Exhibit 10.1 Amended and Restated Financing Agreement


    
      

    


    Exhibit
      10.1

    


    


    AMENDED
      AND RESTATED FINANCING AGREEMENT

    


    


    


    The
      CIT Group/Business Credit, Inc.

    (as
      Lender)

    and

    Command
      Security Corporation

    (as
      Borrower)

    


    Dated:
      As of March 22,
      2006

    


     

    


     

     

     

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    Table
      of Contents

     

                                                                                           
      Page

    


    SECTION
      1.      Definitions                                                                    1

     

    SECTION
      2.      Conditions
      Precedent                                                              10

     

    SECTION
      3.      Revolving
      Loans                                                                 14

     

    SECTION
      4.      Intentionally
      Omitted.                                                              
  17

     

    SECTION
      5.      Letters
      of Credit.                                                                 
17

     

    SECTION
      6.      Collateral                                                                      
      17

     

    SECTION
      7.      Representations,
      Warranties and Covenants                                                
20

     

    SECTION
      8.      Interest,
      Fees and Expenses                                                           26

     

    SECTION
      9.      Powers                                                                       28

     

    SECTION
      10.    Events
      of
      Default and Remedies                                                        29

     

    SECTION
      11.    Termination                                                                   32

     

    SECTION
      12.    Miscellaneous                                                                  33

     

     

    SCHEDULES

    


    Schedule
      1 -    Collateral
      Information

    


    


     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    THE
      CIT GROUP/BUSINESS CREDIT, INC.,
      a New
      York corporation, with offices located at 1211 Avenue of the Americas, New
      York,
      New York 10036 (hereinafter “CIT”),
      is
      pleased to confirm the terms and conditions under which CIT shall make revolving
      loans and other financial accommodations to COMMAND
      SECURITY CORPORATION,
      a New
      York corporation with a principal place of business at Route 55, Lexington
      Park,
      LaGrangeville, New York (herein the “Company”).

     

    Reference
      is hereby made to that certain Financing Agreement, dated December 12, 2003
      (as
      such agreement may have been amended, supplemented, modified or otherwise
      changed from time to time, the “Existing
      Financing Agreement”),
      by
      and between the Company and CIT, pursuant to which CIT agreed to make revolving
      loans and other extensions of credit to the Company. CIT and the Company wish
      to
      amend the Existing Financing Agreement in certain respects and, in that
      connection, to restate the Existing Financing Agreement in its entirety, with
      (i) any loans outstanding under the Existing Financing Agreement on the
      Restatement Effective Date (as hereinafter defined), continuing and remaining
      outstanding as Revolving Loans hereunder after the Restatement Effective Date
      and (ii) on and after the Restatement Effective Date, all references in any
      Loan
      Document to the Existing Financing Agreement being references to the Existing
      Financing Agreement, as amended and restated hereby. Accordingly, the Company
      and CIT hereby agree that the Existing Financing Agreement be amended and
      restated in its entirety as follows:

     

    SECTION
      1. Definitions

     

    “Accounts”
      shall
      mean all of the Company’s now existing and future: (a) accounts (as defined in
      the UCC), and any and all other receivables (whether or not specifically listed
      on schedules furnished to CIT), including, without limitation, the Gemini
      Receivables and TBV Receivables and all accounts created by, or arising from,
      all of the Company’s sales, leases, rentals of goods or renditions of services
      to its customers, including but not limited to, those accounts arising under
      any
      of the Company’s trade names or styles, or through any of the Company’s
      divisions; (b) any and all instruments, documents, chattel paper (including
      electronic chattel paper) (all as defined in the UCC); (c) unpaid seller’s or
      lessor’s rights (including rescission, replevin, reclamation, repossession and
      stoppage in transit) relating to the foregoing or arising therefrom; (d) rights
      to any goods represented by any of the foregoing, including rights to returned,
      reclaimed or repossessed goods; (e) reserves and credit balances arising in
      connection with or pursuant hereto; (f) guarantees, supporting obligations,
      payment intangibles and letter of credit rights (all as defined in the UCC);
      (g)
      insurance policies or rights relating to any of the foregoing; (h) general
      intangibles pertaining to any and all of the foregoing (including all rights
      to
      payment, including those arising in connection with bank and non-bank credit
      cards), and including books and records and any electronic media and software
      thereto; (i) notes, deposits or property of account debtors securing the
      obligations of any such account debtors to the Company; and (j) cash and non
      cash proceeds (as defined in the UCC) of any and all of the
      foregoing.

     

    “Adjustment
      Date”
      shall
      have the meaning provided for in the definition of “Applicable Margin” in
Section
      1
      of this
      Financing Agreement.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    “Administrative
      Management Fee”
      shall
      mean the sum of $25,000.00 which shall be paid to CIT in accordance with
Section
      8,
      paragraph 8.5 hereof to offset the expenses and costs (excluding Out-of-Pocket
      Expenses and auditor fees) of CIT in connection with administration, record
      keeping, analyzing and evaluating the Collateral.

     

    “Anniversary
      Date”
      shall
      mean the date occurring four (4) years from the Original Closing Date and the
      same date in every year thereafter.

     

    “Applicable
      Revolving Line of Credit Fee Margin”
shall
      mean, for any month, the Applicable Line of Credit Fee Margin set forth below
      based on the average daily principal balance of Revolving Loans and the average
      daily undrawn amount
      of
      Letters of Credit outstanding during such month:

    


    
      	
               

              Average
                Daily Principal Balance of Revolving Loans and Average Daily
                Undrawn Amount
                of Letters of Credit Outstanding

            	
               

              Applicable
                Line of Credit Fee Margin

               

              (on
                a per annum basis for the number of days in such month)

            
	
               

              Greater
                than $5,000,000

            	
               

              0.00%

            
	
               

              Equal
                to or less than $5,000,000

            	
               

              0.375%

            


    

     

     

    “Applicable
      Margin”
      shall
      mean, from January 1, 2006 until the initial Adjustment Date (as defined below)
      with respect to the Revolving Loans, (a) 0% for Chase Bank Rate Loans and (b)
      2.50% for LIBOR Loans. On each Adjustment Date following the initial Adjustment
      Date, the Applicable Margins for Chase Bank Rate Loans and LIBOR Loans shall
      be
      adjusted retroactively
      based on
      the EBITDA of the Company for the most recently completed Fiscal Quarter, to
      the
      following amounts:

     

    


    
      	
               

              EBITDA

            	
               

              Chase
                Bank Rate Loans

            	
               

              LIBOR
                Loans

            
	
               

              Greater
                than $500,000

            	
               

              0.00%

            	
               

              2.50%

            
	
               

              Equal
                to or less than $500,000

            	
               

              0.25%

            	
               

              2.75%

            


    

    


    All
      adjustments to the Applicable Margin shall, in each case, (x) be adjusted after
      receipt by CIT of the Company’s financial statements for the Fiscal Quarter
      ending March 31, 2006 and after receipt by CIT of the Company’s financial
      statements for each Fiscal Quarter ended thereafter which are required to be
      delivered to CIT in accordance with the provisions of Section
      7.8(b)
      of this
      Financing Agreement (each, an “Adjustment
      Date”),
      and
      (y) shall take effect retroactively on the Adjustment Date immediately preceding
      the date of CIT’s receipt of such

     


    
      
        
        

      

      
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    financial
      statements. Notwithstanding the foregoing: (a) no reduction in Applicable
      Margins shall occur if a Default or an Event of Default shall have occurred
      and
      be continuing on such Adjustment Date or the date of CIT’s receipt of the
      financial statements on which such reduction is to be based and (b) if the
      Company fails to deliver the financial statements on which any reduction in
      the
      Applicable Margin is to be based within five (5) days of the due date for such
      statements set forth in Section
      7.8(b),
      then
      effective as of the Adjustment Date immediately preceding the due date for
      such
      financial statements, the Applicable Margin shall increase to the highest margin
      set forth in the table above until the delivery of such financial
      statements.

     

    “Availability” shall
      mean, at any time, the amount by which (a) the Borrowing Base of the Company
      at
      such time exceeds (b) the sum at such time of (i) the principal amount of all
      outstanding Revolving Loans, plus
      (ii) the
      undrawn amount of all outstanding Letters of Credit.

     

    “Availability
      Reserve”
      shall
      mean the sum of: (a) (i) three (3) months rental payments or similar charges
      for
      any of the Company’s leased premises or other Collateral locations for which the
      Company has not delivered to CIT a landlord’s waiver in form and substance
      reasonably satisfactory to CIT, plus (ii) three (3) months estimated payments
      plus any other fees or charges owing by the Company to any applicable
      warehousemen or third party processor (as determined by CIT in its reasonable
      business judgment), provided that any of the foregoing amounts shall be adjusted
      from time to time hereafter upon: (x) delivery to CIT of any such acceptable
      waiver, (y) the opening or closing of a Collateral location and/or (z) any
      change in the amount of rental, storage or processor payments or similar
      charges; (b) any reserve which CIT may reasonably require from time to time
      pursuant to this Financing Agreement (including, without limitation, with
      respect to accrued and unpaid Payroll Items); (c) a
      monthly
      reserve for accrued and unpaid interest on LIBOR Loans having an Interest Period
      of more than 30 days; and
      (d)
      such other reserves as CIT deems necessary in its reasonable judgment as a
      result of (i) negative forecasts and/or trends in the Company’s business,
      industry, prospects, profits, operations or financial condition or (ii) other
      issues, circumstances or facts that could otherwise negatively impact the
      Company, its business, prospects, profits, operations, industry, financial
      condition or assets. For purposes hereof “Payroll Items” shall mean the sum of
      the following: (A) the book overdraft with respect to the Company’s payroll
      account, currently number 032267 held at JPMorgan Chase Bank, plus (B) the
      book
      overdraft with respect to the Company’s non-employee of record payroll account,
      currently number 032275 held at JPMorgan Chase Bank, plus (C) the Company’s
      gross payroll due from the week ending the previous Sunday, plus (D) the
      Company’s gross non-employee of record payroll due from the week ending the
      previous Sunday, plus (v) FICA, Medicare and other taxes at the current
      prevailing rate calculated on the total of clauses (C) and (D). Any Revolving
      Loans made by CIT to fund Payroll Items will reduce, dollar-for dollar, any
      Availability Reserve being maintained in respect thereof.

     

    “Borrowing
      Base”
      shall
      mean (without duplication) (a) the sum of (i) eighty-five percent (85%) of
      the
      Company’s aggregate outstanding Eligible Accounts Receivable; provided,
      however,
      that if
      the then Dilution Percentage is greater than five percent (5%), then the rate
      of
      advance herein shall be reduced by the amount of such excess Dilution
      Percentage, plus
      (ii) the
      lesser of (A) 75% of the Company’s aggregate outstanding Eligible Unbilled
      Accounts Receivable or (B) $2,500,000.00, plus
      (iii)
      Delta Receivables of up to (but not exceeding) $750,000, less
      (b) any
      applicable Availability Reserves. For purposes of calculating the

     


    
      
        
        

      

      
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    Borrowing
      Base, no Trade Accounts Receivable of the Company may constitute at the same
      time both Eligible Accounts Receivable and Eligible Unbilled Accounts
      Receivable.

     

    “Business
      Day”
      shall
      mean any day on which CIT and JPMorgan Chase Bank are open for
      business.

     

    “Capital
      Expenditures”
      shall
      mean, for any period, the aggregate expenditures of the Company during such
      period on account of, property, plant, equipment or similar fixed assets that
      in
      conformity with GAAP, are required to be reflected in the balance sheet of
      the
      Company.

     

    “Capital
      Improvements”
      shall
      mean operating Equipment and facilities (other than land) acquired or installed
      for use in the Company’s business operations.

     

    “Capital
      Lease”
      shall
      mean any lease of property (whether real, personal or mixed) which, in
      conformity with GAAP, is accounted for as a capital lease or a Capital
      Expenditure in the balance sheet of the Company.

     

    “Chase
      Bank Rate”
      shall
      mean the rate of interest per annum announced by JPMorgan Chase Bank from time
      to time as its prime rate in effect at its principal office in New York City.
      (The prime rate is not intended to be the lowest rate of interest charged by
      JPMorgan Chase Bank to its borrowers.)

     

    “Chase
      Bank Rate Loans”
      shall
      mean any loans or advances pursuant to this Financing Agreement made or
      maintained at a rate of interest based upon the Chase Bank Rate.

     

    “CIT
      Commitment Letter”
      shall
      mean the Commitment Letter, dated November 19, 2003, issued by CIT to, and
      accepted by, the Company.

     

    “Collateral”
      shall
      mean all present and future Accounts, Equipment, Documents of Title, General
      Intangibles, Real Estate, the TBV Service Agreement, the TBV Receivables,
      Inventory, the Gemini Service Agreement, the Gemini Receivables, Pledged Stock
      of the Company’s subsidiaries and Other Collateral.

     

    “Collection
      Days”
      shall
      mean two (2) Business Days to provide for the deposit, clearance and collection
      of checks or other instruments representing the proceeds of Collateral, the
      amount of which has been credited to the Company’s Revolving Loan Account, and
      for which interest may be charged on the aggregate amount of such deposits,
      at
      the rate provided for in Paragraph 8.1 of Section
      8
      of this
      Financing Agreement.

     

    “Consolidated
      Balance Sheet”
      shall
      mean a consolidated or compiled, as applicable, balance sheet for the Company
      and its consolidated subsidiaries, eliminating all intercompany transactions
      and
      prepared in accordance with GAAP.

     

    “Consolidating
      Balance Sheet”
      shall
      mean a Consolidated Balance Sheet plus individual balance sheets for the Company
      and its consolidated subsidiaries, showing all eliminations of intercompany
      transactions, including a balance sheet for the Company exclusively, all
      prepared in accordance with GAAP.

     


    
      
        
        

      

      
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    “Copyrights”
      shall
      mean all present and hereafter acquired copyrights, copyright registrations,
      recordings, applications, designs, styles, licenses, marks, prints and labels
      bearing any of the foregoing, goodwill, any and all general intangibles,
      intellectual property and rights pertaining thereto, and all cash and non-cash
      proceeds thereof.

     

    “Default”
      shall
      mean any event specified in Section
      10
      hereof,
      whether or not any requirement for the giving of notice, the lapse of time,
      or
      both, or any other condition, event or act, has been satisfied.

     

    “Default
      Rate of Interest” shall
      mean a rate of interest equal to two percent (2%) per annum
      greater
      than the interest rate accruing on the Obligations pursuant to Section
      8.1
      hereof,
      which CIT shall be entitled to charge the Company on all Obligations due CIT
      by
      the Company, as further set forth in Paragraph 10.2 of Section
      10
      of this
      Financing Agreement.

     

    “Delta
      Receivables”
      shall
      mean the Company’s
      Accounts which arise from the rendition of services to Delta Airlines in
      accordance with agreements entered into with Delta Airlines on or after Delta
      Airline’s commencement of cases under Chapter 11 of Title 11 of the United
      States Code in the United States Bankruptcy Court,
      so long
      as such Accounts do not remain
      unpaid for more than thirty (30) days from invoice date.

     

    “Depository
      Accounts”
      shall
      mean the collection accounts, which are subject to CIT’s instructions, as
      specified in Paragraph 3.4 of Section
      3
      of this
      Financing Agreement.

     

    “Dilution
      Percentage”
      shall
      mean, as of any time of calculation, the then sum of the Borrower’s credits,
      claims, allowances, discounts, write-offs, contras, off-sets and deductions
      divided by the then sum of gross sales of the Company, all calculated on a
      rolling ninety (90) day average, as determined and calculated by CIT from time
      to time.

     

    “Documentation
      Fee”
      shall
      mean CIT’s standard fees relating to any and all modifications, waivers,
      releases, amendments or additional collateral with respect to this Financing
      Agreement, the Collateral and/or the Obligations.

     

    “Documents
      of Title”
      shall
      mean all present and future documents (as defined in the UCC), and any and
      all
      warehouse receipts, bills of lading, shipping documents, chattel paper,
      instruments and similar documents, all whether negotiable or not and all goods
      relating thereto and all cash and non cash proceeds of the
      foregoing.

     

    “Early
      Termination Date”
      shall
      mean the date on which the Company terminates this Financing Agreement or the
      Revolving Line of Credit which date is prior to an Anniversary
      Date.

     

    “Early
      Termination Fee”
      shall:
      (a) mean the fee CIT is entitled to charge the Company in the event the Company
      terminates the Revolving Line of Credit or this Financing Agreement on a date
      prior to an Anniversary Date; and (b) be determined by multiplying the Revolving
      Line of Credit by (x) one percent (1%) if the Early Termination Date occurs
      after two (2) years from the Original Closing Date but on or before three (3)
      years from the Original Closing Date and (y) one-half percent (0.5%) if the
      Early Termination Date occurs after three (3) years from the Original Closing
      Date but prior to an Anniversary Date.

