EX-10.6 HILCO CREDIT AGREEMENT



 





EXHIBIT 10.6



Execution Copy




 

 






CREDIT AGREEMENT




$7,000,000




among




BROOKSIDE TECHNOLOGY PARTNERS, INC.

and

U.S. VOICE & DATA, LLC,

as Borrowers




BROOKSIDE TECHNOLOGY HOLDINGS CORP.,

as a Guarantor




and

U.S. VOICE & DATA, LLC,

as Funds Administrator




from




HILCO FINANCIAL, LLC,

as Lender




Dated as of September 26, 2007




 

 








 









 












TABLE OF CONTENTS




	 	 	 	 	 	 	 
	ARTICLE 1 DEFINITIONS	 	 	1	 
	1.1

	 	General Definitions
	 	 	1	 
	1.2

	 	Accounting Terms and Determinations
	 	 	23	 
	1.3

	 	Other Interpretive Provisions
	 	 	23	 
	ARTICLE 2 REVOLVING LOANS	 	 	24	 
	2.1

	 	Revolving Loan Commitment; Delivery of Revolving Notes
	 	 	24	 
	2.2

	 	Borrowing Mechanics for Revolving Loans
	 	 	24	 
	2.3

	 	Voluntary and Mandatory Payment
of Revolving Loans; Termination of Revolving Loan Commitment
	 	 	25	 
	2.4

	 	Payments and Computations
	 	 	26	 
	2.5

	 	Maintenance of Account
	 	 	27	 
	2.6

	 	Statement of Account
	 	 	27	 
	2.7

	 	Withholding and Other Taxes
	 	 	28	 
	ARTICLE 3 INTEREST, FEES AND EXPENSES	 	 	29	 
	3.1

	 	Interest on Loans
	 	 	29	 
	3.2

	 	Interest After Event of Default
	 	 	30	 
	3.3

	 	Fees
	 	 	30	 
	3.4

	 	Reimbursement of Expenses
	 	 	30	 
	3.5

	 	Authorization to Charge Borrowers’ Account
	 	 	30	 
	3.6

	 	Indemnification in Certain Events
	 	 	30	 
	3.7

	 	Calculations and Determinations
	 	 	31	 
	ARTICLE 4 CONDITIONS PRECEDENT	 	 	31	 
	4.1

	 	Conditions to Initial Credit Event
	 	 	31	 
	4.2

	 	Conditions to Each Credit Event
	 	 	33	 
	ARTICLE 5 REPRESENTATIONS AND WARRANTIES	 	 	33	 
	5.1

	 	Organization and Qualification
	 	 	33	 
	5.2

	 	Solvency
	 	 	34	 
	5.3

	 	Rights in Collateral; Priority of Liens
	 	 	34	 
	5.4

	 	No Conflict
	 	 	34	 
	5.5

	 	Enforceability
	 	 	34	 
	5.6

	 	Consents
	 	 	35	 
	5.7

	 	Financial Data
	 	 	35	 
	5.8

	 	Locations of Officers, Records and Inventory
	 	 	35	 
	5.9

	 	Fictitious Business Names
	 	 	36	 
	5.10

	 	Subsidiaries
	 	 	36	 
	5.11

	 	No Judgments or Litigation
	 	 	36	 
	5.12

	 	No Defaults
	 	 	36	 
	5.13

	 	Labor Matters
	 	 	36	 
	5.14

	 	Compliance with Law
	 	 	37	 
	5.15

	 	ERISA
	 	 	37	 
	5.16

	 	Intellectual Property
	 	 	37	 
	5.17

	 	Licenses and Permits
	 	 	38	 
	5.18

	 	Title to Property
	 	 	38	 
	5.19

	 	Investment Company
	 	 	38	 
	5.20

	 	Taxes and Tax Returns
	 	 	38	 






 









 






	 	 	 	 	 	 	 
	5.21

	 	Status of Accounts
	 	 	39	 
	5.22

	 	Material Contracts
	 	 	39	 
	5.23

	 	Affiliate Transactions
	 	 	39	 
	5.24

	 	Accuracy and Completeness of Information
	 	 	40	 
	5.25

	 	Recording Taxes
	 	 	40	 
	5.26

	 	No Adverse Change or Event
	 	 	40	 
	5.27

	 	Additional Adverse Facts
	 	 	40	 
	5.28

	 	Foreign Assets Control Regulations and Anti-Money Laundering. OFAC	 	 	40	 
	5.29

	 	Patriot Act
	 	 	40	 
	5.30

	 	Related Transaction Documents
	 	 	41	 
	ARTICLE 6	 	 	41	 
	AFFIRMATIVE COVENANTS	 	 	41	 
	6.1

	 	Financial Information
	 	 	41	 
	6.2

	 	Inventory
	 	 	43	 
	6.3

	 	Corporate Existence
	 	 	43	 
	6.4

	 	ERISA
	 	 	43	 
	6.5

	 	Books and Records
	 	 	44	 
	6.6

	 	Collateral Records
	 	 	45	 
	6.7

	 	Security Interests
	 	 	45	 
	6.8

	 	Insurance; Casualty Loss
	 	 	45	 
	6.9

	 	Credit Party Taxes
	 	 	47	 
	6.10

	 	Compliance With Laws
	 	 	47	 
	6.11

	 	Use of Proceeds
	 	 	47	 
	6.12

	 	Fiscal Year
	 	 	48	 
	6.13

	 	Notification of Certain Events
	 	 	48	 
	6.14

	 	Intellectual Property
	 	 	48	 
	6.15

	 	Maintenance of Property
	 	 	49	 
	6.16

	 	Further Assurances
	 	 	49	 
	ARTICLE 7	 	 	49	 
	NEGATIVE COVENANTS	 	 	49	 
	7.1

	 	Financial Covenants
	 	 	49	 
	7.2

	 	No Additional Indebtedness
	 	 	50	 
	7.3

	 	No Liens; Judgments
	 	 	51	 
	7.4

	 	No Sale of Assets
	 	 	52	 
	7.5

	 	No Corporate Changes
	 	 	52	 
	7.6

	 	No Guaranties
	 	 	52	 
	7.7

	 	No Restricted Payments
	 	 	52	 
	7.8

	 	No Investments
	 	 	53	 
	7.9

	 	No Affiliate Transactions
	 	 	53	 
	7.10

	 	Limitation on Transactions Under ERISA
	 	 	54	 
	7.11

	 	No Additional Bank Accounts
	 	 	54	 
	7.12

	 	Material Amendments of Material Contracts
	 	 	54	 
	7.13

	 	Additional Restrictive Covenants
	 	 	54	 
	7.14

	 	No Additional Subsidiaries
	 	 	54	 
	7.15

	 	Limitation on Derivative Transactions
	 	 	55	 
	7.16

	 	OFAC
	 	 	55	 






 









 






	 	 	 	 	 	 	 
	7.17

	 	Amendments to Related Agreements
	 	 	55	 
	ARTICLE 8	 	 	55	 
	EVENTS OF DEFAULT AND REMEDIES	 	 	55	 
	8.1

	 	Events of Default
	 	 	55	 
	8.2

	 	Acceleration and Cash Collateralization
	 	 	57	 
	8.3

	 	Remedies
	 	 	58	 
	ARTICLE 9	 	 	59	 
	MISCELLANEOUS	 	 	59	 
	9.1

	 	SUBMISSION TO JURISDICTION; WAIVERS
	 	 	59	 
	9.2

	 	JURY TRIAL
	 	 	59	 
	9.3

	 	GOVERNING LAW
	 	 	60	 
	9.4

	 	Delays; Partial Exercise of Remedies
	 	 	60	 
	9.5

	 	Notices
	 	 	60	 
	9.6

	 	Assignability by Lender
	 	 	61	 
	9.7

	 	Confidentiality
	 	 	61	 
	9.8

	 	Indemnification; Expenses
	 	 	62	 
	9.9

	 	Entire Agreement
	 	 	62	 
	9.10

	 	Amendments, Etc
	 	 	62	 
	9.11

	 	Non-liability of Lender
	 	 	63	 
	9.12

	 	Counterparts
	 	 	63	 
	9.13

	 	Effectiveness; Successors and Assigns
	 	 	63	 
	9.14

	 	Severability
	 	 	63	 
	9.15

	 	Headings Descriptive
	 	 	63	 
	9.16

	 	Maximum Rate
	 	 	63	 
	9.17

	 	Right of Setoff
	 	 	64	 
	9.18

	 	Rights Cumulative
	 	 	64	 
	9.19

	 	Patriot Act Notice
	 	 	64	 
	9.20

	 	Joint and Several Liability of Borrowers
	 	 	64	 
	9.21

	 	Funds Administrator
	 	 	65	 
	ARTICLE 10 GUARANTY	 	 	66	 
	10.1

	 	Guaranty
	 	 	66	 
	10.2

	 	Guaranty Absolute
	 	 	67	 
	10.3

	 	Waiver
	 	 	68	 
	10.4

	 	Continuing Guaranty
	 	 	68	 
	10.5

	 	Maximum Liability
	 	 	68	 
	10.6

	 	Subordination
	 	 	68	 
	10.7

	 	Subrogation
	 	 	69	 






 









 






	 	 	 
	ANNEXES
	 
	 	 
	ANNEX I
	 	Closing Document List
	 
	 	 
	EXHIBITS
	 
	 	 
	EXHIBIT A
	 	Form of Revolving Loan Note
	EXHIBIT B
	 	Form of Notice of Revolving Loan Borrowing
	EXHIBIT C
	 	Form of Compliance Certificate
	 
	 	 
	SCHEDULES
	 
	 	 
	SCHEDULE 5.1
	 	Jurisdictions Qualified to Do Business
	SCHEDULE 5.8
	 	Principal Places of Business; Chief Executive Offices;

	 
	 	Locations of Books and Records; Other Locations of Collateral
	SCHEDULE 5.9
	 	Prior Names; Fictitious Business Names
	SCHEDULE 5.10
	 	Subsidiaries
	SCHEDULE 5.11
	 	Outstanding Judgments; Orders; Waivers
	SCHEDULE 5.14
	 	Violations and Failures to Comply with Requirements of Law;
	 
	 	Environmental Matters
	SCHEDULE 5.15
	 	ERISA Matters
	SCHEDULE 5.17
	 	Licenses and Permits
	SCHEDULE 5.18
	 	Real Estate
	SCHEDULE 5.20
	 	Tax Matters
	SCHEDULE 5.23
	 	Affiliate Transactions
	SCHEDULE 5.27
	 	Additional Adverse Facts
	SCHEDULE 7.2
	 	Existing Indebtedness
	SCHEDULE 7.3
	 	Existing Lien
	SCHEDULE 7.8
	 	Existing Investments
	SCHEDULE 7.11
	 	Bank Accounts







 












 





CREDIT AGREEMENT




Dated as of September 26, 2007




     Borrowers, Parent, Funds Administrator and Lender agree as follows (with certain terms used
herein being defined in Article 1):



ARTICLE 1




DEFINITIONS




     1.1 General Definitions. As used herein, the following terms have the meanings herein
specified:



     “Accounts” has the meaning ascribed to that term in the Security Agreement.



     “Accumulated Funding Deficiency” has the meaning ascribed to that term in Section 302 of
ERISA.



     “Affiliate” means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries Controls, is Controlled by, or is under common Control with,
such Person, or any other Person who is a director or officer of such Person or any Subsidiary of
such Person.



     “Auditors” means a nationally-recognized firm of independent certified public
accountants selected by Parent and reasonably satisfactory to Lender. For purposes of this Credit
Agreement, Helin, Donovan, Trubee & Wilkinson, LLP shall be deemed to be Auditors satisfactory to
Lender as of the Closing Date.



     “BTP” means Brookside Technology Partners, Inc., a Texas corporation.



     “Base Rate” means, for any day, a rate of interest equal to the greater of (a) the rate of
interest which is identified as the “Prime Rate” and normally published in the Money Rates section
of The Wall Street Journal (or, if such rate ceases to be so published, as quoted from such other
generally available and recognizable source as Lender may select) or (b) the sum of the Federal
Funds Rate plus one half of one percent (0.50%). Any change in the Base Rate due to a change in
the “Prime Rate” or the Federal Funds Rate shall be effective on the effective date of such change
in the “Prime Rate” or the Federal Funds Rate.



     “Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. § 101, et seq.



     “Benefit Plan” means an employee pension benefit plan as defined in Section 3(2) of ERISA
(other than a Multiemployer Plan) for which the funding requirements under Section 412 of the Code
or Section 302 of ERISA is, or within the immediately preceding six (6) years was, in whole or in
part, the responsibility of any Credit Party or any Subsidiary of any Credit Party or any ERISA
Affiliate.



1









 





     “Borrowers” means BTP and USVD; and “Borrower” means either of such Persons.



     “Borrower’s Account” has the meaning ascribed to that term in Section 2.5.



     “Borrowing Base” means:



          (a) Subject to clause (b) below, at any time, the amount equal at such time to:





     (i) eighty percent (80%) of the Eligible Accounts Receivable, plus,




     (ii) fifty percent (50%) of the Eligible Inventory, plus




     (iii) the Designated Sublimit; minus




     (iv) the amount of any reserves established by Lender pursuant to clause
(b) below.



          (b) Lender at any time in the exercise of its Permitted Discretion shall be entitled to (i)
establish and increase or decrease reserves against Eligible Accounts Receivable and/or Eligible
Inventory and/or the Designated Sublimit, (ii) reduce the advance rates under clauses
(a)(i) and (a)(ii) above or (following any such reduction) restore any such advance
rate to any level equal to or below the advance rate stated in clauses (a)(i) or
(a)(ii) above, as the case may be, (iii) impose additional restrictions (or eliminate the
same) to the standards of eligibility set forth in the respective definitions of “Eligible Accounts
Receivable,” and “Eligible Inventory” and (iv) establish and increase or decrease a reserve in the
amount of interest payable by Borrowers hereunder, including interest on Revolving Loans.




     “Borrowing Base Certificate” has the meaning ascribed to that term in subsection
6.1(h).



     “Business Day” means any day other than a Saturday, Sunday or legal holiday on which
commercial banks in Chicago, Illinois are generally closed.



     “Capital Expenditures” means, of any Person for any period, the sum of (a) all expenditures
capitalized by such Person for financial statement purposes in accordance with GAAP plus, without
duplication, (b) the entire principal amount of any Indebtedness (including obligations under
Capital Leases) assumed or incurred by such Person in connection with any such expenditures,
provided, that, Capital Expenditures of any Person shall in any event include the purchase
price paid by such Person in connection with the acquisition of any other Person (including through
the purchase of a majority of the Capital Securities or other ownership interests of such other
Person or through merger or consolidation) to the extent allocable to property, plant or equipment.



     “Capital Lease” means, with respect to any Person, any lease that is capitalized by such
Person for financial statement purposes in accordance with GAAP.



2









 





     “Capital Security” means, with respect to any Person, (a) any share of capital stock of, or
membership, partnership or other unit of ownership or other equity interest of any kind in, such Person and (b) any security convertible into, or any option, warrant or other right to
acquire, any share of capital stock of or other unit of ownership interest of any kind in such
Person.



     “Cash Equivalents” means (a) securities issued, guarantied or insured by the United States or
any of its agencies with maturities of not more than one year from the date acquired, (b)
certificates of deposit with maturities of not more than one year from the date acquired issued by
a U.S. federal or state chartered commercial bank of recognized standing, which has capital and
unimpaired surplus in excess of $200,000,000 and which bank or its holding company has a short-term
commercial paper rating of at least A-1 or the equivalent by Standard & Poor’s Corporation and at
least P-1 or the equivalent by Moody’s Investors Services, Inc., (c) reverse repurchase agreements
with terms of not more than seven days from the date acquired, for securities of the type described
in clause (a) above and entered into only with commercial banks having the qualifications
described in clause (b) above, (d) commercial paper, other than commercial paper issued by
any Credit Party or any Affiliate of any Credit Party, issued by any Person incorporated under the
laws of the United States or any state thereof and rated at least A-1 or the equivalent thereof by
Standard & Poor’s Corporation or at least P-1 or the equivalent thereof by Moody’s Investors
Services, Inc., in each case with maturities of not more than one year from the date acquired, and
(e) investments in money market funds which have net assets of at least $200,000,000 and at least
eighty five percent (85%) of whose assets consist of securities and other obligations of the type
described in clauses (a) through (d) above.



     “Casualty Loss” has the meaning ascribed to that term in subsection 6.8(a).



     “Change of Control” means the occurrence of one or more of the following events:



          (a) less than a majority of the members of the Board of Directors of Parent shall be persons
who either (i) were serving as directors on the Closing Date or (ii) were nominated as directors
and approved by the vote of the majority of the directors who are directors referred to in
clause (i) above or this clause (ii); or




          (b) a “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) shall,
as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or
otherwise, have become the direct or indirect beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of Capital Securities of Parent representing more than twenty percent (20%)
of the combined ordinary voting power of the Capital Securities of Parent for the election of
directors or shall have the right to elect a majority of the Board of Directors of Parent;
provided, that, a Change of Control shall not include any of the foregoing that results solely from
the issuance of shares of Capital Securities of Parent upon exercise of warrants of Parent
outstanding as of the date hereof and disclosed to Lender; provided, further, that such warrants
are not amended or modified on or after the date hereof and provided further that the exercise
price or other purchase price thereunder is not reduced, adjusted or otherwise modified and the
number of Capital Securities issued or issuable therender is not increased (whether by operation of
law or in accordance with the relevant governing documents or otherwise) on or after the date
hereof; or





3









 








          (c) Parent ceases to beneficially and of record own and control, directly, free and clear of
all Liens (other than Liens in favor of Lender) (i) one hundred percent (100%) of the
issued and outstanding Capital Securities of BTP, or (ii) one hundred percent (100%) of the
issued and outstanding Capital Securities of USVD.




          (d) the holders of Capital Securities of any Credit Party or any Subsidiary of any Credit
Party approve any plan or proposal for the liquidation or dissolution of such Credit Party or
Subsidiary, as the case may be.




     “Closing Date” means the date on which the initial Credit Event occurs.



     “Closing Document List” means the Closing Document List attached hereto as Annex I.



     “Closing Fee” has the meaning ascribed to that term in Section 3.3.



     “Code” means the Internal Revenue Code of 1986, as amended.



     “Collateral” means any and all assets and rights and interests in or to property of any
Borrower, any other Credit Party and any other Person, whether real or personal, tangible or
intangible or mixed, in each case on which a Lien is granted or purported to be granted to Lender
pursuant to any of the Credit Documents, including, without limitation, the Collateral Documents.



     “Collateral Access Agreements” means any landlord waivers, mortgagee waivers, bailee letters
and any similar acknowledgment agreements of any Person, such as a warehouseman or processor, in
possession of Inventory of any Credit Party, in each case in form and substance reasonably
satisfactory to Lender.



     “Collateral Documents” means the Security Agreement, the Parent Pledge Agreement and all other
agreements, documents and instruments now or hereafter executed and delivered pursuant to and/or in
connection with this Credit Agreement, pursuant to which Liens are granted or are purported to be
granted to Lender on any Collateral.



     “Collateral Management Fee” has the meaning ascribed to that term in Section 3.3.



     “Consolidated EBITDA” means, for any fiscal period of the Consolidated Entity, the following,
in each case determined in accordance with GAAP for such fiscal period: (a) Consolidated Net
Income, minus (b) extraordinary gains, plus (c) extraordinary losses, plus (d) the amount of all
Consolidated Interest Expense, income tax expense, depreciation and amortization, including
amortization of any goodwill or other intangibles, to the extent deducted in calculating
Consolidated Net Income for such fiscal period, and plus or minus (as the case may be) (e)
(i) any other non-cash charges previously agreed to by Lender and (ii) any gains or losses
attributable to any fixed asset sales, that have been, in the case of both clauses (i) and
(ii), subtracted or added, as the case may be, in calculating Consolidated Net Income for
such fiscal period.



4









 





     “Consolidated Entity” means Parent and each of its Subsidiaries that are such by virtue of
clause (a) of the definition thereof, but shall mean and include, in any event, each of the
Credit Parties.



     “Consolidated Interest Expense” shall mean, with respect to any fiscal period, the aggregate
consolidated interest expense (net of interest income) of the Consolidated Entity in respect of
Indebtedness determined for such fiscal period on a consolidated basis in accordance with GAAP,
including amortization of original issue discount on any Indebtedness and of all fees payable in
connection with the incurrence of such Indebtedness (to the extent included in interest expense),
the interest portion of any deferred payment obligation and the interest component of any Capital
Lease obligations.



     “Consolidated Net Income” shall mean, for any fiscal period, the consolidated net income of
the Consolidated Entity for such fiscal period.



     “Control” means, with respect to any Person, the possession, directly or indirectly, of the
power to (a) vote ten percent (10%) or more of the Capital Securities having ordinary voting power
for the election of directors of such Person or (b) direct or cause the direction of management and
policies of such Person, whether through the ownership of voting Capital Securities, by contract or
otherwise either alone or in concert with others or any group. The words “Controlling” and
“Controlled” have correlative meanings.



     “Covered Taxes” has the meaning ascribed to that term in subsection 2.7(a).



     “Credit Agreement” means this credit agreement, dated as of the date hereof, as the same may
be amended, restated, amended and restated, supplemented or otherwise modified and in effect from
time to time.



     “Credit Documents” means, collectively, this Credit Agreement, the Revolving Loan Notes, the
Hilco Warrant, the Hilco Registration Rights Agreement, each of the Collateral Documents, each of
the Subordination Agreements and all other agreements, documents, instruments, opinions and
certificates now or hereafter executed and delivered in connection herewith or therewith, as the
same may be amended, restated, amended and restated, supplemented or otherwise modified and in
effect from time to time.



     “Credit Event” means the making of a Revolving Loan.



     “Credit Party” means each Borrower, each Guarantor, the Funds Administrator and each other
Person (other than Lender) that is a party to any of the Credit Documents.



     “Credit Party Taxes” has the meaning ascribed to that term in subsection 5.20(a).



     “DD Growth Premium” means DD Growth Premium Fund, a Cayman Islands Fund.



     “DD Strategic Opportunities” means Dynamic Decisions Strategic Opportunities Fund, a Cayman
Islands Fund.



5









 





     “DD Subordinated Note” means that certain Subordinated Promissory Note dated as of August 30,
2007, and substituted and amended as of September 26, 2007, in the original principal amount of
$1,000,000, issued by Parent and payable to DD Growth Premium, as amended, restated, amended and restated, supplemented, extended or otherwise modified and in
effect from time to time, together will all promissory notes and other instruments given in
substitution or exchange therefor, in each case to the extent permitted pursuant to Subordination
Agreement



     “DD Subordinated Note Documents” means the collective reference to the DD Subordinated Note
Purchase Agreement, the DD Subordinated Note and all other material agreements, documents and
instruments executed and/or delivered pursuant thereto or in connection therewith, in each case as
amended, restated, amended and restated, supplemented or otherwise modified and in effect from time
to time in accordance with the terms and provisions of the DD Note Subordination Agreement.



