment or prepayment of any amount by
Lender or any other Person shall entitle any Person to be subrogated to the
rights of Lender under any Transaction Document unless and until the Obligations
have been fully performed and paid irrevocably in cash and this Agreement has
been terminated.  Any sums expended by Lender as a result of the
failure of the Borrower or the Guarantors to pay, perform or comply with any
Transaction Document or any of the Obligations may be charged to the account of
Borrower and the Guarantors and added to the Obligations.

       

      (l)           Subject
at all times to (i) there being adequate Availability at the time a request for
an Advance is made and after giving effect to the funding thereof, (ii) such
request for an Advance is accompanied by a duly completed Borrowing Report
furnished to the Lender as provided in this Agreement, and (iii) requests for
Advances are approved for proper business purposes of the Borrower and its
Subsidiaries, as determined by the Lender in the exercise of its Permitted
Discretion (which approval shall not be unreasonably withheld or delayed), in
the event that the Lender shall fail to make any such requested Advance within
five (5) Business Days of the date such Advance is approved, the Lender shall
not be entitled to receive or accrue any fees or interest on then outstanding
Advances for the month or applicable part thereof that the Advance was so
approved and funding delayed.

       

       

      
        
          
          

        

        
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      3.           Payment
of Fees.

       

      (a)           Each
of the Lender and the Borrower do hereby covenant and agree that all Loan
Servicing Fees payable under this Agreement shall accrue and shall be paid to
the Lender on the Maturity Date and shall be deemed part of the
Obligations.

       

      (b)           Each
of the Lender and the Borrower do hereby agree that the CD Release Fee shall
only be payable to the Lender in the event that the Lender is able to arrange
for the Borrower to effect a payment of and drawdown on the Certificate of
Deposit prior to the CD Maturity Date, all upon such terms and conditions as
shall be satisfactory to the Borrower.

       

      4.           Representations
and Warranties

       

      Each of
the Borrower and its Subsidiaries jointly and severally represents and warrants
as of the date hereof, the Closing Date and each Borrowing Date, as
follows:

       

      4.1           Organization and
Authority

       

      Borrower
and each of Borrower’s Subsidiaries is a corporation or limited liability
company duly organized, validly existing and in good standing under the laws of
its state of formation.  Borrower and each of its Subsidiaries
(i) has all requisite corporate or entity power and authority to own its
properties and assets and to carry on its business as now being conducted and as
contemplated in the Transaction Documents, (ii) is duly qualified to do
business in every jurisdiction in which failure so to qualify would reasonably
be likely to have a Material Adverse Effect, and (iii) has all requisite power
and authority (A) to execute, deliver and perform the Transaction Documents
to which it is a party, (B) to borrow hereunder, and (C) to consummate the
transactions contemplated under the Transaction Documents.  Except as
set forth on Schedule 4.1, neither Borrower nor any of its Subsidiaries is an
“investment company” registered or required to be registered under the
Investment Company Act of 1940, as amended, or is controlled by such an
“investment company.”

       

      4.2           Transaction
Documents

       

      Except as set forth on Schedule 4.2, the
execution, delivery and performance by the Borrower and each of Borrower’s
Subsidiaries (collectively, the “Corporations”) of the
Transaction Documents to which it is a party, and the consummation of the
transactions contemplated thereby, (i) have been duly authorized by all
requisite action of each such Person and have been duly executed and delivered
by or on behalf of each such Person; (ii) do not violate any provisions of
(A) applicable law, statute, rule, regulation, ordinance or tariff,
(B) any order of any Governmental Authority binding on any such Person or
any of their respective properties, or (C) the certificate of incorporation
or bylaws (or any other equivalent governing agreement or document) of any such
Person, or any agreement between any such Person and its respective
stockholders, members, partners or equity owners or among any such stockholders,
members, partners or equity owners; (iii) are not in conflict with, and do not
result in a breach or default of or constitute an event of default, or an event,
fact, condition or circumstance which, with notice or passage of time, or both,
would constitute or result in a conflict, breach, default or event of default
under, any indenture, agreement or other instrument to which any such Person is
a party, or by which the properties or assets of such Person are bound;
(iv) except as set forth therein, will not result in the creation or
imposition of any Lien of any nature upon any of the properties or assets of any
such Person, and (v)  do not require the consent, approval or authorization
of, or filing, registration or qualification with, any Governmental Authority or
any other Person.  When executed and delivered, each of the
Transaction Documents to which Borrower and each of the other Corporations is a
party will constitute the legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms, subject to the
effect of any applicable bankruptcy, moratorium, insolvency, reorganization or
other similar law affecting the enforceability of creditors’ rights generally
and to the effect of general principles of equity which may limit the
availability of equitable remedies (whether in a proceeding at law or in
equity).

       

      
        
          
          

        

        
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      4.3           Subsidiaries,
Capitalization and Ownership Interests

       

      Schedule 4.11
states the names of all of the Subsidiaries of the Borrower who have executed
this Agreement, other than AdvisorShares LLC (“AdvisorShares”) which is not a
party to this Agreement or any of the other Transaction
Documents.  Schedule 4.3 sets
forth, the number and class of equity securities and/or ownership, voting or
partnership interests issued and outstanding of Borrower and each of its
Subsidiaries and the record and beneficial owners thereof (including options,
warrants and other
rights to acquire any of the foregoing).  The outstanding equity
securities and/or ownership, voting or partnership interests of Borrower and its
Subsidiaries have been duly authorized and validly issued and are fully paid and
nonassessable, and each Person listed on Schedule 4.3
owns beneficially and of record all the equity securities and/or ownership,
voting or partnership interests it is listed as owning free and clear of any
Liens other than Liens created by the Transaction Documents.  Schedule 4.3
also lists the directors, members, managers and/or partners of Borrower and each
of its Subsidiaries.

       

      4.4           Agreements

       

      Except as set forth on Schedule 4.4 or as
otherwise disclosed in the Corporations’ SEC filings, none of the Corporations
is (i) a party to any judgment, order or decree or any agreement, document or
instrument, or subject to any restriction, which would affect its ability to
execute and deliver, or perform under, any Transaction Document or to pay the
Obligations, (ii) in default in the performance, observance or fulfillment of
any obligation, covenant or condition contained in any agreement, document or
instrument to which it is a party or to which any of its properties or assets
are subject, which default, if not remedied within any applicable grace or cure
period would reasonably be likely to have a Material Adverse Effect, nor is
there any event, fact, condition or circumstance which, with notice or passage
of time or both, would constitute or result in a conflict, breach, default or
event of default under, any of the foregoing which, if not remedied within any
applicable grace or cure period would reasonably be likely to have a Material
Adverse Effect; or (iii) a party or subject to any agreement, document or
instrument with respect to, or obligation to pay any, management or service fee
with respect to, the ownership, operation, leasing or performance of its
business.

       

      4.5           Litigation

       

      Except as
set forth on Schedule
4.5, there is no action, suit, proceeding or investigation pending or, to
Borrower’s knowledge, threatened against any of the Corporations that (i)
questions or could prevent the validity of any of the Transaction Documents or
the right of such Person to enter into any Transaction Document or to consummate
the transactions contemplated thereby, (ii) would reasonably be likely to be or
have, either individually or in the aggregate, any Material Adverse Effect, or
(iii) would reasonably be likely to result in any change of control or
other change in the current ownership, control or management of any of the
Corporations.  Except as set forth on Schedule 4.5, neither
Borrower nor any of the Guarantors is aware that there is any basis for the
foregoing.  None of the Corporations is a party or subject to any
order, writ, injunction, judgment or decree of any Governmental
Authority.  There is no action, suit, proceeding or investigation
initiated by any of the Corporations currently pending.  None of the
Corporations has any existing accrued and/or unpaid indebtedness or other
payment obligations to any Governmental Authority.