     


    
      
        
        

      

      
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    “EBITDA”
      shall
      mean, in any period, all earnings of the Company for said period before
      all interest, tax obligations and depreciation and amortization expense of
      the
      Company
      for said
      period, determined in accordance with GAAP on a consistent basis with the latest
      audited financial statements of the Company, but excluding the effect of
      extraordinary or non-reoccurring gains or losses for such period.

     

    “Eligible
      Accounts Receivable”
      shall
      mean the gross amount of the Company’s Trade Accounts Receivable, other than
      Eligible Unbilled Accounts Receivable, that are subject to a valid, exclusive,
      first priority and fully perfected security interest in favor of CIT, which
      conform to the warranties contained herein and which, at all times, continue
      to
      be acceptable to CIT in the exercise of its reasonable judgment, less, without
      duplication, the sum of: (a) any returns, discounts, claims, credits and
      allowances of any nature (whether issued, owing, granted, claimed or
      outstanding), and (b) reserves for any such Trade Accounts Receivable that
      arise
      from or are subject to or include: (i) sales to the United States of America,
      any state or other governmental entity or to any agency, department or division
      thereof, except for any such sales as to which the Company has complied with
      the
      Assignment of Claims Act of 1940 or any other applicable statute, rules or
      regulation, to CIT’s satisfaction in the exercise of its reasonable business
      judgment; (ii) foreign sales, other than sales which otherwise comply with
      all
      of the other criteria for eligibility hereunder and are (x) secured by letters
      of credit (in form and substance satisfactory to CIT) issued or confirmed by,
      and payable at, banks having a place of business in the United States of
      America, or (y) to customers residing in Canada (iii) Accounts that remain
      unpaid more than ninety (90) days from invoice date or sixty (60) days from
      due
      date; (iv) contra accounts; (v) sales to any subsidiary, or to any company
      affiliated with the Company or TBV or Gemini in any way; (vi) bill and hold
      (deferred shipment) or consignment sales; (vii) sales to any customer which
      is:
      (A) insolvent, (B) the debtor in any bankruptcy, insolvency, arrangement,
      reorganization, receivership or similar proceedings under any federal or state
      law (unless otherwise approved by CIT), (C) negotiating, or has called a meeting
      of its creditors for purposes of negotiating, a compromise of its debts, or
      (D)
      financially unacceptable to CIT or has a credit rating unacceptable to CIT;
      (viii) all sales to any customer if fifty percent (50%) or more of the aggregate
      dollar amount of all outstanding invoices to such customer are unpaid more
      than
      ninety (90) days from invoice date; (ix) sales to any customer and/or its
      affiliates to the extent such sales exceed at any one time twenty percent (20%)
      or more of all Eligible Accounts Receivable; (x) pre-billed receivables and
      receivables arising from progress billing; (xi) an amount representing,
      historically, returns, discounts, claims, credits, allowances and applicable
      terms; (xii) sales not payable in United States currency; (xiii) any other
      reasons deemed necessary by CIT in its reasonable judgment, including without
      limitation those
      which are customary either in the commercial finance industry or in the lending
      practices of CIT;
      (xiv)
      with respect to the TBV Receivables, the TBV Service Agreement and the TBV
      Assignment Agreement shall be in full force and effect, provided that if the
      TBV
      Service Agreement is terminated the TBV Receivables then being serviced by
      Command at the time of such termination shall nevertheless continue to
      constitute Eligible Accounts Receivables if, and to the extent, such TBV
      Receivables comply with the other criteria of this definition;
      (xv)
      Trade Accounts Receivable of any airline
      to the
      extent such Trade
      Accounts Receivable
      exceed
      at any one time twelve percent (12%) or more of all Eligible Accounts
      Receivable;
      and
(xvi)
      with respect to Gemini Receivables, the Gemini Service Agreement and Gemini
      Assignment shall be in full force and effect provided that amounts deemed
      eligible hereunder shall not exceed $300,000 in the aggregate at any time.
      Without
      limiting
      the foregoing, all Trade Accounts

     


    
      
        
        

      

      
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    Receivable
      of any airline or the United States of America,
      any
      state or other governmental entity, agency, department or division thereof
      shall
      be acceptable to CIT in the exercise of its reasonable credit
      judgment.

     

    “Eligible
      Unbilled Accounts Receivable”
      shall
      mean the gross amount of the Company’s Trade Accounts Receivable (other than TBV
      Receivables and the Gemini Receivables) that constitute Eligible Accounts
      Receivable except that such Trade Accounts Receivable are either (a) evidenced
      only by a preliminary invoice, not delivered to the relevant customer, or (b)
      are reflected on the Company’s Billing Cumulative Report, in each case in
      sufficient detail and with back-up that is acceptable to CIT. None of the
      Company’s Trade Accounts Receivable shall constitute Eligible Unbilled Accounts
      Receivable on any date more than forty (40) days past the applicable date
      service was rendered in respect thereof. All Eligible Unbilled Accounts
      Receivable of any airline or the United States of America, any state or other
      governmental entity, agency, department or division thereof shall be acceptable
      to CIT in the exercise of its reasonable credit judgment.

     

    “Equipment”
      shall
      mean all present and hereafter acquired equipment (as defined in the UCC)
      including, without limitation, all machinery, equipment, furnishings and
      fixtures, and all additions, substitutions and replacements thereof, wherever
      located, together with all attachments, components, parts, equipment and
      accessories installed thereon or affixed thereto and all proceeds thereof of
      whatever sort.

     

    “ERISA”
      shall
      mean the Employee Retirement Income Security Act or 1974, as amended from time
      to time and the rules and regulations promulgated thereunder from time to
      time.

     

    “Eurocurrency
      Reserve Requirements”
      shall
      mean for any day, as applied to a LIBOR Loan, the aggregate (without
      duplication) of the maximum rates of reserve requirement (expressed as a decimal
      fraction) in effect with respect to CIT and/or any present or future lender
      or
      participant on such day (including, without limitation, basic, supplemental,
      marginal and emergency reserves under Regulation D or any other applicable
      regulations of the Board of Governors of the Federal Reserve System or other
      governmental authority having jurisdiction with respect thereto, as now and
      from
      time to time in effect, dealing with reserve requirements prescribed for
      Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
      Regulation D of such Board) maintained by CIT and/or any such lenders or
      participants (such rates to be adjusted to the nearest one-sixteenth of one
      percent (1/16 of 1%) or, if there is not a nearest one-sixteenth of one percent
      (1/16 of 1%), to the next higher one sixteenth of one percent (1/16 of
      1%).

     

    “Event(s)
      of Default”
      shall
      have the meaning provided for in Section
      10
      of this
      Financing Agreement.

     

    “Executive
      Officers”
      shall
      mean the Chairman, President, Chief Executive Officer, Chief Operating Officer,
      Chief Financial Officer, Executive Vice President(s), Senior Vice President(s),
      Treasurer, Controller and Secretary of the Company.

     

    “Existing
      Financing Agreement”
      shall
      have the meaning given to such term in the preliminary statements
      hereof.


    
      
        
        

      

      
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    “Financing
      Agreement”
      shall
      mean this Amended and Restated Financing Agreement, by and between CIT and
      the
      Company.

    


    “Fiscal
      Quarter”
      shall
      mean, with respect to the Company, each three (3) month period ending on March
      31, June 30, September 30, and December 31 of each Fiscal Year.

     

    “Fiscal
      Year”
      shall
      mean each twelve (12) month period commencing on April 1 of each year and ending
      on the following March 31.

     

    “Fixed
      Charge Coverage Ratio”
      shall
      mean the ratio for the relevant period of (a) EBITDA to (b) the sum of (i)
      all
      federal, state and local tax obligations of the Company, plus (ii) interest
      obligations paid or due by the Company, plus (iii) all payment of indebtedness
      of the Company, plus (iv) all unfinanced Capital Expenditures of the Company,
      plus (v) dividends paid pursuant to Paragraph 7.9(f) of Section
      7.

     

    “GAAP”
      shall
      mean generally accepted accounting principles in the United States of America
      as
      in effect from time to time and for the period as to which such accounting
      principles are to apply, provided that in the event the Company modifies its
      accounting principles and procedures as applied as of the Original Closing
      Date,
      the Company shall provide such statements of reconciliation as shall be in
      form
      and substance acceptable to CIT.

     

    “GCM
      Group”
      shall
      mean GCM Security Partners LLC and all of its partners, members and/or equity
      holders.

    


    “Gemini”
      shall
      mean Gemini Security Services, LLC, a New Jersey limited liability
      company.

    


    “Gemini
      Assignment Agreement”
      shall
      mean the Assignment of Service Agreement Non-Employer of Record, dated February
      4, 2005, among Gemini, the Company and CIT.

    


    “Gemini
      Receivables”
      shall
      mean the Trade Accounts Receivable of Gemini that are subject to the Gemini
      Service Agreement and to which the Company has a valid, first priority security
      interest which it has, in turn, assigned to CIT.

    


    “Gemini
      Service Agreement”
      shall
      mean the Service Agreement Non-Employer of Record, dated February 4, 2005,
      as
      amended, among the Company, Gemini and William Casey.

    


    “General
      Intangibles”
      shall
      mean all present and hereafter acquired general intangibles (as defined in
      the
      UCC), and shall include, without limitation, all present and future right,
      title
      and interest in and to: (a) all Trademarks, tradenames, corporate names,
      business names, logos and any other designs or sources of business identities,
      (b) Patents, together with any improvements on said Patents, utility models,
      industrial models, and designs, (c) Copyrights, (d) trade secrets, (e) licenses,
      permits and franchises, (f) all applications with respect to the foregoing,
      (g)
      all right, title and interest in and to any and all extensions and renewals,
      (h)
      goodwill with respect to any of the foregoing, (i) any other forms of similar
      intellectual property, (j) all customer lists, distribution agreements, supply
      agreements, blueprints, indemnification rights and tax refunds, together with
      all monies and claims for monies now or hereafter due and payable in connection
      with any of the foregoing or otherwise, and all cash and non cash
      proceeds


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    thereof,
      including, without limitation, the proceeds or royalties of any licensing
      agreements between the Company and any licensee of any of the Company’s General
      Intangibles.

    


    “Guaranties”
      shall
      mean the guaranty documents executed and delivered by the Guarantors
      guaranteeing the Obligations.

    


    “Guarantors”
      shall
      mean each subsidiary, from time to time, of the Company.

     

    “Indebtedness”
      shall
      mean, without duplication, all liabilities, contingent or otherwise, which
      are
      any of the following: (a) obligations in respect of borrowed money or for the
      deferred purchase price of property, services or assets, or (b) lease
      obligations which, in accordance with GAAP, have been, or which should be
      capitalized.

     

    “Insurance
      Proceeds”
      shall
      mean proceeds or payments from an insurance carrier with respect to any loss,
      casualty or damage to Collateral.

     

    “Interest
      Period”
      shall
      mean, subject to availability: (a) with respect to an initial request by the
      Company for a LIBOR Loan or the conversion of a Chase Bank Rate Loan to a LIBOR
      Loan, at the option of the Company a one-month, two-month or three-month period
      commencing on the borrowing or conversion date with respect to such LIBOR Loan
      and ending one month, two months or three months thereafter, as applicable;
      and
      (b) with respect to any continuation of a LIBOR Loan, at the option of the
      Company, a one-month, two-month or three-month period commencing on the last
      day
      of the immediately preceding Interest Period applicable to such LIBOR Loan
      and
      ending one month, two months or three months thereafter, as applicable;
provided
      that (i)
      if any Interest Period would otherwise end on a day which is not a Working
      Day,
      such Interest Period shall be extended to the next succeeding Working Day,
      and
      (ii) if any Interest Period begins on the last Working Day of any month, or
      on a
      day for which there is no numerically corresponding day in the month in which
      such Interest Period ends, such Interest Period shall end on the last Working
      Day of the month in which such Interest Period ends.

     

    “Inventory”
      shall
      mean all of the Company’s present and hereafter acquired inventory (as defined
      in the UCC) and including, without limitation, all merchandise, inventory and
      goods, and all additions, substitutions and replacements thereof, wherever
      located, together with all goods and materials used or usable in manufacturing,
      processing, packaging or shipping same in all stages of production from raw
      materials through work-in-process to finished goods and all proceeds thereof
      of
      whatever sort.

     

    “Investment
      Property”
      shall
      mean all now owned and hereafter acquired investment property (as defined in
      the
      UCC) and all proceeds thereof.

     

    “Issuing
      Bank”
      shall
      mean any bank issuing a Letter of Credit for the Company.

    


    “Letter
      of Credit Guaranty”
      shall
      mean any guaranty or similar agreement delivered by CIT to an Issuing Bank
      of
      the Company’s reimbursement obligation under such Issuing Bank's reimbursement
      agreement, application for letter of credit or other like
      document.


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    “Letter
      of Credit Guaranty Fee”
      shall
      mean the fee that CIT may charge the Company under Section
      8.1(d)
      of this
      Financing Agreement for issuing a Letter of Credit Guaranty or otherwise
      assisting the Company in obtaining Letters of Credit.

    


    “Letter
      of Credit Sub-Line”
      shall
      mean the commitment of CIT to assist the Company in obtaining Letters of Credit
      in an aggregate amount of up to $1,500,000.

    


    “Letters
      of Credit”
      shall
      mean all letters of credit issued for or on behalf of the Company with the
      assistance of CIT by an Issuing Bank in accordance with Section
      5
      hereof.

    


    “LIBOR”
      shall
      mean, for any Interest Period and subject to availability, a rate of interest
      equal to the quotient obtained by dividing: (a) at CIT’s election, (i) LIBOR for
      such Interest Period as quoted to CIT by JPMorgan Chase Bank (or any successor
      thereof) two (2) Business Days prior to the first day of such Interest Period,
      or (ii) the rate of interest determined by CIT at which deposits in Dollars
      are
      offered for such Interest Period as presented on Telerate Systems at page 3750
      as of 11:00 a.m. (London time) two (2) Business Days prior to the first day
      of
      such Interest Period (provided
      that if
      two or more offered rates are presented on Telerate Systems at page 3750 for
      such Interest Period, the arithmetic mean of all such rates, as determined
      by
      CIT, will be the rate elected); by
      (b) a
      number equal to 1.00 minus the Eurocurrency Reserve Requirements, if any, in
      effect on the day which is two (2) Business Days prior to the beginning of
      such
      Interest Period.

    


    “LIBOR
      Interest Payment Date”
      shall
      mean, with respect to any LIBOR Loan, the last day of the Interest Period for
      such LIBOR Loan. 

    


    “LIBOR
      Lending Office”
      shall
      mean the office of JPMorgan Chase Bank, or any successor thereof, maintained
      at
      270 Park Avenue, New York, New York 10017.

    


    “LIBOR
      Loan”
      shall
      mean any loan made pursuant to this Financing Agreement that bears interest
      based upon LIBOR.

    


    “Loan
      Documents”
      shall
      mean this Financing Agreement, the other closing documents and any other
      ancillary loan and security agreements executed from time to time in connection
      with this Financing Agreement, all as may be renewed, amended, extended,
      increased or supplemented from time to time.

     

    “Obligations”
      shall
      mean all loans, advances and extensions of credit made or to be made by CIT
      to
      the Company or to others for the Company’s account (including, without
      limitation, all Revolving Loans and all obligations under Letters of Credit);
      any and all indebtedness and obligations which may at any time be owing by
      the
      Company to CIT arising under any Loan Document, whether now in existence or
      incurred by the Company from time to time hereafter; whether principal,
      interest, fees, costs, expenses or otherwise; whether secured by pledge, lien
      upon or security interest in any of the Company’s Collateral, assets or property
      or the assets or property of any other person, firm, entity or corporation;
      whether such indebtedness is absolute or contingent, joint or several, matured
      or unmatured, direct or indirect and whether the Company is liable to CIT for
      such indebtedness as principal, surety, endorser, guarantor or otherwise.
      Obligations shall also include indebtedness owing to CIT by the Company under
      any Loan Document or under any other agreement or arrangement now or hereafter
      entered into between the Company and CIT; indebtedness or obligations incurred
      by, or imposed on, CIT as a result of environmental claims arising out of the
      Company’s operations, premises or waste

     


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    


    disposal
      practices or sites in accordance with paragraph 7.7 hereof; the Company’s
      liability to CIT as maker or endorser of any promissory note or other instrument
      for the payment of money; the Company’s liability to CIT under any instrument of
      guaranty or indemnity, or arising under any guaranty, endorsement or undertaking
      which CIT may make or issue to others for the Company’s account, including any
      accommodations extended by CIT with respect to applications for Letters of
      Credit, CIT’s acceptance of drafts or CIT’s endorsement of notes or other
      instruments for the Company’s account and benefit; and any and all indebtedness,
      liabilities or obligations of every kind, nature and description owing by the
      Company to any affiliate of CIT.