     “DD Subordinated Note Purchase Agreement” means that certain Subordinated Note Purchase
Agreement dated as of August 30, 2007, among Parent, DD Growth Premium and DD Strategic
Opportunities, as amended, restated, amended and restated, supplemented or otherwise modified and
in effect from time to time, to the extent permitted pursuant to the Subordination Agreement.



     “DD Note Subordination Agreement” means that certain Amended and Restated Subordination
Agreement of even date herewith among Parent, Borrowers, Lender and DD Growth Premium, as amended,
restated, amended and restated, supplemented or otherwise modified and in effect from time to time
in accordance with the terms and provisions thereof.



     “Default” means an event, condition or default which with the giving of notice, the passage of
time or both would be an Event of Default.



     “Depositary Account” has the meaning ascribed to that term in subsection 2.4(b)(i).



     “Depositary Account Agreement” has the meaning ascribed to that term in subsection
2.4(b)(i).



     “Depositary Account Bank” has the meaning ascribed to that term in subsection
2.4(b)(ii).



     “Derivative Contract” means an agreement, whether or not in writing and including any master
agreement, documenting, evidencing or relating to any Derivative Transaction between any Credit
Party and any Subsidiary of any Credit Party and another Person.



     “Derivative Transaction” means (a) an interest rate transaction, including an interest-rate
swap, basis swap, forward rate agreement, interest rate option (including a cap, collar, and
floor), and any other instrument linked to interest rates that gives rise to similar credit risks
(including when-issued securities and forward deposits accepted), (b) an exchange-rate



6









 




transaction, including a cross-currency interest-rate swap, a forward foreign-exchange contract, a currency
option, and any other instrument linked to exchange rates that gives rise to similar credit risks,
(c) an equity derivative transaction, including an equity-linked swap, an equity-linked option, a
forward equity-linked contract, and any other instrument linked to equities that gives rise to
similar credit risk and (d) a commodity (including precious metal) derivative transaction, including a commodity-linked swap, a commodity-linked option, a forward
commodity-linked contract, and any other instrument linked to commodities that gives rise to
similar credit risks.




     “Designated Sublimit” means, at any time, an amount equal to $6,000,000, provided,
that, the Designated Sublimit shall automatically and permanently reduce:



     (a) on each date on or after the Closing Date upon which any Credit Party or any Subsidiary
of any Credit Party receives any net cash proceeds from any sale or other disposition of any
property or assets (other than dispositions permitted by subsection 7.4(a)) (but only to
the extent that the aggregate amount of all such net cash proceeds received by all Credit Parties
and their respective Subsidiaries combined after the Closing Date exceeds $25,000 in any fiscal
year of the Consolidated Entity), by an amount equal to 100% of such net cash proceeds;



     (b) on each date after the Closing Date upon which any Credit Party or any Subsidiary of any
Credit Party receives any net cash proceeds from any Casualty Loss (other than a casualty loss in
respect of Inventory) (but only to the extent that the aggregate amount of all such proceeds
received by all Credit Parties and their respective Subsidiaries combined after the Closing Date
exceeds $25,000 in any fiscal year of the Consolidated Entity), by an amount equal to 100% of such
net cash proceeds;



     (c) on each date after the Closing Date upon which any Credit Party or any Subsidiary of any
Credit Party receives net cash proceeds from any contribution to its capital, or any sale or
issuance of its Capital Securities, by an amount equal to one hundred percent (100%) of such net
cash proceeds;



     (d) on each date after the Closing Date upon which any Credit Party or any Subsidiary of any
Credit Party receives net cash proceeds from any return to such Credit Party or Subsidiary, as the
case may be, of any surplus assets of any Pension Plan, by an amount equal to one hundred percent
(100%) of such net cash proceeds;



     (e) within forty-five (45) days after the end of each fiscal quarter of Parent (commencing
with such fiscal quarter ending as of December 31, 2007), by an amount equal to (i) with respect to
the fiscal quarters of Parent ending as of December 31, 2007 and March 31, 2008, respectively,
forty percent (40%) of Excess Cash Flow with respect to such fiscal quarter, and (ii) with respect
to each fiscal quarter of Parent ending thereafter, eighty percent (80%) of Excess Cash Flow with
respect to such fiscal quarter; and



     (f) on December 31, 2007 and the last day of each fiscal quarter of Parent ending thereafter,
by an amount equal to $250,000.



7









 





     “Disbursement Account” means the operating account of the Funds Administrator maintained with
the Disbursement Account Bank.



     “Disbursement Account Bank” means any bank selected from time to time by Lender and reasonably
acceptable to the Funds Administrator.



     “DOL” means the United States Department of Labor and any successor department or agency.



     “Dollars” and the sign “$” shall each mean freely transferable lawful money of the United
States of America.



     “ECF Available Amount” means, at any time of determination thereof, an amount equal to zero
($-0-); provided, that, the ECF Amount shall:



     (a) increase by an amount equal to (i) sixty percent (60%) of Excess Cash Flow, if any, for
the fiscal quarters of the Consolidated Entity ending as of December 31, 2007 and March 31, 2008,
respectively, and (ii) twenty percent (20%) of Excess Cash Flow, if any, for each fiscal quarter of
the Consolidated Entity ending thereafter; and



     (b) permanently decrease by an amount equal to any Restricted Payment made pursuant to
Sections 7.7(b), (c) or (d).



     “Eligible Accounts Receivable” means Accounts of a Borrower payable in Dollars and deemed by
Lender in its Permitted Discretion to be eligible for inclusion in the calculation of the Borrowing
Base. In determining the amount to be so included, the face amount of such Accounts shall be
reduced by the amount of all returns, discounts, claims, credits, charges, or other allowances and
by the aggregate amount of all reserves, limits and deductions provided for in this definition and
elsewhere in this Credit Agreement, including any reserves established by Lender pursuant to the
definition of the term “Borrowing Base” set forth herein, and there shall be excluded any such
Accounts that Lender determines to be ineligible pursuant to the definition of the term “Borrowing
Base” set forth herein. Unless otherwise approved in writing by Lender, no Account of a Borrower
shall be deemed to be an Eligible Account Receivable if:



     (a) it arises out of a sale made by such Person to an Affiliate of such Person; or



     (b) (i) the payment terms with respect to such Account are more than ninety (90) days after
the original invoice date with respect thereto or (ii) such Account remains unpaid more than sixty
(60) days after the original payment due date with respect thereto; or



     (c) it is from the same account debtor (or any Affiliate thereof) and twenty-five percent
(25%) or more, in face amount, of all Accounts from such account debtor (or any Affiliate thereof)
are ineligible pursuant to clauses (b) above; or



8









 





     (d) the Account, when aggregated with all other Accounts of such account debtor, exceeds
twenty percent (20%) in face value of all Accounts of the Borrowers combined then outstanding, to
the extent of such excess;



     (e) (i) the account debtor is also a creditor of such Borrower, (ii) the account debtor has
disputed its liability on, or the account debtor has made any claim with respect to, such Account
or any other Account due from such account debtor to such Borrower, which has not been resolved or
(iii) the Account otherwise is or may become subject to any right of setoff by the account debtor;
provided, that, any Account deemed ineligible pursuant to this clause (e) shall only be ineligible to the extent of the amount owed by such Borrower to such account
debtor, the amount of such dispute or claim, or the amount of such setoff, as applicable; or



     (f) the account debtor has commenced a voluntary case under the federal bankruptcy laws, as
now constituted or hereafter amended, or made an assignment for the benefit of creditors, or if a
decree or order for relief has been entered by a court having jurisdiction over the account debtor
in an involuntary case under the federal bankruptcy laws, as now constituted or hereafter amended,
or if any other petition or other application for relief under the federal bankruptcy laws has been
filed by or against the account debtor, or if the account debtor has filed a certificate of
dissolution under applicable state law or shall be liquidated, dissolved or wound-up, or shall
authorize or commence any action or proceeding for dissolution, winding-up or liquidation, or if
the account debtor has failed, suspended business, declared itself to be insolvent, is generally
not paying its debts as they become due or has consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a significant portion of its assets or
affairs (any such act or event an “Act of
Bankruptcy”), unless the payment of Accounts from
such account debtor is secured by assets of, or guaranteed by, in either case in a manner
satisfactory to Lender, a Person with respect to which an Act of Bankruptcy has not occurred and
that is acceptable to Lender or, if the Account from such account debtor arises subsequent to a
decree or order for relief with respect to such account debtor under the federal bankruptcy laws,
as now or hereafter in effect, Lender shall have determined that the timely payment and collection
of such Account will not be impaired; or



     (g) the sale is to an account debtor outside of the continental United States, unless such
account debtor has supplied such Person with an irrevocable letter of credit in form and substance
satisfactory to Lender, issued by a financial institution satisfactory to Lender and which has been
duly transferred to Lender (together with sufficient documentation to permit direct draws
thereunder by Lender); or



     (h) the sale to the account debtor is on a bill-and-hold, guarantied sale, sale-and-return,
sale on approval or consignment basis or made pursuant to any other written agreement providing for
repurchase or return; or



     (i) Lender determines in its Permitted Discretion that collection of such Account is insecure
or that such Account may not be paid by reason of the account debtor’s financial inability to pay;
or



9









 





     (j) the account debtor is the United States of America or any department, agency or
instrumentality thereof, unless such Person duly assigns its rights to payment of such Account to
Lender pursuant to the Assignment of Claims Act of 1940 (31 U.S.C. § 3727 et seq.); or



     (k) the goods giving rise to such Account have not been shipped and delivered to and accepted
by the account debtor or the services giving rise to such Account have not been performed by such
Borrower and accepted by the account debtor or the Account otherwise does not represent a final
sale; or



     (l) the Account does not comply with all applicable legal requirements, including, where
applicable, the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and
Regulation Z of the Board of Governors of the Federal Reserve System; or



     (m) Lender does not have a valid and perfected first priority security interest in such
Account or the Account does not otherwise conform to the representations and warranties contained
in the Credit Agreement, the Security Agreement or any of the other Collateral Documents; or



     (n) the Account is subject to any adverse security deposit, progress payment, advance billing
or other similar advance made by or for the benefit of the applicable account debtor.



     “Eligible Inventory” means Inventory of a Borrower that consists of finished goods deemed by
Lender in its Permitted Discretion to be eligible for inclusion in the calculation of the Borrowing
Base. In determining the amount to be so included, the amount of such Inventory shall be valued at
the lower of cost or market on a basis consistent with such Borrower’s current and historical
accounting practice, and shall exclude (a) any goods returned or rejected by customers of such
Borrower and goods in transit to third parties (other than to agents of such Borrower and
warehouses that are not excluded pursuant to clause (ii)(B) below), (b) any Inventory that
Lender determines to be ineligible pursuant to the definition of the term “Borrowing Base” set
forth herein, and (c) any reserves established by Lender pursuant to the definition of the term
“Borrowing Base” set forth herein. Unless otherwise approved in writing by Lender, no Inventory of
a Borrower shall be deemed Eligible Inventory if:




     (i) the Inventory is not owned solely by such Borrower or such Borrower does not have
good, valid and marketable title thereto; or




     (ii) the Inventory is not stored on property that is either (A) owned or leased by such
Borrower or (B) owned or leased by a warehouseman that has contracted with such Borrower to
store Inventory on such warehouseman’s property (provided, with respect to Inventory
of a Borrower stored on property leased by such Borrower, such Borrower shall have delivered
to Lender a Collateral Access Agreement executed by the lessor of such property, and, with
respect to Inventory of a Borrower stored on property owned or leased by a warehouseman,
such Borrower shall have delivered to Lender a Collateral Access Agreement executed by such
warehouseman); or



10









 






     (iii) the Inventory is not subject to a valid and perfected first priority security
interest in favor of Lender; or




     (iv) the Inventory is obsolete or slow moving (in each case as determined by Lender) or
the Inventory does not otherwise conform to the representations and warranties with respect
thereto contained in the Credit Agreement, the Security Agreement or any of the other
Collateral Documents; or




     (v) the Inventory was not manufactured in accordance with and does not meet all
standards imposed by all applicable Requirements of Law or by any Governmental Authority
having regulatory authority over such goods or their manufacture, use or sale.



     “Equipment” has the meaning ascribed to that term in the Security Agreement.



     “ERISA” means the Employee Retirement Income Security Act of 1974, and all final or temporary
regulations promulgated thereunder and published, generally applicable rulings entitled to
precedential effect.



     “ERISA Affiliate” means any Person required at any relevant time to be aggregated with any
Credit Party or any Subsidiary of any Credit Party under Sections 414(b), (c), (m) or (o) of the
Code.



     “Equity Documents” means the collective reference to (i) that certain Securities Purchase
Agreement dated as of September 14, 2007, between Parent and Equity Investor, (ii) that certain
Investor Rights Agreement dated as of September 14, 2007, between Parent and Equity Investor and
(iii) all other material agreements, documents and instruments executed and/or delivered pursuant
thereto or in connection therewith, in each case, as amended, restated, amended and restated,
supplemented or otherwise modified and in effect from time to time, to the extent permitted
hereunder.



     “Equity Investor” means Vicis Capital Master Fund, a sub-trust of Vicis Capital Series Master
Trust, a unit trust organized and existing under the laws of the Cayman Islands.



     “Event(s) of Default” has the meaning ascribed to that term in Article 8 of this
Credit Agreement.



     “Excess Cash Flow” shall mean, with respect to any fiscal period of the Consolidated Entity,
the following, in each case determined in accordance with GAAP for such fiscal period: (a)
Consolidated EBITDA; minus (b) the sum of (i) Consolidated Interest Expense paid or payable
in cash, (ii) income taxes paid in cash, (iii) regularly scheduled principal payments on
Indebtedness (other than repayments of Revolving Loans in the ordinary course of business which do
not permanently reduce the aggregate Revolving Loan Commitment), to the extent permitted hereunder,
and (iv) Capital Expenditures, to the extent permitted hereunder.



     “Exchange Act” means the Securities Exchange Act of 1934, and all final or temporary
regulations promulgated thereunder and published, generally applicable rulings entitled to
precedential effect.



11









 





     “Existing Subordinated Note Debt Documents” means the collective reference to the Existing
Subordinated Notes and all other material agreements, documents and instruments executed and/or
delivered pursuant thereto or in connection therewith, in each case as amended, restated, amended
and restated, supplemented or otherwise modified and in effect from time to time in accordance with
the terms and provisions of the respective Existing Note Subordination Agreements.



     “Existing Subordinated Notes” means the collective reference to (i) that certain Subordinated
Promissory Note dated September 17, 2007, in the original principal amount of $51,000, executed by
Parent and payable to Burton J. and Ruth M. Kleinsmith; (ii) that certain Subordinated Promissory
Note dated May 31, 2007, in the original principal amount of $131,075.34, executed by Parent and payable to Burton J. and Ruth M. Kleinsmith; (iii) that
certain Subordinated Promissory Note dated September 17, 2007, in the original principal amount of
$30,000, executed by Parent and payable to Michael Nole; (iv) that certain Subordinated Promissory
Note dated June 30, 2007, in the original principal amount of $208,307.53, executed by Parent and
payable to Randy Rogers, and (v) that certain Subordinated Promissory Note dated May 31, 2007, in
the original principal amount of $47,172.60, executed by Parent and payable to Ken Dance, in each
case as amended, restated, amended and restated, supplemented, extended or otherwise modified and
in effect from time to time, together will all promissory notes and other instruments given in
substitution or exchange therefor, in each case to the extent permitted pursuant to respective
Existing Note Subordination Agreements



     “Existing Note Subordination Agreements” means the collective reference to (i) that certain
Subordination Agreement of even date herewith among Parent, Borrowers, Lender and Burton J. and
Ruth M. Kleinsmith; (ii) that certain Subordination Agreement of even date herewith among Parent,
Borrowers, Lender and Burton J. and Ruth M. Kleinsmith; (iii) that certain Subordination Agreement
of even date herewith among Parent, Borrowers, Lender and Michael Nole; (iv) that certain
Subordination Agreement of even date herewith among Parent, Borrowers, Lender and Randy Rogers; and
(v) that certain Subordination Agreement of even date herewith among Parent, Borrowers, Lender and
Ken Dance, in each case, as amended, restated, amended and restated, supplemented or otherwise
modified and in effect from time to time in accordance with the terms and provisions thereof.



     “Excluded Deposit Accounts” means deposit accounts specifically and exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of a
Credit Party’s employees; provided, that the funds on deposit in such deposit accounts
shall at no time exceed the actual payroll, payroll taxes and other employee wage and benefit
payments then due and payable by such Credit Party.



     “Expenses” means all present and future reasonable expenses incurred by or on behalf of Lender
in connection with this Credit Agreement, any other Credit Document or otherwise, whether incurred
heretofore or hereafter, which expenses shall include, without being limited to, the cost of record
searches, the fees and expenses of attorneys (including the allocated cost of internal counsel) and
paralegals, all costs and expenses incurred by Lender in opening bank accounts and lockboxes,
depositing checks, receiving and transferring funds, and any charges



12









 




imposed on Lender due to insufficient funds of deposited checks and Lender’s standard fee relating thereto, collateral
examination fees and expenses, fees and expenses of accountants, appraisers, field examiners or
other consultants, experts or advisors employed or retained by Lender, fees and expenses incurred
by Lender in connection with the assignments of or sales of participations in the Revolving Loans,
title insurance premiums, real estate survey costs, fees and taxes relative to the filing of
financing statements, costs of preparing and recording any Mortgages or any other Collateral
Documents, all expenses and costs referred to in Article 3 of this Credit Agreement and all
fees and expenses incurred in connection with releasing Collateral and the amendment or termination
of any of the Credit Documents.




     “Expiration Date” means the earlier of (a) September 26, 2008, and (b) the termination or
reduction to zero ($0) of the Revolving Loan Commitment in accordance with the terms of this Credit
Agreement.



     “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal, for
each day during such period, to the weighted average of the rates on overnight Federal Funds
transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such transactions received by Lender
from three (3) Federal Funds brokers of recognized standing selected by it.



     “Fees” means the Collateral Management Fee, the Closing Fee and the Unused Line Fee and,
without duplication, all other fees payable by Borrowers hereunder or in connection herewith.



     “Financial Statements” means the consolidated and, unless otherwise specified, consolidating
balance sheets, statements of operations, statements of cash flows and statements of changes in
shareholder’s equity of the Consolidated Entity for the period.



     “Funding Institution” has the meaning ascribed to that term in Section 3.6.



     “Funds Administrator” means Parent, acting in its capacity as funds administrator and
borrowing agent for Borrowers hereunder and under the other Credit Documents.



     “GAAP” means generally accepted accounting principles in the United States as in effect from
time to time.



     “Governing Documents” means, as to any Person, the certificate or articles of incorporation
and bylaws or other organizational or governing documents of such Person.



     “Governmental Authority” means any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.



     “Guaranteed Obligations” has the meaning ascribed to that term in Section 10.1.



13









 





     “Guarantor” means (a) Parent and (b) any other Person that guarantees, pursuant to Article
10 or otherwise, all or any part of the Obligations.



     “Guaranty” of any Person means any Liability, contingent or otherwise, of such Person (other
than an endorsement for collection or deposit in the ordinary course of business) (a) to pay any
Liability of any other Person or to otherwise protect, or having the practical effect of
protecting, the holder of any such Liability against loss (whether such obligation arises by virtue
of such Person being a partner of a partnership or participant in a joint venture or by agreement
to pay, to keep well, to maintain solvency, assets, level of income or other financial condition,
to purchase assets, goods, securities or services or to take or pay, or otherwise) or (b) incurred
in connection with the issuance by a third Person of a Guaranty of any Liability of any other
Person (whether such obligation arises by agreement to reimburse or indemnify such third Person or
otherwise). The word “Guarantee” when used as a verb has the correlative meaning.



     “Hilco Registration Rights Agreement” means that Registration Rights Agreement of even date
herewith between Hilco and Parent.



     “Hilco
Warrant” means that certain Warrant to Purchase Common Stock
No. ___ issued on the date
hereof by Parent to Lender.



     “Highest Lawful Rate” means, at any time when any Obligations shall be outstanding hereunder,
the maximum non-usurious interest rate, that then may be contracted for, taken, reserved, charged
or received in respect of the Obligations owing under this Credit Agreement or any of the other
Credit Documents, under (a) the laws of the State of Illinois (or the law of any other jurisdiction
whose laws may be mandatorily applicable notwithstanding other provisions of this Credit Agreement
and the other Credit Documents) or (b) if higher, applicable federal laws, in any case after taking
into account, to the extent permitted by applicable law, any and all relevant payments or charges
under this Credit Agreement and any other Credit Documents executed in connection herewith, and any
available exemptions, exceptions and exclusions.



     “Indebtedness” of any Person means (in each case, whether such obligation is with full or
limited recourse) (a) any obligation of such Person for borrowed money, (b) any obligation of such
Person evidenced by a bond, debenture, note or other similar instrument, (c) any obligation of such
Person to pay the deferred purchase price of property or services, except a trade account payable
that arises in the ordinary course of business but only if and so long as the same is payable on
customary trade terms, (d) any obligation of such Person as lessee under a Capital Lease, (e) any
Mandatorily Redeemable Obligation of such Person owed by any Person other than such Person or a
Wholly Owned Subsidiary of such Person (the amount of such Mandatorily Redeemable Obligation to be
determined for this purpose as the higher of the liquidation preference of and the amount payable
upon redemption of such Mandatorily Redeemable Obligation), (f) any obligation of such Person to
purchase securities or other property that arises out of or in connection with the sale of the same
or substantially similar securities or property, (g) any non-contingent obligation of such Person
to reimburse any other Person in respect of amounts paid under a letter of credit or other Guaranty
issued by such other Person to the extent that such reimbursement obligation remains outstanding
after it becomes



14









 




non-contingent, (h) any Derivative Contract or similar obligation obligating such
Person to make payments, whether periodically or upon the happening of a contingency, except that
if any agreement relating to such obligation provides for the netting of amounts payable by and to
such Person thereunder or if any such agreement provides for the simultaneous payment of amounts by
and to such Person, then in each such case, the amount of such obligation shall be the net amount
thereof, (i) any Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) a Lien on any property or asset
of such Person and (j) any Indebtedness of others Guaranteed by such Person.




     “Initial Projections” means the projections of the financial condition and results of
operations of the Consolidated Entity for the fiscal years of the Consolidated Entity ending
December 31, 2007, December 31, 2008 and December 31, 2009, delivered to Lender prior to the
Closing Date and attached hereto as Annex II.



     “Insolvency Proceeding” means any proceeding commenced by or against any Person under any
provision of the Bankruptcy Code or under any other bankruptcy or insolvency law, assignments for
the benefit of creditors, formal or informal moratoria, compositions, or extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar relief.