       

       

      
        
          
          

        

        
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      4.6           Compliance
with Law

       

      Each of the Corporations (i) is in
compliance with all laws, statutes, rules, regulations, ordinances and tariffs
of any Governmental Authority applicable to such Person and/or such Person’s
business, assets or operations, including, without limitation, ERISA, and (ii)
is not in violation of any order of any Governmental Authority or other board or
tribunal, except where noncompliance or violation could not reasonably be
expected to have a Material Adverse Effect.  There is no event, fact,
condition or circumstance which, with notice or passage of time, or both, would
constitute or result in any noncompliance with, or any violation of, any of the
foregoing, in each case except where noncompliance or violation could not
reasonably be expected to have a Material Adverse Effect.  None of the
Corporations has received any notice that such Corporation is not in compliance
in any respect with any of the requirements of any of the
foregoing.  None of the Corporations have (a) engaged in any
Prohibited Transactions as defined in Section 405 of ERISA and
Section 4965 of the Internal Revenue Code of 1985, as amended, and the
rules and regulations promulgated thereunder, (b) failed to meet any applicable
minimum funding requirements under Section 302 of ERISA in respect of its
plans and no funding requirements have been postponed or delayed, (c) any
knowledge of any amounts due but unpaid to the Pension Benefit Guaranty
Corporation, or of any event or occurrence which would cause the Pension Benefit
Guaranty Corporation to institute proceedings under Title IV of ERISA to
terminate any of the employee benefit plans, (d) any fiduciary responsibility
under ERISA for investments with respect to any plan existing for the benefit of
Persons other than its employees or former employees, or (e) withdrawn,
completely or partially, from any multi-employer pension plans so as to incur
liability under the MultiEmployer Pension Plan Amendments of 1980.

       

      4.7           Intellectual
Property

       

      Each of
the Corporations owns, licenses or utilizes, and is a party to, all patents,
patent applications, trademarks, trademark applications, service marks,
registered copyrights, copyright applications, copyrights, trade names, trade
secrets, software, licenses and other Intellectual Property, necessary to
operate the business of the Borrower and its Subsidiaries.

       

      4.8           Licenses
and Permits; Labor

       

      Each of the Corporations is in
compliance with and has all permits and Intellectual Property necessary or
required by applicable law or Governmental Authority for the operation of such
Corporation’s businesses.  All of the foregoing are in full force and
effect and not in known conflict with the rights of others.  None of
the Corporations is (i) in breach of or default under the provisions of any of
the foregoing, nor is there any event, fact, condition or circumstance which,
with notice or passage of time or both, would constitute or result in a
conflict, breach, default or event of default under, any of the foregoing which,
if not remedied within any applicable grace or cure period would reasonably be
likely to have a Material Adverse Effect, (ii) a party to or subject to any
agreement, instrument or restriction that is so unusual or burdensome that it
might have a Material Adverse Effect, and/or (iii) and has not been, involved in
any labor dispute, strike, walkout or union organization which would reasonably
be likely to have a Material Adverse Effect.

       

      
        
          
          

        

        
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      4.9           Disclosure

       

      No Transaction Document nor any other
agreement, document, certificate, or statement furnished to Lender by or on
behalf of Borrower or any of its Subsidiaries in connection with the
transactions contemplated by the Transaction Documents, nor any representation
or warranty made by any of the Corporations in any Transaction Document,
contains any untrue statement of material fact or omits to state any fact
necessary to make the statements therein not materially
misleading.  There is no fact known to Borrower which has not been
disclosed to Lender in writing which would reasonably be likely to have a
Material Adverse Effect.

       

      4.10           Insurance

       

      Each of Borrower and each of its
Subsidiaries has in full force and effect such insurance policies as are
customary in its industry.

       

      4.11           Names;
Location of Offices, Records and Collateral

       

      During
the preceding two years, neither the Borrower nor any of its Subsidiaries
has  conducted business under or used any name (whether corporate,
partnership or assumed) other than as shown on Schedule
4.11.  The Corporations, as applicable, is the sole owner of
all of its names listed on Schedule 4.11, and
any and all business done and invoices issued in such names are such Person’s
sales, business and invoices.  Each trade name of Borrower or, as
applicable, the Borrower’s Subsidiary represents a division or trading style of
Borrower or such Subsidiary.  Borrower and each of its Subsidiaries
maintains its places of business and chief executive offices only at the
locations set forth on Schedule 4.11, and
all Accounts of Borrower arise, originate and are located, and all of the
Collateral granted by Borrower and its Subsidiaries and all books and records in
connection therewith or in any way relating thereto or evidencing such
Collateral are located and shall only be located, in and at such locations of
Borrower and its Subsidiaries.  All of the Collateral is located only
in the continental United States.

       

      4.12           Non-Subordination

       

      The
Obligations are not subordinated in any way to any other obligations of Borrower
or any of its Subsidiaries or to the rights of any other Person.

       

      4.13           Accounts

       

      Unless
otherwise indicated in writing to Lender or on Schedule 4.13: (i)
each Account of Borrower and its Subsidiaries is genuine and in all respects
what it purports to be and is not evidenced by a judgment, (ii) each Account of
Borrower and its Subsidiaries arises out of a completed, bona fide sale and
delivery of goods or rendering of services by Borrower in the ordinary course of
business and in accordance with the terms and conditions of all purchase orders,
contracts, certifications, participations and other documents relating thereto
or forming a part of the contract between Borrower and the Account Debtor,
(iii)each Account of Borrower and its Subsidiaries together with Lender’s
security interest therein, is not and will not be in the future (by voluntary
act or omission by Borrower), subject to any offset, lien, deduction, defense,
dispute, counterclaim or other adverse condition, is absolutely owing to
Borrower or its Subsidiaries and is not contingent in any respect or for any
reason, (iv) there are no facts, events or occurrences which in any way impair
the validity or enforceability of any Account of Borrower or tend to reduce the
amount payable thereunder from the face amount of the claim or invoice and
statements delivered to Lender with respect thereto, (v) there are no
proceedings or actions which are threatened or pending against any Account
Debtor under any Account of Borrower which might result in any Material Adverse
Effect on the Borrower or any other Subsidiaries (vi) each Account of Borrower
has been billed and forwarded to the Account Debtor for payment in accordance
with applicable laws and is in compliance and conformance with any requisite
procedures, requirements and regulations governing payment by such Account
Debtor with respect to such Account, and, (vii) Borrower has obtained and
currently has all permits necessary in the generation of each Account of such
Person.

       

      
        
          
          

        

        
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      4.14           Survival

       

      Borrower and its Subsidiaries makes the
representations and warranties contained herein with the knowledge and intention
that Lender is relying and will rely thereon.  All such
representations and warranties will survive the execution and delivery of this
Agreement and the making of Advances under this Agreement.

       

      5.           Affirmative
Covenants

       

      Each of Borrower and its Subsidiaries
covenants and agrees that, until full performance and satisfaction, and
indefeasible payment and performance in full of all of the Obligations and
termination of this Agreement:

       

      5.1           Financial
Statements, Borrowing Report, Financial Reports and Other
Information

       

      (a)           Financial
Reports.  In addition to providing the Borrowing Report in
accordance with this Agreement, Borrower shall furnish the following reports to
Lender; provided,
however, if any such report described below is available on the SEC’s
EDGAR Filing System then Borrower need not deliver a hard copy of such document
to the Lender:

       

      (i) as soon as available and in any
event within one hundred and twenty (120) calendar days after the end of each
fiscal year of Borrower, audited annual consolidated financial statements of
Borrower and its Subsidiaries, including the notes thereto, consisting of a
consolidated and consolidating balance sheet at the end of such completed fiscal
year and the related consolidated and consolidating statements of income,
retained earnings, cash flows and owners’ equity for such completed fiscal year,
which financial statements shall be prepared and certified without qualification
by an independent certified public accounting firm accompanied by related
management letters, if available, and

       

      (ii) as soon as available and in any
event within forty-five (45) calendar days after the end of each calendar
quarter, unaudited quarterly consolidated financial statements of Borrower and
its Subsidiaries consisting of a balance sheet and statements of income,
retained earnings and cash flows as of  the end of the immediately
preceding calendar quarter.