     

    “Operating
      Leases”
      shall
      mean all leases of property (whether real, personal or mixed) other than Capital
      Leases.

     

    “Original
      Closing Date”
      shall
      mean December 12, 2003, which is the date that the Existing Financing Agreement
      was executed by CIT and the Company.

     

    “Other
      Collateral”
      shall
      mean all now owned and hereafter acquired lockbox, blocked account and any
      other
      deposit accounts maintained with any bank or financial institutions into which
      the proceeds of Collateral are or may be deposited; all other deposit accounts
      and all Investment Property; all cash and other monies and property in the
      possession or control of CIT; all books, records, ledger cards, disks and
      related data processing software at any time evidencing or containing
      information relating to any of the Collateral described herein or otherwise
      necessary or helpful in the collection thereof or realization thereon; and
      all
      cash and non-cash proceeds of the foregoing.

     

    “Out-of-Pocket-Expenses”
      shall
      mean all of CIT’s present and future expenses incurred relative to this
      Financing Agreement or any other Loan Documents, whether incurred heretofore
      or
      hereafter, which expenses shall include, without being limited to: (a) the
      cost
      of record searches, (b) all costs and expenses incurred by CIT in opening bank
      accounts, depositing checks, receiving and transferring funds, and wire transfer
      charges, any charges imposed on CIT due to returned items and “insufficient
      funds” of deposited checks and CIT’s standard fees relating thereto, (c)
any
      amounts paid by, incurred by or charged to CIT by an Issuing Bank under any
      Letter of Credit or the reimbursement agreement relating thereto, any
      application for a Letter of Credit, Letter of Credit Guaranty or other like
      document which pertains directly to Letters of Credit, and CIT’s standard fees
      relating to the Letters of Credit and any drafts thereunder,
      and (d)
      travel, lodging and similar expenses of CIT’s personnel in connection with
      inspecting and monitoring the Collateral from time to time hereunder, any
      applicable counsel fees and disbursements, fees and taxes relative to the filing
      of financing statements, and all expenses, costs and fees set forth in Paragraph
      10.3 of Section
      10
      of this
      Financing Agreement.

     

    “Overadvance
      Rate”
      shall
      mean a rate equal to one-half of one percent (1/2%) per annum in excess of
      the
      applicable contract rate of interest determined in accordance with Section
      8,
      Paragraph 8.1(a) of this Financing Agreement.

     

    “Overadvances” shall
      mean, at any time, the amount by which (a) the sum at such time of the principal
      amount of all outstanding Revolving Loans plus
      the
      undrawn amount of all outstanding Letters of Credit exceeds (b) the Borrowing
      Base at such time.

     


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    “Patents”
      shall
      mean all of the Company’s present and hereafter acquired patents, patent
      applications, registrations, any reissues or renewals thereof, licenses, any
      inventions and improvements claimed thereunder, and all general intangible,
      intellectual property and patent rights with respect thereto of the Company,
      and
      all income, royalties, cash and non-cash proceeds thereof.

     

    “Permitted
      Encumbrances”
      shall
      mean: (a) liens identified in Schedule 1 hereto on specific items of Equipment
      and other liens expressly permitted, or consented to in writing by CIT; (b)
      Purchase Money Liens; (c) liens of local or state authorities for franchise
      or
      other like Taxes, provided that the aggregate amounts of such liens shall not
      exceed $100,000.00 in the aggregate at any one time; (d) statutory liens of
      landlords and liens of carriers, warehousemen, bailees, mechanics, materialmen
      and other like liens imposed by law, created in the ordinary course of business
      and for amounts not yet due (or which are being contested in good faith, by
      appropriate proceedings or other appropriate actions which are sufficient to
      prevent imminent foreclosure of such liens) and with respect to which adequate
      reserves or other appropriate provisions are being maintained by the Company
      in
      accordance with GAAP; (e) deposits made (and the liens thereon) in the ordinary
      course of business of the Company (including, without limitation, security
      deposits for leases, indemnity bonds, surety bonds and appeal bonds) in
      connection with workers’ compensation, unemployment insurance and other types of
      social security benefits or to secure the performance of tenders, bids,
      contracts (other than for the repayment or guarantee of borrowed money or
      purchase money obligations), statutory obligations and other similar obligations
      arising as a result of progress payments under government contracts; (f)
      easements (including, without limitation, reciprocal easement agreements and
      utility agreements), encroachments, minor defects or irregularities in title,
      variation and other restrictions, charges or encumbrances (whether or not
      recorded) affecting the Real Estate, if applicable, and which in the aggregate
      (A) do not materially interfere with the occupation, use or enjoyment by the
      Company of its business or property so encumbered and (B) in the reasonable
      business judgment of CIT do not materially and adversely affect the value of
      such Real Estate; and (g) liens granted CIT by the Company (including the liens
      granted in favor of the Company pursuant to the TBV Service Agreement and/or
      the
      Gemini Service Agreement that have been assigned by the Company to CIT); (h)
      liens of judgment creditors provided such liens do not exceed, in the aggregate,
      at any time, $50,000.00 (other than liens bonded or insured to the reasonable
      satisfaction of CIT); and (i) tax liens which are not yet due and payable or
      which are being diligently contested in good faith by the Company by appropriate
      proceedings, and which liens are not (x) filed on any public records, (y) other
      than with respect to Real Estate, senior to the liens of CIT or (z) for Taxes
      due the United States of America or any state thereof having similar priority
      statutes, as further set forth in paragraph 7.6 hereof.

     

    “Permitted
      Indebtedness”
      shall
      mean: (a) current Indebtedness maturing in less than one year and incurred
      in
      the ordinary course of business for raw materials, supplies, equipment,
      services, Taxes or labor; (b) the Indebtedness secured by Purchase Money Liens;
      (c) Indebtedness arising under this Financing Agreement; (d) deferred Taxes
      and
      other expenses incurred in the ordinary course of business; and (e) other
      Indebtedness existing on the date of execution of the Existing Financing
      Agreement and listed in the most recent financial statement delivered to CIT
      or
      otherwise disclosed to CIT in writing prior to the Original Closing
      Date.

     


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    “Purchase
      Money Liens”
      shall
      mean liens on any item of Equipment acquired after the date of this Financing
      Agreement provided that (a) each such lien shall attach only to the property
      to
      be acquired, (b) a description of the Equipment so acquired is furnished to
      CIT,
      and (c) the debt incurred in connection with such acquisitions shall not exceed,
      in the aggregate, $100,000.00 in any Fiscal Year.

     

    “Real
      Estate”
      shall
      mean the Company’s fee and/or leasehold interests in real property.

     

    “Regulatory
      Change”
      shall
      mean any change after the Restatement Effective Date in United States federal,
      state or foreign law or regulation (including, without limitation, Regulation
      D
      of the Board of Governors of the Federal Reserve System), or the adoption or
      making after the Restatement Effective Date of any interpretation, directive
      or
      request applying to a class of lenders including CIT of or under any United
      States federal, state or foreign law or regulation, in each case whether or
      not
      having the force of law and whether or not failure to comply therewith would
      be
      unlawful.

     

    “Restatement
      Effective Date”
      shall
      mean the date on which this Financing Agreement is executed by the parties
      hereto and delivered to CIT.

     

    “Revolving
      Line of Credit”
      shall
      mean the aggregate commitment of CIT to make Revolving Loans pursuant to
Section
      3
      of this
      Financing Agreement and assist the Company in opening Letters of Credit pursuant
      to Section
      5
      of this
      Financing Agreement, in an aggregate amount not to exceed
      $12,000,000.

     

    “Revolving
      Line of Credit Fee” shall
      mean, for any month, the product obtained by multiplying (a) (i) the amount
      of
      the Revolving Line of Credit minus
      (ii) the
      average daily principal balance of Revolving Loans and the average daily
      undrawn amount
      of
      Letters of Credit outstanding during such month, times
      (b) the
      Applicable Revolving Line of Credit Fee Margin.

     

    “Revolving
      Loan Account”
      shall
      mean the account on CIT’s books, in the Company’s name, in which the Company
      will be charged with all Obligations under this Financing
      Agreement.

     

    “Revolving
      Loans”
      shall
      mean the loans and advances made, from time to time, to or for the account
      of
      the Company by CIT pursuant to Section
      3
      of this
      Financing Agreement.

     

    “Taxes”
      shall
      mean all federal, state, municipal and other governmental taxes, levies,
      charges, claims and assessments which are or may be due by the Company with
      respect to its business, operations, Collateral or otherwise.

     

    “TBV”
      shall
      mean T.B.V. Enterprises Incorporated, an Arizona corporation.

     

    “TBV
      Assignment Agreement”
      shall
      mean the Assignment of Service Agreement Non-Employer of Record, dated as of
      the
      Original Closing Date, among TBV, the Company and CIT.

     

    “TBV
      Receivables”
      shall
      mean the Trade Accounts Receivable of TBV that are subject to the TBV Service
      Agreement and to which the Company has a valid, first priority security interest
      which it has, in turn, assigned to CIT.

     


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    “TBV
      Service Agreement”
      shall
      mean the Service Agreement Non-Employer of Record, dated October 3, 1994, as
      amended, among the Company, TBV, Thomas J. Vigilante and Elizabeth T.
      Vigilante.

     

    “Trade
      Accounts Receivable”
      shall
      mean (a) that portion of the Company’s Accounts which arises from the rendition
      of services in the ordinary course of the Company’s business, (b) the TBV
      Receivables and (c) the Gemini Receivables.

     

    “Trademarks”
      shall
      mean all present and hereafter acquired trademarks, trademark registrations,
      recordings, applications, tradenames, trade styles, service marks, prints and
      labels (on which any of the foregoing may appear), licenses, reissues, renewals,
      and any other intellectual property and trademark rights pertaining to any
      of
      the foregoing, together with the goodwill associated therewith, and all cash
      and
      non-cash proceeds thereof.

     

    “UCC”
      shall
      mean the Uniform Commercial Code as the same may be amended and in effect from
      time to time in the state of New York.

     

    “Working
      Day”
      shall
      mean any Business Day on which dealings in foreign currencies and exchanges
      between banks may be transacted.

     

    SECTION
      2. Conditions
      Precedent

     

    The
      effectiveness of this Financing Agreement (and the amendment and restatement
      of
      the Existing Financing Agreement to be effected hereby) is subject to the
      satisfaction or waiver in writing by CIT of the following conditions
      precedent:

    


    (a) Financing
      Agreement.
      The
      Company shall have delivered to CIT this Financing Agreement, duly executed
      by
      the Company.

     

    (b) Board
      Resolution.
      CIT
      shall have received a copy of the resolutions of the Board of Directors of
      the
      Company authorizing the execution, delivery and performance of (i) this
      Financing Agreement, and (ii) any related agreements, in each case certified
      by
      the Secretary or Assistant Secretary of the Company as of the date hereof,
      together with a certificate of the Secretary or Assistant Secretary of the
      Company as to the incumbency and signature of the officers of the Company
      executing such Loan Documents and any certificate or other documents to be
      delivered by them pursuant hereto, together with evidence of the incumbency
      of
      such Secretary or Assistant Secretary.

     

    (c) Officer’s
      Certificate.
      CIT
      shall have received an executed Officer’s Certificate of the Company,
      satisfactory in form and substance to CIT, certifying that (i) the
      representations and warranties contained herein are true and correct in all
      material respects on and as of the Restatement Effective Date; (ii) the Company
      is in compliance with all of the terms and provisions set forth herein; and
      (iii) no Default or Event of Default exists as of the Restatement Effective
      Date.

     

    (d) Absence
      of Default.
      No
      Default or Event of Default shall have occurred and be continuing as of the
      Restatement
      Effective Date.

     

    2.2. Conditions
      to Each Extension of Credit

     

     

     


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    


    Except
      to
      the extent expressly set forth in this Financing Agreement, the agreement of
      CIT
      to make any extension of credit requested to be made by it to the Company on
      any
      date (including without limitation, the Restatement Effective Date) is subject
      to the satisfaction of the following conditions precedent:

     

    (a) Representations
      and Warranties.
      Each of
      the representations and warranties made by the Company in or pursuant to this
      Financing Agreement shall be true and correct in all material respects on and
      as
      of such date as if made on and as of such date.

     

    (b) No
      Default.
      No
      Default or Event of Default shall have occurred and be continuing on such date
      or after giving effect to the extension of credit requested to be made on such
      date.

     

    (c) Borrowing
      Base.
      Except
      as may be otherwise agreed to from time to time by CIT and the Company in
      writing, after giving effect to the extension of credit requested to be made
      by
      the Company on such date, the aggregate outstanding balance of the Revolving
      Loans plus the undrawn amount of all outstanding
      Letters
      of Credit will not exceed the lesser of (i) the Revolving Line of Credit or
      (ii)
      the Borrowing Base.

     

    Each
      borrowing by the Company hereunder shall constitute a representation and
      warranty by the Company as of the date of such loan or advance that each of
      the
      representations, warranties and covenants contained in the Financing Agreement
      have been satisfied and are true and correct, except as the Company and CIT
      shall otherwise agree herein or in a separate writing.

     

    SECTION
      3. Revolving
      Loans

     

    3.1. CIT
      agrees, subject to the terms and conditions of this Financing Agreement, from
      time to time (but subject to CIT’s right to make “Overadvances”), to make loans
      and advances to the Company on a revolving basis (i.e., subject to the
      limitations set forth herein, the Company may borrow, repay and re borrow
      Revolving Loans). Such requests for loans and advances shall be in amounts
      not
      to exceed the lesser of (a) the Availability or (b) the Revolving Line of
      Credit. All requests for loans and advances must be received by an officer
      of
      CIT no later than 1:00 p.m., New York time (a)
      on
      the Business Day on which such Revolving Loan is requested to be funded, if
      the
      request is for a Chase Bank Rate Loan, or (b) three (3) Business Days prior
      to
      the Business Day on which such Revolving Loan is requested to be funded, if
      the
      request is for a LIBOR Loan. The funding of any LIBOR Loan is also subject
      to
      the satisfaction of the conditions set forth in Section
      8.10
      of this
      Financing Agreement.

     

    3.2. In
      furtherance of the continuing assignment and security interest in the Company’s
      Accounts, the Company will, upon the creation of Accounts, execute and deliver
      to CIT in such form and manner as CIT may reasonably require, solely for CIT’s
      convenience in maintaining records of Collateral, such confirmatory schedules
      of
      Accounts as CIT may reasonably request, including, without limitation, a daily
      schedule of Accounts and by the 15th of each month, a monthly schedule of
      Accounts, in form and substance satisfactory to CIT, and such other appropriate
      reports designating, identifying and describing the Accounts as CIT may
      reasonably request, and provided further that CIT may request any such
      information more frequently, from time to time, upon its reasonable prior
      request. In addition, the Company shall provide to CIT a daily Borrowing Base
      certificate in form and substance satisfactory to CIT, copies of agreements
      with, or purchase orders from, the Company’s or TBV’s or Gemini’s customers,
      copies of invoices to customers, proof of shipment or delivery, access to its
      computers, electronic media and software programs associated therewith
      (including any electronic records, contracts and signatures) and such other
      documentation and information relating to said Accounts and other Collateral
      as
      CIT may reasonably require. Failure to provide CIT with any of the foregoing
      shall in no

     

     

     


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    


    way
      affect, diminish, modify or otherwise limit the security interests granted
      herein. The Company hereby authorizes CIT to regard the Company’s printed name
      or rubber stamp signature on assignment schedules or invoices as the equivalent
      of a manual signature by one of the Company’s authorized officers or
      agents.