     “Inter-Tel Subordination Agreement” means that certain Subordination Agreement of even date
herewith among Parent, Borrowers, Lender, Inter-Tel Integrated Systems, Inc. and Inter-Tel,
Incorporated, as amended, restated, amended and restated, supplemented or otherwise modified and in
effect from time to time in accordance with the terms and provisions thereof.



     “Inter-Tel Dealer Agreement” means that certain Dealer Agreement dated April 24, 2007, between
Inter-Tel Integrated Systems, Inc. and USVD, as amended, restated, amended and restated,
supplemented or otherwise modified and in effect from time to time to in accordance with the terms
and provisions of the Inter-Tel Subordination Agreement.



     “Internal Revenue Service” or “IRS” means the United States Internal Revenue Service and any
successor agency.



     “Inventory” has the meaning ascribed to that term in the Security Agreement.



     “Investment” mean, as applied to an investment of or by any Person, all Guaranties by such
Person of any Liabilities of another Person and all expenditures made and all Liabilities incurred
(contingently or otherwise) by such Person for or in connection with the acquisition of (a) all or
substantially all of the assets of another Person, (b) stock or other ownership interests or
Indebtedness of another Person, or (c) Indebtedness of, or loans, advances, capital contributions
or transfers of property to, another Person. In determining the aggregate amount of Investments
outstanding at any particular time, (i) the amount of any Investment represented by a Guaranty
shall be taken at not less than the principal amount of the Liabilities to which such Guaranty is
applicable and still outstanding; (ii) there shall be deducted in respect of each such Investment
any amount received as a return of capital (but only by sale, repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iii) there shall not be deducted in



15









 




respect of any Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, until actually received in cash; and (iv) there shall not be
deducted from the original amount of any Investment, and such Investment shall be deemed to
continue to be “outstanding” in such original amount notwithstanding, any (A) decrease in the
market value thereof or (B) amount thereof that may have been forgiven, released, cancelled or
otherwise nullified or held to be invalid.




     “Lender” means Hilco Financial, LLC, a Delaware limited liability company.



     “Lender’s Account” means the following:



	 	 	 	 	 
	 
	 	Bank:	 	LaSalle Bank National Association
	 
	 	 	 	135 South LaSalle Street
	 
	 	 	 	Chicago, Illinois 60603
	 
	 	 	 	Tel. No.:  (312) 904-2000






	 	 	 	 	 
	 
	 	ABA#:	 	071-000-505
	 
	 	Account No.:	 	5800442419
	 
	 	Account Name:	 	Hilco Financial, LLC
	 
	 	Reference:	 	Brookside/USVD






     “Liability” of any Person means (in each case, whether with full or limited recourse) any
indebtedness, liability, obligation, covenant or duty of or binding upon, or any term or condition
to be observed by or binding upon, such Person or any of its property or assets, of any kind,
nature or description, direct or indirect, absolute or contingent, due or not due, contractual or
tortious, liquidated or unliquidated, whether arising under contract, Requirement of Law, or
otherwise, whether now existing or hereafter arising, and whether for the payment of money or the
performance or non-performance of any act.



     “License Agreement” means each now existing and hereafter arising license, supply and/or
distribution and similar agreement to which any Credit Party or any Subsidiary of any Credit Party
is party, as licensee or licensor thereunder.



     “Lien(s)” means (a) any lien, claim, charge, pledge, security interest, deed of trust,
mortgage, other encumbrance or other arrangement having the practical effect of the foregoing or
other preferential arrangement of any other kind and shall include the interest of a vendor or
lessor under any conditional sale agreement, Capital Lease or other title retention agreement and
(b) in addition, in the case of any investment property, any contract or other arrangement, express
or implied, under which any Person has the right to control such investment property.



     “Lockbox” has the meaning ascribed to that term in subsection 2.4(b)(i).



     “Mandatorily Redeemable Obligation” means a Liability of any Person, or a Liability of another
Person Guaranteed by such Person, to the extent that, in either case, it is redeemable, payable or
required to be purchased or otherwise retired or extinguished (a) at a fixed or determinable date,
whether by operation of sinking fund or otherwise, (b) at the option of any



16









 




other Person or (c) upon the occurrence of a condition not solely within the control of such Person as a redemption
required to be made out of future earnings.




     “Material Adverse Effect” means a material adverse effect on (a) the business, prospects,
operations, results of operations, assets, liabilities or condition (financial or otherwise) of the
Credit Parties taken as a whole, (b) the value of Collateral or the amount which Lender would be
likely to receive (after giving consideration to delays in payment and costs of enforcement) in the
liquidation of such Collateral, (c) the ability of any Credit Party or any Subsidiary of any Credit
Party to perform its obligations under the Credit Documents to which it is a party or (d) the
rights and remedies of Lender under any Credit Document.



     “Material Contract” means each contract or other arrangement (other than the Credit
Documents), whether written or oral, to which any Credit Party or any Subsidiary of any Credit
Party is a party with respect to which breaches, non-performances, cancellations or failures to
renew by any party thereto singly or in the aggregate could reasonably be expected to have a
Material Adverse Effect.



     “Maximum Liability” has the meaning ascribed to that term in Section 10.5.



     “Mortgages” means each mortgage and deed of trust and each leasehold mortgage and leasehold
deed of trust, if any, granted by any Credit Party in favor of Lender.



     “Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA
and (a) which is, or within the immediately preceding six (6) years was, contributed to by any
Credit Party, any Subsidiary of any Credit Party or any ERISA Affiliate or (b) with respect to
which any Credit Party or any Subsidiary of any Credit Party may incur any liability.



     “Notice of Revolving Loan Borrowing” has the meaning ascribed to that term in subsection
2.2.



     “Obligations” means (a) the unpaid principal of and interest on the Revolving Loans and any
Revolving Loan Note, (b) the Expenses, and (c) all other Liabilities of Borrower to Lender, which
may arise under, out of, or in connection with, the Credit Agreement, any Revolving Loan Notes, the
Hilco Warrant, any other Credit Document or any other agreements, documents or instruments made,
delivered or given in connection herewith or therewith. As used herein in clause (a) and
wherever else the determination of the amount of “interest” is relevant, “interest” shall include
interest accruing on or after the filing of, or what would have accrued but for the filing of, any
petition in bankruptcy, or the commencement of any Insolvency Proceeding, relating to any Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in such proceeding.



     “Other Taxes” has the meaning ascribed to that term in subsection 2.7(b).



     “PBGC” means the Pension Benefit Guaranty Corporation and any Person succeeding to the
functions thereof.



17









 





     “Parent” means Brookside Technology Holdings Corp., a Florida corporation.



     “Parent Pledge Agreement” means the Stock Pledge Agreement of even date herewith, executed by
Parent in favor of Lender, evidencing the pledge by Parent to Lender of (a) one hundred percent
(100%) of the issued and outstanding Capital Securities of BTP, and (b) one hundred percent (100%)
of the issued and outstanding Capital Securities of USVD, respectively, as the same may be amended,
restated, amended and restated, supplemented or otherwise modified and in effect from time to time



     “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56, as amended.



     “Payment in Full” or “Paid in Full” means the indefeasible payment in full in immediately
available freely transferable Dollars of all Obligations (including interest accrued after the
commencement of any Insolvency Proceeding irrespective of whether a claim for such interest is
allowable in such Insolvency Proceeding) and the termination of the commitment of
Lender or any other obligation of Lender to advance funds or otherwise make extensions of credit
hereunder or under any of the other Credit Documents.



     “Permitted DD Note Payment” means a regularly scheduled payment of principal or interest under
the DD Subordinated Note, as in effect on the date hereof, to the extent that the amount of such
payment (when added to the aggregate amount of any other Restricted Payments of the type described
in Section 7.7(b), (c) or (d) and made on the same date) does not exceed the ECF
Available Amount then in effect.



     “Permitted Existing Noteholder Payment” means a regularly scheduled payment of principal or
interest under any of the Existing Subordinated Notes, in each case as in effect on the date
hereof, to the extent that the amount of such payment (when added to the amount of any other
Restricted Payments of the type described in Section 7.7(b), (c) or (d) and made on
the same date) does not exceed the ECF Available Amount then in effect.



     “Permitted USVD Seller Payment” means a scheduled payment pursuant to Section 2.2(c) or 2.5 of
the USVD Acquisition Agreement, as in effect on the date hereof, to the extent that the amount of
such payment (when added to the amount of any other Restricted Payments of the type described
pursuant to Section 7.7(b), (c) or (d) and made on the same date) does not exceed
the ECF Available Amount then in effect.



     “Permitted Discretion” means Lender’s judgment exercised in good faith based upon its
consideration of any factor which Lender believes in good faith: (a) will or could adversely affect
the value of any Collateral, the enforceability or priority of Lender’s Liens thereon or the amount
which Lender would be likely to receive (after giving consideration to delays in payment and costs
of enforcement) in the liquidation of such Collateral; (b) suggests that any collateral report or
financial information delivered to Lender by any Person on behalf of any Credit Party is
incomplete, inaccurate or misleading in any material respect; (c) materially increases the
likelihood of a bankruptcy, reorganization or other insolvency proceeding involving any Credit
Party or any of the Collateral; or (d) creates or reasonably could be expected to create a Default



18









 




or Event of Default. In exercising such judgment, Lender may consider such factors already
included in or tested by the definitions of Eligible Accounts Receivable and Eligible Inventory, as
well as any of the following: (i) the changes in collection history and dilution with respect to
the Accounts; (ii) changes in demand for, and pricing of, Inventory; (iii) changes in any
concentration of risk with respect to any Accounts or Inventory of any Credit Party; and (iv) any
other factors that change the credit risk of lending to any Borrower on the security of the
Accounts and Inventory of any Credit Party. The burden of establishing lack of good faith
hereunder shall be on the Credit Parties.




     “Permitted Liens” has the meaning ascribed to that term in Section 7.3.



     “Permitted Restrictive Covenant” means (a) any covenant or restriction contained in any Credit
Document, (b) any covenant or restriction of the type contained in Section 7.3 that is
contained in any contract evidencing or providing for the creation of or concerning Indebtedness
secured by any Purchase Money Lien so long as such covenant or restriction is limited to the
property purchased therewith, or (c) any covenant or restriction that (i) is not more burdensome
than an existing Permitted Restrictive Covenant that is such by virtue of clause (b); (ii)
is contained in a contract constituting a renewal, extension or replacement of the Contract in
which such existing Permitted Restrictive Covenant is contained; and (iii) is binding only on the
Person or Persons bound by such existing Permitted Restrictive Covenant.



     “Person” means any individual, sole proprietorship, partnership, joint venture, trust,
business trust, unincorporated organization, association, corporation, limited liability company,
institution, entity, party or government (including any division, agency or department thereof),
and, as applicable, the successors, heirs and assigns of each.



     “Plan” means any employee benefit plan, program or arrangement, whether oral or written,
maintained or contributed to by any Credit Party or any Subsidiary of any Credit Party or any ERISA
Affiliate, or with respect to which any Credit Party or any Subsidiary of any Credit Party or any
ERISA Affiliate, may incur liability.



     “Prohibited Transaction” means any transaction that is prohibited under Code Section 4975 or
ERISA Section 406 and not exempt under Code Section 4975 or ERISA Section 408.



     “Purchase Money Liens” means Liens on any item of Equipment of a Credit Party or any
Subsidiary of any Credit Party acquired after the date of this Credit Agreement to secure the
purchase price thereof; provided, that: (a) each such Lien shall attach only to the
property to be acquired; and (b) the Indebtedness incurred in connection with such acquisitions
shall not exceed one hundred percent (100%) of the amount of the purchase price of such items of
Equipment then being financed.



     “Real Estate” means all real property owned or leased by any Credit Party or any of Subsidiary
of any Credit Party, together with all fixtures, improvements and other structures thereon.



19









 





     “Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor thereto.



     “Related Transactions” means the respective transactions contemplated by the Related
Transactions Documents and includes, without limitation, the USVD Acquisition.



     “Related Transaction Documents” means the USVD Acquisition Documents, the USVD Equity
Documents, the Existing Subordinated Note Documents and the DD Subordinated Note Documents.



     “Reportable Event” means any of the events described in Section 4043 of ERISA and the
regulations thereunder.



     “Requirement of Law” means, as to any Person, the Governing Documents of such Person, and any
law, treaty, rule, regulation, direction, ordinance, criterion or guideline or determination of a
court or other Governmental Authority or determination of an arbitrator, in each case applicable to
or binding upon such Person or any of its property or to which such Person or any of its property
is subject.



     “Restricted Payment” means, (a) any dividend or other distribution, direct or indirect, on
account of any Capital Securities of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (b) any repurchase, redemption, retirement, defeasance, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any Capital Securities of
any Credit Party or any of its Subsidiaries, now or hereafter outstanding, (c) any payment to
retire or to purchase, or to obtain the surrender of, any outstanding warrants, options or other
rights for the purchase or acquisition of shares of any class of Capital Securities of any Credit
Party or any of its Subsidiaries, now or hereafter outstanding, (d) any cash payment or prepayment
of interest on, principal of, premium, if any, fees, redemption, conversion, exchange, purchase,
retirement, defeasance, sinking fund or similar payment with respect to, any Indebtedness or other
obligations subordinated in right of payment to the Obligations, or (e) payment of any management
fees or any other fees or expenses (including the reimbursement thereof by such Credit Party or
such Subsidiary) pursuant to any management, consulting or other services agreement to any of the
shareholders or other equityholders of any Credit Party, or to any other Subsidiary or Affiliate of
any Credit Party. For the purposes of this definition, a “payment” shall include the transfer of
any asset or the incurrence of any Indebtedness or other Liability (the amount of any such payment
to be the fair market value of such asset or the amount of such obligation, respectively) but shall
not include the issuance by such Person to the holders of a class or series of a class of its
Capital Securities of the same class and, if applicable, series, other than, in the case of any
Credit Party or any of its Subsidiaries, Mandatorily Redeemable Obligations.



     “Revolving Loan” has the meaning ascribed to that term in subsection 2.1(a) and shall
include, with limitation, any amount advanced by Lender pursuant to Sections 2.4, 2.5 and
3.5 or any other provision of this Credit Agreement (other than subsections 2.1(b)
and (c)).



20









 





     “Revolving Loan Commitment” means Lender’s commitment to make Revolving Loans on the terms and
subject to the conditions set forth herein in an aggregate outstanding principal amount not to
exceed at any time $7,000,000, as such amount may be reduced from time to time or terminated
pursuant to the terms and provisions of this Credit Agreement.



     “Revolving Loan Note” shall mean a promissory note of Borrowers payable to the order of
Lender, substantially in the form of Exhibit A, evidencing the Indebtedness of Borrowers to
Lender resulting from the Revolving Loans made by Lender.



     “Security Agreement” means the General Security Agreement of even date herewith, between
Lender and Credit Parties, as such General Security Agreement may be amended, restated, amended and
restated, supplemented or otherwise modified and in effect from time to time.



     “Subordination Agreements” means the collective reference to the Existing Note Subordination
Agreements, the DD Note Subordination Agreement, the Inter-Tel Subordination Agreement and the USVD
Seller Subordination Agreement.



     “Subsidiary” means, with respect to any Person at any time (a) any other Person the accounts
of which would be consolidated with those of such first Person in its consolidated financial
statements as of such time, and (b) any other Person (i) that is, at such time, Controlled by, or (ii) Capital Securities of which having ordinary voting power to elect a majority of
the board of directors (or other persons having similar functions), or other ownership interests of
which ordinarily constituting a majority voting interest, are at such time, directly or indirectly,
owned or Controlled by, in the case of each of clauses (i) and (ii), such first
Person or by one or more of its Subsidiaries, or by such first Person and one or more of its
Subsidiaries.



     “Tax Transferee” has the meaning ascribed to that term in subsection 2.7(a).



     “Taxes” has the meaning ascribed to that term in subsection 2.7(a).



     “Termination Event” means (a) a Reportable Event with respect to any Benefit Plan or
Multiemployer Plan; (b) the withdrawal of any Credit Party or any Subsidiary of any Credit Party or
any ERISA Affiliate from a Benefit Plan during a plan year in which such entity was a “substantial
employer” as defined in Section 4001(a) (2) of ERISA; (c) the providing of notice of intent to
terminate a Benefit Plan in a distress termination described in Section 4041(c) of ERISA or the
treatment of any amendment as a termination under Section 4041(e) of ERISA; (d) the institution by
the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan; (e) any event or
condition (i) that might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Benefit Plan or Multiemployer Plan, or (ii) that
may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (f) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any Credit
Party, any Subsidiary of any Credit Party or any ERISA Affiliate from a Multiemployer Plan.



21









 





     “UCC” means the Uniform Commercial Code as in effect from time to time in the State of
Illinois; provided, that, if, with respect to any financing statement or by reason of any
provisions of law, the perfection or the effect of perfection or non-perfection of the Liens
granted to Lender pursuant to the applicable Credit Document is governed by the Uniform Commercial
Code as in effect in a jurisdiction of the United States other than the State of Illinois, the term
“UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction
for purposes of the provisions of this Credit Agreement, each Credit Document and any financing
statement relating to such perfection or effect of perfection or non-perfection.



     “USVD” means U.S. Voice & Data, LLC, an Indiana limited liability company.



     “USVD Acquisition” means the acquisition by Parent of all of the issued and outstanding
Capital Securities of USVD pursuant to the USVD Acquisition Documents.



     “USVD Acquisition Agreement” means that certain Membership Interest Purchase Agreement, dated
as of September 14, 2007, by and among Parent and the USVD Sellers, as amended, restated, amended
and restated, supplemented or otherwise modified and in effect from time to time in accordance with
the terms and provisions of the USVD Seller Subordination Agreement.



     “USVD Acquisition Documents” means the collective reference to the USVD Acquisition Agreement,
the USVD Employment Agreements, the USVD Non-Compete Agreements and all other material agreements,
documents and instruments executed and/or delivered pursuant thereto or in connection therewith, in each case, as amended, restated,
amended and restated, supplemented or otherwise modified and in effect from time to time in
accordance with the terms and provisions of the USVD Seller Subordination Agreement.



     “USVD Employment Agreements” means, collectively, (a) that certain Employment Agreement dated
as of September 14, 2007, between M. Scott Diamond, in his individual capacity, and Lender, and (b)
that certain Employment Agreement dated as of September 14, 2007, between Michael P. Fischer, in
his individual capacity, and Lender, as amended, restated, amended and restated, supplemented or
otherwise modified and in effect from time to time in accordance with the terms and provisions of
the USVD Seller Subordination Agreement.



     “USVD Non-Compete Agreements” means those certain Non-Compete Agreements dated as of September
14, 2007, between each of the respective USVD Sellers and Lender, as amended, restated, amended and
restated, supplemented or otherwise modified and in effect from time to time in accordance with the
terms and provisions of the USVD Seller Subordination Agreement.



     “USVD Sellers” means, collectively, (i) The Michael P. Fischer Irrevocable Delaware Trust
Under Agreement Dated April 5, 2007, (ii) Michael P. Fischer, in his individual capacity, (iii) The
M. Scott Diamond Irrevocable Delaware Trust Under Agreement Dated April 23, 2007, and (ii) M. Scott
Diamond, in his individual capacity.



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     “USVD Seller Subordination Agreement” means that certain Subordination Agreement of even date
herewith among Parent, Borrowers, Lender and each of the USVD Sellers, as amended, restated,
amended and restated, supplemented or otherwise modified and in effect from time to time in
accordance with the terms and provisions thereof.



     “Unapplied Cash Collateral” has the meaning ascribed to that term in Section 2.4(d).



     “Unused Line Fee” has the meaning ascribed to that term in Section 3.3.



     “Wholly Owned Subsidiary” shall mean, with respect to any Person, any Subsidiary of such
Person all of the Capital Securities of which (except directors’ qualifying shares) are, directly
or indirectly, owned or Controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more of such Subsidiaries.



     1.2 Accounting Terms and Determinations. Unless otherwise defined or specified
herein, all accounting terms used herein has the meanings customarily given in accordance with
GAAP, and all financial computations to be made under this Credit Agreement shall, unless otherwise
specifically provided herein, be made in accordance with GAAP applied on a basis consistent in all
material respects with the Financial Statements delivered to Lender on the Closing Date. All
accounting determinations for purposes of determining compliance with Article 7 shall be
made in accordance with GAAP as in effect on the Closing Date and applied on a basis consistent in
all material respects with the Financial Statements delivered to Lender on the Closing Date. The
Financial Statement required to be delivered hereunder from and after the Closing Date and all
financial records shall be maintained in accordance with GAAP as in effect as of the date of the
Financial Statements delivered to Lender on or prior to the Closing Date. If any Credit Party or any Subsidiary of any Credit
Party shall change its method of inventory accounting from the first in first out method to any
other method, all calculations necessary to determine compliance with the covenants contained
herein shall be made as if such method of inventory accounting had not been so changed.



     1.3 Other Interpretive Provisions. Terms not otherwise defined herein which are
defined in the UCC have the meanings given them in the UCC. The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Credit Agreement shall refer to this
Credit Agreement as a whole and not to any particular provision of this Credit Agreement, and
references to Article, Section, Annex, Schedule, Exhibit and like references are references to this
Credit Agreement unless otherwise specified. Any item or list of items set forth following the
word “including,” “include” or “includes” is set forth only for the purpose of indicating that,
regardless of whatever other items are in the category in which such item or items are “included,”
such item or items are in such category, and shall not be construed as indicating that the items in
the category are limited to such items or to items similar to such items. An Event of Default
shall “continue” or be “continuing” until such Event of Default has been waived by Lender in
accordance with Section 9.10. Except as otherwise specified herein, all references herein
(a) to any Person shall be deemed to include such Person’s successors and assigns, (b) to any
Requirement of Law defined or referred to herein shall be deemed references to such Requirement of
Law or any successor Requirement of Law as the same may have been or may be amended or supplemented
from time to time and (c) to any Credit Document or Collateral



23









 




Document defined or referred to herein shall be deemed references to such Credit Document or Collateral Document (and, in the case
of any Revolving Loan Note or any other instrument, any instrument issued in substitution therefor)
as the terms thereof may have been or may be amended, supplemented, waived or otherwise modified
from time to time. Whenever the context so requires, the neuter gender includes the masculine or
feminine, the masculine gender includes the feminine, and the singular number includes the plural,
and vice versa. Except as otherwise specified herein, all references to the time of day shall be
deemed to be to Chicago, Illinois local time as then in effect.