       

      All such
financial statements shall be prepared in accordance with United States
generally accepted accounting principles (“GAAP”) consistently applied
with prior periods.  With each such financial statement, Borrower
shall also deliver a certificate of its chief financial officer stating that (A)
such person has reviewed the relevant terms of the Transaction Documents and the
condition of Borrower, and (B) no Default or Event of Default has occurred or is
continuing, or, if any of the foregoing has occurred or is continuing,
specifying the nature and status and period of existence thereof and the steps
taken or proposed to be taken with respect thereto.

       

      
        
          
          

        

        
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      (b)           Notices.  Borrower,
as applicable, shall promptly, and in any event within five (5) calendar
days after Borrower or any authorized officer of Borrower obtains knowledge
thereof, notify Lender in writing of (i) any pending or threatened litigation,
suit, investigation, arbitration, dispute resolution proceeding or
administrative proceeding brought or initiated against Borrower or any of its
Subsidiaries or otherwise affecting or involving or relating to Borrower or any
of its Subsidiaries or any of such Person’s property or assets to the extent (A)
the amount in controversy exceeds $10,000, or (B) to the extent any of the
foregoing seeks injunctive or declarative relief, (ii) any Default or Event of
Default, which notice shall specify the nature and status thereof, the period of
existence thereof and what action is proposed to be taken with respect thereto,
(iii) any other development, event, fact, circumstance or condition that
would reasonably be likely to have a Material Adverse Effect, in each case
describing the nature and status thereof and the action proposed to be taken
with respect thereto, or (iv) receipt of any notice or request from any
Governmental Authority regarding any liability or claim of
liability.

       

      5.2           Conduct
of Business and Maintenance of Existence and Assets

       

      Each of
the Corporations shall (i) conduct its business in accordance with good business
practices customary to the industry, (ii) engage principally in the same or
similar lines of business substantially as heretofore conducted, (iii) collect
its Accounts in the ordinary course of business, (iv) maintain and keep in full
force and effect its existence and all material Permits and qualifications to do
business and good standing in each jurisdiction in which the ownership or lease
of property or the nature of its business makes such Permits or qualification
necessary and in which failure to maintain such Permits or qualification could
reasonably be likely to have a Material Adverse Effect; and (v) remain in good
standing and maintain operations in all jurisdictions in which currently
located.

       

      5.3           Compliance
with Legal and Other Obligations

       

      Each of
the Corporations shall (i) comply with all laws, statutes, rules,
regulations, ordinances and tariffs of all Governmental Authorities applicable
to it or its business, assets or operations; (ii) pay all taxes, assessments,
fees, governmental charges, claims for labor, supplies, rent and all other
obligations or liabilities of any kind, except liabilities being contested in
good faith and against which adequate reserves have been established in
accordance with GAAP, (iii) perform in accordance with its terms each contract,
agreement or other arrangement to which it is a party or by which it or any of
the Collateral is bound, except where the failure to comply, pay or perform
could not reasonably be expected to have a Material Adverse Effect, and (iv)
maintain and comply with all Permits necessary to conduct its business and
comply with any new or additional requirements that may be imposed on it or its
business.

       

      5.4           Insurance

       

      Borrower
shall, and Borrower shall cause each of its Subsidiaries to maintain all
insurance as is normally required for similar businesses within the Borrower’s
and Subsidiaries’ industry, including Officers and Directors Insurance, General
Worker’s Compensation Insurance and General Liability Insurance.

       

      5.5           True
Books

       

      Borrower shall, and Borrower shall
cause its Subsidiaries to, (i) keep true, complete and accurate books of record
and account in accordance with commercially reasonable business practices in
which true and correct entries are made of all of its and their dealings and
transactions in all material respects; and (ii) set up and maintain on its books
such reserves as may be required by GAAP with respect to doubtful accounts and
all taxes, assessments, charges, levies and claims and with respect to its
business, and include such reserves in its quarterly as well as year end
financial statements.

       

       

      
        
          
          

        

        
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      5.5           Inspection;
Periodic Audits

       

      Lender has the right to audit the
Borrower once each calendar quarter and Borrower shall cause each of its
Subsidiaries to, permit the representatives of Lender from time to time during
normal business hours upon 10 Business Days prior notice, to (i) examine or
audit all of its books of account, records, reports and other papers, (ii) make
copies and extracts therefrom, and (iii) discuss its business, operations,
prospects, properties, assets, liabilities, condition and/or Accounts with its
officers and independent public accountants (and by this provision such officers
and accountants are authorized to discuss the foregoing). If the audit shows a
discrepancy of more than 10% that cannot be resolved after further review, then
the audit shall be paid by Borrower.  If the discrepancy is less than
10% that cannot be resolved after further review, then the cost of the audit
shall be paid by the Lender.

       

      5.6           Further
Assurances; Post Closing

       

      At Borrower’s cost and expense,
Borrower shall, and Borrower shall cause its Subsidiaries to, (i) take such
further actions, obtain such consents and approvals and duly execute and deliver
such further agreements, assignments, instructions or documents as Lender may
request with respect to the purposes, terms and conditions of the Transaction
Documents and the consummation of the transactions contemplated thereby, and
(ii) without limiting and notwithstanding any other provision of any
Transaction Document, execute and deliver, or cause to be executed and
delivered, such agreements and documents, and take or cause to be taken such
actions, and otherwise perform, observe and comply with such
obligations.

       

      5.7           Payment
of Indebtedness

       

      Borrower shall, and Borrower shall
cause its Subsidiaries to, pay, discharge or otherwise satisfy at or before
maturity (subject to applicable grace periods and, in the case of trade
payables, to ordinary course payment practices) all of its material obligations
and liabilities, except when the amount or validity thereof is being contested
in good faith by appropriate proceedings and such reserves as Lender may deem
proper and necessary in its sole discretion shall have been made.

       

      5.8           Intentionally
Omitted.

       

      5.9           Reservation
of Lenders Shares.

       

      Borrower shall reserve, out of its
authorized and unissued Common Stock, all of the Lenders Shares.

       

      5.10           Issuance
of Lenders Shares.

       

      (a)           Not
later than five Business Days after Lender gives a notice of conversion under
the Note, the Borrower shall issue to the Lender all of the applicable number of
Conversion Shares determined by dividing (a) the amount of the Note and all
accrued interest at the Interest Rate set forth in the Notice of Conversion, by
(b) the Conversion Price.

       

      (b)           Not
later than five Business Days after Lender gives a notice of exercise under the
Warrant, the Borrower shall issue to the Lender all of the applicable number of
Warrant Shares determined by dividing (a) the amount of the Warrant being
exercised as set forth in the Notice of Exercise, by (b) the Exercise
Price.

       

       

      
        
          
          

        

        
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      (c)           Not
later than five Business Days after the CD Release Fee becomes due and payable,
the Borrower shall issue to the Lender all of the applicable shares of Common
Stock payable to the Lender in respect of such CD Release Fee.

       

       

      
        	
                6.