     

    3.3. The
      Company hereby represents and warrants that: each Trade Account Receivable
      is
      based on an actual and bona fide rendition of services to customers, made by
      the
      Company (in all cases, other than in respect of the TBV Receivables and the
      Gemini Receivables) and TBV and/or Gemini (in the case of the TBV Receivables
      and/or the Gemini Receivables, as the case may be), in each in the ordinary
      course of its business; the Trade Accounts Receivable created, are the exclusive
      property of the Company and are not and shall not be subject to any lien,
      consignment arrangement, encumbrance, security interest or financing statement
      whatsoever, other than the Permitted Encumbrances; the invoices evidencing
      such
      Trade Accounts Receivable are in the name of the Company; and the customers
      of
      the Company have accepted the services, owe and are obligated to pay the full
      amounts stated in the invoices according to their terms, without dispute,
      offset, defense, counterclaim or contra, except for disputes and other matters
      arising in the ordinary course of business with respect to which the Company
      has
      complied with the notification requirements of Paragraph 3.5 of this
Section
      3.
      The
      Company confirms to CIT that any and all Taxes or fees relating to its business,
      its sales, the Accounts relating thereto, are its sole responsibility and that
      same will be paid by the Company when due, subject to Paragraph 7.6 of
Section
      7
      of this
      Financing Agreement, and that none of said Taxes or fees represent a lien on
      or
      claim against the Accounts. The Company also warrants and represents that it
      is
      a duly and validly existing corporation and is qualified in all states where
      the
      failure to so qualify would have an adverse effect on the business of the
      Company or the ability of the Company to enforce collection of Accounts due
      from
      customers residing in that state. The Company agrees to maintain such books
      and
      records regarding Accounts as CIT may reasonably require and agrees that the
      books and records of the Company will reflect CIT’s interest in the Accounts.
      All of the books and records of the Company will be available to CIT at normal
      business hours, including any records handled or maintained for the Company
      by
      any other company or entity.

     

    3.4. (a) Until
      CIT
      has advised the Company to the contrary after the occurrence of an Event of
      Default, the Company, at its expense, will enforce, collect and receive all
      amounts owing on the Accounts in the ordinary course of its business and any
      proceeds it so receives shall be subject to the terms hereof, and held on behalf
      of and in trust for CIT. Such privilege shall terminate at the election of
      CIT,
      upon the occurrence of an Event of Default. Any checks, cash, credit card sales
      and receipts, notes or other instruments or property received by the Company
      with respect to any Collateral, including Accounts, shall be held by the Company
      in trust for CIT, separate from the Company’s own property and funds, and
      promptly turned over to CIT with proper assignments or endorsements by deposit
      to the Depository Accounts. The Company shall: (i) indicate on all of its
      invoices that funds should be delivered to and deposited in a Depository
      Account; (ii) direct all of its account debtors to deposit any and all proceeds
      of Collateral into the Depository Accounts; (iii) irrevocably authorize and
      direct any banks which maintain the Company’s initial receipt of cash, checks
      and other items to promptly wire transfer all available funds to a Depository
      Account; and (iv) advise all such banks of CIT’s security interest in such
      funds. The Company shall provide CIT with prior written notice of any and all
      deposit accounts opened or to be opened subsequent to the Original Closing
      Date.
      Subject to Collection Days, all amounts received by CIT in payment of Accounts
      will be credited to the Revolving Loan Account when CIT is advised by its bank
      of its receipt of “collected funds” at CIT’s bank account in New York, New York
      on the Business Day of such advise if advised no later than 1:00 p.m. EST or
      on
      the next succeeding Business Day if so advised after 1:00 PM EST. No checks,
      drafts or other instrument received by CIT shall constitute final payment to
      CIT
      unless and until such instruments have actually been collected.

     

     


    
      
        
        

      

      
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    (b)
      The
      Company shall establish and maintain, in its name and at its expense, deposit
      accounts with such banks as are acceptable to CIT (the “Blocked Accounts”) into
      which the Company shall promptly cause to be deposited: (i) all proceeds of
      Collateral received by the Company, including all amounts payable to the Company
      from credit card issuers and credit card processors, and (ii) all amounts on
      deposit in deposit accounts used by the Company at each of its locations, all
      as
      further provided in Paragraph 3.4(a) above. The banks at which the Blocked
      Accounts are established shall enter into an agreement, in form and substance
      satisfactory to CIT (the “Blocked Account Agreements”), providing that all cash,
      checks and items received or deposited in the Blocked Accounts are the property
      of CIT, that the depository bank has no lien upon, or right of set off against,
      the Blocked Accounts and any cash, checks, items, wires or other funds from
      time
      to time on deposit therein, except as otherwise provided in the Blocked Account
      Agreements, and that automatically, on a daily basis the depository bank will
      wire, or otherwise transfer, in immediately available funds, all funds received
      or deposited into the Blocked Accounts to such bank account as CIT may from
      time
      to time designate for such purpose. The Company hereby confirms and agrees
      that
      all amounts deposited in such Blocked Accounts and any other funds received
      and
      collected by CIT, whether as proceeds of Collateral or otherwise, shall be
      the
      property of CIT. Notwithstanding any provision to the contrary contained in
      this
      Agreement, until CIT notifies the Company to the contrary (which notice may
      be
      given by CIT at any time in its sole discretion), it is hereby agreed that
      any
      and all payments, remittances and/or collections from Delta Airlines
      (“Delta
      Collections”)
      shall
      be paid directly to the Company, and shall not be deposited into the Blocked
      Accounts or otherwise turned over or paid to CIT for application to the
      Company’s Obligations under this Agreement. Until CIT notifies the Company to
      the contrary, all such Delta Collections shall be retained by the Company and
      deposited into the Company’s operating bank account. Notwithstanding the
      foregoing arrangement, the Delta Collections and the Accounts due and to become
      due from Delta Airlines giving rise to such Delta Collections are, and shall,
      at
      all times continue to be, subject to CIT’s security interest, lien and all of
      CIT’s rights under this Agreement. The Company hereby agrees to notify Delta
      Airlines of the arrangements between CIT and the Company and take all other
      actions reasonably requested by CIT to implement such arrangements. The Company
      shall not be responsible for, nor shall the Company be in default under this
      Agreement as a result of, Delta Airlines’ failure to comply with the
      arrangements under this Agreement, provided that (x) the Company has complied
      with CIT’s requests hereunder and (y) CIT may, in its sole discretion, return to
      Delta Airlines any and all Delta Collections received by CIT after February
      28,
      2005.

     

    3.5. The
      Company agrees to notify CIT: (a) of any matters affecting the value,
      enforceability or collectibility of any Account and of all customer disputes,
      offsets, defenses, counterclaims, returns, rejections and all reclaimed or
      repossessed merchandise or goods in its daily, weekly and monthly collateral
      reports (as applicable) provided to CIT hereunder, in such detail and format
      as
      CIT may reasonably require from time to time; and (b) promptly of any such
      matters which (i) are material, as a whole, to the Accounts, or (ii) which
      adversely affect the value of any Account in an amount of $25,000.00 or more.
      The Company agrees to issue credit memoranda promptly (with duplicates to be
      immediately forwarded to CIT) upon accepting returns or granting allowances.
      Upon the occurrence of an Event of Default (which is not waived in writing
      by
      CIT) and on notice from CIT, the Company agrees that all returned, reclaimed
      or
      repossessed merchandise or goods shall be set aside by the Company, marked
      with
      CIT’s name (as secured party) and held by the Company for CIT’s
      account.

     

    3.6. CIT
      shall
      maintain a Revolving Loan Account on its books in which the Company will be
      charged with all loans and advances made by CIT to it or for its account, and
      with any other Obligations, including any and all costs, expenses and reasonable
      attorney’s fees which CIT may incur in connection with the exercise by or for
      CIT of any of the rights or powers herein conferred upon CIT, or in the
      prosecution or defense of any action or proceeding to enforce or protect any
      rights of CIT in connection with this Financing Agreement, the other Loan
      Documents or the Collateral assigned hereunder, or any Obligations owing by
      the
      Company. The Company will be credited with all amounts received by
      CIT

     

     


    
      
        
        

      

      
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    from
      the
      Company or from others for the Company’s account, including, as above set forth,
      all amounts received by CIT in payment of Accounts, and such amounts will be
      applied to payment of the Obligations as set forth herein. In no event shall
      prior recourse to any Accounts or other security granted to or by the Company
      be
      a prerequisite to CIT’s right to demand payment of any Obligation. Further, it
      is understood that CIT shall have no obligation whatsoever to perform in any
      respect any of the Company’s contracts or obligations relating to the
      Accounts.

     

    3.7. After
      the
      end of each month, CIT shall promptly send the Company a statement showing
      the
      accounting for the charges, loans, advances and other transactions occurring
      between CIT and the Company during that month. The monthly statements shall
      be
      deemed correct and binding upon the Company and shall constitute an account
      stated between the Company and CIT unless CIT receives a written statement
      of
      the exceptions within thirty (30) days of the date of the monthly
      statement.

     

    3.8. If
      at any
      time (a) the
      sum
      of the outstanding balance of Revolving Loans and undrawn amount of all
      outstanding Letters of Credit exceeds the lesser of (x) the Borrowing Base
      and
      (y) the Revolving Line of Credit, or (b) an Overadvance exists, the amount
      of
      such excess (in the case of clause (a)) or the amount of the Overadvance (in
      the
      case of clause (b)) shall be due and payable to CIT immediately upon CIT’s
      demand therefor, unless CIT otherwise agrees. Should
      CIT for any reason honor requests for Overadvances, any such Overadvances shall
      be made in CIT’s sole discretion and subject to any additional terms CIT deems
      necessary.

     

    3.9. 

     

    (a) So
      long
      as no Event of Default shall have occurred and be continuing, CIT agrees to
      apply all proceeds of Collateral and other payments received by CIT with respect
      to the Obligations to Chase Bank Rate Loans until there are no Chase Bank Rate
      Loans outstanding, and then to LIBOR Loans; provided
      that in
      the event the aggregate outstanding principal amount of Revolving Loans that
      are
      LIBOR Loans exceeds Availability or any other applicable limit set forth herein,
      CIT may apply all proceeds of Collateral or other payments received by CIT
      to
      the payment of the Obligations in such manner and in such order as CIT may
      elect
      in the exercise of its reasonable business judgment. Subject to the terms of
      the
      preceding sentence, so long as no Event of Default shall have occurred and
      be
      continuing, if CIT receives proceeds of Collateral or other payments that exceed
      the outstanding principal amount of Revolving Loans that are Chase Bank Rate
      Loans, the Company may request, in writing, that CIT not apply such excess
      proceeds to outstanding Revolving Loans that are LIBOR Loans, in which case
      CIT
      shall remit such excess to the Company. If
      as a
      result of the application of the provisions of this Section
      3.9(a),
      any
      proceeds of Collateral or other payments are applied to Revolving Loans that
      are
      LIBOR Loans, such application shall be treated as a prepayment of such LIBOR
      Loans and CIT shall be entitled to the costs and fees provided for in
Section
      8.10
      hereof.

     

    (b) If
      an
      Event of Default shall have occurred and be continuing, CIT may apply all
      Proceeds of Collateral and all other payments received by CIT to the payment
      of
      the Obligations in such manner and in such order as CIT may elect in its sole
      discretion. If as a result of the application of the provisions of this
Section
      3.9(b),
      any
      Proceeds or payments are applied to loans that are LIBOR Loans, such application
      shall be treated as a prepayment of such LIBOR Loans and CIT shall be entitled
      to the costs and fees provided for in Section
      8.10
      hereof.

     

    3.10. Notwithstanding
      anything to the contrary contained in this Section
      3,
      the
      Company hereby acknowledges, confirms and agrees that (a) immediately prior
      to
      the Restatement Effective Date, the outstanding principal amount of the
      Revolving Loans under the Existing Financing Agreement is equal to $2,925,522
      (such Indebtedness being hereinafter referred to as the “Existing
      Financing Agreement Indebtedness”),
      and
      (b) such Existing Financing Agreement Indebtedness shall not be
      repaid

     

     

     


    
      
        
        

      

      
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    on
      the
      Restatement Effective Date, but shall constitute, on a dollar for dollar basis,
      a portion of the Revolving Line of Credit under this Financing
      Agreement.

     

    SECTION
      4. Intentionally
      Omitted.

     

    SECTION
      5. Letters
      of Credit. In
      order
      to assist the Company in establishing or opening Letters of Credit with an
      Issuing Bank, the Company has requested that CIT join in the applications for
      such Letters of Credit, and/or guarantee payment or performance of such Letters
      of Credit and any drafts or acceptances thereunder through the issuance of
      one
      or more Letter of Credit Guaranties, thereby lending CIT's credit to the
      Company, and CIT has agreed to do so. These Letter of Credit Guaranties and
      related arrangements shall be provided by CIT subject to satisfaction of the
      conditions set forth in Section 2 hereof and the terms and conditions set forth
      below.

     

    5.1. Within
      the Revolving Line of Credit and subject to sufficient Availability, CIT shall
      assist the Company in obtaining Letters of Credit in an aggregate undrawn amount
      outstanding at any time not to exceed the Letter of Credit Sub-Line. The term,
      form and purpose of each Letter of Credit and all documentation in connection
      therewith, and any amendments, modifications or extensions thereof, must be
      mutually acceptable to CIT, the Issuing Bank and the Company, provided
      that the
      Company shall not request a Letter of Credit to support the purchase of domestic
      Inventory or to secure present or future indebtedness owed to suppliers of
      domestic Inventory. Notwithstanding any other provision of this Financing
      Agreement to the contrary, if a Default or an Event of Default shall have
      occurred and be continuing, CIT's assistance in connection with any Letter
      of
      Credit shall be in CIT's sole discretion.

     

    5.2. The
      Company hereby authorizes CIT, without notice to the Company, to charge the
      Revolving Loan Account with the amount of all indebtedness, liabilities and
      obligations of any kind incurred by CIT under a Letter of Credit Guaranty,
      including the charges of an Issuing Bank, as such indebtedness, liabilities
      and
      obligations are charged to or paid by CIT, or, if earlier, upon the occurrence
      of an Event of Default. Any amount charged to the Revolving Loan Account shall
      be deemed a Chase Bank Rate Loan hereunder and shall incur interest at the
      rate
      provided in Section
      8.1
      of this
      Financing Agreement. The Company confirms that any charges which CIT may make
      to
      the Revolving Loan Account as provided herein will be made as an accommodation
      to the Company and solely at CIT’s discretion.

     

    5.3. The
      Company unconditionally indemnifies CIT and holds CIT harmless from any and
      all
      loss, claim or liability incurred by CIT arising from any transactions or
      occurrences relating to Letters of Credit established or opened for the
      Company’s account, the Collateral relating thereto and any drafts or acceptances
      thereunder, and all Obligations thereunder, including any such loss, claim
      or
      liability arising from any error, omission, negligence, misconduct or other
      action taken by an Issuing Bank, other than for any such loss, claim or
      liability arising out of the gross negligence or willful misconduct by CIT.
      This
      indemnity shall survive the termination of this Financing Agreement and the
      repayment of the Obligations.

     

    5.4. CIT
      shall
      not be responsible for: (a) the
      existence, character, quality, quantity, condition, packing, value or delivery
      of the goods purporting to be represented by any documents relating to any
      Letter of Credit; (b) any
      difference or variation in the character, quality, quantity, condition, packing,
      value or delivery of the goods from that expressed in such documents;
      (c) the
      validity, sufficiency or genuineness of such documents or of any endorsements
      thereon, even if such documents should in fact prove to be in any or all
      respects invalid, insufficient, fraudulent or forged; (d) the
      time,
      place, manner or order in which shipment is made; (e) partial
      or incomplete shipment, or failure or omission to ship any or all of the goods
      referred to in the Letters of Credit or documents relating thereto; (f) any
      deviation from

     

     


    
      
        
        

      

      
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    instructions;
      (g) delay, default, or fraud by the shipper and/or anyone else in connection
      with the goods or the shipping thereof; or (h) any
      breach of contract between the shipper or vendors and the Company.

     

    5.6. The
      Company agrees that any action taken by CIT, if taken in good faith, or any
      action taken by the Issuing Bank of whatever nature, under or in connection
      with
      the Letters of Credit, the Letter of Credit Guaranties, drafts or acceptances
      relating to Letters of Credit, or the goods subject thereto, shall be binding
      on
      the Company and shall not result in any liability whatsoever of CIT to the
      Company, except for any liability arising out of the gross negligence or willful
      misconduct by CIT. CIT shall have the full right and authority, in CIT’s name,
      to (a) clear and resolve any questions of non-compliance of documents, (b)
      give
      any instructions as to acceptance or rejection of any documents or goods, (c)
      execute any and all steamship or airway guaranties (and applications therefor),
      indemnities or delivery orders, (d) grant any extensions of the maturity of,
      time of payment for, or time of presentation of, any drafts, acceptances, or
      documents, and (e) agree to any amendments, renewals, extensions, modifications,
      changes or cancellations of any of the terms or conditions of any of the
      applications, the Letters of Credit, the Letter of Credit Guaranties or drafts
      or acceptances relating to Letters of Credit. An Issuing Bank shall be entitled
      to comply with and honor any and all such documents or instruments executed
      by
      or received solely from CIT, without any notice to or any consent from the
      Company. Notwithstanding
      any prior course of conduct or dealing with respect to the foregoing (including
      amendments to and non-compliance with any documents, and/or the Company’s
      instructions with respect thereto), CIT may exercise its rights under this
      Section
      5.5
      in its
      sole but reasonable business judgment. In addition, the Company agrees not
      to:
      (a) at any time, without the prior written consent of CIT (which consent shall
      not be unreasonably withheld) (i) execute any application for steamship or
      airway guaranties, indemnities or delivery orders, (ii) grant any extensions
      of
      the maturity of, time of payment for, or time of presentation of, any drafts,
      acceptances or documents, or (iii) agree to any amendments, renewals,
      extensions, modifications, changes or cancellations of any of the terms or
      conditions of any of the applications, Letters of Credit, drafts or acceptances;
      and (b) if an Event of Default shall have occurred and be continuing, (i) clear
      and resolve any questions of non-compliance of documents or (ii) give any
      instructions as to acceptances or rejection of any documents or
      goods.