ARTICLE 2




REVOLVING LOANS




     2.1 Revolving Loan Commitment; Delivery of Revolving Notes.



     (a) Subject to the terms and conditions set forth in this Credit Agreement, on and after the
Closing Date and to and excluding the Expiration Date, Lender agrees to make from time to time
loans and advances on a joint and several basis to Borrowers hereunder (each a “Revolving
Loan”); provided, that, no Revolving Loan shall be made if, after giving effect to the
making of such Revolving Loan and the simultaneous application of the proceeds thereof, the
aggregate outstanding principal balance of the Revolving Loans would exceed the lesser at such time
of (i) the Revolving Loan Commitment and (ii) the Borrowing Base. Revolving Loans may be repaid
and reborrowed from time to time, subject to the other terms and provisions hereof.



     (b) Subject to the terms and conditions set forth in this Credit Agreement, on the Closing
Date, Borrowers hereby agree to execute and deliver to Lender a Revolving Loan Note to evidence the
Revolving Loans.



     2.2 Borrowing Mechanics for Revolving Loans.



     (a) Funds Administrator shall give Lender prior telephonic notice (immediately confirmed in
writing, in substantially the form of Exhibit B hereto (a “Notice of Revolving Loan
Borrowing”), not later than 10:00 a.m. on the date of borrowing of a Revolving Loan;
provided, that, notwithstanding anything to the contrary set forth herein, except as
otherwise previously agreed to by Lender, Funds Administrator shall not submit a Notice of
Revolving Loan Borrowing and Lender shall not be required to make any Revolving Loan more than once
in any week. Each Notice of Revolving Loan Borrowing shall be irrevocable and shall specify (i)
the principal amount of the proposed Revolving Loan, and (ii) the proposed borrowing date therefor,
which must be a Business Day.



     (b) The Funds Administrator shall notify Lender in writing of the names of the officers of
Funds Administrator authorized to request Revolving Loans on behalf of Borrowers and specifying
which of those officers are also, or, if none are, the officers that are, authorized to direct the
disbursement of Revolving Loans in a manner contrary to standing disbursement instructions, and
shall provide Lender with a specimen signature of each such officer. In the absence of a
specification of those officers who are authorized to vary standing disbursement instructions,
Lender may assume that each officer authorized to request Revolving Loans also



24









 




has such authority. Lender shall be entitled to rely conclusively on the authority of such officers of Funds
Administrator to request Revolving Loans on behalf of Borrowers, or to vary standing disbursement
instructions, until Lender receives written notice to the contrary. Lender shall have no duty to
verify the authenticity of the signature appearing on any Notice of Revolving Loan Borrowing or
other writing delivered pursuant to this Section 2.2 and, with respect to an oral or
electronic mail request for Revolving Loans, Lender shall have no duty to verify the identity of
any individual representing himself as one of the officers of the Funds Administrator authorized to
make such request on behalf of Borrowers. Lender shall not incur any liability to any Credit Party
as a result of (i) acting upon any telephonic or electronic mail notice referred to in this
Section 2.2 if Lender believes in good faith such notice to have been given by a duly
authorized officer of Funds Administrator or other individual authorized to request Revolving Loans
on behalf of Borrowers or to direct the disbursement thereof in a manner contrary to standing
disbursement instructions, or (ii) otherwise acting in good faith under this Section 2.2
and an advance made and disbursed pursuant to any such telephonic or electronic mail notice shall
be deemed to be a Revolving Loan for all purposes of this Credit Agreement.




     (c) In addition to being evidenced, as provided in Section 2.5, by Borrowers’
Account, the Revolving Loans and Borrowers’ joint and several obligations to repay the Revolving
Loans with interest in accordance with the terms of this Credit Agreement shall be evidenced by
this Credit Agreement, the records of Lender and the respective Revolving Loan Notes. The records
of Lender shall be prima facie evidence of the Revolving Loans and accrued interest thereon and of
all payments made in respect thereof.



     (d) Notwithstanding the obligation of Funds Administrator to send written confirmation of any
Notice of Revolving Loan Borrowing made by telephone or electronic mail transmission if and when
requested by Lender, in the event that Lender agrees to accept a Notice of Revolving Loan Borrowing
made by telephone or electronic mail transmission, such notice shall be binding on Borrowers
whether or not written confirmation is sent by Funds Administrator or requested by Lender. Lender may act prior to the receipt of any requested
written confirmation, without any liability whatsoever, based upon telephonic or electronic mail
notice believed by Lender in good faith to be from Funds Administrator or its agents. Lender’s
records of the terms of any telephonic or electronic mail transmission of any Notice of Revolving
Loan Borrowing shall be conclusive on Borrowers.



     2.3 Voluntary and Mandatory Payment of Revolving Loans; Termination of Revolving Loan
Commitment.



     (a) On the Expiration Date, the Revolving Loan Commitment of Lender shall automatically
reduce to zero and may not be reinstated and all of Lender’s then outstanding Revolving Loans shall
be immediately due and payable, without the necessity of any notice or demand.



     (b) Borrowers may reduce or terminate the Revolving Loan Commitment at any time and from time
to time in whole or in part; provided, that (i) if Borrowers seek to reduce the Revolving
Loan Commitments to an aggregate amount less than $4,000,000 then the Revolving Loan Commitment of
Lender shall be reduced to zero and all then outstanding Revolving Loans



25









 




shall be immediately due and payable, without the necessity of any notice or demand, and (ii) once reduced, the amount of
any such reduction in the Revolving Loan Commitment may not be reinstated.




     (c) The amount by which the aggregate outstanding principal balance of the Revolving Loans
exceeds at any time the lesser at such time of (i) the Revolving Loan Commitment and (ii) the
Borrowing Base, shall be immediately due and payable without the necessity of any notice or demand.
Repayments of such excess amounts shall be applied to the repayment of the Revolving Loans.



     2.4 Payments and Computations.



     (a) Borrowers shall make each payment under the Credit Documents and under the Revolving Loan
Notes not later than 12:00 noon on the day when due in Dollars to Lender at its address referred to
in Section 9.5 in immediately available Dollars. The joint and several obligations of
Borrowers to Lender with respect to such payments shall be discharged by making such payments to
Lender pursuant to this Section 2.4 or by Lender, in its sole discretion, adding such
payments to the principal amount of the Revolving Loans outstanding by charging such payments to
Borrowers’ Account pursuant to Section 2.5.



     (b) (i) Within fifteen (15) days after the Closing Date, each Borrower shall have established
and shall thereafter maintain in existence one or more lockboxes (each a “Lockbox”) with
one or more financial institutions selected by such Borrower and reasonably acceptable to Lender
(each a “Depositary Account Bank”) and shall instruct all account debtors on the Accounts
of such Borrower to remit all payments to a Lockbox. At all times following such establishment,
all payments remitted by account debtors of a Borrower to any Lockbox, all other amounts received
by a Borrower from any account debtor and all other cash received by a Borrower from any other source (including, without limitation, proceeds of dispositions
permitted pursuant to Section 7.4) shall in each case immediately upon receipt thereof be
deposited into an account (each a “Depositary Account”) maintained by such Borrower with a
Depositary Account Bank.



          (ii) Within fifteen (15) days after the Closing Date, each Borrower, Lender and each
Depositary Account Bank shall have entered into an agreement in form and substance satisfactory to
Lender (each a “Depositary Account Agreement”), providing, among other things, that all
available amounts held in each Depositary Account maintained at such Depositary Account Bank (other
than Excluded Deposit Accounts) shall be wired on each Business Day into the Lender’s Account.




          (iii) The closing of any Lockbox or Depositary Account and the termination of any Depositary
Account Agreement shall require in each case the prior written consent of Lender.




     (c) Commencing on the Closing Date and on each successive Business Day thereafter until such
time as Borrowers shall have complied in Lender’s sole determination with all of the requirements
set forth in the foregoing clauses (a) and (b), respectively, (i) all available
amounts



26









 




held in any deposit account maintained by any Credit Party (other than Excluded Deposit
Accounts) shall be wired on each Business Day into the Lender’s Account, and (ii) to the extent not
deposited by the respective payors thereof directly into any such deposit account, all drafts,
checks, money orders, collections and other similar forms of remittances received by any Credit
Party shall be duly endorsed by such Credit Party to Lender and forwarded on the date received to
Lender by overnight courier for deposit into the Lender’s Account.




     (d) Except for any voluntary prepayment of the Revolving Loans pursuant to subsection
2.3(c) (so long as at the time of such prepayment no Default or Event of Default shall have
occurred and be continuing), all amounts received by Lender hereunder shall be applied in the
following order:




     first, to the payment of any Fees and Expenses then due and payable to
Lender under any of the Credit Documents;




     second, to the payment of interest then due and payable on the
Revolving Loans;




     third, to the payment of principal due under the Revolving Loans; and




     fourth, to the payment of other Obligations not specifically referred
to in this subsection 2.4(d) due and payable to Lender under the Credit
Documents.


Any amount not applied pursuant to the foregoing order of application shall be held by Lender as
cash collateral for the Obligations (such cash collateral, the “Unapplied Cash
Collateral”)and, so long as no Default or Event of Default shall then have occurred and be
continuing shall be applied concurrently upon the making thereof to reduce the outstanding
principal balance of any subsequent Revolving Loans thereafter advanced hereunder.




     2.5 Maintenance of Account. Lender shall maintain an account (“Borrowers’
Account”) on its books in the name of Borrowers in which Borrowers will be charged with all
loans and advances made by Lender to Borrowers or for Borrowers’ account, including the Revolving
Loans, the Fees, the Expenses and any other Obligations. Borrowers will be credited, in accordance
with Section 2.4 above, with all amounts received by Lender from Borrowers or from others
for the account of any Borrower, including, as set forth above, all amounts received by Lender in
payment of Accounts of Borrowers. In no event shall prior recourse to any Accounts or other
Collateral be a prerequisite to Lender’s right to demand payment of any Obligation upon its
maturity. Further, Lender shall have no obligation whatsoever to perform in any respect any of the
contracts or obligations relating to the Accounts.



     2.6 Statement of Account. After the end of each month, Lender shall send Funds
Administrator a statement accounting for the charges, loans, advances and other transactions
occurring among and between Lender and Borrowers during that month. The monthly statements shall,
absent manifest error, be presumptively correct.



     2.7 Withholding and Other Taxes.



27









 





     (a) Any and all payments by Borrowers hereunder or under the Revolving Loan Notes shall be
made, free and clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings and penalties, interests and all other liabilities
with respect thereto (“Taxes”), excluding, (i) Taxes imposed on its net income (including
any Taxes imposed on branch profits) and franchise taxes imposed on it by the jurisdiction under
the laws of which Lender is organized or any political subdivision thereof, (ii) Taxes imposed on
Lender’s net income (including any Taxes imposed on branch profits), and franchise Taxes imposed on
it, by the jurisdiction of Lender’s office located at the address set forth in Section 9.5
or any political subdivision thereof, (iii) Taxes that are in effect and that would apply to a
payment of Lender as of the Closing Date, and (iv) if any Person acquires any interest in this
Credit Agreement or any Revolving Loan Note pursuant to the provisions hereof (any such Person
being referred to as a “Tax Transferee”), any Taxes to the extent that they are in effect
and would apply to a payment to such Tax Transferee as of the date of the acquisition of such
interest or changes in office, as the case may be (all such non-excluded Taxes being hereinafter
referred to as “Covered Taxes”). If any Borrower shall be required by law to deduct any
Covered Taxes from or in respect of any sum payable hereunder or under any Revolving Loan Note to
Lender or any Tax Transferee, (A) the sum payable shall be increased as may be necessary so that
after making all required deductions of Covered Taxes (including deductions of Covered Taxes
applicable to additional sums payable under this Section 2.7) Lender or such Tax
Transferee, as the case may be, receives an amount equal to the sum it would have received had no
such deductions been made, (B) such Borrower shall make such deductions and (C) such Borrower shall
pay the full amount so deducted to the relevant taxation authority or other authority in accordance
with applicable law.



     (b) In addition, Borrowers agree to pay any present or future stamp, documentary, excise,
privilege, intangible or similar levies that arise at any time or from time to time (i) from any
payment made under any and all Credit Documents, (ii) from the transfer of the rights of Lender
under any Credit Documents to any transferee or (iii) from the execution or delivery by any
Borrower of, or from the filing or recording or maintenance of, or otherwise with respect to the
exercise by Lender of their rights under, any and all Credit Documents (hereinafter referred to as
“Other Taxes”).



     (c) Borrowers will indemnify Lender and any Tax Transferee for the full amount of (i) Covered
Taxes imposed on or with respect to amounts payable hereunder or under any Revolving Loan Note,
(ii) Other Taxes and (iii) any Taxes other than Covered Taxes imposed by any jurisdiction on
amounts payable under this Section 2.7 paid by Lender or such Tax Transferee, as the case
may be, and any liability (including penalties, interest and expenses) arising solely therefrom or
with respect thereto whether or not such Taxes were correctly or legally asserted by the relevant
governmental taxing authority. Payment of this indemnification shall be made within thirty (30)
days from the date of demand by Lender or such Tax Transferee certifying and setting forth in
reasonable detail the calculation thereof as to the amount and type of such Taxes. Any such
certificate submitted by Lender or such Tax Transferee in good faith to Borrowers shall, absent
manifest error, be presumptively correct.



28









 





     (d) Within thirty (30) days after having received a receipt for Covered Taxes or Other Taxes,
Borrowers will furnish to Lender at its address referred to in Section 9.5, the original or
a certified copy of a receipt evidencing payment thereof.



     (e) If a Tax Transferee that is organized under the laws of a jurisdiction outside of the
United States acquires an interest in this Credit Agreement or any Revolving Loan Note, the
transferor shall cause such Tax Transferee to agree that, on or prior to the effective date of such
acquisition or change, as the case may be, it will deliver to Borrowers (i) two accurate, complete
and signed copies of either (x) Internal Revenue Service Form W-8ECI or successor form, or (y)
Internal Revenue Service Form W-8BEN or successor form, in each case, indicating that such Tax
Transferee is on the date of delivery thereof entitled to receive payments of interest hereunder
free from withholding of United States Federal income tax or (ii) in the case of such Tax
Transferee that is entitled to claim exemption from withholding of United States Federal income tax
under Section 871(h) or Section 881(c) of the Internal Revenue Code, (x) a certificate to the
effect that Person is (A) not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code, (B) not a 10 percent shareholder of the Parent within the meaning of Section
881(c)(3)(B) of the Internal Revenue Code and (C) not a controlled foreign corporation receiving
interest from a related person for purposes of Section 881(c)(3)(C) of the Internal Revenue Code
and (y) two accurate, complete and signed copies of Internal Revenue Service Form W-8BEN or
successor form.



     (f) If any Taxes for which Borrowers would be required to make payment under this Section
2.7 are imposed, Lender shall use its best efforts to avoid or reduce such Taxes by taking any
appropriate action (including assigning its rights hereunder to a related entity or a different
office) which would not in the sole opinion of Lender be otherwise disadvantageous to Lender.



     (g) Without prejudice to the survival of any other agreement of Borrowers hereunder, the
agreements and obligations of Borrowers contained in this Section 2.7 shall survive Payment
in Full.



ARTICLE 3

INTEREST, FEES AND EXPENSES




     3.1 Interest on Loans. Subject to the provisions of Section 3.2, the
Revolving Loans shall bear interest on the aggregate unpaid principal amount thereof at a rate per
annum equal to the greater of (a) the Base Rate plus six and three quarters percent (6.75%), or (b)
fifteen percent (15%). Such interest shall be payable in arrears on the first Business Day of each
month and at maturity of the Revolving Loans and, after maturity of the Revolving Loans (whether by
acceleration or otherwise), upon demand. Each determination by Lender of the interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest error, be presumptively
correct.



     3.2 Interest After Event of Default. Interest on any amount of overdue interest on or
overdue principal of the Revolving Loans, and interest on the amount of principal under the
Revolving Loans outstanding as of the date an Event of Default occurs, and at all times thereafter
until the earlier of the date upon which (a) Payment in Full or (b) such Event of Default shall not



29









 




be continuing, shall be payable on demand at a rate per annum equal to the rate at which the
Revolving Loans are bearing interest pursuant to Section 3.1 above, plus eight percent
(8%). In the event of any change in said applicable interest rate, the rate hereunder shall
change, effective as of the day the applicable interest rate changes, so as to remain eight percent
(8%) per annum above the then applicable interest rate.




     3.3 Fees.



          (a) Borrowers shall pay to Lender on the Closing Date and on the first day of each calendar
month thereafter a collateral management fee (the “Collateral Management Fee”) equal to
$4,000. The Collateral Management Fee shall be non-refundable for any reason and fully earned as
of the Closing Date and each subsequent date of payment thereof.




          (b) Borrowers shall pay to Lender on the Closing Date a non-refundable closing fee (the
“Closing Fee”) in the amount of $350,000. The Closing Fee shall be non-refundable for any
reason, fully earned as of the Closing Date and payable in an amount equal to (i) $210,000, on the
Closing Date, (ii) $140,000, October 26, 2007.




          (c) Borrowers shall pay to Lender, a non-refundable fee (the “Unused Line Fee”) equal
to one-half of one percent (0.50%) per annum of the unused portion of the aggregate amount of the
Revolving Loan Commitment. The Unused Line Fee shall accrue daily from the Closing Date until the
Expiration Date, and shall be due and payable monthly in arrears, on the first Business Day of each
calendar month and on the Expiration Date.




     3.4 Reimbursement of Expenses. From and after the Closing Date, Borrowers shall promptly reimburse Lender for all Expenses
as the same are incurred by Lender.



     3.5 Authorization to Charge Borrowers’ Account. Each Borrower hereby authorizes
Lender to charge Borrowers’ Account with the amount of all Fees, Expenses and other amounts to be
paid hereunder and under the other Credit Documents as and when such payments become due. Borrower
confirms that any charges which Lender may so make to Borrowers’ Account as herein provided will be
made as an accommodation to Borrowers and solely at Lender’s discretion.



     3.6 Indemnification in Certain Events. If after the Closing Date, either (a) any
change in or in the interpretation of any law or regulation is introduced, including with respect
to reserve requirements, applicable to Lender or any Underlying Issuer or any other banking or
financial institution from whom such Person borrows funds or obtains credit (a “Funding
Institution”), or (b) Lender, any Underlying Issuer or any Funding Institution complies with
any future guideline or request from any central bank or other Governmental Authority or (c)
Lender, any Underlying Issuer or any Funding Institution determines that the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof has or would have the
effect described below, or Lender, any Underlying Issuer or any Funding Institution complies with
any request or directive regarding capital adequacy (whether of not having the force of law)



30









 




of any such authority, central bank or comparable agency, and in the case of any event set forth in this
clause (c), such adoption, change or compliance has or would have the direct or indirect
effect of reducing the rate of return on the capital of Lender or such Underlying Issuer as a
consequence of its obligations hereunder to a level below that which such Person could have
achieved but for such adoption, change or compliance (taking into consideration such Person’s or
such Funding Institution’s policies as the case may be with respect to capital adequacy) by an
amount deemed by such Person to be material, or any of the foregoing events described in
clauses (a), (b) or (c) increases the cost to Lender of funding or
maintaining the Commitment, then Borrowers shall upon demand by Lender, for the account of Lender
or, as applicable, a Funding Institution, additional amounts sufficient to indemnify such Person
against such increase in cost or reduction in amount receivable. A certificate as to the amount of
such increased cost and setting forth in reasonable detail the calculation thereof shall, if
requested by any Borrower, be submitted to such Borrower by the Person making such claim, and
shall, absent manifest error, be presumptively correct.




     3.7 Calculations and Determinations.



     (a) All calculations of (i) interest hereunder, and (ii) the Unused Line Fee, shall be made
by Lender on the basis of a year of 360 days, or, if such computation would cause the interest
chargeable hereunder to exceed the Highest Lawful Rate, 365/366 days, in each case to the extent
applicable for the actual number of days elapsed (including the first day but excluding the last
day) occurring in the period for which such interest is payable.



     (b) In making the determinations contemplated by Article 3, Lender may make such
estimates, assumptions, allocations and the like that Lender in good faith determines to be
appropriate.



     (c) Each determination by Lender of an interest rate or payment hereunder shall, absent
manifest error, be presumptively correct.



ARTICLE 4

CONDITIONS PRECEDENT




     4.1 Conditions to Initial Credit Event. The initial Credit Event is subject to the
satisfaction or waiver, immediately prior thereto or concurrently therewith, of the following
conditions precedent:



          (a) Closing Document List. Lender shall have received each of the agreements,
opinions, reports, approvals, consents, certificates and other documents set forth on the Closing
Document List attached hereto as Annex 1, where applicable, duly executed and delivered by
the respective parties thereto.




          (b) Fees and Expenses. Lender shall have received payment in full of those Fees and
Expenses referred to in Article 3 payable to it on or before the initial Credit Event (or
an irrevocable authorization to pay such Fees or Expenses out of the proceeds of the initial
Revolving Loans).




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          (c) Material Adverse Effect. No Material Adverse Effect shall have occurred since
December 31, 2006.




          (d) Availability. Lender shall have received a completed Borrowing Base Certificate
setting forth the Borrowing Base as of the Closing Date, and after giving pro forma effect to the
funding of the initial Revolving Loans and the payment of all costs, fees and expenses incurred by
or for the account of Borrower in connection with the execution and delivery of the Credit
Documents and the Related Transaction Documents, the lesser of the Revolving Loan Commitment or the
Borrowing Base shall exceed the aggregate outstanding principal balance of the Revolving Loans by
at least $500,000.




          (e) Consummation of USVD Acquisition. Lender shall have received evidence
satisfactory to it that (i) the USVD Acquisition shall have been consummated in all material
respects in accordance with the USVD Acquisition Documents and all applicable Requirements of Law
(no material provision of any of which USVD Acquisition Documents shall have been amended or
otherwise modified or waived without the prior written consent of Lender), and (ii) the total
consideration payable in connection with the Acquisition is not more than $15,138,000, no more than
$9,788,000 of which is payable in cash on the Closing Date.




          (f) Minimum Equity Proceeds. Lender shall have received evidence satisfactory to it
of the receipt by Parent of in immediately available Dollars of proceeds of the issuance by Parent
of Capital Securities in all material respects in accordance with the Equity Documents and all applicable Requirements of Law in an aggregate amount not less than
$3,000,000.




          (g) Subordinated Debt Proceeds. Lender shall have received evidence satisfactory to
it of the receipt by Parent of in immediately available Dollars of proceeds of the issuance by
Parent of the Subordinated Note in all material respects in accordance with the Subordinated Debt
Documents and all applicable Requirements of Law in an aggregate amount of $1,000,000.




          (h) Delivery of Certain Documents. Borrowers shall have delivered or caused to be
delivered to Lender true, correct, complete (and, where applicable, executed) copies of each of the
Related Transaction Documents.




          (i) Approvals. All licenses, approvals, waivers and consents of any Governmental
Authority and other Person required in connection with the executed and delivery of the Credit
Documents and the consummation of the Related Transactions shall have been obtained and shall be in
full force and effect.