              	
                Grant
      of Security Interest; Collateral

              


      

       

      (a)           To
secure the payment and performance of the Obligations, Borrower and each of the
Subsidiaries do hereby jointly and severally grant to the Lender a continuing
security interest in and lien upon, and pledge to Lender, all of its and their
respective right, title and interest in and to all of its Accounts (other than
the NHC-GAF Collateral) and all Intellectual Property, whether now owned or
hereafter acquired, including, without limitation, the following, which security
interest is intended to be a first priority security interest:

       

      (i)           all
intangible personal property, including without limitation all present and
future Accounts except for the NHC-GAF Collateral, securities, contract rights,
permits, general intangibles, Intellectual Property, chattel paper, documents,
instruments, deposit accounts, rights to the payment of money or other forms of
consideration of any kind and tax refunds now owned or hereafter acquired, and
all intangible and tangible personal property relating to or arising out of any
of the foregoing; and

       

      (ii)           any
and all additions and accessions to any of the foregoing, and any and all
replacements, products and proceeds of any of the foregoing,

       

      all of
the foregoing herein collectively referred to as the “Collateral.”  For
the avoidance of doubt, Collateral shall not include the NHC-GAF
Collateral.

       

      (b)           Borrower
and each of the Subsidiaries has the full right and power to grant to Lender a
perfected, first priority security interest and lien in the Collateral pursuant
to this Agreement.  Upon the execution and delivery of this Agreement,
and upon the filing of the necessary financing statements and/or appropriate
filings, as applicable, without any further action, Lender will have a good,
valid and first priority and perfected Lien and security interest in the
Collateral granted to Lender pursuant to this Agreement, subject to no transfer
or other restrictions or liens of any kind in favor of any other
Person.  No financing statement relating to any of the Collateral is
on file in any public office except those on behalf of Lender.  Except
for Schedule
6(b), Borrower represents and warrants to Lender that neither it nor any
of its Subsidiaries is a party to any agreement, document or instrument that
conflicts with this Section
6(b).

       

      (c)           Borrower
and each of its Subsidiaries hereby authorizes Lender, as Borrower’s agent and
attorney in fact to execute or file with the appropriate filing authorities in
Delaware, New York or other locations where the Collateral may be situated, such
financing statements under the Uniform Commercial Code as may be required to
perfect Lender’s interest in the Collateral.

       

      7           Closing.  The
closing in connection with this Agreement (the “Closing”) shall take place
simultaneous with the execution and delivery of this Agreement and the other
Transaction Documents (the “Closing Date”) at a mutually
agreeable place and time.  Alternatively, the Parties may, by mutual
consent, forego a formal closing.

       

       

      
        
          
          

        

        
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      8.           Term
of Agreement; Termination

       

      (a)           Term. This Agreement is
effective from the Effective Date and shall continue until April 30, 2010 (the
“Initial Term”), unless
terminated earlier as provided below.

       

      (b)           Renewal. After the Initial
Term, the Agreement shall, at the sole option of both the Lender and the
Borrower be extended for an additional period of one (1) year (a “Renewal Term”), unless
terminated earlier as provided below:

       

      (c)           Termination.  This
Agreement is subject to termination by the applicable Party set forth below,
after providing prior written notice to the other Parties upon the occurrence of
one or more of the following events:

       

      (i)           Mutual
Agreement.   Immediately following the written mutual
agreement among all of the Parties to terminate this Agreement; or

       

      (ii)           Default or Event of
Default.    By the Lender in the event that a Default
or Event of Default under this Agreement shall occur and be continuing, after
notice as provided in Section 9 below; or

       

      (iii)           Breach.   By
the Lender, on one hand, or the Borrower on the other hand, in the event of the
other Party or Parties breach of a material obligation under this Agreement or
any other Transaction Document; provided such breach is not the result of the
actions or inactions of the terminating Party or Parties and such breaching
Party or Parties has failed to cure such breach within thirty (30) days of its
receipt of written notice of such breach, except in the case of failure to pay
any undisputed amount due hereunder, which must be cured within ten (10)
Business Days of receipt of written notice of such nonpayment;

       

      (iv)           Insolvency
Event.    By the Lender, in the event the Borrower
suffers an Insolvency Event; or

       

      (v)           Material Adverse
Effect.  By the Lender or the Borrower, as applicable, in the
event of: (A) a Material Adverse Effect upon the other Party or any Subsidiary
of Borrower or a change in any governmental requirements, laws or regulations,
that, in the opinion of legal counsel for the terminating Party, renders the
continued performance of this Agreement either illegal or commercially
unreasonable; or (B) a Party has been directed by any regulatory authority to
cease or materially limit its performance of its obligations under this
Agreement; and, in each case, the Parties cannot find a legal and commercially
reasonable solution or alternative within a reasonable amount of time which
shall not be greater than one hundred twenty (120) days; or

       

      (vi)           Failure
to Make Advances.  By the Borrower, in the event that the Lender shall
fail to make any requested Advance within five (5) Business Days of the date
such Advance is approved, as contemplated by Section 2(l)
above.

       

      (d)           Survival of Obligations upon
Termination of this Agreement. Upon notice of termination of this
Agreement this Agreement and all Transaction Documents shall continue in full
force and effect and each Party shall continue to fulfill its obligations
hereunder and thereunder (except that no further Advances shall be required to
be made by the Lender hereunder or thereunder) until such time as all
Obligations under this Agreement and the other Transaction Documents shall have
been paid in full.  Upon any permitted termination of this Agreement
by the Lender, all Obligations under this Agreement and the other Transaction
Documents shall become immediately due and payable.

       

      
        
          
          

        

        
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      9.           Events
of Default

       

      The
occurrence and continuation of any one or more of the following shall constitute
an “Event of Default”:

       

      (a)           Borrower
and its Subsidiaries shall fail to pay any amount on the Obligations or provided
for in any Transaction Document when due (whether on any payment date, at
maturity, by reason of acceleration, by notice of intention to prepay, by
required prepayment or otherwise) and such default has not been cured for five
(5) Business Days after written notice of default is given to the Borrower by
the Lender;

       

      (b)           any
representation, statement or warranty made or deemed made by Borrower, any
Guarantor or any other Person (other than Lender) in any Transaction Document or
in any other certificate, document, report or opinion delivered in conjunction
with any Transaction Document to which it is a party, shall not be true and
correct in all material respects or shall have been false or misleading in any
material respect on the date when made or deemed to have been made (except to
the extent already qualified by materiality, dollar thresholds or Material
Adverse Effect qualifiers, in which case it shall be true and correct in all
respects and shall not be false or misleading in any respect);

       

      (c)           Borrower
or any Guarantor shall be in violation, breach or default of, or shall fail to
perform, observe or comply with any covenant, obligation or agreement set forth
in, any Transaction Document and such violation, breach, default or failure
shall not be cured within the applicable period set forth in the applicable
Transaction Document; there shall be a thirty (30) calendar day cure period
commencing from the earlier of (i) receipt by such Person of written notice
of such breach, default, violation or failure, and (ii) the time at which
such Person or any authorized officer thereof knew or became aware, or should
have known or been aware, of such failure, violation, breach or default, but no
Advances will be made during the cure period;

       

      (d)           (i)
any of the Transaction Documents ceases to be in full force and effect, or (ii)
Lender ceases to have a valid perfected first priority security interest in any
of the Collateral or any securities pledged to Lender pursuant to the
Transaction Documents;

       

       (e)           one
or more tax assessments, judgments or decrees is rendered against Borrower or
any Guarantor in an amount in excess of $25,000 individually or $100,000 in the
aggregate, which is/are not satisfied, stayed, vacated or discharged of record
within thirty (30) calendar days of being rendered;

       

      (f)           Any
of the Corporations shall be subject to any Insolvency Event;

       