     

    5.6. [Intentionally
      Omitted]

     

    5.8. Upon
      any
      payments made to an Issuing Bank under a Letter of Credit Guaranty, CIT shall
      acquire by subrogation, any rights, remedies, duties or obligations granted
      to
      or undertaken by the Company to the Issuing Bank in any application for a Letter
      of Credit, any standing agreement relating to Letters of Credit or otherwise,
      all of which shall be deemed to have been granted to CIT and apply in all
      respects to CIT and shall be in addition to any rights, remedies, duties or
      obligations contained herein.

     

    SECTION
      6. Collateral.

     

    6.1. As
      security for the prompt payment in full of all Obligations, the Company hereby
      pledges and grants to CIT a continuing general lien upon, and security interest
      in, all of its:

     

    (a) Accounts;

     

    (b) Inventory;

     

    (c) General
      Intangibles;

     

    (d) Documents
      of Title;

     

    
      (e)
        Other
        Collateral;

    

     

     

    
      
        
        

      

      
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    (f) Equipment;

     

    (g) Gemini
      Receivables and the Gemini Service Agreement; and

     

    (h) TBV
      Receivables and the TBV Service Agreement.

     

    Anything
      contained in this Financing Agreement to the contrary notwithstanding, the
      foregoing grant shall not include any contract, lease, permit, license, charter,
      or license agreement covering real or personal property of the Company if (x)
      under the terms of such contract, lease, permit, license, charter, or license
      agreement, or applicable law with respect thereto, the
      grant
      of a security interest or lien therein or
      collateral assignment of rights, warranties or interests therein, requires
      the consent of the other party to such contract, lease, permit, license, charter
      or license agreement or is prohibited as a matter of law or under the terms
      of
      such contract, lease, permit, license, charter, or license agreement, and (y)
      such prohibition has not been waived or the consent thereto of the other party
      to such contract, lease, permit, license, charter, or license agreement has
      not
      been obtained; provided,
      that
      the foregoing exclusion (1) shall not apply if any described prohibition is
      unenforceable under the UCC or other applicable law, (2) shall not apply when
      such prohibition is no longer in effect, and (3) shall not limit, impair, or
      otherwise affect CIT’s continuing security interests in and liens upon any
      rights or interests of the Company in or to (I) monies due or to become due
      under any described contract, lease, permit, license, charter, or license
      agreement (including any Accounts), or (II) any proceeds from the sale, license,
      lease, or other disposition of any such contract, lease, permit, license,
      charter, or license agreement.

     

    6.2. The
      security interests granted hereunder shall extend and attach to:

     

    (a) All
      Collateral which is owned by the Company or in which the Company has any
      interest, whether held by the Company or others for its account, and, if any
      Collateral is Equipment, whether the Company’s interest in such Equipment is as
      owner, finance lessee or conditional vendee; and

     

    (b) All
      Equipment, whether the same constitutes personal property or fixtures,
      including, but without limiting the generality of the foregoing, all dies,
      jigs,
      tools, benches, molds, tables, accretions, component parts thereof and additions
      thereto, as well as all accessories, motors, engines and auxiliary parts used
      in
      connection with, or attached to, the Equipment.

     

    6.3. The
      Company hereby agrees to immediately forward any and all proceeds of Collateral
      to the Depository Account, and to hold any such proceeds (including any notes
      and instruments), in trust for CIT pending delivery to CIT. 

     

    6.4. The
      Company agrees at its own cost and expense to keep the Equipment in as good
      and
      substantial repair and condition as the same is now or at the time the lien
      and
      security interest granted herein shall attach thereto, reasonable wear and
      tear
      excepted, making any and all repairs and replacements when and where necessary.
      The Company also agrees to safeguard, protect and hold all Equipment in
      accordance with the terms hereof and subject to CIT’s security interest. Any
      sale, exchange or other disposition of any Equipment shall be made by the
      Company only with CIT’s prior written consent. Upon the sale, exchange, or other
      disposition of the Equipment, as herein provided, the security interest provided
      for herein shall, without break in continuity and without further formality
      or
      act,

     


    
      
        
        

      

      
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    continue
      in, and attach to, all proceeds, including any instruments for the payment
      of
      money, Accounts, documents of title, shipping documents, chattel paper and
      all
      other cash and non cash proceeds of such sales, exchange or disposition. As
      to
      any such sale, exchange or other disposition, CIT shall have all of the rights
      of an unpaid seller, including stoppage in transit, replevin, rescission and
      reclamation. 

     

    6.5. The
      rights and security interests granted to CIT hereunder are to continue in full
      force and effect, notwithstanding the termination of this Financing Agreement
      or
      the fact that the Revolving Loan Account may from time to time be temporarily
      in
      a credit position, until the final payment in full to CIT of all Obligations
      and
      the termination of this Financing Agreement. Any delay, or omission by CIT
      to
      exercise any right hereunder shall not be deemed a waiver thereof, or be deemed
      a waiver of any other right, unless such waiver shall be in writing and signed
      by CIT. A waiver on any one occasion shall not be construed as a bar to, or
      waiver of, any right or remedy on any future occasion.

     

    6.6. Notwithstanding
      CIT’s security interest in the Collateral and to the extent that the Obligations
      are now or hereafter secured by any assets or property other than the Collateral
      or by the guarantee, endorsement, assets or property of any other person, CIT
      shall have the right in its sole discretion to determine which rights, liens,
      security interests or remedies CIT shall at any time pursue, foreclose upon,
      relinquish, subordinate, modify or take any other action with respect to,
      without in any way modifying or affecting any of them, or any of CIT’s rights
      hereunder.

     

    6.7. Any
      balances to the credit of the Company and any other property or assets of the
      Company in the possession or control of CIT may be held by CIT as security
      for
      any Obligations and applied in whole or partial satisfaction of such Obligations
      when due. The liens and security interests granted herein, and any other lien
      or
      security interest CIT may have in any other assets of the Company, shall secure
      payment and performance of all now existing and future Obligations. CIT may
      in
      its discretion charge any or all of the Obligations to the Revolving Loan
      Account when due.

     

    6.8. The
      Company possesses all General Intangibles and rights thereto necessary to
      conduct its business as conducted as of the Original Closing Date and the
      Company shall maintain its rights in, and the value of, the foregoing in the
      ordinary course of its business, including, without limitation, by making timely
      payment with respect to any applicable licensed rights. The Company shall
      deliver to CIT, and/or shall cause the appropriate party to deliver to CIT,
      from
      time to time such pledge or security agreements with respect to General
      Intangibles (now or hereafter acquired) of the Company and its subsidiaries
      as
      CIT shall require to obtain valid first liens thereon. In furtherance of the
      foregoing, the Company shall provide timely notice to CIT of any additional
      Patents, Trademarks, tradenames, service marks, Copyrights, brand names, trade
      names, logos and other trade designations acquired or applied for subsequent
      to
      the Original Closing Date and the Company shall execute such documentation
      as
      CIT may reasonably require to obtain and perfect its lien thereon. The Company
      hereby confirms that it shall deliver, or cause to be delivered, any pledged
      stock issued subsequent to the Original Closing Date to CIT in accordance with
      the applicable terms of the Pledge Agreement and prior to such delivery, shall
      hold any such stock in trust for CIT. As additional Collateral hereunder, the
      Company hereby irrevocably grants to CIT a royalty-free, non-exclusive license
      in the General Intangibles, including tradenames, Trademarks, Copyrights,
      Patents, licenses, and any other proprietary and intellectual property rights
      and any and all right, title and interest in any of the foregoing.

     

    6.9. The
      Company agrees to deliver to CIT, promptly following its request therefore,
      possession of all originals of all negotiable documents, instruments and chattel
      paper (duly endorsed in blank, if requested by CIT).

     

    6.10.
      The Company shall not amend,
      otherwise modify or waive any of its rights under the TBV Service Agreement
      or
      the Gemini Service Agreement without the prior written consent of CIT.
      In


    
      
        
        

      

      
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     addition,
      the Company shall deliver to CIT, (a) concurrently upon the receipt or delivery
      thereof, copies of all notices, agreements or documents delivered pursuant
      to
      the TBV Service Agreement and/or the Gemini Service Agreement, and (b) notice
      of
      the breach of any warranty, representation or covenant contained therein by
      the
      Company, TBV and/or Gemini, as the case may be, or any other party
      thereto.

     

    SECTION
      7. Representations,
      Warranties and Covenants

     

    7.1. The
      Company warrants and represents that (i) Schedule 1 hereto correctly and
      completely sets forth the Company’s (A) chief executive office, (B) Collateral
      locations, (C) tradenames, and (D) all the other information listed on said
      Schedule; (ii) except for the Permitted Encumbrances, after filing of financing
      statements in the applicable filing clerks office at the locations set forth
      in
      Schedule 1, this Financing Agreement creates a valid, perfected and first
      priority security interest in the Collateral and the security interests granted
      herein constitute and shall at all times constitute the first and only liens
      on
      the Collateral; (iii) except for the Permitted Encumbrances, the Company is,
      or
      will be, at the time additional Collateral is acquired by it, the absolute
      owner
      of the Collateral with full right to pledge, sell, consign, transfer and create
      a security interest therein, free and clear of any and all claims or liens
      in
      favor of others; (iv) the Company will, at its expense, forever warrant and,
      at
      CIT’s request, defend the same from any and all claims and demands of any other
      person other than a holder of a Permitted Encumbrance; (v) the Company will
      not
      grant, create or permit to exist, any lien upon, or security interest in, the
      Collateral, or any proceeds thereof, in favor of any other person other than
      the
      holders of the Permitted Encumbrances; and (vi) the Equipment is and will only
      be used by the Company in its business and will not be held for sale or lease,
      or removed from its premises, or otherwise disposed of by the Company except
      as
      otherwise permitted in this Financing Agreement.

     

    7.2. The
      Company agrees to maintain books and records pertaining to the Collateral in
      accordance with GAAP and in such additional detail, form and scope as CIT shall
      reasonably require. The Company agrees that CIT or its agents may enter upon
      the
      Company’s premises at any time during normal business hours, and from time to
      time in its reasonable business judgment, for the purpose of inspecting the
      Collateral and any and all records pertaining thereto. The Company irrevocably
      authorizes all accountants and third parties to disclose and deliver directly
      to
      CIT, at the Company’s expense, all financial statements and information, books,
      records, work papers, management reports and other information generated by
      them
      or in their possession regarding the Company and/or the Collateral. The Company
      agrees to afford CIT thirty (30) days prior written notice of any change in
      the
      location of any Collateral, other than to locations, that as of the Original
      Closing Date, are known to CIT and at which CIT has filed financing statements
      and otherwise fully perfected its liens thereon. The Company is also to advise
      CIT promptly, in sufficient detail, of any material adverse change relating
      to
      the type, quantity or quality of the Collateral or on the security interests
      granted to CIT therein.

     

    7.3. The
      Company agrees to: (a) execute and deliver to CIT, from time to time, solely
      for
      CIT’s convenience in maintaining a record of the Collateral, such written
      statements, and schedules as CIT may reasonably require, designating,
      identifying or describing the Collateral; and (b) provide CIT, on request,
      but
      no more frequently than semi-annually, an environmental audit report on its
      leasehold and fee interests, and its waste disposal practices, which report
      shall be (i) at the Company’s expense and otherwise acceptable to CIT and (ii)
      not disclose or indicate any material liability (real or potential) stemming
      from the Company’s premises, its operations, its waste disposal practices or
      waste disposal sites used by the Company. The Company’s failure, however, to
      promptly give CIT such statements, or schedules shall not affect, diminish,
      modify or otherwise limit CIT’s security interests in the Collateral.


     

    7.4
      The Company agrees to comply with the requirements of all state and federal
      laws
      in order to grant to CIT valid and perfected first security interests in the
      Collateral, subject only to the Permitted Encumbrances. CIT is hereby authorized
      by the Company to file (including pursuant to the

    
 

    
      
        
        

      

      
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    applicable
      terms of the UCC) from time to time any financing statements, continuations
      or
      amendments covering the Collateral. The Company hereby consents to and ratifies
      any and all execution and/or filing of financing statements on or prior to
      the
      Original Closing Date by CIT. The Company agrees to do whatever CIT may
      reasonably request, from time to time, by way of: (a) filing notices of liens,
      financing statements, amendments, renewals and continuations thereof; (b)
      cooperating with CIT’s agents and employees; (c) keeping Collateral records; (d)
      transferring proceeds of Collateral to CIT’s possession; and (e) performing such
      further acts as CIT may reasonably require in order to effect the purposes
      of
      this Financing Agreement,
      including
      but not limited to obtaining control agreements with respect to deposit accounts
      and/or Investment Property.

     

    7.5.   (a) The
      Company agrees to maintain insurance on the Real Estate, Equipment and Inventory
      under such policies of insurance, with such insurance companies, in such
      reasonable amounts and covering such insurable risks as are at all times
      reasonably satisfactory to CIT. All policies covering the Real Estate, Equipment
      and Inventory are, subject to the rights of any holders of Permitted
      Encumbrances holding claims senior to CIT, to be made payable to CIT, in case
      of
      loss, under a standard non contributory “mortgagee”, “lender” or “secured party”
clause and are to contain such other provisions as CIT may require to fully
      protect CIT’s interest in the Real Estate, Inventory and Equipment and to any
      payments to be made under such policies. All original policies or true copies
      thereof are to be delivered to CIT, premium prepaid, with the loss payable
      endorsement in CIT’s favor, and shall provide for not less than thirty (30) days
      prior written notice to CIT of the exercise of any right of cancellation. At
      the
      Company’s request, or if the Company fails to maintain such insurance, CIT may
      arrange for such insurance, but at the Company’s expense and without any
      responsibility on CIT’s part for: (i) obtaining the insurance; (ii) the solvency
      of the insurance companies; (iii) the adequacy of the coverage; or (iv) the
      collection of claims. Upon the occurrence of an Event of Default which is not
      waived in writing by CIT, CIT shall, subject to the rights of any holders of
      Permitted Encumbrances holding claims senior to CIT, have the sole right, in
      the
      name of CIT or the Company, to file claims under any insurance policies, to
      receive, receipt and give acquittance for any payments that may be payable
      thereunder, and to execute any and all endorsements, receipts, releases,
      assignments, reassignments or other documents that may be necessary to effect
      the collection, compromise or settlement of any claims under any such insurance
      policies.

     

    (b)    (i) In
      the event any part of the Company’s Real Estate or Equipment is damaged by fire
      or other casualty and the Insurance Proceeds for such damage or other casualty
      is less than or equal to $100,000.00, CIT shall promptly apply such Proceeds
      to
      reduce the Company’s outstanding balance in the Revolving Loan Account. Upon the
      occurrence of a Default or Event of Default, CIT may apply Insurance Proceeds
      to
      the Obligations in such manner as it may deem advisable in its sole discretion;
      and

     

                    (ii) In
      the
      event any part of the Company’s Real Estate or Equipment is damaged by fire or
      other casualty, and the Insurance Proceeds is greater than $100,000.00, CIT
      may,
      subject to the rights of any holders of Permitted Encumbrances holding claims
      senior to CIT, apply the Insurance Proceeds to the payment of the Obligations
      in
      such manner and in such order as CIT may reasonably elect.