          (j) Additional Documents. The Credit Parties shall have executed and delivered to
Lender all documents which Lender determines are reasonably necessary to consummate the
transactions contemplated hereby.





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     4.2 Conditions to Each Credit Event. On the date of each Credit Event (including the
initial Credit Event), both immediately before and immediately after giving effect thereto and to
the application of the proceeds therefrom, the following statements shall be true to the
satisfaction of Lender (and each request for a Credit Event, shall constitute a representation and
warranty by each Borrower to Lender that on the date of such Credit Event, immediately before and
immediately after giving effect thereto and to the application of the proceeds therefrom, such
statements are true):



     (a) The representations and warranties contained in this Credit Agreement and in each other
Credit Document are true and correct in all material respects on and as of the date of such Credit
Event as though made on and as of such date, except (i) to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such representations and
warranties remain true and correct in all material respects on and as of such earlier date), and
(ii) for such representations and warranties that are subject to a Material Adverse Effect or other
materiality qualifier (in which case such representations and warranties are true and correct in
all respects);



     (b) Lender shall have received (i) a Notice of Revolving Loan Borrowing pursuant to
Section 2.2(c) and (ii) a Borrowing Base Certificate pursuant to subsection 6.1(h);
and



     (c) No event has occurred and is continuing, or could reasonably be expected to result from
such Credit Event or the application of the proceeds thereof, which would constitute a Default or
an Event of Default.



ARTICLE 5

REPRESENTATIONS AND WARRANTIES




     To induce Lender to enter into this Credit Agreement, each Credit Party hereby represents and
warrants to Lender:



     5.1 Organization and Qualification. Each Credit Party and each Subsidiary of each
Credit Party: (a) is a corporation or limited liability company, as the case may be, duly
organized, validly existing and in good standing under the laws of the state of its organization,
(b) has the corporate or limited liability company, as the case may be, power and authority to own
its properties and assets and to transact the businesses in which it presently is, or proposes to
be, engaged and (c) is duly qualified and is authorized to do business and is in good standing in
each jurisdiction where it presently is, or proposes to be, engaged in business. Schedule
5.1 lists all jurisdictions in which each Credit Party and each Subsidiary of each are
qualified to do business as foreign corporations or limited liability companies.



     5.2 Solvency. The fair saleable value of the assets of the Credit Parties taken as a
whole on a going concern basis exceeds all probable liabilities of such Persons, including those to
be incurred pursuant to this Credit Agreement and the other Credit Documents. No Credit Party (a)
has unreasonably small capital in relation to the business in which it is, or proposes to be,
engaged and (b) has incurred, and does not believe that it will incur after giving effect to the



33









 




transactions contemplated by this Credit Agreement and the other Credit Documents, debts beyond its
ability to pay such debts as they become due.




     5.3 Rights in Collateral; Priority of Liens. Each Credit Party and each Subsidiary of
each Credit Party owns the property granted by it as Collateral under the Credit Documents, free
and clear of any and all Liens in favor of third parties, except for those listed on Schedule
7.3. Upon the proper filing of the UCC financing statements, and the taking of the other
actions specified, in each case in the Closing Document List, the Liens granted by any Credit Party
pursuant to the Credit Documents will constitute the valid and enforceable first, prior and
perfected Liens on the Collateral, except, in the case of priorities, for the Liens listed on
Schedule 7.3.



     5.4 No Conflict. The execution, delivery and performance by each Credit Party and
each Subsidiary of each Credit Party of each Credit Document and each Related Transaction Document
to which it is a party: (a) are within its corporate or, if applicable, limited liability company,
power; (b) are duly authorized by all necessary corporate or, if applicable, limited liability
company, action; (c) are not in contravention of any Requirement of Law or any indenture, contract,
lease, agreement, instrument or other commitment to which it is a party or by which it or any of
its properties are bound; (d) do not require the consent, registration or approval of any
Governmental Authority or any other Person (except such as have been duly obtained, made or given,
and are in full force and effect); and (e) will not, except as contemplated herein, result in the
imposition of any Liens upon any of its properties.



     5.5 Enforceability. The Credit Agreement and all of the other Credit Documents and
Related Transaction Documents to which any Credit Party or any Subsidiary of any Credit Party is a
party are the legal, valid and binding obligations of such Credit Party and such Subsidiary, as the
case may be, and are enforceable against each of them, as the case may be, in accordance with their
terms, except as such enforceability may be limited by (a) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and
(b) general principles of equity.



     5.6 Consents. No consent or authorization of, filing with or other act by or in
respect of, any Governmental Authority or any other Person is required in connection with any
Credit Event hereunder, the grant of the Liens pursuant to the Credit Documents, the continuing
operations of any Credit Party or any Subsidiary of any Credit Party or with the execution,
delivery, performance, validity or enforceability of this Credit Agreement, the Revolving Loan
Notes, the other Credit Documents or the Related Transaction Documents, except for the filing of
the UCC financing statements and consents or authorizations which have been obtained or filings
which have been made and which, in each case, are in full force and effect.



     5.7 Financial Data



     (a)The Credit Parties have furnished or caused to be furnished to Lender the following
financial statements, each of which has been prepared in accordance with GAAP consistently applied
throughout the periods involved: (a) audited consolidated financial statements of BTP, as at and
for the fiscal year of BTP ended December 31, 2006; (b) unaudited



34









 




financial statements of BTP, as
at and for the seven (7) month period ended July 31, 2007; (c) audited consolidated financial
statements of USVD, as at and for the fiscal year of USVD ended December 31, 2006; (d) unaudited
financial statements of USVD, as at and for the seven (7) month period ended July 31, 2007; and (c)
a pro forma balance sheet (the “Pro Forma Balance Sheet”) of the Consolidated Entity
prepared as of the Closing Date, after giving effect to the funding of the initial Revolving Loans
and consummation of the Related Transactions, including, without limitation, the USVD Acquisition.
All of such financial statements fairly present in all material respects the financial condition of
Persons covered thereby as at the respective dates thereof and the results of operations of Persons
covered thereby for the fiscal periods ended on such respective dates, all in accordance with GAAP.
The Pro Forma Balance Sheet fairly presents in all material respects the consolidated financial
condition of the Consolidated Entity as at the Closing Date, in accordance with GAAP.




     (b) All financial performance projections delivered to Lender, including the Initial
Projections, represent the Credit Parties’ best good faith estimate of future financial performance
and are based on assumptions believed by the Credit Parties to be fair and reasonable in light of
current market conditions, it being acknowledged and agreed by Lender that projections as to future
events are not to be viewed as facts and that the actual results during the period or periods
covered by such projections may differ from the projected results.



     5.8 Locations of Officers, Records and Inventory. The address of the principal place of business and chief executive office of each Credit
Party and each Subsidiary of each is set forth on Schedule 5.8. The books and records of
each Credit Party and each Subsidiary of each Credit Party, and all of their respective chattel
paper and records of Accounts, are maintained exclusively at such locations. There is no location
at which any Credit Party or any Subsidiary of any Credit Party has any Collateral other than those
locations identified on Schedule 5.8. Schedule 5.8 also contains a complete list
of the legal names and addresses of each warehouse at which Inventory of any Credit Party or any
Subsidiary or any Credit Party is stored. None of the receipts received by any Credit Party or any
Subsidiary of any Credit Party from any warehouseman states that the goods covered thereby are to
be delivered to bearer or to the order of a named person or to a named person and such named
person’s assigns. No Credit Party nor any Subsidiary of any Credit Party sells Inventory on
consignment (as such term is defined in Section 9-102 of the UCC).



     5.9 Fictitious Business Names. Except as set forth on Schedule 5.9, No Credit
Party has used any corporate or fictitious name during the five (5) years preceding the date
hereof, other than the corporate name under which it has executed this Credit Agreement.



     5.10 Subsidiaries. The only Subsidiaries of the respective Credit Parties are those
listed on Schedule 5.10 and the record and beneficial owners of all of the issued and
outstanding Capital Securities of each Subsidiary of each Credit Party are listed on Schedule
5.10. In each case, except pursuant to the Credit Documents or as otherwise set forth on
Schedule 5.10, there are no proxies, irrevocable or otherwise, with respect to such Capital
Securities, and no Capital Securities of any Subsidiary of any Credit Party is or may become
required to be issued by reason of any options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights convertible into or
exchangeable for,



35









 




Capital Securities of any Subsidiary of any Credit Party, and here are no
contracts, commitments, understandings or arrangements by which any Subsidiary of any Credit Party
is or may become bound to issue additional Capital Securities convertible into or exchangeable for
such Capital Securities. All of such shares listed on Schedule 5.10 are owned by Person or
Persons indicated free and clear of any Liens. Schedule 5.10 contains a true, correct and
complete list, as to each Subsidiary of each Credit Party, of all jurisdictions in which such
Subsidiary is qualified to do business as a foreign corporation.




     5.11 No Judgments or Litigation. Except as set forth on Schedule 5.11, no
judgments, orders, writs or decrees are outstanding against any Credit Party or any Subsidiary of
any Credit Party nor is there now pending or, to the best of any Credit Party’s knowledge after
diligent inquiry, threatened any litigation, contested claim, investigation, arbitration, or
governmental proceeding by or against any Credit Party or any Subsidiary of any Credit Party.



     5.12 No Defaults. (a) No Credit Party nor any Subsidiary of any Credit Party is in
default under any term of any indenture, contract, lease, agreement, instrument or other commitment
to which any Credit Party or any Subsidiary of any is a party or by which any Credit Party or any
Subsidiary of any Credit Party is bound, and (b) no Credit Party nor any Subsidiary of any Credit
Party knows of any dispute regarding any such indenture, contract, lease, agreement, instrument or
other commitment.



     5.13 Labor Matters.



     (a) There are no labor controversies pending or, to the best knowledge of any Credit Party or
any Subsidiary of any Credit Party after diligent inquiry, threatened between any Credit Party or
any Subsidiary of any Credit Party and any of their respective employees.



     (b) No Credit Party nor any Subsidiary of any Credit Party is engaged in any unfair labor
practice. There is (i) no unfair labor practice complaint pending against any Credit Party or any
Subsidiary of Credit Party or, to the best knowledge of any Credit Party or any Subsidiary of any
Credit Party, threatened against any of them, before the National Labor Relations Board, and no
grievance or significant arbitration proceeding arising out of or under collective bargaining
agreements is so pending against any Credit Party or any Subsidiary of any Credit Party, to the
best knowledge of any Credit Party or any Subsidiary of any Credit Party, threatened against any of
them, (ii) no strike, labor dispute, slowdown or stoppage pending against any Credit Party or any
Subsidiary of any Credit Party or, to the best knowledge of any Credit Party or any Subsidiary of
any Credit Party, threatened against any of them and (iii) no union representation question with
respect to the employees of any Credit Party or any Subsidiary of any Credit Party and no union
organizing activities.



     5.14 Compliance with Law.



     (a) Except as set forth on Schedule 5.14, no Credit Party nor any Subsidiary of any
Credit Party has (i) violated or failed to comply with any Requirement of Law or any requirement of
any self-regulatory organization or (ii) any Liability of which any Credit Party or any Subsidiary
of any Credit Party has knowledge or reasonably should have knowledge in



36









 




connection with any release, generation, storage, use, transportation, disposal or other handling of any hazardous or
toxic waste, substance or constituent, or other substance into the environment, or (iii) received
any notice, letter or other indication of potential Liability arising from the release, generation,
storage, use, transportation, disposal or other handling of any hazardous or toxic waste, substance
or constituent or other substance into the environment.




     (b) Except as set forth on Schedule 5.14, none of the operations of any Credit Party
or any Subsidiary of any Credit Party is the subject of any federal or state investigation
evaluating whether such Credit Party or such Subsidiary disposed of any hazardous or toxic waste,
substance or constituent or other substance at any site that may require remedial action, or any
federal or state investigation evaluating whether any remedial action is needed to respond to a
release of any hazardous or toxic waste, substance or constituent, or other substance into the
environment.



     5.15 ERISA. No Credit Party nor any Subsidiary of any Credit Party nor any ERISA
Affiliate maintains or contributes to any Plan other than those listed on Schedule 5.15.



     5.16 Intellectual Property. Each Credit Party and each Subsidiary of each Credit
Party possesses such assets, licenses, patents, patent applications, copyrights, service marks,
trademarks and trade names as are necessary or advisable to continue to conduct its present and
proposed business activities.



     5.17 Licenses and Permits. Except as set forth on Schedule 5.17, (i) each
Credit Party and each Subsidiary of each Credit Party has obtained and holds in full force and
effect, all franchises, licenses, leases, permits, certificates, authorizations, qualifications,
easements, rights of way and other rights and approvals which are necessary or advisable for the
operation of its businesses as presently conducted and as proposed to be conducted, and (ii) no
Credit Party nor any Subsidiary of any Credit Party is in violation of the terms of any such
franchise, license, lease, permit, certificate, authorization, qualification, easement, right of
way, right or approval.



     5.18 Title to Property. All Real Estate is identified on Schedule 5.18. Each
Credit Party and each Subsidiary of each Credit Party has good and marketable title in fee simple
to, or a valid leasehold interest in, all its Real Estate, and good title to all its other
property, and none of such property is subject to any Lien, except Permitted Liens.



     5.19 Investment Company. No Credit Party nor any Subsidiary of any Credit Party is
(a) an investment company or a company controlled by an investment company within the meaning of
the Investment Company Act of 1940, as amended, or (b) subject to any other law which purports to
regulate or restrict its ability to borrow money or to consummate the transactions contemplated by
this Credit Agreement or the other Credit Documents or to perform its obligations hereunder or
thereunder.



     5.20 Taxes and Tax Returns.



     (a)Except as set forth on Schedule 5.20, each Credit Party and each Subsidiary of
each Credit Party (and any affiliated group of which any Credit Party or any Subsidiary of any



37









 




Credit Party is now or have been members) have timely filed (inclusive of any permitted extensions)
with the appropriate taxing authorities all returns (including information returns) in respect of
Credit Party Taxes required to be filed through the date hereof and will timely file (inclusive of
any permitted extensions) any such returns required to be filed on and after the date hereof. The
information filed is complete and accurate in all material respects. All deductions taken by any
Credit Party and its Subsidiaries as reflected in such income tax returns have been taken in
accordance with applicable laws and regulations, except deductions that may have been disallowed
but are being challenged in good faith and for which adequate reserves have been made in accordance
with GAAP. Except as specified in Schedule 5.20, no Credit Party, no Subsidiary of any
Credit Party, nor any group of which any Credit Party or any Subsidiary of any Credit Party is now
or were members, have requested any extension of time within which to file returns (including
information returns) in respect of the Credit Party Taxes.




     (b) Except for franchises taxes payable with respect to those matters described on
Schedule 5.1, all taxes, assessments, fees and other governmental charges payable by each
Credit Party and each Subsidiary of each Credit Party (and any affiliated group of which any Credit
Party or any Subsidiary of any Credit Party is now or has been a member) in respect of their
incomes, franchises, businesses, properties or otherwise (“Credit Party Taxes”) in
respect of periods beginning prior to the date hereof, have been timely paid, or will be timely
paid, or an adequate reserve has been established therefor, as set forth in Schedule 5.20
or in the Financial Statements, and no Credit Party nor any Subsidiary of any Credit Party has any
liability for taxes in excess of the amounts so paid or reserves so established.



     (c) No deficiencies for Credit Party Taxes have been claimed, proposed or assessed by any
taxing or other Governmental Authority against any Credit Party or any Subsidiary of any Credit
Party and no Liens in respect of Taxes have been filed. There are no pending or, to the best of
the knowledge of any Credit Party or any Subsidiary of any Credit Party, threatened audits,
investigations or claims for or relating to any liability in respect of Credit Party Taxes, and
there are no matters under discussion with any governmental authorities with respect to Credit
Party Taxes which are likely to result in a material additional liability for Credit Party Taxes.
No extension of a statute of limitations relating to Credit Party Taxes is in effect with respect
to any Credit Party or any Subsidiary of any Credit Party.



     (d) No Credit Party nor any Subsidiary of any Credit Party has any obligation under any
agreement regarding payments in lieu of Credit Party Taxes.



     5.21 Status of Accounts. Each Account of each Borrower is based on an actual and bona
fide sale and delivery of goods or rendition of services to customers, made by such Borrower in the
ordinary course of its businesses; the goods and inventory being sold by each Borrower and the
Accounts created thereby are the exclusive property of such Borrower and are not and shall not be
subject to any Lien whatsoever other than those arising under the Security Agreement and the
customers of each Borrower have accepted the goods or services, owe and are obligated to pay the
full amounts stated in the invoices according to their terms, without any dispute, offset, defense,
counterclaim or contra.



38









 





     5.22 Material Contracts. Schedule 5.22 contains a true, correct and complete
list of all the Material Contracts currently in effect on the date hereof. None of the Material
Contracts contains any burdensome restrictions on any Credit Party or any Subsidiary of any Credit
Party or any of their respective properties. Except as set forth on Schedule 5.22, all of
the Material Contracts are in full force and effect, and no defaults by any Credit Party or, to the
best of any Credit Party’s knowledge, any other party thereto, currently exist thereunder.



     5.23 Affiliate Transactions. Except as set forth on Schedule 5.23, or
otherwise expressly permitted hereunder, no Credit Party nor any Subsidiary of any Credit Party is
a party to or bound by any agreement or arrangement (whether oral or written) to which any
Affiliate of any Credit Party or any Subsidiary of any Credit Party is a party.



     5.24 Accuracy and Completeness of Information. All factual information furnished by
or on behalf of any Credit Party or any Subsidiary of any Credit Party in writing to Lender or the
Auditors for purposes of or in connection with this Credit Agreement or any of the other Credit
Documents or any other transaction contemplated hereby is or will be true and accurate in all
material respects on the date as of which such information is dated or certified and not incomplete
by omitting to state any material fact necessary to make such information not misleading at such
time.



     5.25 Recording Taxes. All mortgage recording taxes, recording fees and other charges
payable in connection with the filing and recording of the Credit Documents have either been paid
in full by Credit Parties or arrangements for the payment of such amounts satisfactory to Lender
shall have been made.



     5.26 No Adverse Change or Event. Since December 31, 2006, no change in the business,
assets, Liabilities, financial condition, results of operations or business prospects of any Credit
Party or any Subsidiary of any Credit Party has occurred, and no event has occurred or failed to
occur, that has had or could reasonably be expected to have, either alone or in conjunction with
all other such changes, events and failures, a Material Adverse Effect. Such an adverse change may
have occurred, and such an event may have occurred or failed to occur, at any particular time
notwithstanding the fact that at such time no Default or Event of Default shall have occurred and
be continuing.



     5.27 Additional Adverse Facts. Except for facts and circumstances disclosed on
Schedule 5.27, no fact or circumstance is known to any Credit Party or any Subsidiary of
any Credit Party , as of the Closing Date, that, either alone or in conjunction with all other such
facts and circumstances, has had or could reasonably be expected to have a Material Adverse Effect.
If a fact or circumstance disclosed on such Schedule should in the future have a Material Adverse
Effect, such Material Adverse Effect shall be a change or event subject to Section 5.26
notwithstanding such disclosure.



     5.28 Foreign Assets Control Regulations and Anti-Money Laundering. OFAC. No
Credit Party nor any Subsidiary of any Credit Party (i) is a person whose property or interest in
property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who



39









 




Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or
transactions prohibited by Section 2 of such executive order, or is otherwise associated with any
such person in any manner violative of Section 2, or (iii) is a person on the list of Specially
Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any
other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.




     5.29 Patriot Act. Each Credit Party and each Subsidiary of each Credit Party is in
compliance, in all material respects, with the Patriot Act. No part of the proceeds of the
Revolving Loans or Letters of Credit will be used, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or
obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.



     5.30 Related Transaction Documents. Borrowers have delivered or caused to be
delivered to Lender true, correct, complete (and, where applicable, executed) copies of each of the
Related Transaction Documents.



ARTICLE 6

AFFIRMATIVE COVENANTS




     Until the Expiration Date and payment and satisfaction of all Obligations:



     6.1 Financial Information. Each Credit Party shall furnish or cause to be furnished
to Lender the following information within the following time periods:



     (a) as soon as available and in any event within ninety (90) days after the end of the fiscal
year of the Consolidated Entity ending December 31, 2007, and each fiscal year of the Consolidated
Entity ending thereafter, (i) audited Financial Statements as of the close of such fiscal year and
for such fiscal year, together with comparisons to the Financial Statements for the prior fiscal
year and to the most recent projections with respect to such fiscal year, if any, delivered
pursuant to clause (d) of this Section 6.1, in each case accompanied by (A) an
opinion of the Auditors, which opinion shall be in scope and substance satisfactory to Lender in
its sole discretion, and (B) such Auditors’ “Management Letter” to Parent, (y) a narrative
discussion of the consolidated financial condition and results of operations for such fiscal year
prepared by the chief executive officer or chief financial officer of the Parent, and (z) a
compliance certificate substantially in the form of Exhibit C;



     (b) as soon as available and in any event within forty-five (45) days after the end of each
fiscal quarter of the Consolidated Entity ending after the Closing Date, (i) Financial Statements
as at the end of and for such fiscal quarter and for the fiscal year to date, together with
comparisons to the Financial Statements for the same periods in the prior fiscal year and to the
most recent projections with respect to such periods delivered pursuant to clause (d) of
this Section 6.1, all in reasonable detail and duly certified (subject to normal year-end
audit adjustments) by the chief executive officer or chief financial officer of Parent as having
been



40









 




prepared in accordance with GAAP, (ii) a narrative discussion of the consolidated financial
condition and results of operations and the consolidated and consolidating liquidity and capital
resources of Credit Parties for such fiscal quarter and for the fiscal year to date prepared by the
chief executive officer or chief financial officer of Parent, (iii) a compliance certificate
substantially in the form of Exhibit C together with a schedule in form and substance
satisfactory to Lender of the calculations used required to established the amount of Excess Cash
Flow for such fiscal quarter;




     (c) as soon as available and in any event within thirty (30) days after the end of each
fiscal month of the Consolidated Entity, (i) consolidated and consolidating balance sheets for the
Consolidated Entity as at the end of such month and consolidated and consolidating statements
of operations and cash flows for such month and for the fiscal year to date, together with a
comparison to the consolidated and consolidating balance sheets, statements of operations and
statements of cash flows for the same periods in the prior year, and to the most recent projections
with respect to such fiscal year delivered pursuant to clause (d) of this Section
6.1, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the
chief executive officer or chief financial officer of Parent as having been prepared in accordance
with GAAP, (ii) a narrative discussion of the consolidated financial condition and results of
operations and the consolidated liquidity and capital resources of Credit Parties for such fiscal
month and for the fiscal year to date prepared by the chief executive officer or chief financial
officer of Parent, and (iii) a compliance certificate substantially in the form of Exhibit
C;



     (d) as soon as available and in any event within fifteen (15) days after the end of each
fiscal quarter of the Consolidated Entity, updated monthly projections of the financial condition
and results of operations of the Consolidated Entity for the immediately succeeding eight (8)
fiscal quarters of the Consolidated Entity, including projected consolidated and consolidating
balance sheets, consolidated and consolidating statements of operations and consolidated and
consolidating statements of cash flows and consolidated and consolidating statements of changes in
shareholders’ equity for each such fiscal quarter;



     (e) a copy of the state and federal income tax returns of each Credit Party and each
Subsidiary of such each Credit Party within thirty (30) days after they are filed with the
appropriate taxing authorities, in each case if and when requested by Lender;



     (f) promptly and in any event within two (2) Business Days after becoming aware of the
occurrence of a Default or Event of Default, a certificate of the chief executive officer or chief
financial officer of Parent specifying the nature thereof and the proposed response thereto, each
in reasonable detail;



     (g) promptly upon the earlier of the mailing or filing thereof, copies of all 10-Ks, 10-Qs,
8-Ks, proxy statements, annual reports, quarterly reports, registration statements and any other
filings or other communications made by any Credit Party to holders of its publicly traded
securities or the Securities Exchange Commission from time to time pursuant to the Exchange Act or
the Securities Act of 1933, as amended;



41









 





     (h) upon request by Lender at any time and in any event together with each Notice of
Revolving Loan Borrowing submitted to Lender pursuant to Section 2.2, a borrowing base
certificate (each a “Borrowing Base Certificate”) in form and substance satisfactory to
Lender, duly completed, detailing each Borrower’s Eligible Accounts Receivable and Eligible
Inventory, in each case as of the date of submission thereof, and certified by and certified by the
chief executive officer or chief financial officer of Parent. In addition, each Borrowing Base
Certificate shall have attached to it such additional schedules and/or other information as Lender
may reasonably request;



     (i) in each case to the extent that the same, singly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, promptly after becoming aware thereof, notification of
(i) any occurrence or other development with respect to any results or indications related to any
drug studies involving Property with respect to which any Credit Party or any Subsidiary of any Credit Party has any existing or pending rights, and (ii) any
addition, deletion, extension or suspension of any research, licensing, sourcing or research
funding activities; and



     (j) from time to time, such further information regarding the Collateral, business affairs
and prospects and financial condition of such Credit Party and each Subsidiary of such Credit Party
as Lender may reasonably request.



