Unassociated Document


    
      Execution
Copy 

        
          

        

      

    

    


    LOAN
AND SECURITY AGREEMENT

     

    by
and among

     

    Gwenco,
Inc.,

     

    as
the Borrower,

     

    Interstellar
Holdings, LLC,

     

    as
the Lender,

     

    and

     

    Quest
Minerals & Mining Corp.

     

    and

     

    Quest
Minerals & Mining, Ltd.,

     

    as
Guarantors

     

    Dated
as of March 8, 2010

    
    

    
      
   

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    TABLE
OF CONTENTS

     

    
      
        
          
            
              	
                      1.

                    	
                      DEFINITIONS
      AND CONSTRUCTION

                    	
                      1

                    
	 
      	
                      1.1

                    	
                      Definitions

                    	
                      1

                    
	 
      	
                      1.2

                    	
                      Accounting
      Terms

                    	
                      1

                    
	 
      	
                      1.3

                    	
                      Code

                    	
                      1

                    
	 
      	
                      1.4

                    	
                      Construction

                    	
                      1

                    
	 
      	
                      1.5

                    	
                      Schedules
      and Exhibits

                    	
                      2

                    
	
                      2.

                    	
                      LOANS
      AND TERMS OF PAYMENT

                    	
                      2

                    
	 
      	
                      2.1

                    	
                      Revolving
      Credit Loans

                    	
                      2

                    
	 
      	
                      2.2

                    	
                      Borrowing
      Procedures

                    	
                      2

                    
	 
      	
                      2.3

                    	
                      Payments

                    	
                      3

                    
	 
      	
                      2.4

                    	
                      Overadvances

                    	
                      4

                    
	 
      	
                      2.5

                    	
                      Interest
      Rates; Payments; Calculations

                    	
                      4

                    
	 
      	
                      2.6

                    	
                      Authority

                    	
                      5

                    
	
                      3.

                    	CONDITIONS;
      TERM OF AGREEMENT	
                      5

                    
	 
      	
                      3.1

                    	
                      Conditions
      Precedent to the Initial Extension of Credit

                    	
                      5

                    
	 
      	
                      3.2

                    	
                      Conditions
      Precedent to all Extensions of Credit

                    	
                      5

                    
	 
      	
                      3.3

                    	
                      Term

                    	
                      6

                    
	 
      	
                      3.4

                    	
                      Effect
      of Termination

                    	
                      6

                    
	
                      4.

                    	
                      CREATION
      OF SECURITY INTEREST

                    	
                      6

                    
	 
      	
                      4.1

                    	
                      Grant
      of Security Interest

                    	
                      6

                    
	 
      	
                      4.2

                    	
                      Negotiable
      Collateral

                    	
                      6

                    
	 
      	
                      4.3

                    	
                      Collection
      of Accounts, General Intangibles, and Negotiable
Collateral

                    	
                      6

                    
	 
      	
                      4.4

                    	
                      Delivery
      of Additional Documentation Required

                    	
                      7

                    
	 
      	
                      4.5

                    	
                      Power
      of Attorney

                    	
                      7

                    
	 
      	
                      4.6

                    	
                      Right
      to Inspect

                    	
                      7

                    
	
                      5.

                    	REPRESENTATIONS
      AND WARRANTIES	
                      7

                    
	 
      	
                      5.1

                    	
                      No
      Encumbrances

                    	
                      8

                    
	 
      	
                      5.2

                    	
                      Accounts

                    	
                      8

                    
	 
      	
                      5.3

                    	
                      Inventory

                    	
                      8

                    
	 
      	
                      5.4

                    	
                      Collateral

                    	
                      8

                    
	 
      	
                      5.5

                    	
                      Location
      of Inventory and Equipment

                    	
                      8

                    
	 
      	
                      5.6

                    	
                      Name;
      Background Information; Location of Chief Executive Office; Previous Names
      and Locations

                    	
                      8

                    
	 
      	
                      5.7

                    	
                      Due
      Organization and Qualification; Subsidiaries

                    	
                      8

                    
	 
      	
                      5.8

                    	
                      Due
      Authorization; No Conflict

                    	
                      9

                    
	 
      	
                      5.9

                    	
                      Litigation

                    	
                      10

                    
	 
      	
                      5.10

                    	
                      Fraudulent
      Transfer

                    	
                      10

                    
	 
      	
                      5.11

                    	
                      Employee
      Benefits

                    	
                      10

                    
	 
      	
                      5.12

                    	
                      Environmental
      Condition

                    	
                      11

                    
	 
      	
                      5.13

                    	
                      Intellectual
      Property

                    	
                      11

                    
	 
      	
                      5.14

                    	
                      Leases

                    	
                      11

                    
	 
      	
                      5.15

                    	
                      Indebtedness

                    	
                      11

                    
	 
      	
                      5.16

                    	
                      No
      Employee Disputes; Labor Matters

                    	
                      12

                    
	 
      	
                      5.17

                    	
                      DDAs

                    	
                      12

                    
	 
      	
                      5.18

                    	
                      Bankruptcy
      Case

                    	
                      12

                    


            

          

        

      

    


    
      
         


      

      
        i

        
          

        

      

      
         


      

    

    


    
      
        
          	 
      	
                  5.19

                	
                  Financial
      Statements

                	
                  12

                
	 
      	
                  5.20

                	
                  MAC

                	
                  12

                
	 
      	
                  5.21

                	
                  Permits

                	
                  12

                
	 
      	
                  5.22

                	
                  Compliance
      with Laws

                	
                  12

                
	 
      	
                  5.23

                	
                  Taxes

                	
                  13

                
	 
      	
                  5.24

                	
                  Complete
      Disclosure

                	
                  13

                
	
                  6.

                	
                  AFFIRMATIVE
      COVENANTS

                	
                  13

                
	 
      	
                  6.1

                	
                  Accounting
      System

                	
                  13

                
	 
      	
                  6.2

                	
                  Collateral
      Reporting

                	
                  13

                
	 
      	
                  6.3

                	
                  Financial
      Statements, Reports, Certificates

                	
                  14

                
	 
      	
                  6.4

                	
                  Maintenance
      of Properties

                	
                  15

                
	 
      	
                  6.5

                	
                  Taxes

                	
                  16

                
	 
      	
                  6.6

                	
                  Insurance

                	
                  16

                
	 
      	
                  6.7

                	
                  Location
      of Inventory and Equipment

                	
                  16

                
	 
      	
                  6.8

                	
                  Compliance
      with Laws

                	
                  17

                
	 
      	
                  6.9

                	
                  Leases

                	
                  17

                
	 
      	
                  6.10

                	
                  Existence

                	
                  17

                
	 
      	
                  6.11

                	
                  Environmental

                	
                  17

                
	 
      	
                  6.12

                	
                  ERISA

                	
                  17

                
	 
      	
                  6.13

                	
                  Proceedings
      or Adverse Changes

                	
                  19

                
	 
      	
                  6.14

                	
                  Chapter
      11 Case

                	
                  19

                
	 
      	
                  6.15

                	
                  Cash
      Management

                	
                  20

                
	 
      	
                  6.16

                	
                  Permits

                	
                  20

                
	 
      	
                  6.17

                	
                  Disclosure
      Updates

                	
                  20

                
	
                  7.

                	
                  NEGATIVE
      COVENANTS

                	
                  20

                
	 
      	
                  7.1

                	
                  Indebtedness

                	
                  20

                
	 
      	
                  7.2

                	
                  Liens

                	
                  20

                
	 
      	
                  7.3

                	
                  Consignments

                	
                  20

                
	 
      	
                  7.4

                	
                  Restrictions
      on Fundamental Changes

                	
                  20

                
	 
      	
                  7.5

                	
                  Disposal
      of Assets

                	
                  21

                
	 
      	
                  7.6

                	
                  Change
      Name or Structure

                	
                  21

                
	 
      	
                  7.7

                	
                  Guarantee

                	
                  21

                
	 
      	
                  7.8

                	
                  Nature
      of Business

                	
                  21

                
	 
      	
                  7.9

                	
                  Prepayments
      and Amendments

                	
                  21

                
	 
      	
                  7.10

                	
                  Change
      in Ownership or Management

                	
                  21

                
	 
      	
                  7.11

                	
                  Distributions

                	
                  21

                
	 
      	
                  7.12

                	
                  Accounting
      Methods

                	
                  21

                
	 
      	
                  7.13

                	
                  Acquisitions;
      Investments

                	
                  21

                
	 
      	
                  7.14

                	
                  Transactions
      with Affiliates

                	
                  21

                
	 
      	
                  7.15

                	
                  Suspension

                	
                  21

                
	 
      	
                  7.16

                	
                  Use
      of Proceeds

                	
                  22

                
	 
      	
                  7.17

                	
                  Securities
      Accounts

                	
                  22

                
	 
      	
                  7.18

                	
                  Financial
      Covenants

                	
                  22

                
	 
      	
                  7.19

                	
                  Bank
      Accounts and Other Treasury Management Services

                	
                  22

                
	 
      	
                  7.20

                	
                  OFAC

                	
                  22

                
	 
      	
                  7.21

                	
                  Illegal
      Payments

                	
                  22

                


        

      

    


    
      
         


      

      
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                  8.

                	
                  EVENTS
      OF DEFAULT

                	
                  22

                
	
                  9.

                	
                  THE
      LENDER’S RIGHTS AND REMEDIES

                	
                  25

                
	 
      	
                  9.1

                	
                  Rights
      and Remedies

                	
                  25

                
	 
      	
                  9.2

                	
                  Remedies
      Cumulative

                	
                  26

                
	
                  10.

                	
                  TAXES
      AND EXPENSES

                	
                  26

                
	
                  11.

                	
                  WAIVERS;
      INDEMNIFICATION

                	
                  27

                
	 
      	
                  11.1

                	
                  Demand;
      Protest; etc

                	
                  27

                
	 
      	
                  11.2

                	
                  The
      Lender’s Liability for Collateral

                	
                  27

                
	 
      	
                  11.3

                	
                  Indemnification

                	
                  27

                
	
                  12.

                	
                  NOTICES.

                	
                  28

                
	
                  13.

                	
                  CHOICE
      OF LAW AND VENUE; JURY TRIAL WAIVER

                	
                  29

                
	
                  14.

                	
                  ASSIGNMENTS;
      SUCCESSORS

                	
                  30

                
	 
      	
                  14.1

                	
                  Assignments

                	
                  30

                
	 
      	
                  14.2

                	
                  Successors

                	
                  30

                
	
                  15.

                	
                  AMENDMENTS;
      WAIVERS

                	
                  30

                
	 
      	
                  15.1

                	
                  Amendments
      and Waivers

                	
                  30

                
	 
      	
                  15.2

                	
                  No
      Waivers; Cumulative Remedies

                	
                  30

                
	
                  16.

                	
                  GUARANTY

                	
                  30

                
	 
      	
                  16.1

                	
                  Guaranty

                	
                  30

                
	 
      	
                  16.2

                	
                  Guaranty
      Absolute

                	
                  31

                
	 
      	
                  16.3

                	
                  Waiver

                	
                  31

                
	 
      	
                  16.4

                	
                  Continuing
      Guaranty; Assignments

                	
                  32

                
	 
      	
                  16.5

                	
                  Subrogation

                	
                  32

                
	
                  17.

                	
                  GENERAL
      PROVISIONS

                	
                  33

                
	 
      	
                  17.1

                	
                  Section
      Headings

                	
                  33

                
	 
      	
                  17.2

                	
                  Interpretation

                	
                  33

                
	 
      	
                  17.3

                	
                  Severability
      of Provisions

                	
                  33

                
	 
      	
                  17.4

                	
                  Counterparts;
      Facsimile Execution

                	
                  33

                
	 
      	
                  17.5

                	
                  Revival
      and Reinstatement of Obligations

                	
                  33

                
	 
      	
                  17.6

                	
                  Integration

                	
                  33

                


        

      

    


    
      
         


      

      
        iii

        
          

        

      

      
         


      

    


    LOAN
AND SECURITY AGREEMENT

     

    THIS LOAN AND SECURITY
AGREEMENT (as the same may be amended, restated, supplemented, and/or
renewed from time to time, this “Agreement”)
is entered into as of March 8, 2010 among Interstellar Holdings, LLC, a Nevada
limited liability company (together with its successors and assigns, the “Lender”),
Gwenco, Inc., a Kentucky corporation (the “Borrower”),
Quest Minerals & Mining Corp., a Utah corporation (“Parent”)
and Quest Minerals & Mining, Ltd., a Nevada corporation (“Quest-NV”,
and together with Parent, the “Guarantors”
and each a “Guarantor”).

     

    WHEREAS,
on January 28, 2007, the Borrower commenced a bankruptcy case (the “Chapter
11 Case”) under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the Eastern Division of Kentucky, Ashland Division (the
“Bankruptcy
Court”);

     

    WHEREAS,
pursuant to an Order of the Bankruptcy Court dated August 15, 2007, the Lender
provided debtor-in-possession financing to the Borrower (the “DIP
Loan”) and in such capacity, the Lender is referred to as the Existing
Lender.

     

    WHEREAS,
Quest-NV owns all the outstanding equity of the Borrower, and Parent owns all of
the outstanding equity of Quest-NV.