     

    7.6. The
      Company agrees to pay, when due, all Taxes, including sales taxes, assessments,
      claims and other charges lawfully levied or assessed upon the Company or the
      Collateral unless such Taxes are being diligently contested in good faith by
      the
      Company or TBV (in respect of the TBV Receivables) or Gemini (in respect of
      the
      Gemini Receivables) by appropriate proceedings and adequate reserves are
      established in accordance with GAAP. Notwithstanding the foregoing, if any
      lien
      shall be filed or claimed thereunder (a) for Taxes due the United States of
      America, or (b) which in CIT’s opinion might create a valid obligation having
      priority over the rights granted to CIT herein (exclusive of Real

     


    
      
        
        

      

      
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    Estate),
      such lien shall not be deemed to be a Permitted Encumbrance hereunder and the
      Company shall immediately pay or cause to be paid such tax and remove the lien
      of record. If the Company fails to do so promptly, then at CIT’s election, CIT
      may (i) create an Availability Reserve in such amount as it may deem appropriate
      in its business judgment, or (ii) upon the occurrence of a Default or Event
      of
      Default, imminent risk of seizure, filing of any priority lien, forfeiture,
      or
      sale of the Collateral, pay Taxes on the Company’s behalf, and the amount
      thereof shall be an Obligation secured hereby and due on demand.

     

    7.7. The
      Company: (a) agrees to comply with all acts, rules, regulations and orders
      of
      any legislative, administrative or judicial body or official, which the failure
      to comply with would have a material and adverse impact on the Collateral,
      or
      any material part thereof, or on the business or operations of the Company,
      provided that the Company may contest any acts, rules, regulations, orders
      and
      directions of such bodies or officials in any reasonable manner which will
      not,
      in CIT’s reasonable opinion, materially and adversely effect CIT’s rights or
      priority in the Collateral; (b) agrees to comply with all environmental
      statutes, acts, rules, regulations or orders as presently existing or as adopted
      or amended in the future, applicable to the Collateral, the ownership and/or
      use
      of its real property and operation of its business, which the failure to comply
      with would have a material and adverse impact on the Collateral, or any material
      part thereof, or on the operation of the business of the Company; and (c) shall
      not be deemed to have breached any provision of this Paragraph 7.7 if (i) the
      failure to comply with the requirements of this Paragraph 7.7 resulted from
      good
      faith error or innocent omission, (ii) the Company promptly commences and
      diligently pursues a cure of such breach, and (iii) such failure is cured within
      (30) days following the Company’s receipt of notice of such failure, or if such
      cannot in good faith be cured within thirty (30) days, then such breach is
      cured
      within a reasonable time frame based upon the extent and nature of the breach
      and the necessary remediation, and in conformity with any applicable consent
      order, consensual agreement and applicable law.

     

    7.8. Until
      termination of this Financing Agreement and payment and satisfaction of all
      Obligations due hereunder, the Company agrees that, unless CIT shall have
      otherwise consented in writing, the Company will furnish to CIT: (a) within
      ninety (90) days after the end of each Fiscal Year of the Company, (i) an
      audited Consolidated Balance Sheet, with a Consolidating Balance Sheet attached
      thereto, as at the close of such year, and statements of profit and loss, cash
      flow and reconciliation of surplus of the Company and its consolidated
      subsidiaries for such year, audited by independent public accountants selected
      by the Company and satisfactory to CIT, (ii) comparable information adjusted
      to
      reflect changes from the prior Fiscal Year and with the projections delivered
      pursuant to this Paragraph, in each case certified by an authorized financial
      or
      accounting officer of the Company; and (iii) a management discussion and
      analysis regarding the Company’s actual results versus the prior Fiscal Year
      results and the projections provided pursuant to this Paragraph; (b) within
      forty-five (45) days after the end of each Fiscal Quarter a Consolidated Balance
      Sheet and Consolidating Balance Sheet as at the end of such period and
      statements of profit and loss, cash flow and surplus of the Company and its
      consolidated subsidiaries, together with comparable information adjusted to
      reflect any changes for the corresponding period of the previous Fiscal Year
      and
      with the projections delivered pursuant to this Paragraph, in each case
      certified by an authorized financial or accounting officer of the Company;
      (c)
      within thirty (30) days after the end of each month a Consolidated Balance
      Sheet
      as at the end of such period and statements of profit and loss, cash flow and
      surplus of the Company and all subsidiaries for such period, certified by an
      authorized financial or accounting officer of the Company; (d) concurrently
      after the filing or sending thereof, all reports, financial statements and
      registration statements filed by the Company or any of its subsidiaries with
      the
      Securities and Exchange Commission or any securities exchange and (e) from
      time
      to time, such further information regarding the business affairs and financial
      condition of the Company and its consolidated subsidiaries as CIT may reasonably
      request, including, without limitation (i) the accountant’s management practice
      letter and (ii) within thirty (30) days prior to the end of each Fiscal Year
      annual income statement, balance sheet, cash flow and Availability projections
      for the next following Fiscal Year, on a monthly basis, together with the
      assumptions (in reasonable detail) relating

     


    
      
        
        

      

      
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    thereto,
      all in a form satisfactory to CIT. Each financial statement which the Company
      is
      required to submit hereunder must be accompanied by an officer’s certificate,
      signed by the President, Vice President, Controller, or Treasurer, pursuant
      to
      which any one such officer must certify that: (w) the financial statement(s)
      fairly and accurately represent(s) the Company’s financial condition at the end
      of the particular accounting period, as well as the Company’s operating results
      during such accounting period, subject to year end audit adjustments; (x) during
      the particular accounting period: (A) no Default or Event of Default has
      occurred and is continuing under this Financing Agreement, provided,
      however,
      that if
      any such officer has knowledge that any such Default or Event of Default, has
      occurred during such period, the existence of and a detailed description of
      same
      shall be set forth in such officer’s certificate; (B) the Company has not
      received any notice of cancellation with respect to its property insurance
      policies; (C) the Company has not received any notice that could result in
      a
      material adverse effect on the value of the Collateral taken as a whole; and
      (D)
      the exhibits attached to such financial statement(s) constitute detailed
      calculations showing compliance with all financial covenants contained in this
      Financing Agreement and; (y) the Company has paid, as and when due, all monthly
      premium payments and quarterly lost fund payments as required by its insurance
      carrier in respect of workers’ compensation claims; and (z) the Company and, to
      the Company’s knowledge, the other parties to the TBV Service Agreement have
      complied with all the terms of the TBV Service Agreement and the other parties
      to the Gemini Service Agreement have complied with all the terms of the Gemini
      Service Agreement (and, if such non-compliance has occurred, provide a
      reasonably detailed explanation regarding the same and the steps taken to
      address such non-compliance).

     

    7.9. Until
      termination of this Financing Agreement and payment and satisfaction of all
      Obligations hereunder, the Company agrees that, without the prior written
      consent of CIT, except as otherwise herein provided, the Company will
      not:

     

    (a) Mortgage,
      assign, pledge, transfer or otherwise permit any lien, charge, security
      interest, encumbrance or judgment, (whether as a result of a purchase money
      or
      title retention transaction, or other security interest, or otherwise) to exist
      on any of the Company’s Collateral or any other assets, whether now owned or
      hereafter acquired, except for the Permitted Encumbrances;

     

    (b) Incur
      or
      create any Indebtedness other than the Permitted Indebtedness;

     

    (c) Sell,
      lease, assign, transfer or otherwise dispose of (i) Collateral, except as
      otherwise specifically permitted by this Financing Agreement, or (ii) either
      all
      or substantially all of the Company’s assets, which do not constitute
      Collateral;

     

    (d) Merge,
      consolidate or otherwise alter or modify its corporate name, principal place
      of
      business, structure, or existence, re-incorporate or re-organize, or enter
      into
      or engage in any operation or activity materially different from that presently
      being conducted by the Company, except that the Company may change its corporate
      name or address; provided that: (i) the Company shall give CIT thirty (30)
      days
      prior written notice thereof, and (ii) the Company shall execute and deliver,
      prior to or simultaneously with any such action, any and all documents and
      agreements requested by CIT to confirm the continuation and preservation of
      all
      security interests and liens granted to CIT hereunder;

     

    (e) Assume,
      guarantee, endorse, or otherwise become liable upon the obligations of any
      person, firm, entity or corporation, except by the endorsement of negotiable
      instruments for deposit or collection or similar transactions in the ordinary
      course of business;

     

     


    
      
        
        

      

      
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    (f)
      Declare or pay any dividend or distributions of any kind on, or purchase,
      acquire, redeem or retire, any of the capital stock or equity interest, of
      any
      class whatsoever, whether now or hereafter outstanding, except that the Company
      may declare and pay dividends in the ordinary course of its business with
      respect to its Series A Convertible Preferred Stock, provided
      that (i)
      the aggregate amount of such dividends does not exceed in any Fiscal Quarter
      $41,000 and (ii) immediately before and after giving effect to the making of
      any
      such dividend (A) no Default or Event of Default shall have occurred and be
      continuing, (B) the Company shall be in compliance with Paragraph 7.10 of
Section
      7
      and (c)
      the Company shall have at least $500,000.00 in Availability immediately before
      and after giving effect to the making of each such dividend;

     

    (g) Make
      any
      advance or loan to, or any investment in, any firm, entity, person or
      corporation, or purchase or acquire all or substantially all of the stock or
      assets of any entity, person or corporation, except that the Company may make
      loans to TBV, pursuant to the terms of the TBV Service Agreement and to Gemini,
      pursuant to the terms of the Gemini Service Agreement, on terms and in an amount
      satisfactory to CIT; or

     

    (h) Pay
      any
      management, consulting or other similar fees to any person, corporation or
      other
      entity affiliated with the Company.

     

    7.10. If
      the
      average Availability during any calendar month is less than $2,000,000, then,
      on
      and after any such month until the termination of this Financing Agreement
      and
      payment and satisfaction in full of all Obligations hereunder, the Company
      will,
      as of the last day of each month, maintain a Fixed Charge Coverage Ratio of
      not
      less than (a) 1.10:1:00 for the twelve (12) month period ending each month
      during the period commencing on the Restatement
      Effective Date
      and
      ending September 30, 2006, and (b) 1.15:1.00 for the twelve (12) month period
      ending each month thereafter.

     

    7.11. The
      Company agrees to advise CIT in writing of: (a) all expenditures (actual or
      anticipated) in excess of $150,000.00 from the budgeted amount therefor in
      any
      Fiscal Year for (i) environmental clean up, (ii) environmental compliance or
      (iii) environmental testing and the impact of said expenses on the Company’s
      Working Capital; and (b) any notices the Company receives from any local, state
      or federal authority advising the Company of any environmental liability (real
      or potential) stemming from the Company’s operations, its premises, its waste
      disposal practices, or waste disposal sites used by the Company and to provide
      CIT with copies of all such notices if so required.

     

    7.12. The
      Company hereby agrees to indemnify and hold harmless CIT and its officers,
      directors, employees, attorneys and agents (each an “Indemnified Party”) from,
      and holds each of them harmless against, any and all losses, liabilities,
      obligations, claims, actions, damages, costs and expenses (including attorney’s
      fees) and any payments made by CIT pursuant to any indemnity provided by CIT
      with respect to or to which any Indemnified Party could be subject insofar
      as
      such losses, liabilities, obligations, claims, actions, damages, costs, fees
      or
      expenses with respect to the Loan Documents, including without limitation those
      which may arise from or relate to: (a) the Depository Account, the Blocked
      Accounts, the lockbox and/or any other depository account and/or the agreements
      executed in connection therewith; and (b) any and all claims or expenses
      asserted against CIT as a result of any environmental pollution, hazardous
      material or environmental clean up relating to the Real Estate; or any claim
      or
      expense which results from the Company’s operations (including, but not limited
      to, the Company’s off site disposal practices) and use of the Real Estate, which
      CIT may sustain or incur (other than solely as a result of the physical actions
      of CIT on the Company’s premises which are determined to constitute gross
      negligence or willful misconduct by a court of competent jurisdiction), all
      whether through the alleged or actual negligence of such person or otherwise,
      except and to the extent that the same results solely and directly from the
      gross negligence or willful misconduct of such Indemnified Party as finally
      determined by a court of competent jurisdiction. The Company hereby agrees
      that
      this indemnity shall survive termination of this Financing Agreement, as well
      as
      payments of Obligations which may be due hereunder. CIT may, in its sole
      business judgment, establish such Availability Reserves with respect thereto
      as
      it may deem advisable under the circumstances and, upon any termination hereof,
      hold such reserves as cash reserves for any such contingent
      liabilities.

     

     

    
      
        
        

      

      
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    7.13. Without
      the prior written consent of CIT, the Company agrees that it will not enter
      into
      any transaction, including, without limitation, any purchase, sale, lease,
      loan
      or exchange of property with any subsidiary or affiliate of the Company;
provided
      that,
      except as otherwise set forth in this Financing Agreement, the Company may
      enter
      into sale and service transactions in the ordinary course of its business and
      pursuant to the reasonable requirements of the Company, and upon standard terms
      and conditions and fair and reasonable terms, no less favorable to the Company
      than the Company could obtain in a comparable arms length transaction with
      an
      unrelated third party; provided
      further
      that no Default or Event of Default exists or will occur hereunder prior to
      and
      after giving effect to any such transaction.

     

    7.14. Any
      replacement of the Chief Financial Officer and/or Chief Operating Officer of
      the
      Company shall be reasonably satisfactory to CIT.

     

    7.15. The
      Company agrees to notify CIT of all worker’s compensation claims in an amount of
      $150,000.00 or more (whether or not covered by insurance).

     

    SECTION
      8. Interest,
      Fees and Expenses

     

    8.1.    (a) Interest
      on the outstanding principal balance of the Revolving Loans that are Chase
      Bank
      Rate Loans shall accrue at a rate per annum equal to the Chase Bank Rate
plus
      the
      Applicable Margin. Interest on Revolving Loans that are Chase Bank Rate Loans
      shall be due and payable on the first day of each month and shall be based
      on
      the average net principal balance of such Revolving Loans at the close of each
      day during the immediately preceding month. In the event of any change in the
      Chase Bank Rate, the rate set forth in the first sentence of this Section
      8.1
      shall
      change, effective as of the date of such change, so as to remain equal to the
      new Chase Bank Rate plus
      the
      Applicable Margin. On each Revolving Loan (or portion of a Revolving Loan)
      that
      is a LIBOR Loan, interest shall be due and payable on the LIBOR Interest Payment
      Date and shall accrue at a rate per annum equal to the Applicable Margin
plus
      the
      applicable LIBOR on the outstanding principal balance of such LIBOR Loan. All
      interest rates shall be calculated based on a 360-day year and actual days
      elapsed.
      CIT
      shall be entitled to charge the Revolving Loan Account at the rate provided
      for
      herein when due until all Obligations have been paid in full.

     

    (b) Notwithstanding
      any provision to the contrary contained in this Section
      8,
      in the
      event that the outstanding Revolving Loans plus the undrawn amount of all
outstanding
      Letters
      of Credit exceed the lesser of (i) the Revolving Line of Credit or (ii) the
      Borrowing Base: (A) as a result of Revolving Loans advanced by CIT at the
      request of the Company (herein “Requested
      Overadvances”),
      for
      any one (1) or more days in any month, or (ii) for any other reason whatsoever
      (herein “Other
      Overadvances”)
      and
      such Other Overadvances continue for five (5) or more days in any month, the
      average net balance of all Revolving Loans for such month shall bear interest
      at
      the Overadvance Rate.

     

    (c) Upon
      and
      after the occurrence of an Event of Default (a) after the giving of any required
      notice by CIT in accordance with the provisions of Section
      10,
      Paragraph 10.2 hereof, all Obligations shall bear interest at the Default Rate
      of Interest and (b) at
      CIT’s
      election at any time thereafter, interest on each outstanding LIBOR Loan shall
      be due and payable on the first day of each month, notwithstanding the Interest
      Period with respect thereto.

     

    (d) In
      consideration of the issuance of any Letter of Credit Guaranty by CIT or other
      assistance of CIT in obtaining Letters of Credit pursuant to Section
      5
      hereof,
      the Company agrees to pay to CIT a Letter of Credit Guaranty Fee equal to two
      percent (2%) per annum on the face amount of each Letter of Credit. All Letter
      of Credit Guaranty Fees shall be due and payable monthly on the first day of
      each month.

     

     

    
      
        
        

      

      
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    (e) The
      Company agrees to reimburse CIT for any and all charges, fees, commissions,
      costs and expenses charged to CIT for the Company’s account by an Issuing Bank
      in connection with, or arising out of, Letters of Credit or out of transactions
      relating thereto, when charged to or paid by CIT, or as may be due upon any
      termination of this Financing Agreement.

     

    8.2. The
      Company shall reimburse or pay CIT, as the case may be, for: (a) all Out of
      Pocket Expenses; (b) any applicable Documentation Fee; and (c) without the
      payment of such constituting a waiver by CIT of a Default or Event of Default
      hereunder, a non-refundable fee of $250.00 for each document or report requested
      by, but not promptly delivered, to CIT.