     6.2 Inventory. Upon the request of Lender from time to time, Borrowers shall provide
to Lender written statements listing categories of Inventory in reasonable detail as requested by
Lender. Borrowers shall conduct or cause to be conducted annual physical counts of the Inventory
(a) so long as an Event of Default shall not have occurred and be continuing, at least once in each
calendar year, and (b) upon the occurrence and during the continuance of an Event of Default, at
such other time or times as Lender shall request. A copy of such count shall be promptly supplied
to Lender accompanied by a report of the value (valued at FIFO) of such Inventory. After the
occurrence and during the continuance of an Event of Default, Borrowers shall conduct such a
physical count at such other times and as of such dates as Lender shall reasonably request. In
addition to, and not in limitation of, the foregoing, at any time and from time to time Lender may
conduct (or engage third parties to conduct) such field examinations, appraisals, verifications and
evaluations of the Inventory as Lender shall deem necessary or appropriate in the exercise of its
sole discretion. If any Inventory of a Borrower is at any time hereafter stored or located at any
warehouse not owned or leased by a Credit Party, then such Borrower shall promptly deliver to such
warehouseman notification of Lender’s Lien on such Inventory and shall take such other steps as
Lender reasonably requires to perfect its Liens thereon.



     6.3 Corporate Existence. Each Credit Party shall, and shall cause each of its
Subsidiaries to, (a) maintain its corporate existence and maintain in full force and effect all
licenses, bonds, franchises, leases, trademarks and qualifications to do business, and all patents,
contracts and other rights necessary or advisable to the profitable conduct of their businesses,
(b) continue in, and limit their operations to, the same general lines of business as presently
conducted by it and (c) comply with all Requirements of Law.



42









 





     6.4 ERISA. Each Credit Party shall deliver to Lender, at such Credit Party’s expense,
the following information at the times specified below:



     (a) within thirty (30) days after the filing thereof with the DOL, Internal Revenue Service
or PBGC, copies of each annual report (form 5500 series), including Schedule B thereto,
filed with respect to each Benefit Plan;



     (b) within thirty (30) days after receipt by such Credit Party, any Subsidiary of such Credit
Party or any ERISA Affiliate of each actuarial report for any Benefit Plan or Multiemployer Plan
and each annual report for any Multiemployer Plan, copies of each such report;



     (c) within ten (10) days after the occurrence thereof, notification of any increase in the
benefits of any existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which such Credit Party, any Subsidiary of such Credit Party or any
ERISA Affiliate was not previously contributing; and



     (d) within three (3) days after the occurrence thereof, any event or condition referred to in
clauses (i) through (vii) of subsection 8.1(m), whether or not such event
or condition shall constitute an Event of Default.



     Each Credit Party and each Subsidiary of each Credit Party shall establish, maintain and
operate all Plans to comply in all material respects with the applicable provisions of ERISA, the
Code, and all other Requirements of Law, other than to the extent such Credit Party or any such
Subsidiary (i) is in good faith contesting by appropriate proceedings the validity or application
of any such provision, law, rule, regulation or interpretation and (ii) has made an adequate
reserve or other appropriate provision therefor as required in order to be in conformity with GAAP.



     6.5 Books and Records. Each Credit Party agrees to maintain, and to cause each of its
Subsidiaries to maintain, books and records, including those pertaining to the Collateral, in such
detail, form and scope as is consistent with good business practice, and agrees that such books and
records will reflect Lender’s respective interests in its Accounts. Each Credit Party agrees that
Lender or its agents may enter upon the premises of such Credit Party or any Subsidiary of such
Credit Party at any time and from time to time, during normal business hours and upon reasonable
notice under the circumstances, and at any time at all on and after the occurrence and during the
continuance of a Default or an Event of Default, for the purposes of (a) conducting field
examinations and appraisals and inspecting, evaluating and verifying the Collateral, (b) inspecting
and/or copying (at such Credit Party’s expense) any and all records pertaining thereto and (c)
discussing the business affairs and prospects and financial condition of such Credit Party and each
Subsidiary of such Credit Party with any officers, employees and directors of such Credit Party or
such Subsidiary or with the Auditors. Each Credit Party shall give Lender thirty (30) days prior
written notice of any change in the location of any Collateral or in the location of its chief
executive office or place of business from the locations specified in Schedule 5.8, and
such Credit Party shall execute in advance of such change and cause to be filed and/or delivered to
Lender any financing statements, Collateral Access Agreements or other documents required by
Lender, all in form and substance satisfactory to Lender. Each Credit



43









 




Party agrees to advise Lender promptly, in sufficient detail, of any substantial changes relating to the type, quantity or
quality of the Collateral, or any event which singly or in the aggregate could reasonably be
expected to have a material adverse effect on the value of the Collateral or on the Liens granted
for the benefit of Lender thereon. Notwithstanding the foregoing or anything to the contrary set
forth herein or in any of the other Credit Documents, each Credit Party agrees that, at all times
from and after the date that is fifteen (15) days after the Closing Date, such Credit Party shall
cause to be maintained at the premises of USVD located at 11500 Blankenbaker Access Drive,
Louisville, Kentucky 40299, copies of all material books and records pertaining to such Credit
Party’s business and Collateral.




     6.6 Collateral Records. Each Credit Party agrees to execute and deliver, and to cause each of its Subsidiaries to
execute and deliver, to Lender, from time to time, solely for Lender’s convenience in maintaining a
record of the Collateral, such written statements and schedules as Lender may reasonably require
designating, identifying or describing the Collateral. The failure by any Credit Party or any
Subsidiary of any Credit Party, however, to promptly give Lender such statements or schedules shall
not affect, diminish, modify or otherwise limit the Liens on the Collateral granted pursuant to the
Credit Documents.



     6.7 Security Interests. Each Credit Party shall, and shall cause each of its
Subsidiaries to, defend the Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein. Each Credit Party shall, and shall cause each of its
Subsidiaries to, comply with the requirements of all state and federal laws in order to grant to
Lender valid and perfected first priority security interests in the Collateral, with perfection, in
the case of any investment property, being effected by giving Lender control of such investment
property, rather than by the filing of a UCC financing statement with respect to such investment
property. Lender is hereby authorized by each Credit Party to file any UCC financing statements
covering the Collateral. Each Credit Party shall, and shall cause each of its Subsidiaries to, do
whatever Lender may reasonably request, from time to time, to effect the purposes of this Credit
Agreement and the other Credit Documents, including filing notices of liens, UCC financing
statements, fixture filings and amendments, renewals and continuations thereof; cooperating with
Lender’s representatives; keeping stock records; obtaining waivers from landlords and mortgagees
and from warehousemen and their landlords and mortgagees; and, paying claims which might, if
unpaid, become a Lien on the Collateral.



     6.8 Insurance; Casualty Loss.



     (a) Each Credit Party agrees to maintain, and to cause each of its Subsidiaries to maintain,
public liability insurance, third party property damage insurance and replacement value insurance
on the Collateral under such policies of insurance, with such insurance companies, in such amounts
and covering such risks as are at all times satisfactory to Lender in its commercially reasonable
judgment. All policies covering the Collateral are to name Lender as an additional insured and the
loss payee in case of loss, and are to contain such other provisions as Lender may reasonably
require to fully protect the interest of Lender in the Collateral and to any payments to be made
under such policies. Each Credit Party shall provide written notice to Lender of the occurrence of
any of the following events within five (5) Business Days after the occurrence of such event: any
asset or property owned or used by such Credit Party or any



44









 




Subsidiary of such Credit Party is (i) damaged or destroyed, or suffers any other loss; or (ii) condemned, confiscated or otherwise taken,
in whole or in part, or the use thereof is otherwise diminished so as to render impracticable or
unreasonable the use of such asset or property for the purposes for which such asset or property
was used immediately prior to such condemnation, confiscation or taking, by exercise of the powers
of condemnation or eminent domain or otherwise (collectively, a “Casualty Loss”). Each
Borrower shall diligently file and prosecute, or cause to be filed and prosecuted, all claims for
any award or payment in connection with a Casualty Loss with respect to such Credit Party or any
Subsidiary of such Credit Party. In the event of a Casualty Loss with respect to any Credit Party
or any Subsidiary of such Credit Party, such Credit Party shall pay to Lender, promptly upon receipt thereof, any and all insurance
proceeds and payments received by such Credit Party or such Subsidiary on account of damage,
destruction, loss, condemnation or eminent domain proceedings. Lender may, at its election and in
its sole discretion, (i) apply the proceeds realized from Casualty Losses to payment of accrued and
unpaid interest or outstanding principal under the Revolving Loans or any other Obligations then
due and payable, (ii) hold such proceeds as additional Collateral to secure any other Obligations
not then due and payable or (iii) pay such proceeds to the applicable Credit Party to be used to
repair, replace or rebuild the asset or property or portion thereof that was the subject of the
Casualty Loss. After the occurrence and during the continuance of an Event of Default, (A) no
settlement on account of any such Casualty Loss with respect to any Credit Party or any Subsidiary
of any Credit Party shall be made without the consent of Lender and (B) Lender may participate in
any such proceedings and the applicable Credit Party shall deliver to Lender such documents as may
be requested by Lender to permit such participation and shall consult with Lender, its attorneys
and agents in the making and prosecution of such claim or claims. Each Credit Party hereby
irrevocably authorizes and appoints Lender its attorney-in-fact, and agrees that, upon request, it
will cause each Subsidiary of Credit Party to authorize and appoint Lender its attorney-in-fact,
after the occurrence and during the continuance of an Event of Default, to collect and receive any
such award or payment and to file and prosecute such claim or claims, which power of attorney shall
be irrevocable and shall be deemed to be coupled with an interest with full power of substitution,
and each Credit Party shall, upon demand of Lender, make, execute and deliver, and cause each of
its Subsidiary to make, execute and deliver, any and all assignments and other instruments
sufficient for the purpose of assigning any such award or payment to Lender free and clear of any
encumbrances of any kind or nature whatsoever.




     (b) UNLESS A CREDIT PARTY PROVIDES LENDER WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY
THIS CREDIT AGREEMENT, LENDER MAY PURCHASE INSURANCE AT SUCH CREDIT PARTY’S EXPENSE TO PROTECT
LENDER’S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT SUCH CREDIT
PARTY’S INTERESTS. THE COVERAGE THAT LENDER PURCHASES MAY NOT PAY ANY CLAIM THAT SUCH CREDIT PARTY
MAY MAKE OR ANY CLAIM THAT IS MADE AGAINST SUCH CREDIT PARTY IN CONNECTION WITH THE COLLATERAL.
SUCH CREDIT PARTY MAY LATER CANCEL ANY INSURANCE PURCHASED BY LENDER, BUT ONLY AFTER PROVIDING
LENDER WITH EVIDENCE THAT SUCH CREDIT PARTY HAS OBTAINED INSURANCE AS REQUIRED BY THIS CREDIT
AGREEMENT. IF LENDER PURCHASES INSURANCE FOR THE COLLATERAL, SUCH CREDIT PARTY WILL BE RESPONSIBLE
FOR THE COSTS OF THAT



45









 




INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED IN
CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR
EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS. THE
COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE ANY CREDIT PARTY MAY BE ABLE TO
OBTAIN ON ITS OWN.




     6.9 Credit Party Taxes. Each Credit Party agrees to pay, when due, and to cause each of its Subsidiaries to pay
when due, all Credit Party Taxes lawfully levied or assessed against such Credit Party, any
Subsidiary of such Credit Party or any of their properties, including any of the Collateral, before
any penalty or interest accrues thereon; provided, unless the Credit Party Taxes have
become a federal tax or ERISA Lien on any of the assets of such Credit Party or any such
Subsidiary, no Credit Party Taxes need be paid if the same is being contested, in good faith, by
appropriate proceedings promptly instituted and diligently conducted and if an adequate reserve or
other appropriate provision shall have been made therefor as required in order to be in conformity
with GAAP.



     6.10 Compliance With Laws.



     (a) Each Credit Party agrees to comply, and to cause each of its Subsidiaries to comply, in
all material respects, with all Requirements of Law applicable to its business or its operations or
to the Collateral or any part thereof.



     (b) Within fifteen (15) days after any Credit Party learns of the enactment or promulgation
of any Requirement of Law which could reasonably be expected to have a Material Adverse Affect,
such Credit Party shall provide Lender with notice thereof.



     (c) At the request of Lender from time to time, but in any event not more frequently than
once in any twelve month period, and at the sole cost and expense of such Credit Party, each Credit
Party shall retain an environmental consulting firm, satisfactory to Lender in its commercially
reasonable judgment, to conduct an environmental review, audit or investigation of the specific
items as requested by Lender relating to the properties of such Credit Party and its Subsidiaries
and provide to Lender a copy of any reports delivered in connection therewith. At the request of
Lender, each Credit Party shall provide Lender with any additional information relating to
environmental matters and any potential related liability resulting therefrom as Lender may
reasonably request.



     6.11 Use of Proceeds. The initial Revolving Loans made to Borrowers hereunder shall
be used by Borrowers to (a) finance, in part, the USVD Acquisition, (b) refinance a portion of the
existing Indebtedness of the Credit Parties, and (c) pay fees and expenses in connection with the
transactions contemplated hereby and by the Related Transaction Documents, to the extent that
payment thereof is permitted pursuant to Sections 7.7 and 7.9, including, including
Fees and Expenses due and payable on the Closing Date pursuant to Article 4; and the
proceeds of any subsequent Revolving Loans made hereunder shall be used by Borrowers solely for
working capital and, to the extent permitted hereunder, other general corporate purposes, of



46









 




Borrowers. No Credit Party shall use any portion of the proceeds of any such Revolving Loans for
the purpose of purchasing or carrying any “margin stock” (as defined in Regulation U of the Board
of Governors of the Federal Reserve System) in any manner which violates the provisions of
Regulation U or X of said Board of Governors or for any other purpose in violation of any
applicable statute or regulation, or of the terms and conditions of this Credit Agreement.




     6.12 Fiscal Year. Each Credit Party agrees to maintain its fiscal year as a year ending December 31st of each
calendar year, unless otherwise required by law, in which case such Credit Party will give Lender
at least thirty (30) days prior written notice thereof.



     6.13 Notification of Certain Events. Each Credit Party agrees that it shall promptly
(but, in the case of clause (g), in any event within two (2) Business Days after such
Credit Party learns of any such proceeding, change, development or event) notify Lender of:



     (a) any Material Contract of such Credit Party or any Subsidiary of such Credit Party that is
terminated or amended or any new Material Contract that is entered into, in which event such Credit
Party shall provide Lender with a copy of such Material Contract;



     (b) any material change or amendment of the material terms upon which suppliers of such
Credit Party or any Subsidiary of such Credit Party do business with such Credit Party or such
Subsidiary;



     (c) the entry of any order, judgment or decree in excess of $25,000 against such Credit Party
or any Subsidiary of such Credit Party or any of their respective properties or assets;



     (d) receipt by such Credit Party or any Subsidiary of such Credit Party of any notification
of violation of any Requirement of Law from any Governmental Authority;



     (e) any actual or prospective change, development or event which has had or could reasonably
be expected to have a Material Adverse Effect;



     (f) any proceedings being instituted or threatened to be instituted by or against such Credit
Party or any Subsidiary of such Credit Party before any Governmental Authority or arbitrator;



     (g) any Event of Default or Default; or



     (h) the commencement of, or any material development in, any litigation or proceeding
affecting any Credit Party or any Subsidiary of any Credit Party, or any of their respective
Affiliates, in which injunctive or similar relief is sought or in which the damages or other
payments sought are in excess of $25,000.



     6.14 Intellectual Property. Each Credit Party shall, and shall cause each of its
Subsidiaries to, do and cause to be done all things necessary to preserve and keep in full force
and effect all registrations of patents, copyrights, trademarks, service marks and other marks,
trade names or other trade rights.



47









 





     6.15 Maintenance of Property. Each Credit Party agrees to keep, and to cause each of
its Subsidiaries to keep, all property useful and necessary to its respective businesses in good
working order and condition (ordinary wear and tear and accidental casualty excepted) in accordance
with their past operating practices and not to commit or suffer any waste with respect to any of
its properties.



     6.16 Further Assurances; Post-Closing Deliveries.



     (a) Each Credit Party shall take, and shall cause each of its Subsidiaries to take, all such
further actions and execute all such further agreements, documents and instruments as Lender may at
any time determine in its sole discretion to be necessary or desirable to further carry out and
consummate the transactions contemplated by the Credit Documents, to cause the execution, delivery
and performance of the Credit Documents to be duly authorized and to perfect or protect the Liens
(and the priority status thereof) of Lender on the Collateral



     (b) In furtherance and not in limitation of the foregoing, each Credit Party shall deliver or
cause to be delivered to Lender:




     (i) within fifteen (15) days after the Closing Date, original executed counterparts of
each of the Subordination Agreements executed by each party thereto other than Lender and
the Credit Parties; and




     (ii) within fifteen (15) days after the Closing Date, evidence reasonably satisfactory
to Lender of the termination of UCC Financing Statement Number 200705897905, filed on June
27, 2007 in the office of the Secretary of State of Florida naming BTP as debtor and
Advantage Funding Corporation as Secured Party.



ARTICLE 7

NEGATIVE COVENANTS




     Until the Expiration Date and Payment in Full, each of the Credit Parties agrees that:



     7.1 Financial Covenants.



     (a) Capital Expenditures. The Credit Parties shall not make or commit to make, or
permit any of their respective Subsidiaries to make to commit to make, Capital Expenditures during
any calendar month that exceed in the aggregate for all Credit Parties and their respective
Subsidiaries combined an amount equal to projected Capital Expenditures for such calendar month set
forth in the Initial Projections.



     (b) Minimum Revenues. The Credit Parties shall not permit revenues of the
Consolidated Entity:




     (i) as determined as of October 31, 2007 and the last day of each consecutive calendar
month ending thereafter through and including August 31, 2008, in each case for



48









 






the period commencing on the Closing Date and ending on such date, to be less than ninety percent (90%)
of the projected revenues of the Consolidated Entity for such period set forth in the
Initial Projections; and




     (ii) as determined as of September 30, 2008 and the last day of each consecutive
calendar month ending thereafter, in each case for the twelve month period
ending on such date, to be less than ninety percent (90%) of the projected revenues of
the Consolidated Entity for such period set forth in the Initial Projections.



     (c) Minimum EBITDA. The Credit Parties shall not permit EBITDA:




     (i) as determined as of October 31, 2007 and the last day of each consecutive calendar
month ending thereafter through and including August 31, 2008, in each case for the period
commencing on the Closing Date and ending on such date, to be less than ninety percent (90%)
of the projected EBITDA for such period set forth in the Initial Projections; and




     (ii) as determined as of September 30, 2008 and the last day of each consecutive
calendar month ending thereafter, in each case for the twelve month period ending on such
date, to be less than ninety percent (90%) of the projected EBITDA for such period set forth
in the Initial Projections.



     7.2 No Additional Indebtedness. No Credit Party shall, or shall permit any of its
Subsidiaries to, directly or indirectly, incur, create, assume or suffer to exist any Indebtedness
other than:



     (a) Indebtedness secured by Purchase Money Liens not to exceed, in the aggregate for Credit
Parties and their respective Subsidiaries combined, $10,000 outstanding at any one time, such
Indebtedness to be from parties and to have terms and conditions satisfactory to Lender;



     (b) Indebtedness arising under this Credit Agreement and the other Credit Documents



     (c) in the case of Parent, Indebtedness evidenced by the Existing Subordinated Notes, not to
exceed in the aggregate $527,555.47 at any time outstanding;



     (d) in the case of Parent, the payment obligations of Parent pursuant to Sections 2.2(c) and
2.5 of the USVD Acquisition Agreement;



     (e) in the case of Parent, Indebtedness evidenced by the DD Subordinated Note, not to exceed
$1,000,000 at any time outstanding;



     (f) in the case of USVD, to the extent constituting Indebtedness, obligations of USVD
incurred in the ordinary course of business pursuant to the Inter-Tel Dealer Agreement; and



49









 





     (g) Indebtedness described (and in the respective principal amounts set forth) on
Schedule 7.2.