     

    The
parties agree as follows:

     

    1.           DEFINITIONS
AND CONSTRUCTION.

     

    1.1           Definitions.  For
purposes of this Agreement, the terms set forth at Exhibit A
shall have the definitions set forth therein.

     

    1.2           Accounting
Terms.  All accounting terms not specifically defined in this
Agreement shall be construed in accordance with generally accepted accounting
principles, as in effect from time to time in the United Sates, consistently
applied (“GAAP”).  Any
reference to the term “financial statements” shall include the notes and
schedules thereto.

     

    1.3           Code.  Any
terms used in this Agreement that are defined in the Code shall be construed and
defined as set forth in the Uniform Commercial Code adopted in the Commonwealth
of Kentucky, as in effect from time to time (the “Code”),
unless otherwise defined herein.

     

    1.4           Construction.  Unless
the context of any Loan Document clearly requires otherwise, references to the
plural include the singular, references to the singular include the plural, the
terms “include” and “including” are not limiting, and the term “or” has, except
where otherwise indicated, the inclusive meaning represented by the phrase
“and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and
similar terms in any Loan Document refer to such Loan Document as a whole and
not to any particular provision of such Loan Document.  Unless
otherwise specifically noted, any reference in any Loan Document to any
agreement, instrument, or document shall include all amendments, restatements,
supplements, and renewals.  Any reference to any Person shall be
construed to include such Person’s successors and assigns.  Any
requirement of a writing contained in any Loan Document shall additionally be
satisfied by an electronic transmission and any such writing or electronic
transmission shall constitute a representation and warranty as to the accuracy
and completeness of the information contained therein.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    1.5         Schedules
and Exhibits.  All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.

     

    2.           LOANS
AND TERMS OF PAYMENT.

     

    2.1         Revolving
Credit Loans.

     

    (a)           Subject
to the terms and conditions of this Agreement, and until March 8, 2015 (the
“Revolving
Credit Maturity Date”), the Lender agrees to make revolving credit Loans
(the “Revolving
Credit Loans”) to the Borrower in an amount at any one time outstanding
not to exceed an amount equal to $2,136,902.21 (the “Maximum
Revolver Amount”).  The Revolving Credit Loan shall be
evidenced by the Promissory Note.

     

    (b)           The
Lender shall have no obligation to make any Revolving Credit Loans when a
Default or Event of Default has occurred and is continuing.

     

    (c)           Amounts
borrowed under the Revolving Credit Loans may be repaid and, subject to the
terms and conditions of this Agreement, reborrowed prior to the Revolving Credit
Maturity Date or the earlier termination of this Agreement.

     

    (d)           If,
at any time, the outstanding balance of the Revolving Credit Loans exceeds any
of the limits specified in this Agreement, the Borrower shall use commercially
reasonable efforts to pay to the Lender an amount sufficient to pay down any
such excess.

     

    2.2         Borrowing
Procedures.

     

    (a)           All
Loans may, at the Lender’s option, be advanced in response to a written request
by an Authorized Person delivered to the Lender (which request must be in the
form of Exhibit
B hereto (a “Borrowing
Request”) and received by the Lender no later than 11:00 a.m. Fairfield,
Connecticut time on the day that is five (5) Business Days prior to the
requested Funding Date) specifying (i) the amount of such Borrowing and (ii) the
requested Funding Date, which shall be a Business Day.  Each Borrowing
Request shall constitute the Borrower’s representation and warranty that the
conditions precedent set forth in Section
3.2 have been satisfied.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    (b)           The
Lender shall record each Borrowing, and any prepayment of Loans or conversions
under the Promissory Note, on Exhibit A to the Promissory Note and on the
Lender’s books and records.  Lender shall provide Borrower and Parent
with a copy of any amendments to Exhibit A to the Promissory Note and Borrower
and Parent shall have 10 days afer receipt of such amended Exhibit A to notify
Lender of any objectons to the notations thereunder.  The Lender’s
notatons on such Exhibit A to the Promissory Note (absent objection by Borrower
or Parent) and on its books and records shall be conclusive, absent manifest
error; provided, however, that the
Lender’s failure to make any such notation shall not affect the Loan Parties’
obligations hereunder.  The Lender’s books and records shall be prima
facie evidence of the outstanding principal amount of Revolving Credit
Loans.

     

    2.3         Payments.

     

    (a)          Payments
by the Borrower.  Except as otherwise expressly provided
herein, all payments by the Borrower shall be made to the Lender and shall be
made in immediately available funds no later than 11:00 a.m. Fairfield,
Connecticut time on the date specified herein.  Any payment received
by the Lender later than 3:00 p.m. Fairfield, Connecticut time shall be deemed
to have been received on the following Business Day and any applicable interest
or fee shall continue to accrue until such following Business Day.

     

    (b)         Application.

     

    (i)           All
payments shall be remitted to the Lender and all such payments, and all proceeds
of Accounts or other Collateral received by the Lender, shall be applied to the
Obligations as the Lender elects or as follows:

     

    A.           first,
to pay any Lender Expenses and fees then due under the Loan Documents until paid
in full,

     

    B.           second,
to pay interest then due in respect of the Loans until paid in
full,

     

    C.           third,
to pay principal then due in respect of all Loans (in the inverse order of
maturity) until paid in full,

     

    D.           fourth,
to pay any other Obligations until paid in full, and

     

    E.           fifth,
to the Borrower or such other Person entitled thereto under applicable
law.

     

    (ii)           For
purposes of the foregoing, “paid in full” means payment of all amounts owing
under the Loan Documents according to the terms thereof, including loan fees,
service fees, professional fees, interest (and specifically including interest
accrued after the commencement of any Insolvency Proceeding), default interest,
interest on interest, and expense reimbursements, whether or not the same would
be or is allowed or disallowed in whole or in part in any Insolvency
Proceeding.

     

    (iii)           In
the event of a direct conflict between the priority provisions of this Section
2.3 and other provisions contained in any other Loan Document, it is the
intention of the parties hereto that such priority provisions in such documents
shall be read together and construed, to the fullest extent possible, to be in
concert with each other.  In the event of any actual, irreconcilable
conflict that cannot be resolved as aforesaid, the terms and provisions of this
Section
2.3 shall control and govern.


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    (c)           Effect of
Termination.  The outstanding unpaid principal balance and all
accrued and unpaid interest on the Loans shall be due and payable on the date of
termination of this Agreement, whether by its terms, by prepayment, or by
acceleration.  All amounts outstanding under the Loans shall
constitute Obligations.

     

    2.4         Overadvances.  If,
at any time or for any reason, the amount of Revolving Credit Loans owed by the
Borrower to the Lender pursuant to this Article
2 is greater than the limitations set forth in any provision of this
Article
2 (an “Overadvance”),
the Borrower shall use commercially reasonable efforts to
promptly  pay to the Lender, in cash, the amount of such excess, which
amount shall be used by the Lender to reduce the Revolving Credit Loans in
accordance with the priorities set forth in Section
2.3(b)(i).  In addition, the Borrower hereby promises to pay
the Obligations (including principal, interest, fees, costs, and expenses) in
Dollars in full to the Lender as and when due and payable under the terms of
this Agreement and the other Loan Documents.

     

    2.5         Interest
Rates; Payments; Calculations.

     

    (a)           Interest
Rates.  Except as provided in clause
(b) below, all Loans and related Obligations shall bear interest on the
Daily Balance thereof at a per annum rate equal to twelve percent
(12%).

     

    (b)           Default
Rate.  Upon the occurrence and during the continuation of an
Event of Default (and at the election of the Lender), all Obligations shall bear
interest on the Daily Balance thereof at a per annum rate equal to eight percent
(8%) above the per annum rate otherwise applicable hereunder.

     

    (c)           Payment.  Except
only as specifically provided otherwise in this Agreement, all accrued and
unpaid interest and all other fees payable hereunder shall be due and payable,
in arrears, on the 10th day of
each month at any time that Obligations are outstanding or this Agreement
remains in force or effect.  Wherever any payment to be made hereunder
shall be stated to be due on a day that is not a Business Day, the payment may
be made on the next succeeding Business Day.  Any interest not paid
when due shall thereafter constitute Revolving Credit Loans hereunder and shall
accrue interest at the rate then applicable to Revolving Credit Loans
hereunder.

     

    (d)           Computation.  All
interest and fees chargeable under the Loan Documents shall be computed on the
basis of a 360 day year for the actual number of days elapsed.

     

    (e)           Intent to
Limit Charges to Maximum Lawful Rate.  In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable; provided, however, that notwithstanding anything to the contrary
herein, if any rate or rates of interest or manner of payment specified herein
exceeds the maximum allowable under applicable law, then, as of the date of this
Agreement, the Borrower is and shall be liable only for the payment of such
maximum as allowed by law, and payments received from the Borrower in excess of
such legal maximum, whenever received, shall be applied to reduce the principal
balance of the Obligations to the extent of such excess.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

        

    2.6         Authority.  The
Lender is authorized to make the Loans based upon telephonic or other
instructions received from anyone purporting to be an Authorized
Person.

     

    3.           CONDITIONS;
TERM OF AGREEMENT.

     

    3.1         Conditions
Precedent to the Initial Extension of Credit.  The obligation
of the Lender to make the initial Loan (or otherwise to extend any credit
provided for hereunder), is subject to the fulfillment, to the satisfaction of
the Lender, or waiver by the Lender, of each of the conditions precedent set
forth in Section
3.2 and in Exhibit
C attached hereto.

     

    3.2         Conditions
Precedent to all Extensions of Credit.  The obligation of the
Lender to make Loans (or otherwise to extend credit hereunder) after the initial
Loan shall be subject to the following conditions precedent:

     

    (a)           the
representations and warranties contained in this Agreement and the other Loan
Documents shall be true and correct in all material respects on and as of the
date of such extension of credit, as though made on and as of such date (except
to the extent that such representations and warranties relate solely to an
earlier date);

     

    (b)           no
Default or Event of Default shall have occurred and be continuing on the date of
such extension of credit, nor shall either result from the making
thereof;

     

    (c)           after
giving effect to the Loan, the Maximum Revolver Amount shall not be
exceeded;

     

    (d)           no
injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the extending of such credit shall have been issued and
remain in force by any Governmental Authority against the Borrower, the Lender,
or any of their Affiliates;

     

    (e)           no
Material Adverse Change shall have occurred; and

     

    (f)           the
Borrower shall have submitted a Borrowing Request.

     

    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    3.3         Term.  This
Agreement shall become effective upon the execution and delivery hereof by each
Loan Party and the Lender and shall continue in full force and effect for a term
ending on the Revolving Credit Maturity Date.  The foregoing
notwithstanding, the Lender shall have the right to terminate its obligations
under this Agreement immediately and without notice upon the occurrence and
during the continuation of an Event of Default.

     

    3.4         Effect of
Termination.  On the date of termination of this Agreement, all
Obligations immediately shall become due and payable without notice or
demand.  No termination of this Agreement, however, shall relieve or
discharge any Loan Party of its duties, Obligations, or covenants hereunder and
the Lender’s Liens in the Collateral shall remain in effect until all
Obligations have been fully, finally, and indefeasibly paid and the Lender’s
obligations to provide additional credit hereunder have been
terminated.  When this Agreement has been terminated and all of the
Obligations have been fully, finally, and indefeasibly paid and the Lender’s
obligations to provide additional credit under the Loan Documents have been
terminated irrevocably, the Lender will, at the Loan Parties’ sole expense,
execute and deliver or authorize any UCC termination statements, lien releases,
mortgage releases, re-assignments of trademarks, discharges of security
interests, and other similar discharge or release documents (and, if applicable,
in recordable form) as are reasonably necessary to release, as of record, the
Lender’s Liens and all notices of security interests and liens previously filed
by the Lender with respect to the Obligations.

     

    4.           CREATION
OF SECURITY INTEREST.

     

    4.1         Grant of
Security Interest.  The Borrower hereby grants to the Lender a
first priority, continuing security interest in all of the Borrower’s right,
title, and interest in all currently existing and hereafter acquired or arising
Collateral in order to secure prompt repayment of any and all of the Obligations
in accordance with the terms and conditions of the Loan Documents and in order
to secure prompt performance by each Loan Party of each of its covenants and
duties under the Loan Documents.  The Lender’s Liens in and against
the Collateral shall attach to all Collateral without the requirement of any
further action on the part of the Borrower or the Lender.  Anything
contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions, the Borrower has no
authority, express or implied, to dispose of any item or portion of the
Collateral.

     

    4.2         Negotiable
Collateral.  In the event that any Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral, and if and to
the extent that perfection or priority of Lender’s security interest is
dependent on or enhanced by possession, the Borrower, promptly upon the request
of the Lender, shall endorse and deliver physical possession of such Negotiable
Collateral to the Lender.

     

    4.3         Collection
of Accounts, General Intangibles, and Negotiable
Collateral.  At any time after the occurrence and during the
continuation of an Event of Default, the Lender or the Lender’s designee may (a)
notify Account Debtors of the Borrower (with concurrent notice to the Borrower)
that the Accounts, chattel paper, or General Intangibles have been assigned to
the Lender or that the Lender has a security interest therein, or (b) collect
the Accounts, chattel paper, or General Intangibles directly and charge the
collection costs and expenses to the Lender Expenses.  Each Loan Party
agrees that it will hold in trust for the Lender, as the Lender’s trustee, any
proceeds of Collateral that it receives and immediately will deliver said
proceeds of Collateral to the Lender in their original form as received by such
Loan Party.