     

    8.3. Upon
      the
      last Business Day of each month, commencing on December 31, 2003, the Company
      shall pay to CIT (i) the Revolving Line of Credit Fee, and (ii) interest on
      the
      Collection Days. Interest will be computed at the rate, and in the manner,
      set
      forth in Paragraph 8.1 of this Financing Agreement.

     

    8.4. [Intentionally
      Omitted]

     

    8.5. On
      each
      anniversary of the Original Closing Date the Company shall pay to CIT the
      Administrative Management Fee in the amount of $25,000.00, which shall be deemed
      fully earned on the Original Closing Date.

     

    8.6. The
      Company shall pay CIT’s standard charges and fees for CIT’s personnel used by
      CIT for reviewing the books and records of the Company and for verifying,
      testing, protecting, safeguarding, preserving or disposing of all or any part
      of
      the Collateral (which fees shall be in addition to the Administrative Management
      Fee and any Out-of-Pocket Expenses, and are currently billed at the rate of
      $850.00 per examiner per day). 

     

    8.7. The
      Company hereby authorizes CIT to charge the Revolving Loan Account with the
      amount of all payments due hereunder as such payments become due (including,
      without limitation, CIT’s standard charges for wire transfers).
      The
      Company confirms that any charges which CIT may so make to the Revolving Loan
      Account as herein provided will be made as an accommodation to the Company
      and
      solely at CIT’s discretion.

     

    8.8. In
      the
      event that CIT or any participant hereunder (or any financial institution which
      may from time to time become a participant or lender hereunder) shall have
      determined in the exercise of its reasonable business judgment that, subsequent
      to the Original Closing Date, any change in applicable law, rule, regulation
      or
      guideline regarding capital adequacy, or any change in the interpretation or
      administration thereof, or compliance by CIT or such participant with any new
      request or directive regarding capital adequacy (whether or not having the
      force
      of law) of any such authority, central bank or comparable agency, has or would
      have the effect of reducing the rate of return on CIT’s or such participant’s
      capital as a consequence of its obligations hereunder to a level below that
      which CIT or such participant could have achieved but for such adoption, change
      or compliance (taking into consideration CIT or such participant’s policies with
      respect to capital adequacy) by an amount reasonably deemed by CIT or such
      participant to be material, then, from time to time, the Company shall pay
      no
      later than five (5) days following demand to CIT or such participant such
      additional amount or amounts as will compensate CIT’s or such participant’s for
      such reduction. In determining such amount or amounts, CIT or such participant
      may use any reasonable averaging or attribution methods. The protection of
      this
      Paragraph 8.8 shall be available to CIT or such participant regardless of any
      possible contention of invalidity or inapplicability with respect to the
      applicable law, regulation or condition. A certificate of CIT or such
      participant setting forth such amount or amounts as shall be necessary to
      compensate CIT or such participant with respect to this Section
      8
      and the
      calculation thereof when delivered to the Company shall be conclusive on the
      Company absent manifest error. Notwithstanding anything in this paragraph to
      the
      contrary, in the event CIT or such participant has exercised its rights pursuant
      to this paragraph, and subsequent thereto determines that the additional amounts
      paid by the Company in whole or in part exceed the amount which CIT or such
      participant actually required to be made whole, the excess, if any, shall be
      returned to the Company by CIT or such participant.

     

     

    
      
        
        

      

      
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    8.9. In
      the
      event that any applicable law, treaty or governmental regulation, or any change
      therein or in the interpretation or application thereof, or compliance by CIT
      or
      such participant with any request or directive (whether or not having the force
      of law) from any central bank or other financial, monetary or other authority,
      shall:

     

    (a) subject
      CIT or such participant to any tax of any kind whatsoever with respect to this
      Financing Agreement or change the basis of taxation of payments to CIT or such
      participant of principal, fees, interest or any other amount payable hereunder
      or under any other documents (except for changes in the rate of tax on the
      overall net income of CIT or such participant by the federal government or
      the
      jurisdiction in which it maintains its principal office);

     

    (b) impose,
      modify or hold applicable any reserve, special deposit, assessment or similar
      requirement against assets held by, or deposits in or for the account of,
      advances or loans by, or other credit extended by CIT or such participant by
      reason of or in respect to this Financing Agreement and the Loan Documents,
      including (without limitation) pursuant to Regulation D of the Board of
      Governors of the Federal Reserve System; or

     

    (c) impose
      on
      CIT or such participant any other condition with respect to this Financing
      Agreement or any other document, and the result of any of the foregoing is
      to
      increase the cost to CIT or such participant of making, renewing or maintaining
      its loans hereunder by an amount that CIT or such participant deems to be
      material in the exercise of its reasonable business judgment or to reduce the
      amount of any payment (whether of principal, interest or otherwise) in respect
      of any of the loans by an amount that CIT or such participant deems to be
      material in the exercise of its reasonable business judgment, then, in any
      case
      the Company shall pay CIT or such participant, within five (5) days following
      its demand, such additional cost or such reduction, as the case may be. CIT
      or
      such participant shall certify the amount of such additional cost or reduced
      amount to the Company and the calculation thereof and such certification shall
      be conclusive upon the Company absent manifest error. 

     

    8.10. 

     

    (a) The
      Company may elect to use LIBOR as to any Revolving Loans, convert any Chase
      Bank
      Rate Loan to a new LIBOR Loan or continue any existing LIBOR Loan as a new
      LIBOR
      Loan on the last day of the Interest Period with respect to such existing LIBOR
      Loan, so long as:

     

    (i) no
      Default or Event of Default shall have occurred and be continuing on the date
      on
      which such new LIBOR Loan is requested and on the first day of the Interest
      Period for such new LIBOR Loan;

     

    (ii) the
      Company requests the new LIBOR Loan no later than three (3) Business Days
      preceding the first day of the Interest Period for such new LIBOR Loan (or
      three
      (3) Business Days prior to the expiration of any Interest Period, in the case
      of
      a continuation of an existing LIBOR Loan);

     

     

    
      
        
        

      

      
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    (iii) if
      CIT
      requests written confirmation of any new LIBOR Loan from the Company, the
      Company shall have signed and returned to CIT any such confirmation on or prior
      to the first day of the Interest Period for such new LIBOR Loan;
      and

     

    (iv) with
      respect to the Interest Period selected by the Company for such new LIBOR Loan,
      (x) either JPMorgan Chase Bank provides a LIBOR quote for such Interest Period
      or CIT otherwise determines the LIBOR for such Interest Period, as provided
      in
      the definition of LIBOR, and (y) such Interest Period ends on or before the
      Termination Date.

     

    Any
      LIBOR
      election must be for at least $1,000,000 and if greater, in integral multiples
      of $100,000, and there shall be no more than four (4) LIBOR Loans outstanding
      at
      one time. Elections for LIBOR Loans shall be irrevocable once made. If any
      condition for a LIBOR election is not satisfied, then the requested new loan
      (or
      continuation of an existing LIBOR Loan) shall be made to the Company as a Chase
      Bank Rate Loan.

    


    (b) Notwithstanding
      any other provision of this Financing Agreement to the contrary, if any law,
      regulation, treaty or directive, or any amendment thereto or change in the
      interpretation or application thereof, shall make it unlawful for CIT to make
      or
      maintain any LIBOR Loan, then (x) such LIBOR Loan shall convert automatically
      to
      a Chase Bank Rate Loan at the end of the applicable Interest Period, or such
      earlier date as may be required by such law, regulation, treaty or directive,
      and (y) the obliga-tion of CIT thereafter to make or continue LIBOR Loans and
      to
      convert Chase Bank Rate Loans into LIBOR Loans hereunder shall be suspended
      until CIT determines that it is no longer unlawful to make and maintain LIBOR
      Loans as contemplated herein. In addition, in the event that, by reason of
      any
      Regulatory Change, CIT either (x) incurs any material additional costs based
      on
      or measured by the excess above a specified level of the amount of a category
      of
      deposits or other liabilities of CIT which includes deposits by reference to
      which the interest rate on LIBOR Loans is determined hereunder, or a category
      of
      extensions of credit or other as-sets of CIT which includes LIBOR Loans, or
      (y)
      becomes subject to any material restrictions on the amount of such a category
      of
      liabilities or assets which CIT may hold, then if CIT so elects by notice to
      the
      Company, the obliga-tion of CIT thereafter to make or continue LIBOR Loans
      and
      to convert Chase Bank Rate Loans into LIBOR Loans hereunder shall be suspended
      until such Regulatory Change ceases to be in effect.

    


    (c) Notwithstanding
      any other provision of this Financing Agreement to the contrary, if CIT
      determines in the exercise of its reason-able business judgment (which
      determination shall be conclusive and binding upon the Company) that by reason
      of circumstances affecting the interbank LIBOR market, adequate and reasonable
      means do not exist for ascertaining LIBOR applicable to an Interest Period
      with
      respect to any election of a new LIBOR Loan, CIT shall give written notice
      of
      such determination to the Company prior to the effective date of such election.
      Upon receipt of such notice, the Company may cancel the Company’s request for
      such new LIBOR Loan, in which case the requested LIBOR Loan shall be made as
      a
      Chase Bank Rate Loan. Until such notice has been withdrawn by CIT, the
      obliga-tion of CIT thereafter to make or continue LIBOR Loans and to convert
      Chase Bank Rate Loans into LIBOR Loans hereunder shall be suspended until CIT
      determines that adequate and reasonable means again exist for ascertaining
      LIBOR
      applicable to an Interest Period with respect to any election of a new LIBOR
      Loan.

     

     

    
      
        
        

      

      
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    (d) The
      Company hereby agrees to pay to CIT, on demand, any ad-ditional amounts
      necessary to compensate CIT for any costs incurred by CIT in making any
      conversions from LIBOR Loans to Chase Bank Rate Loans in accordance with this
      Section
      8.10,
      including, without limitation, breakage costs provided for in Section
      8.10(e)
      of this
      Financing Agreement.

    


    (e) In
      the
      event that the Company (i) pays all or any part of the principal amount of
      a
      LIBOR Loan on a date prior to the last day of an Interest Period for such LIBOR
      Loan, (ii) fails to borrow a LIBOR Loan, or fails to convert a Chase Bank Rate
      Loan to a LIBOR Loan, on the date for such borrowing or conversion specified
      in
      the relevant request to CIT, or (iii) fails to pay to CIT the principal of,
      or
      interest on, any LIBOR Loan when due, the Company agrees to pay to CIT (and
      any
      financial institution that purchases from CIT a participation in the loans
      made
      by CIT to the Company hereunder), on demand, the greater of (x) such amount
      as
      shall compensate CIT and such financial institution for any actual loss, cost
      or
      expense that CIT or such financial institution may sustain or incur as a result
      of such event (including, without limitation, any interest or fees payable
      by
      CIT or such financial institution to lenders or depositors of funds obtained
      by
      CIT or such financial institution in order to make or maintain any LIBOR Loans
      under this Financing Agreement), and (y) in the case of a prepayment of any
      LIBOR Loan, the excess (if any) of the amount of interest that would have
      accrued on such loan from the first day of the Interest Period to the date
      of
      prepayment, assuming that such loan was a Chase Bank Rate Loan, over the amount
      of interest that actually accrued on such loan from the first day of the
      Interest Period to the date of prepayment. The determination by CIT of the
      amount of any such loss, cost or expense described in clause (x) of the
      preceding sentence, when set forth in a written notice to the Company containing
      CIT’s calculations thereof in reasonable detail, shall be conclusive and binding
      upon the Company, in the absence of manifest error.

    


    8.11. For
      purposes of this Financing Agreement and Section
      8
      thereof,
      any reference to CIT shall include any financial institution which may become
      a
      participant or co-lender subsequent to the Original Closing Date.

     

    SECTION
      9. Powers

     

    The
      Company hereby constitutes CIT, or any person or agent CIT may designate, as
      its
      attorney in fact, at the Company’s cost and expense, to exercise all of the
      following powers, which being coupled with an interest, shall be irrevocable
      until all Obligations to CIT have been paid in full:

     

    (a) To
      receive, take, endorse, sign, assign and deliver, all in the name of CIT or
      the
      Company, any and all checks, notes, drafts, and other documents or instruments
      relating to the Collateral;

     

    (b) To
      receive, open and dispose of all mail addressed to the Company and to notify
      postal authorities to change the address for delivery thereof to such address
      as
      CIT may designate;

     

    (c) To
      request from customers indebted on Accounts at any time, in the name of CIT
      information concerning the amounts owing on the Accounts;

     

     

    
      
        
        

      

      
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    (d) To
      request from customers indebted on Accounts at any time, in the name of the
      Company, in the name of certified public accountant designated by CIT or in
      the
      name of CIT’s designee, information concerning the amounts owing on the
      Accounts;

     

    (e) To
      transmit to customers indebted on Accounts notice of CIT’s interest therein and
      to notify customers indebted on Accounts to make payment directly to CIT for
      the
      Company’s account; and

     

    (f) To
      take
      or bring, in the name of CIT or the Company, all steps, actions, suits or
      proceedings deemed by CIT necessary or desirable to enforce or effect collection
      of the Accounts.

     

    Notwithstanding
      anything hereinabove contained to the contrary, the powers set forth in (b)
      and
      (f) above may only be exercised during the continuance of an Event of
      Default.

     

    SECTION
      10. Events
      of Default and Remedies

     

    10.1. Notwithstanding
      anything hereinabove to the contrary, CIT may terminate this Financing Agreement
      immediately upon the occurrence of any of the following Events of
      Default:

     

    (a) cessation
      of the business of the Company or any Guarantor, or the calling of a meeting
      of
      the creditors of the Company or any Guarantor, for purposes of compromising
      the
      debts and obligations of the Company or any Guarantor;

     

    (b) the
      failure of the Company or any Guarantor to generally pay its debts as they
      mature;

     

    (c) (i)
      the
      commencement by the Company or any Guarantor of any bankruptcy, insolvency,
      arrangement, reorganization, receivership or similar proceedings under any
      federal or state law; (ii) the commencement against the Company or any Guarantor
      of any bankruptcy, insolvency, arrangement, reorganization, receivership or
      similar proceeding under any federal or state law by creditors of the Company
      or
      any Guarantor, provided that such Default shall not be deemed an Event of
      Default if such proceeding is controverted within ten (10) days and dismissed
      and vacated within thirty (30) days of commencement except, in the event that
      any of the actions sought in any such proceeding shall occur or the Company
      or
      any Guarantor shall take action to authorize or effect any of the actions in
      any
      such proceeding; or (iii) the commencement (x) by the
      Company’s or any Guarantor’s subsidiaries, or any one of them, of any
      bankruptcy, insolvency, arrangement, reorganization, receivership or similar
      proceeding under any applicable state law, or (y) against the
      Company’s or any Guarantor’s subsidiaries, or any one of them, of any
      involuntary bankruptcy, insolvency, arrangement, reorganization, receivership
      or
      similar proceeding under applicable law, provided that such Default shall not
      be
      deemed an Event of Default if such proceeding is controverted within ten (10)
      days and dismissed or vacated within thirty (30) days of commencement, except
      in
      the event that any of the actions sought in any such proceeding shall occur
      or
      the Company’s or any Guarantor’s subsidiaries, or any one of them, shall take
      action to authorize or effect any of the actions in any such
      proceeding;

     

    (d) breach
      by
      the Company of any warranty, representation or covenant contained herein (other
      than those referred to in sub paragraph (e) below) or in any other written
      agreement between the Company or CIT, provided that such Default by the Company
      of any of the warranties, representations or covenants referred in this clause
      (d) shall not be deemed to be an Event of Default unless and until such Default
      shall remain unremedied to CIT’s satisfaction for a period of ten (10) days from
      the date of such breach;

     

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (e) breach
      by
      the Company of any warranty, representation or covenant of Paragraphs 3.3 (other
      than the fourth sentence of Paragraph 3.3) and 3.4 of Section
      3
      hereof;
      Paragraphs 6.3, 6.4 (other than the first sentence of Paragraph 6.4), and 6.10
      of Section
      6
      hereof;
      Paragraphs 7.1, 7.5, 7.6, and 7.8 through 7.14 hereof;

     

    (f) failure
      of the Company to pay any of the Obligations within five (5) Business Days
      of
      the due date thereof, provided that nothing contained herein shall prohibit
      CIT
      from charging such amounts to the Revolving Loan Account on the due date
      thereof;

     

    (g) the
      Company shall (i) engage in any “prohibited transaction” as defined in ERISA,
      (ii) have any “accumulated funding deficiency” as defined in ERISA, (iii) have
      any “reportable event” as defined in ERISA, (iv) terminate any “plan”, as
      defined in ERISA or (v) be engaged in any proceeding in which the Pension
      Benefit Guaranty Corporation shall seek appointment, or is appointed, as trustee
      or administrator of any “plan”, as defined in ERISA, and with respect to this
      sub paragraph (h) such event or condition (x) remains uncured for a period
      of
      thirty (30) days from date of occurrence and (y) could, in the reasonable
      opinion of CIT, subject the Company to any tax, penalty or other liability
      material to the business, operations or financial condition of the
      Company;

     

    (h) the
      occurrence of any default or event of default (after giving effect to any
      applicable grace or cure periods) under any instrument or agreement evidencing
      any Indebtedness of the Company
      having a principal amount in excess of $250,000.00; 

     

    (i) the
      Chief
      Financial Officer and/or Chief Operating Officer of the Company resigns and
      such
      position is not filled with a replacement reasonably satisfactory to CIT within
      thirty (30) days thereafter;

     

    (j) if
      at any
      time the Continuing Directors cease to constitute at least a majority of the
      members of the Company’s Board of Directors. For purposes of this section, the
      Company’s “Continuing Directors” shall mean Messrs. Bruce Galloway, Peter Kikis,
      Thomas Kikis, Robert Ellin, Martin Wade and Martin Blake;

     

    (k) if
      any
      Guarantor dies or terminates its respective
      Guaranty
      or otherwise fails to perform any of the terms of the Guaranty, all prior to
      termination of this Financing Agreement and payment in full of all
      Obligations;

     

    (l) any
      judgment or judgments aggregating in excess of $100,000.00 or any injunction
      or
      attachment is obtained or enforced against the Company or any Guarantor and
      which remains unstayed for more than ten (10) Business Days;

     

    (m) at
      any
      time the TBV Receivables form a part of the Borrowing Base the TBV Assignment
      Agreement shall be terminated or not otherwise be in full force or effect,
      or
      TBV, the Company or any other party thereto (other than CIT) shall breach any
      warranty, representation or covenant contained therein; or

     

    (n) at
      any
      time the Gemini Receivables form a part of the Borrowing Base, the Gemini
      Service Agreement or Gemini Assignment Agreement shall be terminated or not
      otherwise be in full force or effect, or Gemini, the Company or any other party
      thereto (other than CIT) shall breach any warranty, representation or covenant
      contained therein.