     7.3 No Liens; Judgments. No Credit Party shall, or shall permit any of its
Subsidiaries to, directly or indirectly, mortgage, assign, pledge, transfer, create, incur, assume,
suffer to exist or otherwise permit any Lien (whether as a result of a purchase money or title
retention transaction, or other security interest, judgment or otherwise) to exist on any of its property, assets, revenues or goods,
whether real, personal or mixed, whether now owned or hereafter acquired, except for the following
(the “Permitted Liens”):



     (a) Liens granted by any Credit Party or any Subsidiary of any Credit Party pursuant to any
Credit Document;



     (b) Liens described on Schedule 7.3;



     (c) Purchase Money Liens securing Indebtedness permitted pursuant to subsection
7.2(a);



     (d) Liens of warehousemen, mechanics, material men, workers, repairmen, common carriers and
landlords arising by operation of law not waived in connection herewith, for amounts that are not
yet due and payable;



     (e) Attachment and judgment Liens securing outstanding Liabilities of a Credit Party or a
Subsidiary of a which individually or in the aggregate for all such Liens are not in excess of
$25,000 for Credit Parties and their respective Subsidiaries combined;



     (f) Liens for Credit Party Taxes not yet due and payable or which are being diligently
contested in good faith by a Credit Party by appropriate proceedings; provided, that, in
any such case an adequate reserve is being maintained by the applicable Credit Party for the
payment of same;



     (g) Deposits or pledges of cash or Cash Equivalents to secure obligations arising in the
ordinary course of business under workmen’s compensation, social security or similar laws, or under
unemployment insurance;



     (h) Deposits or pledges of cash or cash Equivalents to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety and appeal bonds
and other obligations of like nature arising in the ordinary course of business not to exceed an
aggregate of $25,000 outstanding at any one time for Credit Parties and their respective
Subsidiaries combined; and



     (i) Easements, rights-of-way, restrictions and other similar encumbrances arising or incurred
in the ordinary course of business which, in the aggregate, are not substantial in amount and which
do not detract in any material respect from the value of the property subject thereto or interfere
in any material respect with the ordinary conduct of the business of any Credit Party or any
Subsidiary of any Credit Party.



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     For the purposes of subsection 7.3(e), (g) and (h), Liabilities and
obligations referred to therein shall remain “outstanding”, notwithstanding the sale or other
disposition of any property subject to a Lien permitted thereunder.



     7.4 No Sale of Assets. No Credit Party shall, or shall permit any of its Subsidiaries to, directly or indirectly,
sell, lease, assign, transfer or otherwise dispose of any assets other than (a) Inventory in the
ordinary course of business, (b) obsolete or worn out property disposed of in the ordinary course
of business and other dispositions of assets (other than Capital Securities); provided: (i)
such dispositions described in the foregoing clause (b) are for fair value; (ii) one
hundred percent (100%) of the consideration for each of such other dispositions is received by such
Credit Party or such Subsidiary, as the case may be, in the form of cash; and (iii) the
consideration for such other dispositions does not exceed, in the aggregate for Credit Parties and
their Subsidiaries combined, for any fiscal year, $25,000.



     7.5 No Corporate Changes. No Credit Party shall, or shall permit any of its
Subsidiaries to, directly or indirectly, merge, consolidate or otherwise alter or modify such
Person’s Governing Documents, structure, status or existence, or enter into or engage in any
operation or activity materially different from that currently being conducted by such Credit Party
or such Subsidiary.



     7.6 No Guaranties. No Credit Party shall, or shall permit any of its Subsidiaries to,
directly or indirectly, issue or assume any Guaranty with respect to the Liabilities of any other
Person, except (a) pursuant to the Credit Documents, (b) by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary course of business,
and (c) Indebtedness permitted to be incurred pursuant to Section 7.2.



     7.7 No Restricted Payments. No Credit Party shall, or shall not permit any of its
Subsidiaries to, directly or indirectly make any Restricted Payment; provided, that,
notwithstanding the foregoing:



     (a) any Subsidiary of a Borrower may declare and pay dividends and other distributions to any
Borrower;



     (b) Parent may make regularly scheduled payments of principal and interest under the Existing
Subordinated Notes, as in effect on the date hereof, so long as (i) before and after giving effect
thereto, no Default or Event of Default exists, (ii) such payment constitutes a Permitted Existing
Noteholder Payment, and (iii) such payment is otherwise permitted pursuant to the applicable
Existing Note Subordination Agreement;



     (c) Parent may make regularly scheduled payments of principal and interest under the DD
Subordinated Note, as in effect on the date hereof, so long as (i) before and after giving effect
thereto, no Default or Event of Default exists, (ii) such payment constitutes a Permitted DD Note
Payment, and (iii) such payment is otherwise permitted pursuant to the DD Note Subordination
Agreement;



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     (d) Parent may make payments pursuant to Sections 2.2(c) and 2.5 of the USVD Acquisition
Agreement, so long as (i) before and after giving effect thereto, no Default or Event of Default
exists, (ii) such payment constitutes a Permitted USVD Seller Payment, and (iii) such payment is
otherwise permitted pursuant to the USVD Seller Subordination Agreement;



     (e) USVD make payments to Inter-Tel Integrated Systems, Inc. and Inter-Tel, Incorporated, so
long as (i) before and after giving effect thereto, no Default or Event of Default exists, and (ii)
such payment is otherwise permitted pursuant to the Inter-Tel Subordination Agreement; and



     (f) any Credit Party may declare and pay dividends and other distributions to holders of its
Capital Securities, payable solely in its common stock, to the extent that (except in the case of
such dividends or other distributions made by Parent) such common stock is pledged to Lender as
collateral security for the Obligations in accordance with the terms and provisions of the
respective Collateral Documents.



     7.8 No Investments. No Credit Party shall, or shall permit any of its Subsidiaries
to, directly or indirectly, make any Investment in any Person other than:



     (a) Investments in existence on the Closing Date which are described on Schedule 7.8;



     (b) Advances or loans made to employees in the ordinary course of business not to exceed
$10,000 outstanding at any time to any one Person and $25,000 in the aggregate outstanding at any
one time;



     (c) Cash Equivalents, to the extent Lender has a perfected, first priority Lien thereon
securing all Obligations; and



     (d) Guaranties permitted under Section 7.6.



     7.9 No Affiliate Transactions. No Credit Party shall, or shall permit any of its
Subsidiaries to, directly or indirectly, enter into any transaction with, including the purchase,
sale or exchange of property or the rendering of any service to any Affiliate of any Credit Party
or any Subsidiary of any Credit Party and whether or not such transaction would otherwise be
permitted under any of the other provisions of the Credit Documents, except in the ordinary course
of and pursuant to the reasonable requirements of such Person’s business and upon fair and
reasonable terms no less favorable to such Person than could be obtained in a comparable
arms-length transaction with an unaffiliated Person.



     7.10 Limitation on Transactions Under ERISA. No Credit Party shall, or shall permit
any of its Subsidiaries to, directly or indirectly:



          (d) amend, or permit any ERISA Affiliate to amend, a Benefit Plan resulting in an increase in
current liability for the plan year such that such Credit Party , any Subsidiary of



52









 






such Credit
Party or any ERISA Affiliate is required to provide security to such a Benefit Plan under Section
401(a)(29) of the Code; or




          (e) allow the representation made in Section 5.15 to be untrue at any time.




     7.11 No Additional Bank Accounts. No Credit Party shall, or shall permit any of its
Subsidiaries to, directly or indirectly, open, maintain or otherwise have any checking, savings or
other accounts of any kind whatsoever at any bank or other financial institution, or any other
account where money is or may be deposited or maintained with any Person, other than the depositary
accounts set forth on Schedule 7.11.



     7.12 Material Amendments of Material Contracts. Without the prior written consent of
Lender (which consent shall not be unreasonably withheld or delayed), no Credit Party shall, or
shall permit any of its Subsidiaries to, directly or indirectly, (a) amend or modify any material
term of any of the Material Contracts, or permit the amendment or modification of any material term
of any of the Material Contracts, or (b) cancel or terminate or permit the cancellation or
termination of any of the Material Contracts.



     7.13 Additional Restrictive Covenants. No Credit Party shall, or shall permit any of
its Subsidiaries to, directly of indirectly, create or otherwise cause or suffer to exist or become
effective (a) any consensual restriction limiting the ability (whether by covenant, event of
default, subordination or otherwise and including any such the effect of which is to require the
providing of equal and ratable security to any other Person in the event a Lien is granted to or
for the benefit of Lender) to (i) pay dividends or make any other distributions on shares of its
Capital Securities held by such Credit Party or any other Subsidiary of such Credit Party; (ii) pay
any Liability owed to such Credit Party or any other Subsidiary of such Credit Party; (iii) make
any loans or advances to, or other Investments in, such Credit Party or in any other Subsidiary of
such Credit Party; or (iv) create or permit to exist any Lien upon the assets of such Credit Party
or any Subsidiary of such Credit Party, other than Liens permitted under Section 7.3; or
(b) any contractual obligation which may restrict or inhibit Lender’s rights or ability to sell or
otherwise dispose of the Collateral or any part thereof after the occurrence of an Event of
Default, other than Permitted Restrictive Covenants.



     7.14 No Additional Subsidiaries. No Credit Party shall, or shall permit any of its
Subsidiaries to, directly or indirectly, form or acquire any new Subsidiaries.



     7.15 Limitation on Derivative Transactions. No Credit Party shall, or shall permit
any of its Subsidiaries to, enter into any Derivative Transaction.



     7.16 OFAC. No Credit Party shall, or shall permit any of its Subsidiaries to, (i)
become a person whose property or interests in property are blocked or subject to blocking pursuant
to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit or Support Terrorism (66 Fed. Reg.
49079(2001), (ii) engage in any dealings or transactions prohibited by Section 2 of such executive
order, or be otherwise associated with any such person in any manner violative of Section 2, or
(iii) otherwise become a person on the list of Specially Designated Nationals and



53









 




Blocked Persons or subject to the limitations or prohibitions under any other OFAC regulation
or executive order.




     7.17 Amendments to Related Agreements. No Credit Party shall and no Credit Party shall
permit any of its Subsidiaries, to amend, supplement, waive or otherwise modify any provision of,
any Related Agreement.



ARTICLE 8

EVENTS OF DEFAULT AND REMEDIES




     8.1 Events of Default. The occurrence of any of the following events shall constitute
an “Event of Default” hereunder (whatever the reason for such event and whether it shall be
voluntary or involuntary, or within or without the control of any Credit Party or any Subsidiary of
any Credit Party, or be effected by operation of law or pursuant to any judgment or order of any
court or any order, rule or regulation of any governmental or nongovernmental body):



     (a) failure of any Credit Party to pay any Obligations when due, whether at stated maturity,
by acceleration, or otherwise.



     (b) failure of any Credit Party or any Subsidiary of any Credit Party to perform, comply with
or observe any term, covenant or agreement applicable to it contained in (i) subsection
2.3(c), (ii) Article 6 (other than Sections 6.3 or 6.10), or (iii)
Articles 7;



     (c) any representation or warranty made by any Credit Party or any Subsidiary of any Credit
Party under this Credit Agreement or under any other Credit Document shall prove to have been
incorrect or misleading in any material respect when made or deemed made, except (i) to the extent
that such representation or warranty expressly relates solely to an earlier date (in which case
such representation or warranty shall prove to have been incorrect or misleading on or as of such
earlier date), and (ii) for any such representation or warranty that is subject to a Material
Adverse Effect or other materiality qualifier (in which case such representation or warranty shall
prove to have been incorrect or misleading in any respect); or



     (d) any Credit Party or any Subsidiary of any Credit Party shall fail to comply with any
covenant contained in this Credit Agreement (other than under a provision covered by
subsections 8.1(a) or (b) above) or the other Credit Documents, which failure to
comply is not cured within the earlier of ten (10) Business Days after the date on which an officer
of any Credit Party becomes aware of its occurrence and thirty (30) days after the Funds
Administrator is given notice thereof by Lender;



     (e) dissolution, liquidation, winding up or cessation of the businesses of any Credit Party
or any Subsidiary of any Credit Party, or the failure of any Credit Party or any Subsidiary of any
Credit Party to meet its debts as they mature, or the calling of one or more meetings of the major
creditors of any Credit Party or any Subsidiary of any Credit Party for purposes of obtaining a
moratorium on payment or a compromise of such Person’s debts;



     (f) the insolvency (however defined) of any Credit Party or any Subsidiary of any Credit
Party; or



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     (g) the commencement by or against of any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any federal or state law and, in the
event any such proceeding is commenced against any Credit Party or any Subsidiary of any Credit
Party, such proceeding is not dismissed within thirty (30) days;



     (h) the occurrence of a default or event of default (in each case which shall continue beyond
the expiration of any applicable grace periods) which permits, or could permit, the acceleration of
the maturity of, any note, agreement or instrument evidencing any other Indebtedness of any Credit
Party or any Subsidiary of any Credit Party, and the aggregate principal amount of all such
Indebtedness with respect to which a default or an event of default has occurred, or the maturity
of which is permitted to be accelerated, exceeds $25,000



     (i) any covenant, agreement or obligation of any party contained in or evidenced by any of
the Credit Documents shall cease to be enforceable in accordance with its terms, or any party
(other than Lender) to any Credit Document shall deny or disaffirm its obligations under any of the
Credit Documents, or any Credit Document shall be cancelled, terminated, revoked or rescinded
without the express prior written consent of Lender, or any action or proceeding shall have been
commenced by any Person (other than Lender) seeking to cancel, revoke, rescind or disaffirm the
obligations of any party to any Credit Document, or any court or other Governmental Authority shall
issue a judgment, order, decree or ruling to the effect that any of the obligations of any party to
any Credit Document are illegal, invalid or unenforceable; or



     (j) (i) Michael P. Fischer shall cease for any reason to occupy the office of Chief Executive
Officer of USVD or to perform the customary functions of such office on a full time basis; or



     (ii) Scott M. Diamond shall cease for any reason to occupy the office of Chief Operating
Officer of USVD or to perform the customary functions of such office on a full time basis; or




     (iii) Michael Nole cease for any reason to occupy the office of Chief Executive Officer of
Parent or to perform the customary functions of such office on a full time basis; or




     (iv) George Pacinelli shall cease for any reason to occupy the office of President of Parent
or to perform the customary functions of such office on a full time basis; or




     (k) the occurrence of a Change of Control; or



     (l) Lender does not have or ceases to have a valid and perfected first priority security
interest in the Collateral or any substantial portion thereof; or



     (m) the subordination provisions of any Subordination Agreement shall for any reason be
revoked or invalidated, or otherwise cease to be in full force and effect, or any Person shall
contest in any manner the validity or enforceability thereof or deny that it has any further
liability



55









 




or obligation thereunder, or the Obligations, for any reason shall not have the priority
contemplated by this Agreement or such subordination provisions; or




     (n) Parent shall be required to make payments pursuant to Section 2.2(b) and 2.3 of the USVD
Acquisition Agreement that exceed in the aggregate $250,000; or



     (o) (i) any Termination Event shall occur with respect to any Benefit Plan of any Credit
Party, any Subsidiary of any Credit Party or any ERISA Affiliate, (ii) any Accumulated Funding
Deficiency, whether or not waived, shall exist with respect to any such Benefit Plan, (iii) any
Person shall engage in any Prohibited Transaction involving any such Benefit Plan, (iv) any Credit
Party, any Subsidiary of any Credit Party or any ERISA Affiliate shall be in “default” (as defined
in ERISA Section 4219(c)(5)) with respect to payments owing to any such Benefit Plan that is a
Multiemployer Plan as a result of such Person’s complete or partial withdrawal (as described in
ERISA Section 4203 or 4205) therefrom, (v) any Credit Party, any Subsidiary of any Credit Party or
any ERISA Affiliate shall fail to pay when due an amount that is payable by it to the PBGC or to
any such Benefit Plan under Title IV of ERISA, (vi) a proceeding shall be instituted by a fiduciary
of any such Benefit Plan against any Credit Party, any Subsidiary of any Credit Party or any ERISA
Affiliate to enforce ERISA Section 515 and such proceeding shall not have been dismissed within 30
days thereafter or (vii) any other event or condition shall occur or exist with respect to any such
Benefit Plan, except that no event or condition referred to in clauses (i) through
(vii) shall constitute an Event of Default if it, together with all other such events or
conditions at the time existing, has not subjected, and in the reasonable determination of Lender
will not subject, any Credit Party or any Subsidiary of any Credit Party to any liability that,
alone or in the aggregate with all such liabilities for all such Persons, exceeds $25,000.



     8.2 Acceleration and Cash Collateralization. Upon the occurrence of an Event of Default
and which is continuing, Lender may take any or all of the following actions, without prejudice to
the rights of Lender to enforce its claims against any or all of the Credit Parties: (a) declare
all Obligations to be immediately due and payable (except with respect to any Event of Default set
forth in subsection 8.1(f), in which case all Obligations shall automatically become
immediately due and payable without the necessity of any notice or other demand) without
presentment, demand, protest or any other action or obligation of Lender; and (b) immediately
terminate the Commitment hereunder.



     8.3 Remedies. From and after the occurrence of any Event of Default and which is
continuing, Lender may: (a) remove from any premises where same may be located any and all
documents, instruments, files and records (including the copying of any computer records), and any
receptacles or cabinets containing same, relating to any or all of the Collateral, or Lender may
use (at the expense of the Credit Parties) such of the supplies or space of any Credit Party at
such Credit Party’s place of business or otherwise, as may be necessary to properly administer and
control any or all of the Collateral or the handling of collections and realizations thereon; (b)
bring suit, in the name of any Credit Party or Lender and generally shall have all other rights
respecting any or all of the Collateral, including the right to: accelerate or extend the time of
payment, settle, compromise, release in whole or in part any amounts owing on any or all of the
Collateral and issue credits in the name of any Credit Party or Lender; and (c) foreclose the
security interests created pursuant to the Credit Documents by any available judicial procedure,



56









 




or to take possession of any or all of the Collateral without judicial process and enter any
premises where any Collateral may be located for the purpose of taking possession of or removing
same. Lender 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 any Credit Party or Lender, or in the name of such other
party as Lender 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, and upon such
other terms and conditions as Lender in its sole discretion may deem advisable, and Lender shall
have the right to purchase at any such sale. If any Collateral shall require rebuilding,
repairing, maintenance or preparation, Lender shall have the right, at its option, to do such of
the aforesaid as is necessary, for the purpose of putting such Collateral in such saleable form as
Lender shall deem appropriate. Each Credit Party agrees, at the request of Lender, to assemble the
Collateral and to make it available to Lender at places which Lender shall select, whether at the
premises of such Credit Party or elsewhere, and to make available to Lender the premises and
facilities of such Credit Party for the purpose of Lender taking possession of, removing or putting
the Collateral in saleable form. However, if notice of intended disposition of any Collateral is
required by law, it is agreed that ten (10) Business Days notice shall constitute reasonable
notification. Unless expressly prohibited by the licensor thereof, if any, Lender is hereby
granted a license to use all computer software programs, data bases, processes and materials used
by each Credit Party in connection with its businesses or in connection with the Collateral. The
net cash proceeds resulting from Lender’s exercise of any of the foregoing rights (after deducting
all charges, costs and expenses, including reasonable attorneys’ fees) shall be applied by Lender
to the payment of the Obligations, whether due or to become due, in such order as Lender may elect,
and pending such payment shall be held as security for such payment. Credit Parties shall remain
liable on a joint and several basis to Lender for any deficiencies. 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.




ARTICLE 9

MISCELLANEOUS




     9.1 SUBMISSION TO JURISDICTION; WAIVERS. EACH CREDIT PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY:



     (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NONEXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF ILLINOIS, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE NORTHERN
DISTRICT OF ILLINOIS, IN EACH CASE LOCATED IN CHICAGO, ILLINOIS, AND APPELLATE COURTS FROM ANY
THEREOF;



     (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR



57









 




PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;




     (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY
MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO SUCH CREDIT PARTY AT THE ADDRESS OF SUCH CREDIT PARTY SET FORTH IN SECTION
9.5 OR AT SUCH OTHER ADDRESS OF WHICH LENDER SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;



     (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT OF LENDER TO EFFECT SERVICE OF PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF LENDER TO BRING ANY ACTION OR
PROCEEDING AGAINST SUCH CREDIT PARTY, OR ITS PROPERTY IN THE COURTS OF OTHER JURISDICTIONS.



     (e) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM IN RESPECT OF, AND ALL
STATUTES OF LIMITATIONS WHICH MAY BE RELEVANT TO, SUCH ACTION OR PROCEEDING; AND



     (f) WAIVES DUE DILIGENCE, DEMAND, PRESENTMENT AND PROTEST AND ANY NOTICES THEREOF AS WELL AS
NOTICE OF NONPAYMENT.



     9.2 JURY TRIAL. EACH CREDIT PARTY AND LENDER HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE OTHER CREDIT DOCUMENTS
OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.



     9.3 GOVERNING LAW. THE RIGHTS AND DUTIES OF EACH CREDIT PARTY AND LENDER UNDER THIS
CREDIT AGREEMENT, THE REVOLVING LOAN NOTES (INCLUDING MATTERS RELATING TO THE HIGHEST LAWFUL RATE)
AND THE OTHER CREDIT DOCUMENTS SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.



     9.4 Delays; Partial Exercise of Remedies. No delay or omission of Lender to exercise
any right or remedy hereunder or under any of the other Credit Documents, 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 Lender of
any right or remedy shall preclude any other or further exercise thereof, or preclude any other
right or remedy.



58









 





     9.5 Notices. All notices and other communications provided for hereunder shall be in writing and shall
be mailed, facsimiled or delivered, if to any Credit Party, at the following address:


BROOKSIDE TECHNOLOGY HOLDINGS CORP.

Suite 500

7703 North Lamar Boulevard

Austin, Texas 78752

Attention: Michael Nole, CEO

Facsimile: (813) 854-1045



with a copy to:



SHUMAKER, LOOP & KENDRICK, LLP

Suite 2800

101 East Kennedy Boulevard

Tampa, Florida 33602-5151

Attention: Julio C. Esquivel, Esq.

Facsimile: (813) 229-1660



and, if to Lender, to it at the following address:



HILCO FINANCIAL, LLC

5 Revere Drive

Suite 430

Northbrook, Illinois 60062

Attention: Scott Morse

Facsimile: (847) 509-1150



with a copy to:



KATTEN MUCHIN ROSENMAN LLP

525 West Monroe Street

Chicago, Illinois 60661

Attention: Denise S. Burn, Esq.

Facsimile: (312) 577-8778



or, as to each party, at such other address as shall be designated by such party in a written
notice to the other parties complying as to delivery with the terms of this Section 9.5.
All such notices and other communications shall be effective, (a) if mailed, when received or three
Business Days after deposited in the mails, whichever occurs first, (b) if facsimiled, on the date
of transmission if transmitted before 4:00 p.m. (Chicago time), otherwise on the next Business Day,
(c) if delivered by personal delivery, upon delivery, or (d) if delivered by overnight courier one
(1) Business Day after delivery to the courier (specifying one (1) Business Days’ delivery), in
each case, properly addressed.




     9.6 Assignability by Lender.



59









 





     (a) Lender may make, carry or transfer Revolving Loans at, to or for the account of, any of
its branch offices or the office of an Affiliate of Lender.