    
      
         


      

      
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    4.4         Delivery
of Additional Documentation Required.  At any time upon the
request of the Lender, the Borrower shall execute and deliver, or cause to be
executed and delivered, to the Lender any and all security agreements, pledges,
assignments, endorsements of certificates of title, waivers, access agreements,
and all other documents (the “Additional
Documents”) that the Lender may reasonably request to perfect and
continue perfected or better perfect the Lender’s Liens in the Collateral
(whether now owned or hereafter arising or acquired).

     

    4.5         Power of
Attorney.  The Borrower hereby irrevocably makes, constitutes,
and appoints Lender (and any of Lender’s officers, employees, or agents
designated by Lender) as the Borrower’s true and lawful attorney, with power to
(a) if the Borrower refuses to, or fails within five (5) Business Days to
execute and deliver any of the documents described in Section 4.4, sign the name
of the Borrower on any of the documents described in Section 4.4, (b) at any
time that an Event of Default has occurred and is continuing, sign the
Borrower’s name on any invoice or bill of lading relating to the Collateral,
drafts against Account Debtors, or notices to Account Debtors, (c) at any time
that an Event of Default has occurred and is continuing, send requests for
verification of Accounts, (d) endorse the Borrower’s name on any collection item
that may come into the Lender’s possession, (e) at any time that an Event of
Default has occurred and is continuing, make, settle, and adjust all claims
under the Borrower’s policies of insurance and make all determinations and
decisions with respect to such policies of insurance, and (f) at any time that
an Event of Default has occurred and is continuing, settle and adjust disputes
and claims respecting the Accounts, chattel paper, or General Intangibles
directly with Account Debtors, for amounts and upon terms that the Lender
determines to be reasonable, and the Lender may cause to be executed and
delivered any documents and releases that the Lender determines to be
necessary.  The appointment of the Lender as the Borrower’s attorney,
and each and every one of its rights and powers, being coupled with an interest,
is irrevocable until all of the Obligations have been fully and finally repaid
and performed and the Lender’s obligations to extend credit hereunder are
terminated.

     

    4.6         Right to
Inspect.  The Lender shall, upon reasonable notice to the
Borrower and during normal business hours,  have the right, from time
to time hereafter to inspect the Books and to examine, check, test, and appraise
the Collateral.

     

    5.           REPRESENTATIONS
AND WARRANTIES.

     

    In order
to induce the Lender to enter into this Agreement, each Loan Party, jointly and
severally, makes the following representations and warranties to the Lender,
which shall be true, correct, and complete in all material respects as of the
date hereof, and shall be true, correct, and complete in all material respects
as of the Closing Date, and at and as of the date of the making of each Loan (or
other extension of credit) made thereafter, as though made on and as of the date
of such Loan (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement.  Except as otherwise disclosed in any document filed by any
Loan Party with the SEC or with the Bankruptcy Court in connection with the
Chapter 11 Plan, each Loan Party represents and warrants as
follows:


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    5.1         No
Encumbrances.  The Borrower has good and indefeasible title to
all of its assets and properties, including the Collateral, free and clear of
Liens, as provided in the Confirmation Order, except for Permitted
Liens.

     

    5.2         Accounts.  The
Accounts are bona fide existing payment obligations of Account Debtors created
by the sale and delivery of Inventory or the rendition of services to such
Account Debtors in the ordinary course of the Borrower’s business, owed to the
Borrower without defenses, disputes, offsets, counterclaims, or rights of return
or cancellation.

     

    5.3         Inventory.  All
Inventory is of good and merchantable quality, free from material
defects.

     

    5.4         Collateral.  All
of the Collateral is used or held for use in the Borrower’s business, is fit for
such purposes, and, if Equipment or other tangible asset (other than any
Equipment or other tangible asset which qualifies for a Permitted Disposition),
is in good condition and repair, subject to ordinary wear and
tear.  The Collateral constitutes all of the assets and properties
necessary for the current conduct of Borrower’s business and conforms in all
material respects with all applicable ordinances, regulations and laws relating
to their use and operation.

     

    5.5         Location
of Inventory and Equipment.  Other than as listed on Schedule
5.5, the Inventory and Equipment are not stored with a bailee,
warehouseman, or similar party, and are located only at the locations identified
on Schedule
5.5.

     

    5.6         Name;
Background Information; Location of Chief Executive Office; Previous Names and
Locations.  The exact legal name, type of entity, jurisdiction
of formation, organizational identification number, and tax identification
number of each Loan Party  are listed at Schedule
5.6.  The chief executive office and a mailing address of each
Loan Party are located at the address indicated in Schedule
5.6.  Within the past 5 years, other than as listed on Schedule
5.6, no Loan Party has conducted business under, or been known by, any
other name or had any business locations except those listed on Schedule
5.6.

     

    5.7         Due
Organization and Qualification; Subsidiaries.

     

    (a)           Each
Loan Party is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and is qualified to do business in each
state where such qualification is required, except where the failure to be so
qualified does not result in a Material Adverse Change.  Each Loan
Party has all requisite power and authority to conduct its business as presently
conducted and to own and operate its properties and assets.


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    (b)           Set
forth on Schedule
5.7(b) is a complete and accurate description of the authorized Stock of
the Borrower, by class, and, as of the Closing Date, a description of the number
of shares, units, or percentage interests of each such class that are issued and
outstanding and the owners of such shares, units, or percentage
interests.  Other than as described on Schedule
5.7(b), there are no subscriptions, options, warrants, or calls relating
to any shares, units, or percentage interests of the Borrower’s Stock, including
any right of conversion or exchange under any outstanding security or other
instrument.  The Borrower is not subject to any obligation (contingent
or otherwise) to repurchase or otherwise acquire or retire any shares, units, or
percentage interests of its Stock or any security convertible into or
exchangeable for any of its Stock.

     

    (c)           The
Borrower has no direct or indirect Subsidiaries.  The Guarantors’
Subsidiaries are listed on Schedule
5.7 (c).

     

    5.8         Due
Authorization; No Conflict.

     

    (a)           Each
Loan Party has the requisite power to execute, deliver and perform this
Agreement and the Loan Documents to which it is a named
party.  Subject to the approval of the Bankruptcy Court pursuant to
the Confirmation Order, the execution, delivery, and performance by each Loan
Party of this Agreement and the Loan Documents to which it is a named party have
been duly authorized by all necessary action on the part of such Loan
Party.

     

    (b)           This
Agreement and the other Loan Documents to which it is a named party have been
duly executed and delivered by each Loan Party.

     

    (c)           Subject
to the approval of the Bankruptcy Court pursuant to the Confirmation Order, the
execution, delivery, and performance by each Loan Party of this Agreement and
the Loan Documents to which it is a named party do not and will not (i) violate
in any material respect any provision of federal, state, or local law or
regulation applicable to any Loan Party, the Governing Documents of any Loan
Party, or any order, judgment, or decree of any court or other Governmental
Authority binding on any Loan Party, (ii) conflict with, result in a breach of,
or constitute (with due notice or lapse of time or both) a material default
under any material contractual obligation of any Loan Party, (iii) result in or
require the creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of any Loan Party, other than Permitted Liens, or (iv)
require any approval of any Loan Party’s shareholders, members, or equity
holders or any approval or consent of any third party under any material
contractual obligation of any Loan Party.

     

    (d)           The
execution, delivery, and performance by each Loan Party of this Agreement and
the Loan Documents to which each Loan Party is a named party do not and will not
require to the knowledge of any Loan Party, any registration with, consent, or
approval of, or notice to, or other action with or by, any Governmental
Authority or other Person, except approval of the Bankruptcy Court pursuant to
the Confirmation Order.


    
      
         


      

      
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    (e)           Subject
to the approval of the Bankuptcy Court pursuant to the Confirmation Order, this
Agreement and the other Loan Documents to which each Loan Party is a named
party, and all other documents contemplated hereby and thereby, when executed
and delivered by such Loan Party, will be the legally valid and binding
obligations of each Loan Party, enforceable against each Loan Party in
accordance with their respective terms, except as enforceability may be limited
by general principles of equity.

     

    (f)           Subject
to the approval of the Bankruptcy Court pursuant to the Confirmation Order, the
Lender’s Liens in and against the Collateral are validly created, enforceable,
perfected, and first priority Liens, subject only to Permitted
Liens.

     

    5.9         Litigation.  Other
than those matters disclosed on Schedule
5.9, there are no actions, suits, or proceedings pending or, to the best
knowledge of each Loan party, threatened against any Loan Party.

     

    5.10       Fraudulent
Transfer.

     

    (a)           Assuming
the initial Loan is made pursuant to Section 3.1 hereof, the Borrower is and
will be Solvent as of the effective date of the Chapter 11 Plan.

     

    (b)           No
transfer of property is being made by the Borrower and no obligation is being
incurred by the Borrower in connection with the transactions contemplated by
this Agreement or the other Loan Documents with the intent to hinder, delay, or
defraud either present or future creditors of the Borrower or otherwise in
violation of any fraudulent transfer or conveyance law.

     

    5.11       Employee
Benefits.  None of the Borrower or any of its Subsidiaries or
any ERISA Affiliate maintains or contributes to any Benefit Plan or Retiree
Health Plan other than those listed on Schedule
5.11. Each such Benefit Plan has been and is being maintained and funded
in accordance with its terms and in compliance in all material respects with all
provisions of ERISA and the IRC applicable thereto.  The Borrower,
each of its Subsidiaries, and each ERISA Affiliate has fulfilled all obligations
related to the minimum funding standards of ERISA and the IRC for each Benefit
Plan, is in compliance in all material respects with the currently applicable
provisions of ERISA and of the IRC and has not incurred any liability (other
than routine liabilities for premiums) under Title IV of ERISA.  No
Termination Event has occurred nor has any other event occurred that may result
in such a Termination Event that could reasonably be expected to result in a
Material Adverse Change.  No event or events have occurred in
connection with which the Borrower, any of its Subsidiaries, any ERISA
Affiliate, any fiduciary of a Benefit Plan or any Benefit Plan, directly or
indirectly, would be subject to any liability, individually or in the aggregate,
under ERISA, the IRC or any other law, regulation, or governmental order or
under any agreement, instrument, statute, rule of law, or regulation pursuant to
or under which any such entity has agreed to indemnify or is required to
indemnify any person against liability incurred under, or for a violation or
failure to satisfy the requirements of, any such statute, regulation, or order
that could reasonably be expected to result in a Material Adverse
Change.  No ERISA Affiliate has incurred, or could reasonably be
expected to incur, any liability under ERISA, the IRC, or any other applicable
law that has had or could reasonably be expected to result in a Material Adverse
Change.


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    5.12       Environmental
Condition.  Except as set forth on Schedule
5.12, (a) none of any Loan Party’s properties or assets has ever been
used by a Loan Party or to any Loan Party’s knowledge by previous owners or
operators in the disposal of, or to produce, store, handle, treat, release, or
transport, any Hazardous Materials, where such production, storage, handling,
treatment, release, or transport was in violation, in any material respect, of
any applicable Environmental Law, (b) none of any Loan Party’s properties or
assets has ever been designated or identified in any manner pursuant to any
environmental protection statute as a Hazardous Materials disposal site, (c) no
Loan Party has received notice that a Lien arising under any Environmental Law
has attached to any revenues or to any real property owned or operated by a Loan
Party, and (d) no Loan Party has received a summons, citation, notice, or
directive from the U.S. Environmental Protection Agency or any other federal or
state governmental agency concerning any action or omission by a Loan Party
resulting in the releasing or disposing of Hazardous Materials into the
environment or relating to any Environmental Law.

     

    5.13       Intellectual
Property.  The Borrower to its knowledge owns, or holds
licenses in, all trademarks, trade names, copyrights, patents, patent rights,
and licenses that are necessary to the conduct of its business as currently
conducted, except where the failure to hold such license, trademark, trade name,
copyright patent and patent rights would not have a Material Advese
Change.  Attached hereto as Schedule
5.13 is a true, correct, and complete listing of all patents, patent
applications, trademarks, trademark applications, copyrights, and copyright
registrations as to which the Borrower is the owner or is an exclusive
licensee.

     

    5.14       Leases.  The
Borrower enjoys peaceful and undisturbed possession under all leases material to
the business of the Borrower and to which the Borrower is a party or under which
the Borrower is operating and such leases are listed on Schedule
5.14.  As of the effective date of the Chapter 11 Plan, all of
such leases are valid and subsisting and no material default by the Borrower or
any other party exists under any of them.

     

    5.15       Indebtedness.  Set
forth on Schedule
5.15 is a true and complete list of all Indebtedness of the Borrower
outstanding as of the effective date of the Chapter 11 Plan that is to remain
outstanding after the Closing Date and such Schedule accurately reflects the
aggregate principal amount of such Indebtedness and the principal terms
thereof.