     

     

    
      
        
        

      

      
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    10.2. Upon
      the
      occurrence of a Default and/or an Event of Default, at the option of CIT, all
      loans, advances and extensions of credit provided for in Section
      3
      of this
      Financing Agreement shall be thereafter in CIT’s sole discretion and the
      obligation of CIT to make Revolving Loans and to assist the Company in opening
      Letters of Credit shall cease unless such Default is cured to CIT’s satisfaction
      or Event of Default is waived in writing by CIT , and at the option of CIT
      upon
      the occurrence of an Event of Default: (a) all Obligations shall become
      immediately due and payable; (b) CIT may charge the Company the Default Rate
      of
      Interest on all then outstanding or thereafter incurred Obligations in lieu
      of
      the interest provided for in Section
      8
      of this
      Financing Agreement, and (c) CIT may immediately terminate this Financing
      Agreement upon notice to the Company; provided, however, that, upon the
      occurrence of an Event of Default listed in Paragraph 10.1(c) of this
Section
      10,
      this
      Financing Agreement shall automatically terminate and all Obligations shall
      become due and payable, without any action, declaration, notice or demand by
      CIT. The exercise of any option is not exclusive of any other option, which
      may
      be exercised at any time by CIT.

     

    10.3. Immediately
      upon the occurrence of any Event of Default, CIT may, to the extent permitted
      by
      law: (a) remove from any premises where same may be located any and all books
      and records, computers, electronic media and software programs associated with
      any Collateral (including any electronic records, contracts and signatures
      pertaining thereto), documents, instruments, files and records, and any
      receptacles or cabinets containing same, relating to the Accounts, or CIT may
      use, at the Company’s expense, such of the Company’s personnel, supplies or
      space at the Company’s places of business or otherwise, as may be necessary to
      properly administer and control the Accounts or the handling of collections
      and
      realizations thereon; (b) bring suit, in the name of the Company or CIT, and
      generally shall have all other rights respecting said Accounts, including
      without limitation the right to: accelerate or extend the time of payment,
      settle, compromise, release in whole or in part any amounts owing on any
      Accounts and issue credits in the name of the Company or CIT; (c) sell, assign
      and deliver the Collateral and any returned, reclaimed or repossessed Inventory,
      with or without advertisement, at public or private sale, for cash, on credit
      or
      otherwise, at CIT’s sole option and discretion, and CIT may bid or become a
      purchaser at any such sale, free from any right of redemption, which right
      is
      hereby expressly waived by the Company; (d) foreclose the security interests
      in
      the Collateral created herein or by the Loan Documents by any available judicial
      procedure, or to take possession of any or all of the Collateral, including
      any
      Inventory, Equipment and/or Other Collateral without judicial process, and
      to
      enter any premises where any Inventory, Equipment and/or Other Collateral may
      be
      located for the purpose of taking possession of or removing the same; and (e)
      exercise any other rights and remedies provided in law, in equity, by contract
      or otherwise. CIT shall have the right, without notice or advertisement, to
      sell, lease, or otherwise dispose of all or any part of the Collateral, whether
      in its then condition or after further preparation or processing, in the name
      of
      the Company or CIT, or in the name of such other party as CIT may designate,
      either at public or private sale or at any broker’s board, in lots or in bulk,
      for cash or for credit, with or without warranties or representations (including
      but not limited to warranties of title, possession, quiet enjoyment and the
      like), and upon such other terms and conditions as CIT in its sole discretion
      may deem advisable, and CIT shall have the right to purchase at any such sale.
      If any Inventory and Equipment shall require rebuilding, repairing, maintenance
      or preparation, CIT shall have the right, at its option, to do such of the
      aforesaid as is necessary, for the purpose of putting the Inventory and
      Equipment in such saleable form as CIT shall deem appropriate and any such
      costs
      shall be deemed an Obligation hereunder. Any action taken by CIT pursuant to
      this paragraph shall not effect commercial reasonableness of the sale. The
      Company agrees, at the request of CIT, to assemble the Inventory and Equipment
      and to make it available to CIT at premises of the Company or elsewhere and
      to
      make available to CIT the premises and facilities of the Company for the purpose
      of CIT’s taking possession of, removing or putting the Inventory and Equipment
      in saleable form. If notice of intended disposition of any Collateral is
      required by law, it is agreed that ten (10) days notice shall constitute
      reasonable notification and full compliance with the law. The net cash proceeds
      resulting from CIT’s exercise of any of the foregoing rights, (after deducting
      all charges, costs and expenses, including

     

     

    
      
        
        

      

      
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    reasonable
      attorneys’ fees) shall be applied by CIT to the payment of the Obligations,
      whether due or to become due, in such order as CIT may elect, and the Company
      shall remain liable to CIT for any deficiencies, and CIT in turn agrees to
      remit
      to the Company or its successors or assigns, any surplus resulting therefrom.
      The enumeration of the foregoing rights is not intended to be exhaustive and
      the
      exercise of any right shall not preclude the exercise of any other rights,
      all
      of which shall be cumulative. The Company hereby indemnifies CIT and holds
      CIT
      harmless from any and all costs, expenses, claims, liabilities, Out-of-Pocket
      Expenses or otherwise, incurred or imposed on CIT by reason of the exercise
      of
      any of its rights, remedies and interests hereunder, including, without
      limitation, from any sale or transfer of Collateral, preserving, maintaining
      or
      securing the Collateral, defending its interests in Collateral (including
      pursuant to any claims brought by the Company, the Company as
      debtor-in-possession, any secured or unsecured creditors of the Company, any
      trustee or receiver in bankruptcy, or otherwise), and the Company hereby agrees
      to so indemnify and hold CIT harmless, absent CIT’s gross negligence or willful
      misconduct as finally determined by a court of competent jurisdiction. The
      foregoing indemnification shall survive termination of this Financing Agreement
      until such time as all Obligations (including the foregoing) have been finally
      and indefeasibly paid in full. In furtherance thereof CIT, may establish such
      reserves for Obligations hereunder (including any contingent Obligations) as
      it
      may deem advisable in its reasonable business judgment. Any applicable
      mortgage(s), deed(s) of trust or assignment(s) issued to CIT on the Real Estate
      shall govern the rights and remedies of CIT thereto.

     

    SECTION
      11. Termination

     

    Except
      as
      otherwise permitted herein, CIT may terminate this Financing Agreement only
      as
      of the initial or any subsequent Anniversary Date and then only by giving the
      Company at least sixty (60) days prior written notice of termination.
      Notwithstanding the foregoing CIT may terminate the Financing Agreement
      immediately upon the occurrence of an Event of Default, provided, however,
      that
      if the Event of Default is an event listed in Paragraph 10.1(c) of Section
      10
      of this
      Financing Agreement, this Financing Agreement shall terminate in accordance
      with
      paragraph 10.2 of Section
      10.
      This
      Financing Agreement, unless terminated as herein provided, shall automatically
      continue from Anniversary Date to Anniversary Date. The Company may terminate
      this Financing Agreement at any time upon sixty (60) days’ prior written notice
      to CIT, provided that the Company pays to CIT immediately on demand an Early
      Termination Fee and/or the Prepayment Premium, if applicable. All Obligations
      shall become due and payable as of any termination hereunder or under
Section
      10
      hereof
      and, pending a final accounting, CIT may withhold any balances in the Company’s
      account (unless supplied with an indemnity satisfactory to CIT) to cover all
      of
      the Obligations, whether absolute or contingent, including, but not limited
      to,
      cash reserves for any contingent Obligations and an amount equal to 105% of
      the
      face amount of any outstanding Letters of Credit. All of CIT’s rights, liens and
      security interests shall continue after any termination until all Obligations
      have been paid and satisfied in full.

     

    SECTION
      12. Miscellaneous

     

    12.1. The
      Company hereby waives diligence, notice of intent to accelerate, notice of
      acceleration, demand, presentment and protest and any notices thereof as well
      as
      notice of nonpayment. No delay or omission of CIT or the Company to exercise
      any
      right or remedy hereunder, whether before or after the happening of any Event
      of
      Default, shall impair any such right or shall operate as a waiver thereof or
      as
      a waiver of any such Event of Default. No single or partial exercise by CIT
      of
      any right or remedy precludes any other or further exercise thereof, or
      precludes any other right or remedy.

     

     

    
      
        
        

      

      
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    12.2. This
      Financing Agreement and the Loan Documents executed and delivered in connection
      therewith constitute the entire agreement between the Company and CIT; supersede
      any prior agreements; can be changed only by a writing signed by both the
      Company and CIT; and shall bind and benefit the Company and CIT and their
      respective successors and assigns.

     

    12.3. In
      no
      event shall the Company, upon demand by CIT for payment of any Indebtedness
      relating hereto, by acceleration of the maturity thereof, or otherwise, be
      obligated to pay interest and fees in excess of the amount permitted by law.
      Regardless of any provision herein or in any agreement made in connection
      herewith, CIT shall never be entitled to receive, charge or apply, as interest
      on any indebtedness relating hereto, any amount in excess of the maximum amount
      of interest permissible under applicable law. If CIT ever receives, collects
      or
      applies any such excess, it shall be deemed a partial repayment of principal
      and
      treated as such; and if principal is paid in full, any remaining excess shall
      be
      refunded to the Company. This paragraph shall control every other provision
      hereof, the Loan Documents and of any other agreement made in connection
      herewith.

     

    12.4. If
      any
      provision hereof or of any other agreement made in connection herewith is held
      to be illegal or unenforceable, such provision shall be fully severable, and
      the
      remaining provisions of the applicable agreement shall remain in full force
      and
      effect and shall not be affected by such provision’s severance. Furthermore, in
      lieu of any such provision, there shall be added automatically as a part of
      the
      applicable agreement a legal and enforceable provision as similar in terms
      to
      the severed provision as may be possible.

     

    12.5. THE
      COMPANY AND CIT EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
      OR
      PROCEEDING ARISING OUT OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
      THEREUNDER. THE COMPANY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
      AND CONSENTS TO SERVICE OF PROCESS BY CERTIFIED OR REGISTERED MAIL, RETURN
      RECEIPT REQUESTED. IN NO EVENT WILL CIT BE LIABLE FOR LOST PROFITS OR OTHER
      SPECIAL OR CONSEQUENTIAL DAMAGES.

     

    12.6. Except
      as
      otherwise herein provided, any notice or other communication required hereunder
      shall be in writing (provided that, any electronic communications from the
      Company with respect to any request, transmission, document, electronic
      signature, electronic mail or facsimile transmission shall be deemed binding
      on
      the Company for purposes of this Financing Agreement, provided further that
      any
      such transmission shall not relieve the Company from any other obligation
      hereunder to communicate further in writing), and shall be deemed to have been
      validly served, given or delivered when hand delivered or sent by facsimile,
      or
      three days after deposit in the United State mails, with proper first class
      postage prepaid and addressed to the party to be notified or to such other
      address as any party hereto may designate for itself by like notice, as
      follows:

     

    (A) if
      to
      CIT, at:

     

    The
      CIT
      Group/Business Credit, Inc.

    The
      CIT
      Building

    505
      Fifth
      Avenue

    New
      York,
      New York 10017

    Attn:
      Regional Credit Manager

    Fax
      No.:
      (212) 790-9123

     

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    (B) if
      to the
      Company at:

     

    Route
      55

    Lexington
      Park

    LaGrangeville,
      New York 12540

     

    Attn:
      Barry Regenstein, President and Chief Financial Officer

    Fax
      No.:
      (845) 454-0075

     

    With
      a
      courtesy copy of any material notice
      to
      the Company’s counsel at:

     

    Kramer
      Levin Naftalis & Frankel LLP

    1177
      Avenue of the Americas

    New
      York,
      New York 10036


     

    Attn:
      Andrew Hulsh, Esq.

    Fax
      No.
      (212) 715-7519

     

    provided,
      however, that the failure of CIT to provide the Company’s counsel with a copy of
      such notice shall not invalidate any notice given to the Company and shall
      not
      give the Company any rights, claims or defenses due to the failure of CIT to
      provide such additional notice.

     

    12.7. THE
      VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS FINANCING AGREEMENT AND THE
      OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
      EXCEPT TO THE EXTENT THAT ANY OTHER LOAN DOCUMENT INCLUDES AN EXPRESS ELECTION
      TO BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION.

     

    12.8. This
      Financing Agreement does not extinguish the obligations for the payment of
      money
      outstanding under the Existing Financing Agreement or discharge or release
      the
      obligations under the Existing Financing Agreement or the lien or priority
      of
      any mortgage, pledge, security agreement or any other security therefor. Nothing
      herein contained shall be construed as a substitution or novation of the
      obligations outstanding under the Existing Financing Agreement or instruments
      securing the same, which shall remain in full force and effect, except as
      modified hereby or by instruments executed concurrently herewith. Nothing
      expressed or implied in this Financing Agreement shall be construed as a release
      or other discharge of the Company under the Existing Financing Agreement from
      any of its obligations and liabilities thereunder. The Company hereby (a)
      confirms and agrees that, except as modified hereby or by instruments executed
      concurrently herewith, each loan document to which it is a party and executed
      in
      connection with the Existing Financing Agreement shall constitute a “Loan
      Document” under this Financing Agreement, and shall continue to be in full force
      and effect and is hereby ratified and confirmed in all respects, except that
      on
      and after the Closing Date all references in any such Loan Document to the
      “Financing Agreement,” “thereto,” “thereof,” “thereunder” or words of like
      import referring to the Existing Financing Agreement shall mean the Existing
      Financing Agreement, as amended and restated by this Financing Agreement and
      (b)
      confirms and agrees that to the extent that any such Loan Document purports
      to
      assign or pledge to CIT a security interest in or lien on, any Collateral as
      security for the obligations of the Company from time to time existing in
      respect of the Existing Financing Agreement and the Loan Documents, such pledge,
      assignment and/or grant of the security interest or lien is hereby ratified
      and
      confirmed in all respects.

     

     


    
      
        
        

      

      
        38

        
          

        

      

      
        
        

        
          


        

      

    



    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Financing Agreement to be effective, executed,
      accepted and delivered as of March 22, 2006, by their proper and duly authorized
      officers as of the date set forth above.

    


     

    
      	
              COMMAND
                SECURITY CORPORATION

               

            	
              THE
                CIT GROUP/BUSINESS CREDIT, INC.

               

            
	
              By:
                /s/
                Alan Strauss

                 Title:
                Vice
                President

               

            	
              By:
                /s/
                Barry Regenstein

                 Title:
                President

            


    

    


     

     

     

     

    39