      (g)           a
court of competent jurisdiction shall (A) enter an order, judgment or decree
appointing a custodian, receiver, trustee, liquidator or conservator of any of
the Corporations or the whole or any substantial part of any such Person’s
properties, which shall continue unstayed and in effect for a period of thirty
(30) calendar days, (B) shall approve a petition filed against any of the
Corporation seeking reorganization, liquidation or similar relief under the
Bankruptcy Act or any other applicable law or statute, which is not dismissed
within thirty (30) calendar days or, (C) under the provisions of the
Bankruptcy Act or other applicable law or statute, assume custody or control
of  any of the Corporations or of the whole or any substantial part of
any such Corporation’s properties, which is not irrevocably relinquished within
thirty (30) calendar days, or (ii) there is commenced
against  any of the Corporations any proceeding or petition seeking
reorganization, liquidation or similar relief under any Bankruptcy Act or any
other applicable law or statute and either (A) any such proceeding or petition
is not unconditionally dismissed within thirty (30) calendar days after the date
of commencement, or (B) any of the Corporations takes any action to indicate its
approval of or consent to any such proceeding or petition, but no Advances will
be made before any such order, judgment or decree described above is stayed,
vacated or discharged, any such petition described above is dismissed, or any
such custody or control described above is relinquished;

       

       

      
        
          
          

        

        
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      (h)           an
Event of Default occurs and is continuing under any other Transaction Document;
or,

       

      then, and
in any such event, notwithstanding any other provision of any Transaction
Document, if any such Event of Default shall occur and be continuing, the Lender
may, without notice or demand, do any of the following: (i) terminate its
obligations to make Advances hereunder and (ii) declare all or any of the
Advances, all interest thereon and all other Obligations to be due and payable
immediately, in each case without presentment, demand, protest or further notice
of any kind, all of which are hereby expressly waived by the
Corporations.

       

       

      10.           Rights
and Remedies

       

      


      (a)           In
addition to the acceleration provisions set forth in Section 9 above, upon the
occurrence and continuation of an Event of Default, Lender shall have the right
to exercise any and all rights, options and remedies provided for in the
Transaction Documents, under the UCC or at law or in equity, including, without
limitation, the right to (i) apply any Collateral to reduce the Obligations,
(ii) foreclose the liens created hereunder, (iii) realize upon, take
possession of and/or sell any Collateral or securities pledged with or without
judicial process, (iv) exercise all rights and powers with respect to the
Collateral as any of the Corporations might exercise, (v) collect and send
notices regarding the Collateral, with or without judicial process, (vi) by its
own means or with judicial assistance, enter any premises at which Collateral is
located, or render any of the foregoing unusable or dispose of the Collateral on
such premises without any liability for rent, storage, utilities, or other sums,
and Borrower shall not resist or interfere with such action, (vii) require that
all or any part of the Collateral be assembled and made available to Lender at
any place designated by Lender.  Notwithstanding any provision of any
Transaction Document, Lender, in its sole discretion, shall have the right, at
any time that Borrower fails to do so, and from time to time, without prior
notice, to: (i) obtain insurance covering any of the Collateral to the extent
required hereunder; (ii) pay for the performance of any of Obligations; (iii)
discharge taxes or Liens on any of the Collateral that are in violation of any
Loan document unless Borrower is in good faith with due diligence by appropriate
proceedings contesting those items; and (iv) pay for the maintenance and
preservation of the Collateral.  Such expenses and advances shall be
added to the Obligations until reimbursed to Lender and shall be secured by the
Collateral, and such payments by Lender shall not be construed as a waiver by
Lender of any Event of Default or any other rights or remedies of
Lender.

       

      (b)           Borrower and the Guarantors each agree
that notice received by it at least twenty (20) calendar days before the time of
any intended public sale, or the time after which any private sale or other
disposition of Collateral is to be made, shall be deemed to be reasonable notice
of such sale or other disposition.  If permitted by applicable law,
any perishable Collateral which threatens to speedily decline in value or which
is sold on a recognized market may be sold immediately by Lender without prior
notice to any of the Corporations.  At any sale or disposition of
Collateral, Lender may (to the extent permitted by applicable law) purchase all
or any part thereof free from any right of redemption by any of the Corporations
which right is hereby waived and released.  Each of Borrower and the
Guarantors covenants and agrees not to, and not to permit or cause any of the
Corporations to, interfere with or impose any obstacle to Lender’s exercise of
its rights and remedies with respect to the Collateral.  Lender, in
dealing with or disposing of the Collateral or any part thereof, shall not be
required to give priority or preference to any item of Collateral or otherwise
to marshal assets or to take possession or sell any Collateral with judicial
process.

       

       

      
        
          
          

        

        
          -17-

          
            

          

        

        
          
          

        

      

       

       

      (c)           Each
of the Borrower and the Guarantors hereby grants to Lender, after the occurrence
and during the continuance of an Event of Default, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation) to use,
assign, license or sublicense any Intellectual Property now owned or hereafter
acquired by any of the Corporations, and wherever the same may be located,
including in such license reasonable access as to all media in which any of the
licensed items may be recorded or stored and to all computer programs and used
for the compilation or printout thereof, in each case in connection with the
exercise of Lender’s remedies hereunder and under the other Transaction
Documents.  All proceeds received by Lender in connection with such
license will be used by Lender to satisfy the Obligations.

       

      (d)           In
addition to the acceleration provisions set forth in Section 10 above, upon the
occurrence and continuation of an Event of Default, Borrower shall take any
action that Lender may request in order to enable Lender to obtain and enjoy the
full rights and benefits granted to Lender hereunder.  Without
limiting the generality of the foregoing, upon the occurrence and continuation
of any Event of Default, at the request of Lender and at Borrower’s sole cost
and expense, each of the Corporations, as applicable, shall execute all
documents and take all other actions requested by Lender to enable Lender, its
designee, any receiver, trustee or similar official or any purchaser of all or
any part of the Collateral to obtain from any Person any required authority
necessary to operate the business of Borrower.

       

      (e)           In
addition to any other rights, options and remedies Lender has under the
Transaction Documents, the UCC, at law or in equity, all profits, fees,
revenues, income and other proceeds collected or received from collecting,
holding, managing, renting, selling, or otherwise disposing of all or any part
of the Collateral or any proceeds thereof upon exercise of its remedies
hereunder shall be applied in the following order of
priority:  (i) first, to the payment
of all costs and expenses of such collection, holding, operation, management,
sale, disposition or delivery with respect to maintaining the Collateral, and to
the payment of all sums which Lender may be required or may elect to pay, if
any, for taxes, assessments, insurance and other charges upon the Collateral or
any part thereof, and all other payments that Lender may be required or
authorized to make under any provision of this Agreement (including, without
limitation, in each such case, in-house documentation and diligence fees and
legal expenses, search, audit, recording, professional and filing fees and
expenses and reasonable attorneys' fees and all expenses, liabilities and
advances made or incurred in connection therewith); (ii) second, to the
payment of all Obligations as provided herein; (iii) third, to the payment
of any surplus then remaining to the Borrower, unless otherwise provided by law
or directed by a court of competent jurisdiction, provided that the
Corporations shall be liable for any deficiency if such proceeds are
insufficient to satisfy the Obligations or any of the other items referred to in
this section.

      


      (f)           Lender
shall have the right in its sole discretion to determine which rights, Liens
and/or remedies Lender may at any time pursue, relinquish, subordinate or
modify, and such determination will not in any way modify or affect any of
Lender’s rights, Liens or remedies under any Transaction Document, applicable
law or equity.  The enumeration of any rights and remedies in any
Transaction Document is not intended to be exhaustive, and all rights and
remedies of Lender described in any Transaction Document are cumulative and are
not alternative to or exclusive of any other rights or remedies which Lender
otherwise may have.  The partial or complete exercise of any right or
remedy shall not preclude any other further exercise of such or any other right
or remedy.

       

       

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

       

       

      11.           Confidentiality

       

      (a)           Confidential Information. The
term “Confidential Information” shall mean this Agreement and all proprietary
information, trade secrets, business methods and plans, marketing data,
financial reports, expense reports, plans and projections, cost structures,
technologies, processes, competitive positions and information, and any other
information, documents or data of any kind whatsoever which: (i) a Party (“Discloser”) discloses, in
writing, orally or visually, to the other Party (“Recipient”) or to which
Recipient obtains access in connection with the negotiation or performance of
this Agreement; and which (ii) relates: (A) to the Discloser; (B) in the case of
the Lender as Recipient, to Borrower and its customers and/or Affiliates; or (C)
in the case of Borrower as Recipient, to the Lender and its affiliates. Each
Party agrees to comply with all federal and state privacy laws.