    
      
         


      

      
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    5.16       No
Employee Disputes; Labor Matters.  There are no controversies
pending or, to the best of any Loan Party’s knowledge, threatened between any
Loan Party and any of its employees, other than those arising in the ordinary
course of business that could not reasonably be expected to result in a Material
Adverse Change.  Other than as set forth in Schedule
5.16, there is (a) no unfair labor practice complaint pending against any
Loan Party or, to the best knowledge of any Loan Party, threatened against any
Loan Party, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective bargaining agreements
that has or could reasonably be expected to result in a Material Adverse Change
is so pending against any Loan Party or, to the best knowledge of any Loan
Party, threatened against any Loan Party, (b) no strike, labor dispute,
slowdown, or stoppage pending against any Loan Party or, to the best knowledge
of any Loan Party, threatened against any Loan Party, and (c) no union
representation or question of union representation with respect to the employees
of any Loan Party and no union organizing activity involving any Loan Party or
its employees.

     

    5.17       DDAs.  Set
forth on Schedule
5.17 are all of the Borrower’s DDAs, including, with respect to each
depository (i) the name and address of such depository, and (ii) the account
numbers of the accounts maintained with such depository.

     

    5.18       Bankruptcy
Case.   The Chapter 11 Case was commenced in accordance
with applicable law and proper notice thereof, and of the hearing for the
approval of the Confirmation Order, have been given.  Following entry
of the Confirmation Order, the Chapter 11 Plan has become effective by its
terms.

     

    5.19       Financial
Statements.  The Loan Parties (in consolidated form) and the
Borrower (individually) have delivered to the Lender all financial statements of
the Loan Parties and the Borrower, including balance sheet and income statement,
for the fiscal year ended December 31, 2007 and for the nine (9) months ended
September 30, 2008.  In the case of audited statements, such
statements are accompanied by an unqualified report of such
auditors.  All such statements were prepared in accordance with GAAP
and from the books and records of the Loan Parties and fairly present in all
material repsects the financial condition, operations and results of operations
of the Loan Parties as at and for the respective periods then
ended.

     

    5.20       MAC.  Since
January 1, 2007, no Material Adverse Change has occurred except for the Chapter
11 Case.

     

    5.21       Permits.  The
Borrower holds all permits, licenses and approvals (“Permits”)
necessary for the conduct of its business, each such permit, license, and
approval is in full force and effect, and the Borrower is not in default
thereunder.

     

    5.22       Compliance
with Laws.  Each of the Loan Parties has complied in all
material respects with all of the laws, rules, regulations, orders, judgments,
decrees and other requirements imposed by any Governmental Authority applicable
to its business, and no Loan Party has received any notice or citation for
noncompliance with any of the foregoing.  To its best knowledge, each
of the Loan Parties is not aware of any condition or event which, after notice
or lapse of time, or both, would constitute noncompliance with any of the
foregoing.


    
      
         


      

      
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    5.23       Taxes.  Except
to the extent excused by the Bankruptcy Code or an applicable order of the
Bankruptcy Court, the Loan Parties have timely filed all state, federal and
local tax returns, information returns, and reports required to be filed with
respect to their businesss and have paid all taxes, assessments fees and other
charges shown thereon to be due.  All taxes which any Loan Party is
required to withhold or to collect have been duly withheld and collected and, if
required to be paid over to the proper Governmental Authority, have been so
paid.

     

    5.24       Complete
Disclosure.  All factual information (taken as a whole)
furnished by or on behalf of any Loan Party to the Lender or the Bankruptcy
Court (including all information contained in the Schedules hereto or in the
other Loan Documents) for purposes of or in connection with this Agreement, the
other Loan Documents, or any transaction contemplated herein or therein, or for
purposes of or in connection with the Chapter 11 Plan and entry of the
Confirmation Order, is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of any Loan Party to the Lender or
the Bankruptcy Court 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 fact necessary to make such information (taken as a whole)
not misleading in any material respect in light of the circumstances under which
such information was provided.

     

    6.           AFFIRMATIVE
COVENANTS.

     

    Each of
the Borrower and, with respect to Sections 6.1, 6.3, 6.5, 6.8, 6.10, and 6.17
only, each Guarantor covenants and agrees that, so long as any credit hereunder
shall be available and until full, final, and indefeasible payment of the
Obligations, such Loan Party shall do all of the following:

     

    6.1          Accounting
System.  Maintain a system of accounting that enables the Loan
Parties to produce financial statements in accordance with GAAP and maintain
records pertaining to the Collateral that contain information as from time to
time the Lender may reasonably request.  The Borrower also shall keep
an inventory reporting system that shows all additions, sales, claims, returns,
and allowances with respect to the Inventory.

     

    6.2          Collateral
Reporting.  Provide the Lender with the following documents at
the following times in form and detail reasonably satisfactory to the
Lender:

     

    
      
        
          	
                  Monthly
      (not later than the 15th day of each month)

                	 	
                  (a)
      a current aging, by Account Debtor, of Accounts,

                
	 
      	 	 
      
	 
      	 	
                  (b)
      a current aging, by vendor (including landlords of leased real property),
      of Borrower’s accounts payable, and

                
	 
      	 	 
      
	 
      	 	
                  (b)
      a current listing of
Inventory.

                


        

      

    

     

    
      
         


      

      
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                Upon
      request by the Lender

              	 	
                (d)
      such other reports as to the Collateral, or the financial condition of the
      Loan Parties, as the Lender may reasonably
  request.

              


      

    

     

    6.3         Financial
Statements, Reports, Certificates.  Deliver to the Lender, at
the Lender’s request:

     

    (a)         as
soon as available, and in any event within 15 days after the end of each
month:

     

    (i)           an
internally prepared balance sheet and income statement covering the Loan
Parties’ consolidated, and the Borrower’s separate, financial condition and
results of operations at such date or during such period, as
applicable,

     

    (ii)          a
Compliance Certificate signed by the chief financial officer or another senior
officer of the Borrower in form and containing information required by the
Lender;

     

    (b)         as
soon as available, but in any event within 105 days after the end of each of the
Borrower’s fiscal years,

     

    (i)           consolidated
financial statements of the Loan Parties, and separate financial statements of
the Borrower, for each such fiscal year, audited by independent certified public
accountants reasonably acceptable to the Lender (such audited financial
statements to include a balance sheet, income statement, and statement of cash
flow and such accountants’ audit report), and

     

    (ii)          a
certificate of such accountants addressed to the Lender stating that such
accountants do not have knowledge of the existence of any Default or Event of
Default;

     

    (c)          within
5 days after filing by any Loan Party,

     

    (i)           any
filings made by any Loan Party with the SEC, via a link to the appropriate page
of the SEC’s website,

     

    (ii)          copies
of the Loan Parties’ federal income tax returns, and any amendments thereto,
filed with the Internal Revenue Service, and

     

    (iii)         any
filings made by any Loan Party with the Bankruptcy Court;

     

    (d)         If
any when filed by any Loan Party and as requested by the Lender, satisfactory
evidence of payment of applicable excise taxes in each jurisdiction in which (i)
any Loan Party conducts business or is required to pay any such excise tax, (ii)
any Loan Party’s failure to pay any such applicable excise tax would result in a
Lien on the properties or assets of such Loan Party, or (iii) any Loan Party’s
failure to pay any such applicable excise tax reasonably could be expected to
result in a Material Adverse Change;


    
      
         


      

      
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    (e)           as
soon as available, but in any event within 20 days before the start of
Borrower’s fiscal year, copies of the Borrower’s Projections broken down on a
quarterly basis, in form and substance satisfactory to the Lender, in its
reasonable discretion, for that fiscal year;

     

    (f)           as
soon as the Borrower has knowledge of any event or condition that constitutes a
Default or an Event of Default, notice thereof and a statement of the curative
action that the Borrower proposes to take with respect thereto; and

     

    (g)           upon
the request of the Lender, any other report reasonably requested relating to the
financial condition or performance of the Borrower.

     

    The
Borrower agrees that its independent certified public accountants are authorized
to communicate with the Lender and to release to the Lender whatever financial
information concerning the Loan Parties that the Lender may reasonably
request.  Each of the Loan Parties waives the right to assert a
confidential relationship, if any, it may have with any accounting firm or
service bureau in connection with any information requested by the Lender
pursuant to or in accordance with this Agreement, and agrees that the Lender may
contact directly any such accounting firm or service bureau in order to obtain
such information.

     

    The
Lender agrees that it shall keep any non-public financial or other information
it receives pursuant to this section confidential and that Lender shall not
disclose any such information to any person in any manner whatsoever; provided,
however, that the Lender may make any disclosure of such information to which
the Borrower has given its prior written consent.  In addition, the
Lender acknowledges that it is aware that the United States securities laws
prohibit the Lender and any person who has received material, non-public
information about the Parent or its subsidiaries from purchasing or selling
securities of the Parent or its subsidiaries, or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such
securities.  The Lender agrees that it will not, directly or
indirectly, and that no person acting on its behalf of or pursuant to any
understanding with the Lender, engage in any transactions in the securities of
the Parent (including, without limitations, any short sales involving the
Parent’s securities) from the date of disclosure of such information to the
Lender until the time that such information is publicly disclosed.

     

    6.4           Maintenance
of Properties.  Maintain and preserve all of its properties,
including Collateral, in good working order and condition, ordinary wear and
tear excepted, and comply at all times with the provisions of all leases to
which it is a party as lessee, so as to prevent any loss or forfeiture thereof
or thereunder.


    
      
         


      

      
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    6.5         Taxes.  Timely
file all tax returns required to be filed and cause all assessments and taxes,
whether real, personal, or otherwise, due or payable by, or imposed, levied, or
assessed against, any Loan Party or any of its assets to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest.  Each Loan Party will make timely payment or
deposit of all tax payments and withholding taxes required of it by applicable
laws, and will, upon request, furnish the Lender with proof satisfactory to the
Lender indicating that such Loan Party has made such payments or
deposits.

     

    6.6         Insurance.

     

    (a)           At
the Borrower’s expense, maintain insurance respecting its property and assets
wherever located and business interruption and potential liabilities, covering
hazards and risks as ordinarily are insured against by other Persons engaged in
the same or similar businesses.  All such policies of insurance shall
be in such amounts and with such insurance companies as are reasonably
satisfactory to the Lender.  The Borrower shall pay all premiums as
they come due and the Borrower shall deliver copies of all such policies to the
Lender with satisfactory lender’s loss payable endorsements naming the Lender as
sole loss payee and naming the Lender as additional insured, as
appropriate.  Each policy of insurance or endorsement shall contain a
clause requiring the insurer to give not less than 30 days prior written notice
to the Lender in the event of cancellation or revision of the policy for any
reason whatsoever.

     

    (b)           The
Borrower shall give the Lender prompt notice of any loss covered by such
insurance.  The Lender shall have the exclusive right to adjust, and
to apply toward the Obligations any insurance proceeds (in the case of property
insurance) relating to, any losses payable under any such insurance policies in
excess of $25,000, without any liability to the Borrower whatsoever in respect
of such adjustments.

     

    (c)           The
Borrower shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Section 6.6, unless the
Lender is included thereon as named insured with the loss payable to the Lender
under a lender’s loss payable endorsement or its equivalent.

     

    6.7         Location
of Inventory and Equipment.  Keep the Inventory and Equipment
only at the locations identified on Schedule
5.5; provided, however, that the Borrower may amend Schedule
5.5 so long as such amendment occurs by written notice to the Lender not
less than 30 days prior to the date on which the Inventory or Equipment is moved
to such new location, so long as such new location is within the continental
United States, and so long as, at the time of such written notification, the
Borrower provides the Lender a duly executed Collateral Access Agreement for any
such new location.


    
      
         


      

      
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    6.8         Compliance
with Laws.  Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, including
the Fair Labor Standards Act, other than laws, rules, regulations, and orders
the non-compliance with which, individually or in the aggregate, would not
result in and reasonably could not be expected to result in a Material Adverse
Change.

     

    6.9         Leases.  Pay
when due all rents and other amounts payable under any leases to which the
Borrower is a party or by which the Borrower’s properties and assets are bound,
unless such payments are the subject of a Permitted Protest.

     

    6.10       Existence.  At
all times preserve and keep in full force and effect each Loan Party’s valid
existence and good standing and any rights and franchises material to such Loan
Party’s business.

     

    6.11       Environmental.  (a)
Keep any property either owned or operated by the Borrower free of any
Environmental Liens or post bonds or other financial assurances sufficient to
satisfy the obligations or liability evidenced by such Environmental Liens, (b)
comply, in all material respects, with Environmental Laws and provide to the
Lender documentation of such compliance that the Lender reasonably requests, (c)
promptly notify the Lender of any release of a Hazardous Material of any
reportable quantity from or onto property owned or operated by the Borrower and
take any Remedial Actions required to abate said release or otherwise to come
into compliance with applicable Environmental Law, and (d) promptly provide the
Lender with written notice within 10 days of the receipt of any of the
following:  (i) notice that an Environmental Lien has been filed
against any of the real or personal property of the Borrower, (ii) commencement
of any Environmental Action or notice that an Environmental Action will be filed
against the Borrower, and (iii) notice of a violation, citation, or other
administrative order that reasonably could be expected to result in a Material
Adverse Change.