     (b) Lender may assign or sell participations to one or more banks, other financial
institutions, investment funds or any other Person all or a portion of the Commitment, the
Revolving Loans and the other rights and obligations of Lender under this Credit Agreement, any
Revolving Loan Note and the other Credit Documents.



     9.7 Confidentiality. Lender agrees that it will use its reasonable best efforts not
to disclose without the prior consent of such Credit Party (other than to its employees, auditors,
advisors, Affiliates and counsel) any information with respect to any Credit Party or any of its
Subsidiaries which is furnished pursuant to this Credit Agreement or any of the other Credit
Documents and which is designated by such Credit Party to Lender in writing as confidential,
provided, Lender may disclose any such information (a) as has become generally available to
the public, (b) as may be required or appropriate in any report, statement or testimony submitted
to or examination conducted by any Governmental Authority having or claiming to have jurisdiction
over such Lender, (c) as may be required or appropriate in response to any summons or subpoena or
in connection with any litigation, (d) in order to comply with any Requirement of Law, (e) to any
prospective or actual transferee or participant in connection with any contemplated transfer or
participation of any Revolving Loan Note or the Commitment or any interest therein by Lender, (f)
to other financial institutions with respect to which Lender has a contractual relationship in
accordance with Lender’s regular banking procedures, provided, each such other financial
institution agrees to be bound by the confidentiality provisions contained in this Section
9.7, (g) to any nationally recognized rating agency that requires access to information
regarding Lender’s investment portfolio in connection with such rating agency’s issuance of ratings
with respect to Lender, provided, Lender advises such rating agency of the confidential
nature of such information, (h) as may be required or appropriate in protecting, preserving,
exercising or enforcing any of its rights in, under or related to the Collateral or the Credit
Documents and (i) as may be required or appropriate in consulting with any Person with respect to
any of the foregoing matters.



     9.8 Indemnification; Expenses. Credit Parties shall and hereby agree to jointly and
severally indemnify, defend and hold harmless Lender and its directors, officers, agents,
employees, counsel, advisors and Affiliates from and against (a) any and all losses, claims,
damages, liabilities, deficiencies, judgments or expenses incurred by any of them (except to the
extent that it is finally judicially determined to have resulted from their own gross negligence or
willful misconduct) arising out of or by reason of any litigations, investigations, claims or
proceedings which arise out of or are in any way related to (i) any of the Credit Documents, any of
the Related Transactions or any of the respective transactions contemplated thereby; (ii) the
administration by Lender of the credit facility under this Credit Agreement as a co-borrowing
facility with a borrowing agent and funds administrator, (iii) any actual or proposed use by any
Credit Party of the proceeds of any Revolving Loans; or (iv) Lender’s entering into this Credit
Agreement, the other Credit Documents or any other agreements, instruments or documents relating
thereto, including amounts paid in-settlement, court costs and the fees and disbursements of
counsel incurred in connection with any such litigation, investigation, claim or proceeding or



60









 




any advice rendered in connection with any of the foregoing; and (b) any such losses, claims, damages, liabilities,
deficiencies, judgments or expenses that arise directly or indirectly from or in connection with
any federal, state or local environmental laws, acts, rules, regulations, orders, directions,
ordinances, criteria or guidelines. If and to the extent that the Obligations of any Credit Party
hereunder are unenforceable for any reason, such Credit Party hereby agrees to make the maximum
contribution to the payment and satisfaction of such Obligations which is permissible under
applicable law. Each Credit Party’s obligations hereunder shall survive any termination of this
Credit Agreement and the other Credit Documents and Payment in Full, and are in addition to, and
not in substitution of, any other of its Obligations. In addition, each Credit Party shall, upon
demand, pay to Lender all Expenses, including, without limitation, costs and expenses (including
the reasonable fees and disbursements of counsel and other professionals) paid or incurred by
Lender in (i) enforcing or defending its rights under or in respect of this Credit Agreement, the
other Credit Documents or any other agreement, document or instrument now or hereafter executed and
delivered in connection herewith, (ii) collecting the Revolving Loans and other Obligations, (iii)
foreclosing or otherwise collecting upon the Collateral or any part thereof and (iv) obtaining any
legal, accounting or other advice in connection with any of the foregoing.




     9.9 Entire Agreement. This Credit Agreement and the other Credit Documents constitute
the entire agreement among Credit Parties and Lender (in their respective capacities as such) and
supersedes any prior agreements between them.



     9.10 Amendments, Etc. No amendment or waiver of any provision of this Credit
Agreement or any Collateral Document, nor consent to any departure by any Credit Party therefrom,
shall in any event be effective unless the same shall be in writing and signed by Lender (and, in
the case of amendments, each Credit Party), and each such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given.



     9.11 Non-liability of Lender. The relationship between each Credit Party and Lender
shall be solely that of borrower or guarantor, as the case may be, and lender. Lender shall have
no fiduciary responsibilities to any Credit Party. Lender undertakes no responsibility to any
Credit Party to review or inform such Credit Party of any matter in connection with any phase of
such Credit Party’s business or operations.



     9.12 Counterparts. This Credit Agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together constitute one and the
same instrument. Any such counterpart which may be delivered by facsimile, email or similar
electronic transmission shall be deemed the equivalent of an originally signed counterpart and
shall be fully admissible in any enforcement proceedings regarding this Credit Agreement.



     9.13 Effectiveness; Successors and Assigns. This Credit Agreement shall become
effective when it shall have been executed by each Credit Party and Lender and when the conditions
precedent set forth in Article 4 have been
satisfied or waived in writing by Lender in accordance with the terms of this Credit
Agreement, and thereafter shall be binding upon and



61









 




inure to the benefit of each Credit Party and Lender, and their respective successors and assigns, except that no Credit Party shall have the
right to assign its rights hereunder or any interest herein without the prior written consent of
Lender, and any assignment by Lender shall be governed by Section 9.6.




     9.14 Severability. In case any provision in or obligation under this Credit Agreement
or the Revolving Loan Notes or the other Credit Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not
in any way be affected or impaired thereby.



     9.15 Headings Descriptive. The headings of the several sections and subsections of
this Credit Agreement, and the Table of Contents, are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this Credit Agreement.



     9.16 Maximum Rate. Notwithstanding anything to the contrary contained elsewhere in
this Credit Agreement or in any other Credit Document, each Credit Party and Lender each hereby
agrees that all agreements between them under this Credit Agreement and the other Credit Documents,
whether now existing or hereafter arising and whether written or oral, are expressly limited so
that in no contingency or event whatsoever shall the amount paid, or agreed to be paid, to Lender
for the use, forbearance, or detention of the money loaned to any Credit Party and evidenced hereby
or thereby or for the performance or payment of any covenant or obligation contained herein or
therein, exceed the Highest Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents at the time performance of
such provision shall be due shall exceed the Highest Lawful Rate, then, automatically, the
obligation to be fulfilled shall be modified or reduced to the extent necessary to limit such
interest to the Highest Lawful Rate, and if from any such circumstance Lender should ever receive
anything of value deemed interest by applicable law which would exceed the Highest Lawful Rate,
such excessive interest shall be applied to the reduction of the principal amount then outstanding
hereunder or on account of any other then outstanding Obligations and not to the payment of
interest, or if such excessive interest exceeds the principal unpaid balance then outstanding
hereunder and such other then outstanding Obligations, such excess shall be refunded to Credit
Parties. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of
the Obligations and other Indebtedness of any Credit Party to Lender shall, to the extent permitted
by applicable law, be amortized, prorated, allocated and spread throughout the full term of such
Indebtedness until Payment in Full so that the actual rate of interest on account of all such
Indebtedness does not exceed the Highest Lawful Rate throughout the entire term of such
Indebtedness. The terms and provisions of this Section shall control every other provision of this
Credit Agreement and all agreements among Credit Parties and Lender.



     9.17 Right of Setoff. In addition to and not in limitation of all rights of offset
that Lender may have under applicable law, Lender shall, upon the occurrence and during the
continuance of any Event of Default and whether or not Lender has made any demand or the Obligations are matured, Lender
shall have the right to appropriate and apply to the payment of the Obligations all deposits
(general or special, time or demand, provisional or final) then or



62









 




thereafter held by or under the control of, and other Indebtedness or property then or thereafter owing by, Lender, including any
and all amounts in any Depositary Account, the Lender’s Account or the Disbursement Account.




     9.18 Rights Cumulative. Each of the rights and remedies of Lender under the Credit
Documents shall be in addition to all of its other rights and remedies under the Credit Documents
and applicable law, and nothing in the Credit Documents shall be construed as limiting any such
rights or remedies.



     9.19 Patriot Act Notice1.2 . Lender, to the extent Lender is subject to the Patriot
Act, hereby notifies each Credit Party that pursuant to the requirements of the Patriot Act, it may
be required to obtain, verify and record information that identifies such Credit Party, which
information includes the name and address of such Credit Party and other information that will
allow Lender to identify such Credit Party in accordance with the Patriot Act.



     9.20 Joint and Several Liability of Borrowers.



          (a) Each of the Borrowers shall be jointly and severally liable hereunder and under each of
the other Credit Documents with respect to all Obligations, regardless of which of such Persons
actually receives the proceeds of the Revolving Loans or the benefit of any other extensions of
credit hereunder, or the manner in which any of the Borrowers account therefor or Lender accounts
therefor in their respective books and records. Notwithstanding the foregoing, (i) the obligations
and liabilities of the respective Borrowers with respect to proceeds of Revolving Loans which it
receives, and related fees, costs and expenses, and (ii) the obligations and liabilities of the
respective Borrowers arising as a result of the joint and several liability of Borrowers hereunder
with respect to proceeds of Revolving Loans received by, the other Borrower, together with the
related fees, costs and expenses, shall be separate and distinct obligations, both of which are
primary obligations of Borrowers. Neither the joint and several liability of, nor the Liens
granted to Lender under the Collateral Documents by, any of the Borrowers shall be impaired or
released by (A) the failure of Lender, any successors or assigns thereof, or any holder of any
Revolving Loan Note or any of the Obligations to assert any claim or demand or to exercise or
enforce any right, power or remedy against any Borrower or any other Person, the Collateral or
otherwise; (B) any extension or renewal for any period (whether or not longer than the original
period) or exchange of any of the Obligations or the release or compromise of any obligation of any
nature of any Person with respect thereto; (C) the surrender, release or exchange of all or any
part of any property (including without limitation the Collateral) securing payment, performance
and/or observance of any of the Obligations or the compromise or extension or renewal for any
period (whether or not longer than the original period) of any obligations of any nature of any
Person with respect to any such property; (D) any action or inaction on the part of Lender, or any
other event or condition with respect to the other Borrower, including any such action or inaction
or other event or condition, which might otherwise constitute a defense available to, or a
discharge of, such Borrower, or a guarantor or surety of or for any or all of the Obligations; and
(E) any other act, matter or thing (other than payment or performance of the Obligations) which would or might, in the absence of this
provision, operate to release, discharge or otherwise prejudicially affect the obligations of such
or any other Borrower.





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     9.21 Funds Administrator.



     (a) Borrowers maintain an integrated cash management system reflecting their interdependence
on one another and the mutual benefits shared among them as a result of their respective
operations. In order to efficiently fund and operate their respective businesses and minimize the
number of borrowings which they will make under this Credit Agreement and thereby reduce the
administrative costs and record keeping required in connection therewith, including the necessity
to enter into and maintain separately identified and monitored borrowing facilities, Borrowers have
requested, and Lender has agreed that all Revolving Loans will be advanced to and for the account
of Borrowers on a joint and several basis in accordance with the other provisions hereof. Each
Borrower hereby acknowledges that it will be receiving direct and indirect benefits from each
Revolving Loan made pursuant to this Credit Agreement.



     (b) Each Borrower hereby designates, appoints, authorizes and empowers USVD as its borrowing
agent and fund administrator to act as specified in this Credit Agreement and each of the other
Credit Documents and hereby acknowledges such designation, authorization and empowerment, and
accepts such appointment. Each Borrower hereby irrevocably authorizes and directs Funds
Administrator to take such action on its behalf under the provisions of this Credit Agreement and
the other Credit Documents, and any other instruments, documents and agreements referred to herein
or therein, and to exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of Funds Administrator by the respective terms and provisions
hereof and thereof, and such other powers are reasonably incidental thereto, including, without
limitation, to take the following actions for and on such Borrower’s behalf:




     (i) to submit on behalf of each Borrower, notices of borrowing and all other notices to
Lender in accordance with the provisions of this Credit Agreement and the other Credit
Documents;




     (ii) to receive on behalf of each Borrower the proceeds of Revolving Loans in
accordance with the provisions of this Credit Agreement, such proceeds to be disbursed to or
for the account of the applicable Borrower as soon as practicable after its receipt thereof;
and




     (iii) to submit on behalf of each Borrower Borrowing Base Certificates and any Notice
of Revolving Loan Borrowing, Compliance Certificates and all other certificates, notices and
other communications given or required to be given hereunder.



     Funds Administrator hereby further is authorized and directed by each Borrower to take all
such actions on behalf of such Borrower necessary to exercise the specific power granted in clauses
(i) through (iii) above and to perform such other duties hereunder and under the Credit Documents,
and deliver such agreements, documents, certificates and instruments as delegated to or required of
Funds Administrator by the terms hereof or thereof.



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     (c) The administration by Lender of the credit facility under this Credit Agreement as a
co-borrowing facility with a borrowing agent and funds administrator in the manner set forth herein
is solely as an accommodation to Credit Parties and at their request and Lender shall not incur any
liability to any Credit Party as a result thereof.



ARTICLE 10

GUARANTY




     10.1 Guaranty. Each Guarantor jointly and severally hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration
or otherwise, of all Obligations of each other Credit Party, including, without limitation, of each
Borrower, now or hereafter existing under any Credit Document, whether for principal, interest
(including, without limitation, all interest that accrues after the commencement of any Insolvency
Proceeding with respect to any Borrower or any other Credit Party), fees, commissions, expense
reimbursements, indemnifications or otherwise (such obligations, to the extent not paid by
Borrowers, the “Guaranteed Obligations”), and agrees to pay any and all Expenses) incurred
by Lender in enforcing any rights under the guaranty set forth in this Article 10. Without
limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts
that constitute part of the Guaranteed Obligations and would be owed by any Borrower or any other
Credit Party to Lender under any Credit Document, but for the fact that they are unenforceable or
not allowable due to the existence of any Insolvency Proceeding involving Borrower or any other
Credit Party. This guaranty is a guaranty of payment and not of collection.



     10.2 Guaranty Absolute. Each Guarantor jointly and severally guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the Credit Documents,
regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting
any such terms or the rights of Lender with respect thereto. The obligations of each Guarantor
under this Article 10 are independent of the Guaranteed Obligations, and a separate action
or actions may be brought and prosecuted against each Guarantor to enforce such obligations,
irrespective of whether any action is brought against any Credit Party or whether any Credit Party
is joined in any such action or actions. The liability of each Guarantor under this Article
10 shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby
irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of
the following:



     (a) any lack of validity or enforceability of any Credit Document or any agreement or
instrument relating thereto;



     (b) any change in the time, manner or place of payment of, or in any other term of, all or
any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure
from any Credit Document, including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Credit Party or otherwise;



65









 





     (c) any taking, exchange or release of, or non-perfection of a Lien on, any Collateral, or
any taking, release or amendment or waiver of or consent to departure from any other guaranty, for
all or any of the Guaranteed Obligations;



     (d) any change, restructuring or termination of the corporate, limited liability company or
partnership structure or existence of any Credit Party; or



     (e) any other circumstance (including, without limitation, any statute of limitations) or any
existence of or reliance on any representation by Lender that might otherwise constitute a defense
available to, or a discharge of, any Credit Party or any other guarantor or surety, other than the
occurrence of all of the following: (i) the termination of the Commitment, (ii) the payment in full
in cash of the Guaranteed Obligations and all other amounts payable under this Article 10, and
(iii) the termination of Credit Agreement and the other Credit Documents in accordance with the
respective terms and provisions hereof and thereof,.



     This Article 10 shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be
returned to Lender or any other Person upon the insolvency, bankruptcy or reorganization of any
Borrower or any other Credit Party or otherwise, all as though such payment had not been made.



     10.3 Waiver. Each Guarantor hereby waives promptness, diligence, notice of acceptance
and any other notice with respect to any of the Guaranteed Obligations and this Article 10
and any requirement that Lender exhaust any right or take any action against any other Credit
Party, any other Person or any Collateral. Each Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated herein and that the waiver set
forth in this Section 10.3 is knowingly made in contemplation of such benefits. Each Guarantor
hereby waives any right to revoke this Article 10, and acknowledges that this Article
10 is continuing in nature and applies to all Guaranteed Obligations, whether existing now or
in the future.



     10.4 Continuing Guaranty. This Article 10 is a continuing guaranty and shall
(a) remain in full force and effect until the indefeasible payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Article 10 and the
termination of this Credit Agreement, (b) be binding upon each Guarantor, its successors and
assigns and (c) inure to the benefit of, and be enforceable by, Lender and its successor, pledgees,
transferees and assigns.



     10.5 Maximum Liability. The provisions of this Guaranty are severable, and in any
action or proceeding involving any state corporate or other similar law, or in any Insolvency
Proceeding, if the obligations of any Guarantor under this Guaranty would otherwise be held or
determined to be avoidable, invalid or unenforceable on account of the amount of such Guarantor’s
liability under this Guaranty, then, notwithstanding any other provision of this Guaranty to the
contrary, the amount of such liability shall, without any further action by the Guarantors or
Lender, be automatically limited and reduced to the highest amount that is valid and enforceable as
determined in such action or proceeding (such highest amount determined hereunder being the
relevant Guarantor’s “Maximum Liability”). This Section with respect to the Maximum Liability of each
Guarantor is intended solely to preserve the rights of Lender to



66









 




the maximum extent not subject to avoidance under applicable law, and no Guarantor nor any other Person shall have any right or claim
under this Section with respect to such Maximum Liability, except to the extent necessary so that
the obligations of any Guarantor hereunder shall not be rendered voidable under applicable
Requirements of Law. Each Guarantor agrees that the Guaranteed Obligations may at any time and
from time to time exceed the Maximum Liability of each Guarantor without impairing this Guaranty or
affecting the rights and remedies of Lender hereunder, provided that, nothing in this sentence
shall be construed to increase any Guarantor’s obligations hereunder beyond its Maximum Liability.




     10.6 Subordination. Each of the Guarantors hereby agrees that, after the occurrence
and during the continuance of any Default or Event of Default, the payment of any amounts due with
respect to the Indebtedness owing by any Borrower to such Guarantor or any amounts due with respect
to the Indebtedness owing by any Borrower to such Guarantor or by any Guarantor to any other
Guarantor is hereby subordinated to the prior indefeasible payment in full in cash of the
Obligations. Each Guarantor hereby agrees that, after the occurrence and during the continuance of
any Default or Event of Default, such Guarantor shall not demand, sue for or otherwise attempt to
collect any Indebtedness of any Borrower or any other Guarantor owing to such Guarantor until the
Obligations shall have been paid indefeasibly in full in cash. If, notwithstanding the foregoing
sentence, such Guarantor shall collect, enforce or receive any amounts in respect of such
indebtedness, such amounts shall be collected, enforced and received by such Guarantor as trustee
for Lender, and such Guarantor shall deliver any such amounts to Lender for application to the
Obligations.



     10.7 Subrogation. No Guarantor shall exercise any rights that it may now have or
hereafter acquire against any other Credit Party or any other guarantor or that arise from the
existence, payment, performance or enforcement of such Guarantor’s obligations under this
Article 10, including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any claim or remedy of
Lender against any other Credit Party or any other guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from any other Credit Party or any other
guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner,
payment or security solely on account of such claim, remedy or right, unless and until all of the
Guaranteed Obligations and all other amounts payable under this Article 10 shall have been
indefeasibly paid in full in cash and the Commitment has terminated; provided, that no
Guarantor shall have any rights hereunder against any Credit Party or any of its Subsidiaries if
all or any portion of the Guaranteed Obligations shall have been satisfied with proceeds from the
exercise of remedies in respect of the Capital Securities of such Credit Party or Subsidiary
pursuant to a Collateral Document. If any amount shall be paid to any Guarantor in violation of
the immediately preceding sentence, such amount shall be held in trust for the benefit of Lender
and shall forthwith be paid to Lender to be credited and applied to the Guaranteed Obligations and
all other amounts payable under this Article 10, whether matured or unmatured, in
accordance with the terms of this Credit Agreement, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Article 10 thereafter arising. If (i) any Guarantor shall make payment to
Lender of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and
all other amounts payable under this Article 10 shall be paid in full in cash and



67









 




(iii) the Commitment has terminated, Lender will, at such Guarantor’s request and expense, execute and
deliver to such Guarantor appropriate documents, without recourse and without representation or
warranty, reasonably necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment by such Guarantor.




— Remainder of Page Intentionally Blank; Signature Pages Follow —




68









 





     IN WITNESS WHEREOF, the Credit Parties hereto have caused this Credit Agreement to be executed
and delivered by their proper and duly authorized officers as of the date set forth above.



	 	 	 	 	 
	 	BORROWERS:



BROOKSIDE TECHNOLOGY PARTNERS, INC.,
 a Texas
corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



	 	 	 	 	 
	 	U.S. VOICE & DATA, LLC, an Indiana limited liability

company

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



	 	 	 	 	 
	 	GUARANTOR:



BROOKSIDE TECHNOLOGY HOLDINGS CORP., 
a Florida
corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



Brookside/USVD

Credit Agreement





 









 









     IN WITNESS WHEREOF, Lender has caused this Credit Agreement to be executed and delivered by
their proper and duly authorized officers as of the date set forth above.



	 	 	 	 	 
	 	LENDER:



HILCO FINANCIAL, LLC, a Delaware limited liability

company

 	 
	 	By:  	 	 
	 	 	Name:  	Scott Morse 	 
	 	 	Title:  	Executive Vice President 	 
	 




 









 








ANNEX I

TO

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 26, 2007




CLOSING DOCUMENT LIST




Attached




 









 





ANNEX I

TO

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 26, 2007




CLOSING DOCUMENT LIST




Attached




 









 





ANNEX I

TO

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 26, 2007




CLOSING DOCUMENT LIST




Attached




 









 





ANNEX II

TO

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 26, 2007




INITIAL PROJECTIONS




Attached




 









 





EXHIBIT A

TO

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 26, 2007




FORM OF REVOLVING LOAN NOTE




Attached




 









 





EXHIBIT B

TO

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 26, 2007




FORM OF NOTICE OF REVOLVING LOAN BORROWING




Attached




 









 





EXHIBIT C

TO

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 26, 2007




FORM OF COMPLIANCE CERTIFICATE




Attached