       

      (b)           Disclosure to Employees, Agents and
others. Each of the Parties, as Recipient, hereby agrees on behalf of
itself and its employees, officers, affiliates and subcontractors that
Confidential Information will not be disclosed or made available to any person
for any reason whatsoever, other than on a “need to know basis” and then only:
(i) to the Parties’ employees and officers and professional advisors; (ii) to
subcontractors and other third Parties specifically permitted under this
Agreement, provided that all such persons are subject to a confidentiality
agreement that is no less restrictive than the confidentiality provisions of
this Agreement; (iii) to independent contractors, agents, and consultants hired
or engaged by the Parties, provided that all such persons are subject to a
confidentiality agreement that is no less restrictive than the confidentiality
provisions of this Agreement; or (iv) as required by law or as otherwise
permitted by this Agreement, either during the term of this Agreement or after
the termination of this Agreement.  Prior to any disclosure of
Confidential Information as required by law, the Recipient shall: (i) notify the
Discloser of any actual or threatened legal compulsion of disclosure, and any
actual legal obligation of disclosure immediately upon becoming so obligated;
and (ii) cooperate with the Discloser’s reasonable, lawful efforts to resist,
limit or delay disclosure.

       

      (c)           Materials. Upon the
termination or expiration of this Agreement, or at any time upon the request of
a Party, the other Party shall return all Confidential Information in the
possession of such Party or in the possession of any third Party over which such
Party has or may exercise control.

       

      (d)           Exceptions. The obligations of
confidentiality in this Agreement shall not apply to any information which a
Party rightfully has in its possession before disclosed to it by the other
Party, information which a Party independently develops, information which is or
becomes known to the public other than by breach of this Agreement or
information rightfully received by a Party from a third Party without the
obligation of confidentiality.

       

      (e)           Publicity.  Except
as provided in this section, the Parties agree that none of them, nor any of
their respective directors, officers, employees or agents shall disclose any of
the terms or provisions of this Agreement to any other Party.  No
Party shall use another Party’s name or trademark or refer to such other Party
directly or indirectly in any media release, public announcement or public
disclosure relating to this Agreement or its subject matter, in any promotional
or marketing materials, lists or business presentations, without consent from
the other Party for each such use or release in accordance with this section.
Any media releases, public announcements, public disclosures and promotional or
marketing materials issued or made by any Party relating to this Agreement or
the subject matter of this Agreement (each, a “Disclosure”), shall be subject
to review and approval, which approval shall not be unreasonably withheld, by
the other Party prior to release; provided, however, that this prior approval
requirement shall not apply to: (i) announcements intended solely for internal
distribution; or (ii) disclosures to the extent required to meet legal or
regulatory requirements beyond the reasonable control of the disclosing
Party.  Such approval shall be deemed to be given if a Party does not
object to a proposed Disclosure within ten (10) Business Days of receiving
it.  Nothing contained in this Agreement shall prohibit any Party from
making any disclosure, which its legal counsel reasonably deems necessary to
comply with applicable law.

       

       

      
        
          
          

        

        
          -19-

          
            

          

        

        
          
          

        

      

       

      (f)           Remedies. In the event of a
breach or the threatened breach of the provisions of this Section 11, the
Discloser shall be entitled to injunctive relief restraining the Recipient from
such breach or threatened breach and to enforce the provisions herein in any
state or federal court located in the state in which the Recipient maintains its
principal place of business.  Nothing herein shall be construed as
prohibiting the Discloser from pursuing any other remedy against the Recipient
on account of such breach or threatened breach.

       

      (g)           Survival. The terms of this
Section 11 shall survive any termination or expiration of this
Agreement.

       

      12.           Lender Representations and
Warranties. Lender hereby represents and warrants to Borrower
that:

       

      (a)           Lender
is duly organized and in good standing in the State of Nevada.  Lender
has all requisite power and authority to conduct its business as currently being
conducted.

       

      (b)           Lender
has all requisite power and authority to execute and deliver this Agreement and
all other documents in connection with this Agreement, and to carry out the
terms of this Agreement, and has taken all action required on its part necessary
for the execution, delivery and performance of this Agreement.  This
Agreement is the legal, valid and binding obligation of the Lender, enforceable
in accordance with its terms, except as its enforceability may be limited by
bankruptcy laws and general principles of equity.

       

      (c)           This
Agreement does not contain any untrue statement of material fact or omits to
state a material fact necessary to make the statements herein
misleading.

       

      (d)           Lender
is in material compliance with all applicable federal, state and local
laws.

       

      (e)           The
execution, delivery and performance of this Agreement do not and will not
conflict with or constitute a material default under any other obligation of the
Lender.

       

      (f)           Lender
is in a financial position to bear the economic risk of the Investment and
withstand a complete loss of the Funds.

       

      (g)           Lender
is taking the position and believes that the Investment is not a security for
the purposes of US Federal Securities Laws and corresponding state blue sky
laws. This fact notwithstanding, the Lender represents to the Borrower that the
Lender is an accredited investor as that term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933. Further, at no time
will the Lender transfer any portion of the Investment to any person or entity
that is not an accredited investor.

       

      (h)           Lender
recognizes that the Investment involves a high degree of risk. Lender is aware
that short term loans can have a high rate of default and that the Lender may
not receive the return or any return on its Investment that it hopes to
receive.

       

      (i)           The
Investment is suitable for the Lender based upon its investment objectives and
financial needs and the Lender has adequate net worth and means for providing
for its financial needs and contingencies and has no need for liquidity of
investment with respect to the Investment.

       

       

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

      

       

       

      (j)           Lender
has obtained, to the extend the Lender deems necessary, the Lender’s own
professional advice with respect to the risks inherent in the Investment and the
suitability of the Investment in light of the Lender’s financial condition and
investment needs.

       

      (k)           Lender
has been furnished with or has had access to such information as a sophisticated
investor would customarily require to evaluate the merits and risks of the
Investment together such additional information as the Lender considers
necessary to verify the accuracy of the information supplied. Lender further
represents that the Lender has had an opportunity to ask questions of Borrower’s
management as the Lender has deemed necessary or desirable. Lender further
represents and acknowledges that the Lender has been solely responsible for the
Lender’s own: (i) due diligence investigation of Borrower, its management and
its assets; (ii) analysis of the merits and risks of the Investment; and (iii)
analysis of the terms of the Investment, and that in taking any action or
performing any role relative to the arranging of the Investment, the Lender has
acted solely in the Lender’s own interest.

       

      (l)           Lender
is an “Accredited Investor” as that term is defined in Rule 501(a) promulgated
under the Securities Act of 1933, as amended (the “Act”). Further, the Lender
further represents that it is a sophisticated investor, can bear the economic
risk of this Investment for an indefinite period of time, and has such knowledge
and experience in financial and business matters so as to be capable of
evaluating the merits and risks of this Investment. Lender further represents
that it is the position of Borrower that this Investment is not a security
within the meaning of the Federal and State securities laws however, if it is
determined that this Investment is a security for the purposes of such laws, the
Investment has been issued pursuant to exemptions from registration under the
applicable securities laws.

       

      (m)           Lender
has purchased the GAF Note from GAF and as a result is the sole beneficiary of
the GAF Note. Lender further represents that no other Person has any rights,
title and interest to the GAF Note.

       

      13.           Covenants of Lender. Lender
shall:

       

      (a)           maintain
its corporate existence in good standing; and

       

      (b)           notify
Borrower within five (5) days of: (i) any lawsuit or proceedings which, if
successful, would materially affect Lender’s ability to make Advances under this
Agreement; and (ii) any agreement to merge, consolidate, or sell its assets to a
third Party.