     

    6.12       ERISA.  The
Borrower will deliver to the Lender, at the Borrower’s expense, the following
information at the times specified below:

     

    (a)           within
10 Business Days after the Borrower, any of its Subsidiaries, or any ERISA
Affiliate knows or has reason to know that a Termination Event has occurred, a
written statement of the chief financial officer of the Borrower describing such
Termination Event and the action, if any, which the Borrower or other such
entities have taken, are taking or propose to take with respect thereto, and
when known, any action taken or threatened by the Internal Revenue Service,
Department of Labor, or PBGC with respect thereto;

     

    (b)           within
10 Business Days after the Borrower, any of its Subsidiaries, or any ERISA
Affiliate knows or has reason to know that a prohibited transaction (as defined
in Section 406 of ERISA and Section 4975 of the IRC) has occurred, a statement
of the chief financial officer of the Borrower describing such transaction and
the action that the Borrower or other such entities have taken, are taking, or
propose to take with respect thereto;

     

    
      
        
        

      

      
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    (c)           within
30 Business Days after the filing thereof with the Department of Labor, Internal
Revenue Service, or PBGC, copies of each annual report (Form 5500 series),
including all schedules and attachments thereto, filed with respect to each
Benefit Plan of the Borrower, its Subsidiaries, or any ERISA
Affiliate;

     

    (d)           within
30 Business Days after receipt by the Borrower, any of its Subsidiaries, or any
ERISA Affiliate, copies of each actuarial report for any Benefit Plan or
Multiemployer Plan of the Borrower, any of its Subsidiaries, or any ERISA
Affiliate and copies of each annual report for any such Multiemployer
Plan;

     

    (e)           within
10 Business Days prior to the filing thereof with the Internal Revenue Service,
a copy of any funding waiver request with respect to any Benefit Plan of the
Borrower, its Subsidiaries, or any ERISA Affiliate and within 3 Business Days
after receipt, any communication received by the Borrower, any of its
Subsidiaries, or any ERISA Affiliate with respect to such request;

     

    (f)           within
60 Business Days after the occurrence thereof, notification of any increase in
the benefits of any existing Benefit Plan of the Borrower, any of its
Subsidiaries, or any ERISA Affiliate or the establishment of any new Benefit
Plan of the Borrower, any of its Subsidiaries, or any ERISA Affiliate or the
commencement of contributions to any Benefit Plan to which the Borrower, any of
its Subsidiaries, or any ERISA Affiliate was not previously
contributing;

     

    (g)           within
10 Business Days after receipt by the Borrower, any of its Subsidiaries, or any
ERISA Affiliate, copies of any notice of the PBGC’s intention to terminate a
Benefit Plan or to have a trustee appointed to administer a Benefit
Plan;

     

    (h)           within
10 Business Days after receipt by the Borrower, any of its Subsidiaries, or any
ERISA Affiliate, copies of any favorable or unfavorable determination letter
from the Internal Revenue Service regarding the qualification of a Benefit Plan
or other employee pension benefit plan intending to qualify under section 401(a)
of the Internal Revenue Code of the Borrower, any of its Subsidiaries, or any
ERISA Affiliate under Section 401(a) of the IRC;

     

    (i)           within
10 Business Days after receipt by the Borrower, any of its Subsidiaries, or any
ERISA Affiliate, copies of any notice regarding the imposition of withdrawal
liability under any Multiemployer Plan;

     

    (j)           within
10 Business Days prior to the date the Borrower, any of its Subsidiaries, or any
ERISA Affiliate intends to fail to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or before the
due date for such installment or payment, a notification of such
failure;

     

    (k)           within
10 Business Days after the Borrower, any of its Subsidiaries, or any ERISA
Affiliate knows (i) a Multiemployer Plan of the Borrower, any of its
Subsidiaries, or any ERISA Affiliate has been terminated, (ii) the administrator
or plan sponsor of a Multiemployer Plan of the Borrower, its Subsidiaries, or
any ERISA Affiliate intends to terminate any such Multiemployer Plan, or (iii)
the PBGC has instituted or will institute proceedings under Section 4042 of
ERISA to terminate a Multiemployer Plan of the Borrower, its Subsidiaries, or
any ERISA Affiliate, a written statement setting forth any such event or
information;


    
      
         


      

      
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    (l)           within
10 Business Days after the Borrower, any of its Subsidiaries, or any ERISA
Affiliate knows that an ERISA Affiliate has incurred, or to the best knowledge
of the Borrower or any of its Subsidiaries could reasonably be expected to
incur, any liability under ERISA, the IRC, or any other law applicable to
Benefit Plans that has had or could reasonably be expected to result in a
Material Adverse Change, a statement of the chief financial officer of the
Borrower describing such transaction and the action that the Borrower or other
such entities have taken, are taking, or propose to take with respect thereto;
and

     

    (m)           within
30 days after receipt by the Borrower or any of its Subsidiaries of each
actuarial report for any Retiree Health Plan of the Borrower or any of its
Subsidiaries, copies of each such report.

     

    For
purposes of this Section
6.12, the Borrower, any of its Subsidiaries, and any ERISA Affiliate
shall be deemed to know all facts known by the administrator of any Benefit Plan
of which such entity is then the plan sponsor.

     

    The
Borrower will establish, maintain, and operate all Benefit Plans of the
Borrower, any of its Subsidiaries, or any ERISA Affiliate in compliance in all
material respects with the provisions of ERISA, the IRC, and all other
applicable laws, and the regulations and interpretations thereunder other than
to the extent that the Borrower is in good faith contesting by appropriate
proceedings the validity or implication of any such provision, law, rule,
regulation, or interpretation.

     

    6.13       Proceedings
or Adverse Changes.  The Borrower will as soon as practicable,
and in any event within 5 Business Days after the Borrower learns of the
following, give written notice to the Lender of any proceeding(s) being
instituted, or threatened to be instituted, by or against the Borrower in any
federal, state, local, or foreign court or before any commission or other
regulatory body (federal, state, local, or foreign) that may expose the Borrower
to liability in excess of $25,000 (without regard to whether any or all of such
amount is covered by insurance) or that may result in injunctive or equitable
relief against the Borrower.  The Borrower will as soon as possible,
and in any event within 5 Business Days after the Borrower learns of the
following, give written notice to the Lender of any Material Adverse
Change.  Provision of any such notice by the Borrower will not
constitute a waiver or excuse of any Default or Event of Default occurring as a
result of such changes or events.

     

    6.14       Chapter
11 Case.  Promptly, but in no event later than one (1) Business
Day after the same is available, deliver to the Lender all pleadings, motions,
applications, judicial information, financial information, and other documents
filed by or on behalf of any Loan Party with the Bankruptcy
Court.


    
      
         


      

      
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    6.15       Cash
Management.  The Borrower shall maintain such accounts and cash
management systems as are reasonably satisfactory to the Lender.

     

    6.16       Permits.  The
Borrower shall maintain all surety bonds with respect to the Permits and keep
all Permits in full force and effect.

     

    6.17       Disclosure
Updates.  Promptly and in no event later than 5 Business Days
after obtaining knowledge thereof, (a) notify the Lender if any information,
exhibit, or report furnished, or any representation or warranty made by the
Borrower, to the Lender is or becomes untrue in any respect, contained any
untrue statement of a material fact, or omitted to state any material fact
necessary to make the statements contained therein not misleading in light of
the circumstances in which made, and (b) correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgement,
filing, or recordation thereof.

     

    7.           NEGATIVE
COVENANTS.

     

    The
Borrower, and, with respect to Sections 7.4, 7.6, 7.8, 7.10, 7.15, 7.20, and
7.21 only, each Guarantor covenants and agrees that, so long as any credit
hereunder shall be available and until full, final, and indefeasible payment of
the Obligations, such Loan Party will not, without the consent of Lender, which
consent shall not be unreasonably withheld, do any of the
following:

     

    7.1         Indebtedness.  Create,
incur, assume, permit, guarantee, or otherwise become or remain, directly or
indirectly, liable with respect to any Indebtedness, except:

     

    (a)           Indebtedness
to the Lender evidenced by this Agreement and the other Loan Documents;
and

     

    (b)           Permitted
Purchase Money Indebtedness, provided that the Loan Parties will notify Lender
of any intent to incur purchase money indebtedness and the identity of the
proposed lender and will give Lender a right of first refusal to provide such
purchase money financing.

     

    7.2         Liens.  Create,
incur, assume, or permit to exist, directly or indirectly, any Lien on or with
respect to any of its assets, of any kind, whether now owned or hereafter
acquired, or any income or profits therefrom, except for Permitted
Liens.

     

    7.3         Consignments.  Consign
any Inventory or sell any Inventory on bill and hold, sale or return, sale on
approval, or other conditional terms of sale.

     

    7.4         Restrictions
on Fundamental Changes.

     

    (a)           Enter
into any merger, consolidation, reorganization, or recapitalization, or
reclassify its Stock.

     

    (b)           Liquidate,
wind up, or dissolve itself (or suffer any liquidation or
dissolution).


    
      
         


      

      
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    (c)           Convey,
sell, lease, license, assign, transfer, or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of its
assets.

     

    7.5         Disposal
of Assets.  Other than Permitted Dispositions, convey, sell,
lease, license, assign, transfer, or otherwise dispose of any of its
assets.

     

    7.6         Change
Name or Structure.  Change any Loan Party’s name, corporate
structure or identity, jurisdiction of formation, organizational identification
number, tax identification number, or add any new fictitious name; provided,
however, that any Loan Party may change its name upon at least 10 days prior
written notice by any Loan Party to the Lender of such change.

     

    7.7         Guarantee.  Guarantee
or otherwise become in any way liable with respect to the obligations of any
third Person except by endorsement of instruments or items of payment for
deposit to the account of the Borrower or that are transmitted or turned over to
the Lender.

     

    7.8         Nature of
Business.  Make any change in the principal nature of its
business.

     

    7.9         Prepayments
and Amendments.  Except in connection with the Obligations,
prepay any Indebtedness of the Borrower or, directly or indirectly, amend any of
the terms or conditions of any agreement, instrument, or writing
evidencing  or concerning any Indebtedness.

     

    7.10       Change in
Ownership or Management.  Cause, permit, or suffer, directly or
indirectly, any change in the ownership or management of the
Borrower.

     

    7.11       Distributions.  Make
any distribution or declare or pay any dividends (in cash or other property) on,
or purchase, acquire, redeem, or retire any of, the Borrower’s Stock, of any
class, whether now or hereafter outstanding.

     

    7.12       Accounting
Methods.  Modify or change its method of accounting (other than
as may be required to conform to GAAP).

     

    7.13       Acquisitions;
Investments.  Make any Acquisition or, except for Permitted
Investments, directly or indirectly, make or acquire any Investment, or incur
any liabilities (including contingent obligations) for or in connection with any
Investment.

     

    7.14       Transactions
with Affiliates.  Directly or indirectly enter into or permit
to exist any transaction with any Affiliate of the Borrower except for
transactions that are in the ordinary course of the Borrower’s business, upon
fair and reasonable terms, that are fully disclosed to the Lender, and that are
no less favorable to the Borrower than would be obtained in an arm’s length
transaction with a non-Affiliate.

     

    7.15       Suspension.  Suspend
or cease operating or conducting a substantial portion of its business, or shut
down, idle or close any mines except for such suspensions as may be required by
any Governmental Authority.


    
      
         


      

      
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    7.16       Use of
Proceeds.  Use the proceeds of the Loans for any purpose other
than (a) on the Closing Date, (i) to repay in full the outstanding principal,
accrued interest, and accrued fees and expenses owing to Existing Lender, and
(ii) to pay transactional fees, costs, and expenses incurred in connection with
this Agreement, the other Loan Documents, and the transactions contemplated
hereby and thereby, and (b) thereafter, consistent with the terms and conditions
hereof, for working capital purposes.

     

    7.17       Securities
Accounts.  Establish or maintain any Securities Account unless
the Lender shall have received a control agreement (in form and substance
satisfactory to the Lender) in respect of such Securities Account.

     

    7.18       Financial
Covenants.  Intentionally Omitted.

     

    7.19       Bank
Accounts and Other Treasury Management Services.  Establish or
maintain any deposit, disbursement, cash or treasury management, or other bank
account with, or obtain treasury management services from, any bank or other
financial institution other than as set forth on Schedule
5.18.

     

    7.20       OFAC.  None
of the Loan Parties or any of their Subsidiaries will use any Loan in violation
of any applicable laws or regulations.  In connection with the
foregoing, none of the Loan Parties or any of their Subsidiaries will use any
Loan: (a) to fund any operations of, to finance any investments or activities
in, or to make any payments to, any Person named on the list of specially
designated nationals or blocked persons maintained by the United States
Department of the Treasury’s Office of Foreign Assets Control; or (b) to fund
any operations in, to finance any investments or activities in, or to make any
payments to, an agency of the government of a country, an organization
controlled by a country, or a Person resident in a country that is subject to a
sanctions program administered by the United States Department of the Treasury’s
Office of Foreign Assets Control under 31 C.F.R. Chapter V.

     

    7.21       Illegal
Payments.  None of the Loan Parties or any of their
Subsidiaries nor any of their respective officers, directors, or agents has made
or shall make any illegal payment or contribution of any kind (including,
without limitation, payments, gifts, or gratuities), directly or indirectly, to
any domestic or foreign governmental entity or to any domestic or foreign
government official, employee, or agent, or any candidate therefor.