       

      (c)           cancel
the GAF Note and incorporate it into the Prior Advances and evidenced by the
Note executed by Borrower under this Agreement.

       

      14.           Indemnification

       

      (a)           By the Borrower and its
Subsidiaries.   The Borrower and each of the Subsidiaries
hereby jointly and severally agrees to indemnifies and hold harmless (i) the
Lender; (ii) the Lender’s parents, Subsidiaries, and Affiliates; and (iii) each
of the respective officers, directors, employees, representatives, agents, and
attorneys of the Persons identified in clauses (i), (ii) and (iii) above
(collectively, the “Lender
Indemnified Parties”) from and against any and all losses, liabilities,
damages, penalties, demands, judgments, settlements, costs, and expenses,
including without limitation those costs and expenses relating to any
investigation or any defense or prosecution of any proceedings, and reasonable
fees and expenses of attorneys, (collectively, “Lender Losses”) suffered or
incurred by the Lender Indemnified Parties to the extent arising out of or
resulting from any claims, suits, arbitrations, or actions instituted by a third
Party based on any of the following:

       

       

      
        
          
          

        

        
          -21-

          
            

          

        

        
          
          

        

      

       

      (i)           the
breach in any material respect of any representation or warranty made by the
Borrower and contained in this Agreement or in any other Transaction Document;
and

       

      (ii)           the
failure of Borrower and the Guarantors to pay and perform the Obligations under
this Agreement or any other Transaction Document;

       

      (iii)           the
failure of Borrower and the Guarantors to perform any other covenant and
agreement contained in this Agreement or in any other Transaction Documents;
or

       

      (iv)           the
burglary, fraud, theft, other criminal acts, gross negligence, willful
misconduct of the Borrower and any of the Guarantors or any of their employees,
agents or Affiliates.

       

      (b)           By Lender. Lender hereby
indemnifies and agrees to hold harmless (i) the Borrower and the Guarantors;
(ii) the parent, Subsidiaries, and Affiliates of such Persons; and (iii) each of
the respective officers, directors, employees, representatives, agents, and
attorneys of the Persons described in clauses (i) – (iii) above (collectively,
the “Borrower Indemnified
Parties”) from and against any and all losses, liabilities, damages,
penalties, demands, judgments, settlements, costs, and expenses, including
without limitation those costs and expenses relating to any investigation or any
defense or prosecution of any proceedings, and reasonable fees and expenses of
attorneys, (collectively, “Borrower Losses”) suffered or
incurred by the Borrower Indemnified Parties to the extent arising out of or
resulting from any claims, suits, arbitrations, or actions instituted by a third
Party based on any of the following:

       

      (i)           The
inaccuracy in any material respect of any representation or warranty made by the
Lender and contained in this Agreement; and

       

      (ii)           Lender’s,
its employees’ or its agents’ burglary, fraud, theft, other criminal acts, gross
negligence, willful misconduct or breach of this Agreement.

       

       (c)           General. If any claim or
demand is asserted against any Lender Indemnified Party or Borrower Indemnified
Party (individually or collectively, the “Indemnified Party”) by any
person who is not a Party to this Agreement in respect of which the Indemnified
Party may be entitled to indemnification under the provisions of this Section
14, written notice of such claim or demand shall promptly be given to the Party
(the “Indemnifying
Party”) from whom indemnification may be sought.  The
Indemnifying Party shall have the right, by notifying the Indemnified Party
within ten (10) days of its receipt of the notice of the claim or demand, to
assume the entire control (subject to the right of the Indemnified Party to
participate at the Indemnified Party’s expense and with counsel of the
Indemnified Party’s choice) of the defense, compromise or settlement of the
matter, including, at the Indemnifying Party’s expense, employment of counsel of
the Indemnifying Party’s choice reasonably acceptable to the other
Party.  If the Indemnifying Party gives notice to any Indemnified
Party that the Indemnifying Party will assume control of the defense, compromise
or settlement of the matter, the Indemnifying Party will be deemed to have
waived all defenses to the claims for indemnification by the Indemnified Party
with respect to that matter. Any damages to the Indemnified Party caused by a
failure of the Indemnifying Party to defend, compromise or settle a claim or
demand in a reasonable and expeditious manner, after the Indemnifying Party has
given notice that it will assume control of the defense, compromise or
settlement of the matter, shall be included in the damages for which the
Indemnifying Party shall be obligated to indemnify the Indemnified
Party.

       

      (d)           Survival. The provisions of
this clause 14 shall survive termination or expiration of this Agreement until
the first anniversary of the Maturity Date.

       

       

      
        
          
          

        

        
          -22-

          
            

          

        

        
          
          

        

      

       

       

      15.           Limitations
of Liability

       

      (a)           No Special Damages. Neither
Party shall be liable to the other for any special, indirect, incidental,
consequential, punitive or exemplary damages, including, but not limited to,
lost profits, under any circumstances regardless of the theory of recovery even
if such Party has knowledge of the possibility of such damages.

       

      (b)           Disclaimer of Warranties.
Except as otherwise expressly provided herein, the Parties specifically disclaim
all warranties of any kind, express or implied, arising out of or related to
this Agreement, including without limitation, any warranty of merchantability or
fitness for a particular purpose, each of which is hereby excluded by agreement
of the Parties.

       

      16.           Notices. All notices, requests
and approvals required by this Agreement shall be in writing addressed/directed
to the other Party at the address and facsimile numbers set forth below, or at
such other address of which the notifying Party hereafter receives notice in
conformity with this section.  All such notices, requests, and
approvals shall be deemed given upon the earlier of receipt of facsimile
transmission during normal business hours or actual receipt
thereof.  All such notices, requests and approvals shall be addressed
to the attention of:

       

      If to
Lender:

       

      IP Global Investors Ltd.

      499 North Canon

      Beverly Hills, CA 90210

      Attn: Meghann McEnroe, CEO

      Facsimile: (310) 526-6575

       

      If to
Borrower:

       

      Fund.com Inc.

      14 Wall Street, 20th
Floor

      New York, New York 10005

      Attn: Gregory Webster, CEO

      Facsimile: (212) ___-____

      


      17.           Miscellaneous

       

      (a)           Waiver.  The failure
of either Party to insist upon or enforce performance by the other Party of any
provision of this Agreement or to exercise any right under this Agreement will
not be construed as a waiver or relinquishment to any extent of such Party’s
right to assert or rely upon any such provision or right in that or any other
instance; rather the same will be and remain in full force and
effect.

       

      (b)           Force
Majeure.  Neither Party shall be liable for, or considered in
breach of or default under this Agreement on account of, any delay or failure to
perform as required by the Agreement (except with respect to payment
obligations) as a result of any causes or conditions which are beyond such
Party’s reasonable control and which such Party is unable to overcome by the
exercise of reasonable diligence.  If any force majeure event occurs
(which shall include, without limitation, acts of God, telecommunications,
Internet or network failure, results of vandalism or computer hacking, fire,
explosion, storm or other natural occurrences, any conflicting order, direction,
action or request of the United States government (including, without
limitation, state and local governments) or of any regulatory department,
agency, commission, court, bureau, corporation or other instrumentality, or of
any civil or military authority, national emergencies, insurrections, riots,
wars, strikes, lockouts, work stoppages or other such labor difficulties), the
affected Party will give prompt written notice to the other Party and will use
commercially reasonable efforts to minimize the impact of such
event.  Notwithstanding the foregoing, the Parties' obligations to one
another shall be excused and/or postponed during and only for the duration of
the applicable force majeure event and shall resume as soon as practicable after
the force majeure event has ended.