     

    8.           EVENTS
OF DEFAULT.

     

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

     

    8.1         If
any Loan Party fails to pay when due and payable, or when declared due and
payable, all or any portion of the Obligations (other than Lender Expenses) and
such failure shall continue for five (5) Business Days; or

     

    8.2         If
any Loan Party fails to perform, keep, or observe any term, provision,
condition, covenant, or agreement contained in this Agreement or in any of the
other Loan Documents and such failure shall continue for a period of ten (10)
Business Days after written notice; or


    
      
         


      

      
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    8.3           If
any material portion of any Loan Party’s assets is attached, seized, subjected
to a writ or distress warrant, levied upon, or comes into the possession of any
third Person and such attachment has not been discharged after 30 days;
or

     

    8.4           If
an Insolvency Proceeding is commenced by any Loan Party; or

     

    8.5           If
an Insolvency Proceeding is commenced against any Loan Party, and any of the
following events occur:  (a) such Loan Party consents to the
institution of the Insolvency Proceeding against it; (b) the petition commencing
the Insolvency Proceeding is not timely controverted; (c) the petition
commencing the Insolvency Proceeding is not dismissed within 45 calendar days of
the date of the filing thereof (provided, however, that, during the pendency of
such period, the Lender shall be relieved of its obligation to extend credit
hereunder); (d) an interim trustee is appointed to take possession of all or any
substantial portion of the properties or assets of, or to operate all or any
substantial portion of the business of, such Loan Party; or (e) an order for
relief shall have been entered therein; or

     

    8.6           If
any Loan Party is enjoined, restrained, or in any way prevented by court order
from continuing to conduct all or any material part of its business affairs for
a period in excess thirty (30) days; or

     

    8.7           If
a notice of Lien, levy, or assessment is filed of record with respect to the
Borrower’s assets by the United States, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or governmental
agency, or if any taxes or debts owing at any time hereafter to any one or more
of such entities becomes a Lien, whether choate or otherwise, upon any of the
Borrower’s assets and the same is not paid on the payment date thereof;
or

     

    8.8           If
a judgment or other claim or decree (a) is entered against the Borrower and
shall not have been vacated, discharged, stayed or bonded pending appeal within
the time required by the terms of such judgment, claim or decree, or (b) becomes
a Lien or encumbrance upon any material portion of the Borrower’s properties or
assets; or

     

    8.9           If
a default or event of default occurs under any other agreement or instrument
between any Loan Party and the Lender or under any other agreement or instrument
running to the benefit of the Lender from any Loan Party and such default
continues for a period of ten (10) Business Days after written notice;
or

     

    8.10         If
a default or event of default occurs with respect to any Indebtedness of any
Loan Party and such default continues for a period of five (5) Business Days;
or

     

    8.11        
If there is a default or event of default under any agreement to which the
Borrower is a party that the Lender deems material and such default or event of
default (a) occurs at the final maturity of the obligations thereunder, or (b)
results in a right by the other party thereto, irrespective of whether
exercised, to accelerate the maturity of the Borrower’s obligations thereunder,
to terminate such agreement, or to refuse to renew such agreement pursuant to an
automatic renewal right therein; or


    
      
         


      

      
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    8.12        If
any Loan Party makes any payment on account of Indebtedness that has been
contractually subordinated in right of payment to the payment of the
Obligations, except to the extent such payment is permitted by the terms of
subordination provisions agreed to in writing by the Lender that are applicable
to such Indebtedness; or

     

    8.13        If
any material misstatement or misrepresentation exists now or hereafter in any
warranty, representation, statement, or Record made to the Lender by any Loan
Party or any officer, employee, agent, or director of any Loan Party;
or

     

    8.14        If
this Agreement or any other Loan Document that purports to create a Lien in
favor of the Lender, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby; or

     

    8.15        If
any provision of any Loan Document shall at any time for any reason be declared
to be null and void, or the validity or enforceability thereof shall be
contested by any Loan Party, or a proceeding shall be commenced by any Loan
Party, or by any Governmental Authority having jurisdiction over any Loan Party,
seeking to establish the invalidity or unenforceability thereof, or any Loan
Party shall deny that any Loan Party has any liability or obligation purported
to be created under any Loan Document; or

     

    8.16        If
Parent shall fail to comply with the conversion provisions of the Promissory
Note resulting in a Triggering Event (as defined in the Promissory Note);
or

     

    8.17        If
there is a default or event of default under the Interstellar Royalty Agreement
and such default continues for a period of ten (10) Business Days afer written
notice; or

     

    8.18        [Intentionally
Omitted]; or

     

    8.19        An
SEC or judicial stop trade order or trading suspension by the OTC Bulletin
Board, the Pink Sheets OTC Electronic Market, or a Subsequent
Market (as defined in the Promissory Note) with respect to the Common Stock
that lasts for five or more consecutive Trading Days; or

     

    8.20        If
the registration of the Common Stock with the SEC under the Exchange Act is
revoked; or

     

    8.21        If
the Lender in its Permitted Discretion deems itself insecure with respect to
payment of the Obligations or that the prospect of payment of the obligations is
impaired.


    
      
         


      

      
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    9.           THE
LENDER’S RIGHTS AND REMEDIES.

     

    9.1         Rights
and Remedies.  Upon the occurrence, and during the
continuation, of an Event of Default, the Lender may do any one or more of the
following, all of which are authorized by the Loan Parties:

     

    (a)           Declare
all Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable;

     

    (b)           Cease
advancing money or extending credit to or for the benefit of the Borrower under
this Agreement, under any of the Loan Documents, or under any other agreement
between the Borrower and the Lender;

     

    (c)           Terminate
this Agreement and any of the other Loan Documents as to any future liability or
obligation of the Lender, but without affecting any of the Lender’s Liens in the
Collateral and without affecting the Obligations;

     

    (d)           Settle
or adjust disputes and claims directly with Account Debtors for amounts and upon
terms which the Lender considers advisable;

     

    (e)           Without
notice to or demand upon any Loan Party, make such payments and do such acts as
the Lender considers necessary or reasonable to protect its security interests
in the Collateral.  The Borrower agrees to assemble the Collateral if
the Lender so requires, and to make the Collateral available to the Lender at a
place that the Lender may designate.  The Borrower authorizes the
Lender to enter the premises where the Collateral is located, to take and
maintain possession of the Collateral, or any party of it, and to pay, purchase,
contest, or compromise any Lien that in the Lender’s determination appears to
conflict with the Lender’s Liens and to pay all expenses incurred in connection
therewith.  With respect to the Borrower’s owned or leased premises,
the Borrower hereby grants the Lender a license to enter into possession of such
premises and to occupy the same, without charge, in order to exercise any of
Lender’s rights or remedies provided herein, at law, in equity, or
otherwise;

     

    (f)           Without
notice to any Loan Party (such notice being expressly waived), and without
constituting a retention of any collateral in satisfaction of an obligation
(within the meaning of the Code), set off and apply to the Obligations any and
all (i) balances and deposits of any Loan Party held by the Lender, or (ii)
Indebtedness at any time owing to or for the credit or the account of any Loan
Party held by the Lender;

     

    (g)           Hold,
as cash collateral, any and all balances and deposits of the Borrower held by
the Lender to secure the full and final repayment of all of the
Obligations;

     

    (h)           Sell
the Collateral in compliance with the Code at either a public or private sale,
or both, by way of one or more contracts or transactions, for cash or on terms,
in such manner and at such places (including the Borrower’s premises) as the
Lender determines is commercially reasonable.  It is not necessary
that the Collateral be present at any such sale;


    
      
         


      

      
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    (i)           Seek
the appointment of a receiver to take possession of all or any portion of the
Collateral or to operate same and, to the maximum extent permitted by law, may
seek the appointment of such a receiver without the requirement of prior notice
or a hearing; and

     

    (j)           In
the case of a default under Section
8.1, charge a late payment fee of five percent (5%) of the overdue
payment.

     

    The
Lender shall have all other rights and remedies available to it at law or in
equity or pursuant to any other Loan Documents.  Any deficiency that
exists after disposition of the Collateral will be paid immediately by the Loan
Parties to the Lender, and, if applicable, any excess will be returned, without
interest and subject to the rights of third Persons, by the Lender to the
Borrower

     

    9.2         Remedies
Cumulative.  The rights and remedies of the Lender under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative.  The Lender shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in
equity.  No exercise by the Lender of one right or remedy shall be
deemed an election, and no waiver by the Lender of any breach, Default, or Event
of Default shall be deemed a continuing waiver.  No delay by the
Lender shall constitute a waiver, election, or acquiescence by it.

     

    10.         TAXES
AND EXPENSES.

     

    (a)           The
Borrower shall promptly, upon the Lender’s demand therefor, reimburse the Lender
for all Lender Expenses.

     

    (b)           If
any Loan Party fails to pay any monies (whether taxes, assessments, insurance
premiums, or, in the case of leased properties or assets, rents or other amounts
payable under such leases) due to third Persons, or fails to make any deposits
or furnish any required proof of payment or deposit, all as required under the
terms of this Agreement, then, the Lender, in its sole discretion and without
prior notice to any Loan Party, may do any or all of the
following:  (a) make payment of the same or any part thereof; (b) set
up such reserves as the Lender deems necessary to protect the Lender from the
exposure created by such failure; or (c) in the case of the failure to comply
with Section
6.6 hereof, obtain and maintain insurance policies of the type described
in Section
6.6 and take any
action with respect to such policies as the Lender deems prudent.  Any
such amounts paid by the Lender shall constitute Lender Expenses and any such
payments shall not constitute an agreement by the Lender to make similar
payments in the future or a waiver by the Lender of any breach, Default, or
Event of Default under this Agreement.  The Lender need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.


    
      
         


      

      
        26

        
          

        

      

      
         


      

    


    11.         WAIVERS;
INDEMNIFICATION.

     

    11.1       Demand;
Protest; etc.  Each Loan Party waives demand, protest, notice
of protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender on which any Loan Party may in any way be liable.

     

    11.2       The
Lender’s Liability for Collateral.  Each Loan Party hereby
agrees that:  (a) so long as the Lender complies with its obligations,
if any, under the Code, the Lender shall not in any way or manner be liable or
responsible for  (i) the safekeeping of the Collateral, (ii) any loss
or damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person; and (b) all
risk of loss, damage, or destruction of the Collateral shall be borne by the
Loan Parties.

     

    11.3       Indemnification.  Each
Loan Party shall pay, indemnify, defend, and hold the Lender-Related Persons
with respect to the Lender and each of their respective officers, directors,
employees, agents, and attorneys-in-fact (each, an “Indemnified
Person”)
harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, and damages, and
all reasonable attorneys’ fees and disbursements and other costs and expenses
actually incurred in connection therewith (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them (a) in connection with or as a result of or
related to the execution, delivery, enforcement, performance, or administration
of this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby, and (b) with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Loan Document, or
the use of the proceeds of the credit provided hereunder (irrespective of
whether any Indemnified Person is a party thereto), or any act, omission, event,
or circumstance in any manner related thereto (all the foregoing, collectively,
the “Indemnified
Liabilities”).  The foregoing notwithstanding, no Loan Party
shall have any obligation to any Indemnified Person under this Section
11.3 with respect to
any Indemnified Liability that a court of competent jurisdiction finally
determines to have resulted from the gross negligence or willful misconduct of
such Indemnified Person.  This provision shall survive the termination
of this Agreement and the repayment of the Obligations.  If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which the Borrower was required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by the Borrower
with respect thereto.  WITHOUT LIMITATION, THE FOREGOING
INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED
LIABILITIES THAT IN WHOLE OR IN PART WERE CAUSED BY, OR ARISE OUT OF, ANY
NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER
PERSON.


    
      
         


      

      
        27

        
          

        

      

      
         


      

    


    12.        NOTICES.

     

    Unless
otherwise provided in this Agreement, all notices or demands by the Borrower or
the Lender to the other relating to this Agreement or any other Loan Document
shall be in writing and shall be deemed given to a party: (a) when delivered to
the appropriate address by hand; (b) on the first business day after sent by
nationally recognized overnight courier service (costs prepaid); (c) when sent
by facsimile with telephonic confirmation or electronic mail with confirmation
of transmission (i.e. a “Read Receipt”) by the transmitting equipment; or (d)
three (3) Business Days after deposit if sent by certified mail, return receipt
requested, when received or rejected by the addressee, in each case to the
following addresses, facsimile numbers or electronic mail addresses and marked
to the attention of the person (by name or title) designated below (or to such
other address, facsimile number, electronic mail address, or person as a party
may designate by notice to the other party in writing given in accordance with
this Section 12):

     

    
      
        	
                If
      to any Loan Party:

              	 	
                Gwenco,
      Inc.

              
	 
      	 	
                18B
      East 5th
      Street

              
	 
      	 	
                Paterson,
      NJ 07524

              
	 
      	 	
                Attn:
      President

              
	 
      	 	
                Fax
      No.: (973) 684-8009

              
	 
      	 	
                E-mail
      Address: g2@harveywestbury.com

              
	 
      	 	 
      
	
                with
      a mandatory copy to:

              	 	
                Paul
      Stewart Synder, Esq.