       

      
        
          
          

        

        
          -23-

          
            

          

        

        
          
          

        

      

       

       

      (c)           Relationship of the
Parties.  The Parties to the Agreement are independent
contractors.  Neither Party is an agent, representative, partner or
employee of the other Party.  Neither Party will have any right,
power, or authority to enter into any agreement on behalf of, or incur any
obligation or liability of, or to otherwise bind the other Party.  The
Agreement will not be interpreted or construed to create an association, agency,
joint venture, or partnership between the Parties or to impose any liability
attributable to such a relationship upon either Party.

       

      (d)           Survival.  In
addition to any provisions which specifically provide for survival or for
continued obligations following the termination of this Agreement, the following
shall survive the termination of this Agreement:  all representations
and warranties; all provisions for payment of any amounts due hereunder,
including but not limited to, expenses or compensation; all provisions for
confidentiality; all provisions for indemnification, until the first anniversary
of the Maturity Date; all provisions for insurance coverage; and all provisions
for arbitration or the resolution of disputes.

       

      (e)           Construction;
Severability.   Each Party acknowledges that the
provisions of this Agreement were negotiated to reflect an informed, voluntary
allocation between them of all the risks (both known and unknown) associated
with the transactions contemplated hereunder.  Further, all provisions
are inserted conditionally on their being valid in law.  In the event
that any provision of the Agreement conflicts with the law under which the
Agreement is to be construed or if any such provision is held invalid or
unenforceable by a court with jurisdiction over the Parties to the
Agreement:  (i) such provision will be restated to reflect as nearly
as possible the original intentions of the Parties in accordance with applicable
law; and (ii) the remaining terms, provisions, covenants, and restrictions of
the Agreement will remain in full force and effect.

       

      (f)           Remedies.   Except
as otherwise specified, the rights and remedies granted to a Party under the
Agreement are cumulative and in addition to, not in lieu of, any other rights
and remedies which the Party may possess at law or in equity.

       

      (g)           Entire
Agreement.  This Agreement and the other Transaction Documents
constitutes the entire and only agreements among the Parties and supersedes any
and all prior agreements, whether written, oral, express, or implied, of the
Parties with respect to the transactions set forth herein and therein. Further,
the Lender must rely on its own examination of Borrower, the proposed Advances
and the terms of this Agreement, including the merits and risks involved in
making a decision to proceed with the transactions contemplated hereby and
thereby. Lender, to the extent permitted by applicable law, agrees not to make a
claim or bring any action and waives and releases any and all claims against
Borrower or Borrower related to any projections furnished by Borrower to the
Lender, which represent only the good faith estimate by Borrower of future
financial performance and / or opportunities and should not be considered as
facts or certainties.

       

      (h)           Amendment.  No
change, amendment, or modification of any provision of the Agreement will be
valid unless set forth in a written instrument signed by all of the
Parties.

       

      (i)           Assignment.  No
Party to the Agreement shall sell, transfer, or assign the Agreement, the other
Transaction Documents or the rights or obligations hereunder or thereunder
without the prior written consent of the other Party or Parties.

       

       

      
        
          
          

        

        
          -24-

          
            

          

        

        
          
          

        

      

       

      (j)           Headings.  The
captions and headings used in the Agreement are inserted for convenience only
and will not affect the meaning or interpretation of the Agreement.

       

      (k)           Counterparts.  The
Agreement may be executed in counterparts, each of which will be deemed an
original and all of which together will constitute one and the same
document.

       

      (l)           Governing Law; Jurisdiction and
Venue.  This Agreement will be interpreted, construed, and
enforced in all respects in accordance with the laws of the State of New York,
without respect to its conflict of laws principles.

       

      (m)           Expenses.   Each
of the Parties will bear their own costs and expenses in connection with the
drafting, negotiation and execution of this Agreement and the other Transaction
Documents; provided,
that on the Closing Date, the Borrower will, in connection with the initial
Advance drawn under this Agreement, pay to Hodgson Russ LLP, as Lender’s counsel
the sum of $25,000 in payment of such counsel’s legal fees incurred on behalf of
the Lender.

       

      (n)           Fees and Costs.  In
the event that any of the Parties hereto institutes any action, suit or
proceeding to enforce the provisions of this Agreement, or for breach thereof,
or to declare the rights of the Parties with respect thereto, the prevailing
Party shall be entitled to recover, in addition to damages, injunctive or other
relief, reasonable costs and expenses including, without limitation, costs and
reasonable attorneys’ fees incurred in the furtherance of such action, suit or
proceeding.

       

      (o)           Contract
Interpretation.  For purposes of contract interpretation,
including resolution of any ambiguity, the Parties acknowledge that this
Agreement was prepared jointly by their respective attorneys and therefore the
terms of the Agreement should not be construed against either Party as the
drafting Party.

       

      (p)           Facsimile
Signature.   This Agreement and any Transaction Document
may be executed by pdf or other facsimile transmission and such signatures
shall, for all purposes, hereunder and thereunder, be treated as ribbon
originals.

       

      [balance
of this page intentionally left blank - signature page follows]

       

       

      
        
          
          

        

        
          -25-

          
            

          

        

        
          
          

        

      

       

       

      IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the Effective Date set forth
above.

      


      Borrower:

      


       FUND.COM INC.

      


      


      By: /s/   Gregory Webster                

      Gregory Webster, Chief Executive
Officer

      


      Subsidiaries:

      


      FUND.COM
TECHNOLOGIES INC.

      


      


      By:
/s/   Gregory Webster               

      Gregory Webster, Chief Executive
Officer

      


      FUND.COM
MANAGED PRODUCTS INC.

      


      


      By:
/s/   Gregory Webster                

      Gregory Webster, Chief Executive
Officer

      


      FUND.COM
CAPITAL INC.

      


      


      By:
/s/   Gregory Webster                

      Gregory Webster, Chief Executive
Officer

      


      Lender:

      


      IP
GLOBAL INVESTORS LTD.

      


      


      By:/s/  Meghann McEnroe                

      Meghann McEnroe, Chief Executive
Officer

      


      


      
        
          
          

        

        
          -26-

          
            

          

        

        
          
          

        

      

      


      EXHIBIT
A

      FUND.COM
INC.

      14 Wall
Street,

      20th
floor

      New York,
New York 10005

       

      
        Borrowing
Report

      

      
        
        

      

      ____________,
20__

      IP Global
Inc.

      ______________________

      ______________________

      Attn:  _________________

      


      
        	
                 
      

              	
                Gentlemen:

              


      

       

      Reference is made to the revolving
credit loan agreement, dated April __, 2009 (the “Loan Agreement”),
between Fund.Com Inc. (“Borrower”) and IP
Global Inc. (“Lender”).   Unless
otherwise defined herein, all capitalized terms used in this Borrowing Report
shall have the same meaning as is defined in the Loan Agreement.

       

      Pursuant to Section 2 of the Loan
Agreement, the Borrower does hereby request an Advance of
$____________.  In such connection, the Borrower does hereby
represent, warrant and covenant to the Lender, as follows:

       

      1.           No
Event of Default or other event which (with the passage of time, the giving of
notice or both) would constitute an Event of Default under the Loan Agreement
exists or would exist by virtue of the Advance requested hereby.

       

      2.           The
Borrower will, after giving effect to the Advance requested hereby, continue to
have Availability of not less than $100.00 under the Loan
Agreement.

       

      3.           The
date by which the Borrower needs the Funds under this Advance is
______________.

       

      4.           The
purpose and use of the Advance is as follows:

       

      5.           The
name and addresses of the creditor(s) of the Borrower that will be paid with
Funds from the Advance are as follows:

       

      6.           Please
wire the Advance to the Person(s) listed below and in accordance with the wire
instructions listed below.

       

       

      Very
truly yours,

       

       

      FUND.COM
INC.

       

      By:________________________

                 Name


                 Title:

      
        
        

      

      
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