              
	 
      	 	
                1544
      Winchester Ave, Suite 820

              
	 
      	 	
                PO
      Box 1067

              
	 
      	 	
                Ashland,
      Ky 41105-1067

              
	 
      	 	
                Fax
      No.: (606) 324-1665

              
	 
      	 	
                E-mail
      Address: ps@ws5.com

              
	 
      	 	 
      
	
                and

              	 	
                Indeglia
      & Carney

              
	 
      	 	
                1900
      Main Street, Suite 300

              
	 
      	 	
                Irvine,
      CA  92614

              
	 
      	 	
                Attn:
      Marc A. Indeglia, Esq.

              
	 
      	 	
                Fax
      No.: (949) 861-3324

              
	 
      	 	
                E-mail
      Address: marc@indegliacarney.com

              
	 
      	 	 
      
	
                If
      to the Lender:

              	 	
                Interstellar
      Holdings, LLC

              
	 
      	 	
                1446
      Redding Road

              
	 
      	 	
                Fairfield,
      CT 06824

              
	 
      	 	
                Attn:
      Leonard Amato

              
	 
      	 	
                Fax
      No.: (203) 259-2272

              
	 
      	 	
                E-mail
      Address: lininterstellar@gmail.com

              
	 
      	 	 
      
	
                with
      a mandatory copy to:

              	 	
                Taft
      Stettinius & Hollister LLP

              
	 
      	 	
                425
      Walnut Street, Suite 1800

              
	 
      	 	
                Cincinnati,
      OH 45202

              
	 
      	 	
                Attn:
      Paige L. Ellerman, Esq.

              
	 
      	 	
                Fax
      No.: (513) 381-0205

              
	 
      	 	
                E-mail
      Address:
ellerman@taftlaw.com

              


      

    


    
      
         


      

      
        28

        
          

        

      

      
         


      

    


    The
Borrower acknowledges and agrees that notices sent by the Lender in connection
with the exercise of enforcement rights against Collateral under the provisions
of the Code shall be deemed sent when deposited in the mail or personally
delivered, or, where permitted by law, transmitted by telecopy, electronic mail,
or any other method set forth above.

     

    13.           CHOICE
OF LAW AND VENUE; JURY TRIAL WAIVER.

     

    (a)           THE VALIDITY OF THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER
LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE
PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
KENTUCKY.

     

    (b)           THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS
LOCATED IN FAIRFIELD, CONNECTICUT; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE THE LENDER ELECTS TO
BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND.  EACH OF THE LOAN PARTIES AND THE LENDER WAIVES, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b).

     

    (c)           EACH OF THE PARTIES HERETO HEREBY
WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH OF THE PARTIES HERETO
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


    
      
         


      

      
        29

        
          

        

      

      
         


      

    


    14.        ASSIGNMENTS;
SUCCESSORS.

     

    14.1       Assignments.

     

    (a)           The
Lender, at any time, may assign and delegate to one or more assignees (each an
“Assignee”)
all, or any part, of the Obligations and the other rights and obligations of the
Lender hereunder and under the other Loan Documents,.

     

    (b)           In
connection with any such assignment or proposed assignment, the Lender may
disclose all documents and information that it now or hereafter may have
relating to the Borrower or the Borrower’s business.

     

    14.2       Successors.  This
Agreement shall bind and inure to the benefit of the respective successors and
assigns of each of the parties; provided, however, that neither the Borrower nor
any Guarantor may assign this Agreement or any rights or duties hereunder
without the Lender’s prior written consent and any prohibited assignment shall
be absolutely void ab initio.  No consent by the Lender to assignment
shall release the Borrower or any Guarantor from its Obligations.  The
Lender may assign this Agreement and the other Loan Documents and its rights and
duties hereunder and thereunder pursuant to Section
14.1 hereof.

     

    15.        AMENDMENTS;
WAIVERS.

     

    15.1       Amendments
and Waivers.  No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by any Loan Party therefrom, shall be effective unless the same shall
be in writing and signed by the  Lender and the Borrower, and then any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.

     

    15.2       No
Waivers; Cumulative Remedies.  No failure by the Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by the Lender in exercising the same, will operate as a
waiver thereof.  No waiver by the Lender will be effective unless it
is in writing, and then only to the extent specifically stated.  No
waiver by the Lender on any occasion shall affect or diminish the Lender’s
rights thereafter to require strict performance by any Loan Party of any
provision of this Agreement or any of the other Loan Documents.  The
Lender’s rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that the Lender may
have.

     

    16.        GUARANTY.

     

    16.1       Guaranty.  Each
Guarantor hereby unconditionally and irrevocably guarantees the punctual payment
when due, whether at stated maturity, by acceleration or otherwise, of all
Obligations of the Borrower now or hereafter existing under any Loan Document,
whether for principal, interest fees, expenses or otherwise (such obligations,
to the extent not paid by the Borrower, being the “Guaranteed
Obligations”), and agrees to pay any and all expenses (including
reasonable counsel fees and expenses) incurred by the Lender in enforcing any
rights under the guaranty set forth in this Article.  This is a
guaranty of payment not of collection.


    
      
         


      

      
        30

        
          

        

      

      
         


      

    


    16.2       Guaranty
Absolute.  Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Lender with
respect thereto.  The obligations of each Guarantor under this Article
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 the Borrower
or whether the Borrower is joined in any such action or actions.  The
liability of each Guarantor under this Article 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 Loan 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 Loan Document, including, without limitation, any
increase in the Guaranteed Obligations resulting from the extension of
additional credit to the Borrower or otherwise;

     

    (c)           any
taking, exchange, release or non-perfection of 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 the Borrower; or

     

    (e)           any
other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by the Lender that might
otherwise constitute a defense available to, or a discharge of, any Guarantor,
the Borrower or any other guarantor or surety.

     

    This
Article 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 by the Lender or any other Person, all as though such
payment had not been made.

     

    16.3       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
and any requirement that the Lender exhaust any right or take any action against
the Borrower or 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 16.3 is knowingly made in contemplation of such
benefits.  Each Guarantor hereby waives any right to revoke this
Article, and acknowledges that this Article is continuing in nature and applies
to all Guaranteed Obligations, whether existing now or in the
future.


    
      
         


      

      
        31

        
          

        

      

      
         


      

    


    16.4       Continuing
Guaranty; Assignments.  This Article is a continuing guaranty
and shall (a) remain in full force and effect until the later of (i) the
indefeasible cash payment in full of the Guaranteed Obligations (other than
indemnification obligations as to which no claim has been made) and all other
amounts payable under this Article and (ii) the Revolving Credit Maturity Date,
(b) be binding upon each Guarantor, its successors and assigns and (c) inure to
the benefit of and be enforceable by the Lender and its successors, pledgees,
transferees and assigns.  Without limiting the generality of the
foregoing clause (c), the Lender may pledge, assign or otherwise transfer all or
any portion of its rights and obligations under this Agreement (including,
without limitation, all or any portion of its commitments, its loans, owing to
it and any note held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted the
Lender herein or otherwise, in each case as provided in Article 14.

     

    16.5       Subrogation.  Each
Guarantor will not exercise any rights that it may now or hereafter acquire
against any Borrower or any other insider guarantor that arise from the
existence, payment, performance or enforcement of any Guarantor’s obligations
under this Article, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claims or remedy of the Lender against the Borrower or any
other insider guarantor or any Collateral, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including the
right to take or receive from the Borrower or any other insider 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 shall have been indefeasibly paid in full in cash and the
Revolving Credit Maturity Date shall have occurred.  If any amount
shall be paid to any Guarantor in violation of the immediately preceding
sentence at any time prior to the later of the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Article and the
Revolving Credit Maturity Date, such amount shall be held in trust for the
benefit of the Lender and shall forthwith be paid to the Lender to be credited
and applied to the Guaranteed Obligations and all other amounts payable under
this Article whether matured or unmatured, in accordance with the terms of this
Agreement, or to be held as collateral for any Guaranteed Obligations or other
amounts payable under this Article thereafter arising.  If (i) any
Guarantor shall make payment to the Lender of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Article shall be indefeasibly paid in full in cash, and (iii)
the Revolving Credit Maturity Date shall have occurred, the Lender will, at such
Guarantor’s request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment by such
Guarantor.


    
      
         


      

      
        32

        
          

        

      

      
         


      

    


    17.         GENERAL
PROVISIONS.

     

    17.1       Section
Headings.  Headings and numbers have been set forth herein for
convenience only.  Unless the contrary is compelled by the context,
everything contained in each Section applies equally to the entire
Agreement.

     

    17.2       Interpretation.  Neither
this Agreement nor any uncertainty or ambiguity herein shall be construed or
resolved against the Lender or the Borrower, whether under any rule of
construction or otherwise.  On the contrary, this Agreement has been
reviewed and negotiated by both  parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of the parties
hereto.

     

    17.3       Severability
of Provisions.  Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

     

    17.4       Counterparts;
Facsimile Execution.  This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement.  Delivery of an executed counterpart of this Agreement by
telecopy or in portable document format via electronic mail shall be equally as
effective as delivery of an original executed counterpart of this
Agreement.  Any party delivering an executed counterpart of this
Agreement by telecopy or electronic mail also shall deliver an original executed
counterpart of this Agreement, but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.  The foregoing shall also apply to each other Loan
Document.

     

    17.5       Revival
and Reinstatement of Obligations.  If the incurrence or payment
of the Obligations by any Loan Party or the transfer to the Lender of any
property should for any reason subsequently be declared to be void or voidable
under any state or federal law relating to creditors’ rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a “Voidable
Transfer”), and if the Lender is required to repay or restore, in whole
or in part, any such Voidable Transfer, or elects to do so upon the advice of
its counsel, then, as to any such Voidable Transfer, or the amount thereof that
the Lender is required or elects to repay or restore, and as to all reasonable
costs, expenses, and attorneys’ fees of the Lender related thereto, the
liability of the Loan Parties automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been
made.

     

    17.6       Integration.  This
Agreement, together with the other Loan Documents, reflects the entire
understanding of the parties with respect to the transactions contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral
or written, before the date hereof.


    
      
         


      

      
        33

        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly and validly executed and
delivered as of the date first written above.

    


    
      
        	
                THE
      LENDER:

              
	 
      
	
                INTERSTELLAR
      HOLDINGS, LLC

              
	 
      
	
                By:   

              	/s/
      Leonard Amato
	
                Name:
      Leonard Amato

              
	
                Title:
      Manager

              
	 
      
	
                THE
      BORROWER:

              
	 
      
	
                GWENCO,
      INC.

              
	 
      
	
                By:

              	/s/
      Eugene Chiaramonte, Jr.
	
                Name:
      Eugene Chiaramonte, Jr.

              
	
                Title:
      President

              
	 
      
	
                THE
      GUARANTORS:

              
	 
      
	
                QUEST
      MINERALS & MINING CORP.

              
	 
      
	
                By:

              	/s/
      Eugene Chiaramonte, Jr.
	
                Name:
      Eugene Chiaramonte, Jr.

              
	
                Title:
      President

              
	 
      
	
                QUEST
      MINERALS & MINING, LTD.

              
	 
      
	
                By:

              	/s/
      Eugene Chiaramonte, Jr.
	
                Name:
      Eugene Chiaramonte, Jr.

              
	
                Title:
      President

              


      

    


    
      
         


      

      
        34

        
          

        

      

      
         


      

    


    EXHIBIT
A

     

    DEFINITIONS

     

    “Account
Debtor” means any Person who is or who may become obligated under, with
respect to, or on account of, an Account, chattel paper, or a General
Intangible.

     

    “Accounts”
means all “accounts” as such term is defined in the Code and includes all of the
Borrower’s now owned or hereafter acquired right, title, and interest in
accounts receivable and any and all supporting obligations in respect
thereof.

     

    “Acquisition”
means any transaction or series of transactions designed to accomplish, or
having the effect, for any Borrower or any Borrower’s Subsidiary of: (a)
consolidating with or merging into any other Person; (b) permitting any other
Person to merge into any Borrower or any Borrower’s Subsidiary; or (c) acquiring
(or forming a new Subsidiary to acquire) all or substantially all of the assets
or equity of any other Person or identifiable business units, divisions, or
operations of any other Person, and “Acquisitions”
means more than one Acquisition.

     

    “Additional
Documents” has the meaning set forth in Section
4.2.

     

    “Affiliate”
means, as applied to any Person, any other Person who, directly or indirectly,
controls, is controlled by, or is under common control with, such
Person.  For purposes of this definition, “control” means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; provided, however, that, in any event: (a) any Person that owns
directly or indirectly 10% or more of the securities having ordinary voting
power for the election of directors, managers, or other members of the governing
body of a Person or 10% or more of the partnership or other ownership interests
of a Person (other than as a limited partner of such Person) shall be deemed to
control such Person; (b) each director (or comparable manager) and officer of a
Person shall be deemed to be an Affiliate of such Person; and (c) each
partnership or joint venture in which a Person is a partner or joint venturer
shall be presumed to be an Affiliate of such Person.

     

    “Agreement”
has the meaning set forth in the preamble hereto.

     

    “Assignee”
has the meaning set forth in Section
14.1.

     

    “Authorized
Person” means any officer of the Borrower.

     

    “Bankruptcy
Code” means Title 11 of the United States Code, as in effect from time to
time.

     

    “Bankruptcy
Court” has the meaning set forth in the recitals hereto.


    
      
         


      

      
        A-1

        
          

        

      

      
         


      

    


    “Benefit
Plan” means a “defined benefit plan” (as defined in Section 3(35) of
ERISA) for which the Borrower or any Subsidiary or ERISA Affiliate of the
Borrower has been an “employer” (as defined in Section 3(5) of ERISA) within the
past six years.

     

    “Board of
Directors” means the board of directors (or comparable managers) of the
Borrower or any committee thereof duly authorized to act on behalf
thereof.

     

     “Books”
means all of the Borrower’s now owned and hereafter acquired books and records
(including all of its Records indicating, summarizing, or evidencing its assets
(including the Collateral) or liabilities, all of its Records relating to its
business operations or financial condition, and all of its goods or General
Intangibles related to such information).

     

    “Borrower”
has the meaning set forth in the preamble to this Agreement.

     

    “Borrowing”
means a borrowing hereunder consisting of Loans made by the Lender to the
Borrower.

     

    “Borrowing
Request” has the meaning set forth in Section
2.2(a).

     

    “Business
Day” means any day that is not a Saturday, Sunday, or other day on which
Connecticut banks are authorized or required to close.

     

    “Capital
Expenditures” means expenditures for the acquisition (including the
acquisition by Capital Lease) or improvement of capital assets, as determined in
accordance with GAAP.

     

    “Capital
Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and which lease does not qualify as
a Tax Operating Lease.  For purposes of this definition, “Tax
Operating Lease” means any  “synthetic lease”, and any other lease (i)
that is treated as a lease for purposes of the IRC, and (ii) the lessor under
which is treated as the owner of the assets subject to the lease for purposes of
the IRC.

     

    “Capital
Lease Obligations” means, with respect to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are Capital Leases, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.

     

    “Cash
Equivalents” means Dollar denominated investments in book-entry
securities, negotiable instruments, or securities represented by instruments in
bearer or registered form that evidence:

     

    (a)           direct
obligations of, and obligations fully guaranteed as to timely payment by, the
United States of America;


    
      
         


      

      
        A-2

        
          

        

      

      
         


      

    


    (b)           demand
deposits, time deposits, or certificates of deposit of any depositors
institution or trust company incorporated under the laws of the United States of
America or any state thereof (or any domestic branch of a foreign bank) and
subject to supervision and examination by federal or state banking or depository
institution authorities; provided, however, that at the time of the investment
or contractual commitment to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such depository institution
or trust company) thereof shall have a credit rating from each of the Rating
Agencies in the highest investment category granted thereby; or

     

    (c)           repurchase
obligations with respect to any security that is a direct obligation of, or
fully guaranteed by, the United States of America or any agency or
instrumentality thereof the obligations of which are backed by the full faith
and credit of the United States of America, in either case entered into with a
depository institution or trust company (acting as principal) described in clause
(b) above (such depository institution or trust company being referred to
in this definition as a “financial
institution”).

     

    “Chapter
11 Case” has the meaning set forth in the recitals.

     

    “Chapter
11 Plan” means that certain plan of reorganization proposed by the
Borrower and the Parent in the Chapter 11 Case, in form and substance
satisfactory to Lender, as the same may be amended, supplemented and restated
from time to time.

     

    “Closing
Date” means the date of the making of the initial Loan (or other
extension of credit) hereunder, which shall not occur prior to the effective
date of the Chapter 11 Plan.

     

    “Code”
has the meaning set forth in Section
1.3.

     

    “Collateral”
means all of the Borrower’s now owned and hereafter acquired right, title, and
interest in and to all of its assets and property, including each of the
following:

     

    (a)           Accounts,

     

    (b)           Books,

     

    (c)           Equipment,

     

    (d)           General
Intangibles,

     

    (e)           Inventory,

     

    (f)           Investment
Property,

     

    (g)           Negotiable
Collateral,


    
      
         


      

      
        A-3

        
          

        

      

      
         


      

    


    (h)           Commercial
Tort Claims,

     

    (i)           Supporting
obligations,

     

    (j)           DDAs,

     

    (k)           Securities
Accounts,

     

    (l)           leasehold
interests in real estate,

     

    (m)           cash,
Cash Equivalents, money or other assets of the Borrower that now or hereafter
come into the possession, custody, or control of the Lender, and

     

    (n)           the
proceeds and products, whether tangible or intangible, of any of the foregoing,
including proceeds of insurance covering any or all of the foregoing, or other
tangible or intangible property resulting from the sale, exchange, collection,
or other disposition of any of the foregoing, or any portion thereof or interest
therein, and the proceeds thereof.

     

    “Collateral
Access Agreement” means a landlord waiver, processor waiver, bailee
letter, or other acknowledgement or agreement of any lessor, warehouseman,
processor, bailee,  consignee, or other Person in possession of,
having a Lien upon, or having rights or interests in any of  the
Collateral, in each case in form and substance satisfactory to the
Lender.

     

    “Commercial
Tort Claims” means any “commercial tort claim” as such term is defined in
the Code.

     

    “Compliance
Certificate” means that compliance certificate completed and executed by
the Borrower in the form attached hereto as Exhibit
D.

     

    “Confirmation
Order” means a final and non-appealable order of the Bankruptcy Court, in
form and substance satisfactory to Lender, entered pursuant to Section 1129 of
the Bankruptcy Code which order, among other things, confirms the Chapter 11
Plan and approves this Agreement in all respects.

     

    “Daily
Balance” means, with respect to each day during the term of this
Agreement, the amount of an Obligation owed at the end of such day.

     

    “DDA”
means any “deposit account” as such term is defined in the Code and includes any
checking or other demand deposit account maintained by the
Borrower.

     

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

     

    “Disbursement
Letter” means an instructional letter executed and delivered by the
Borrower to the Lender regarding the extensions of credit to be made on the
Closing Date, the form and substance of which is satisfactory to the
Lender.


    
      
         


      

      
        A-4

        
          

        

      

      
         


      

    


    “Dollar”
or “Dollars”
or “$” means currency of
the United States.

     

     “Environmental
Actions” means any complaint, summons, citation, notice, directive,
order, claim, litigation, investigation, judicial or administrative proceeding,
judgment, letter, or other communication from any Governmental Authority, or any
third party involving violations of Environmental Laws or releases of Hazardous
Materials from (a) any assets, properties, or businesses of the Borrower or any
predecessor in interest, (b) from adjoining properties or businesses, or (c) or
onto any facilities that received Hazardous Materials generated by the Borrower
or any predecessor in interest.

     

    “Environmental
Law” means any applicable federal, state, provincial, foreign, or local
statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree, or judgment, to the extent binding on the Borrower,
relating to the environment, employee health and safety, or Hazardous Materials
(including CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USC § 1251
et seq.; the Toxic Substances Control Act, 15 USC, § 2601 et seq.; the Clean Air
Act, 42 USC § 7401 et seq.; the Safe Drinking Water Act, 42 USC. § 3803 et seq.;
the Oil Pollution Act of 1990, 33 USC. § 2701 et seq.; the Emergency Planning
and the Community Right-to-Know Act of 1986, 42 USC. § 11001 et seq.; the
Hazardous Material Transportation Act, 49 USC § 1801 et seq.; and the
Occupational Safety and Health Act, 29 USC. §651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials)); and any state, local,
or foreign counterparts or equivalents, in each case as amended from time to
time.

     

    “Environmental
Liabilities and Costs” means all liabilities, monetary obligations,
Remedial Actions, losses, damages, punitive damages, consequential damages,
treble damages, costs, and expenses (including all reasonable fees,
disbursements, and expenses of counsel, experts, or consultants, and costs of
investigation and feasibility studies), fines, penalties, sanctions, and
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party that relate to any Environmental
Action.

     

    “Environmental
Lien” means any Lien in favor of any Governmental Authority or third
party for Environmental Liabilities and Costs.

     

    “Equipment”
means any “equipment” as such term is defined in the Code and includes all of
the Borrower’s now owned and hereafter acquired right, title, and interest with
respect to equipment, machinery, machine tools, motors, furniture, furnishings,
fixtures, vehicles (including motor vehicles), tools, parts, and goods (other
than consumer goods, farm products, or Inventory), wherever located, including
all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing.


    
      
         


      

      
        A-5

        
          

        

      

      
         


      

    


    “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute thereto.

     

    “ERISA
Affiliate” means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of the Borrower under
IRC Section 414(b), (b) any trade or business subject to ERISA whose employees
are treated as employed by the same employer as the employees of the Borrower
under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and
Section 412 of the IRC, any organization subject to ERISA that is a member of an
affiliated service group of which the Borrower is a member under IRC Section
414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of
the IRC, any Person subject to ERISA that is a party to an arrangement with the
Borrower and whose employees are aggregated with the employees of the Borrower
under IRC Section 414(o).

     

    “Event of
Default” has the meaning set forth in Section
8.

     

    “Exchange
Act” means the Securities Exchange Act of 1934, as in effect from time to
time.

     

    “Existing
Lender” means Interstellar Holdings, LLC.

     

    “Funding
Date” means the date on which a Borrowing occurs.

     

    “GAAP”
has the meaning set forth in Section
1.2.

     

    “General
Intangibles” means any “general intangible” as such term is defined in
the Code and includes all of the Borrower’s now owned or hereafter acquired
right, title, and interest with respect to general intangibles (including
payment intangibles, contract rights, rights to payment, rights arising under
common law, statutes, or regulations, chooses or things in action, goodwill,
patents, trade names, trademarks, servicemarks, copyrights, blueprints,
drawings, purchase orders, customer lists, monies due or recoverable from
pension funds, route lists, rights to payment and other rights under any royalty
or licensing agreements, infringement claims, computer programs, information
contained on computer disks or tapes, software, literature, reports, catalogs,
money, deposit accounts, insurance premium rebates, tax refunds, and tax refund
claims), and any and all supporting obligations in respect thereof, and any
other personal property other than goods, Accounts, Investment Property, and
Negotiable Collateral.

     

    “Governing
Documents” means as to any Person that is (a) a corporation, the
certificate or articles of incorporation and by-laws or code of regulations of
such Person, (b) a limited liability company, the articles of organization and
limited liability company agreement, operating agreement, or similar agreement
of such Person, (c) a partnership, the partnership agreement or similar
agreement of such Person, or (d) any other form of entity or organization, the
organizational documents analogous to the foregoing.


    
      
         


      

      
        A-6

        
          

        

      

      
         


      

    


    “Governmental
Authority” means any federal, state, local, or other governmental or
administrative body, instrumentality, department, or agency or any court,
tribunal, administrative hearing body, arbitration panel, commission, or other
similar dispute-resolving panel or body.

     

    “Guaranteed
Obligations” has the meaning set forth in Section
16.1.

     

    “Guarantor”
and “Guarantors”
have the meanings set forth in the preamble.

     

    “Hazardous
Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity,” (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

     

     “Indebtedness”
means (a) all obligations of the Borrower for borrowed money, (b) all
obligations of the Borrower evidenced by bonds, debentures, notes, or other
similar instruments and all reimbursement or other obligations of the Borrower
in respect of letters of credit, bankers acceptances, interest rate swaps, or
other financial products, (c) all obligations of the Borrower under Capital
Leases, (d) all obligations or liabilities of others secured by a Lien on any
asset of the Borrower, irrespective of whether such obligation or liability is
assumed, (e) all obligations of the Borrower for the deferred purchase price of
assets (other than trade debt incurred in the ordinary course of the Borrower’s
business and repayable in accordance with customary trade practices), (f) all
obligations of the Borrower guaranteeing or intended to guarantee (whether
directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with
recourse to the Borrower) any obligation of any other Person, and (g) all
obligations of the Borrower under the Chapter 11 Plan.

     

    “Indemnified
Liabilities” has the meaning set forth in Section
11.3.

     

    “Indemnified
Person” has the meaning set forth in Section
11.3.

     

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

     

    “Intangible
Assets” means, with respect to any Person, that portion of the book value
of all of such Person’s assets that would be treated as intangibles under
GAAP.


    
      
         


      

      
        A-7

        
          

        

      

      
         


      

    


    “Interstellar
Royalty Agreement” means that certain Royalty Agreement dated as of
August 1, 2006, between the Borrower and Tarun Mendiratta, as assigned to Lender
in June, 2007.

     

     “Inventory”
means all “inventory” as such term is defined in the Code and includes all of
the Borrower’s now owned or hereafter acquired right, title, and interest with
respect to inventory, including goods held for sale or lease or to be furnished
under a contract of service, goods that are leased by the Borrower as lessor,
goods that are furnished by the Borrower under a contract of service, and
finished goods, raw materials, work in process, or materials used or consumed in
the Borrower’s business, and minerals including coal in the ground and above the
ground.

     

    “Investment”
means, with respect to any Person, any investment by such Person in any other
Person (including Affiliates) in the form of loans, guarantees, advances, or
capital contributions (excluding (a) commission, travel, and similar advances to
officers and employees of such Person made in the ordinary course of business
and (b) bona fide Accounts arising from the sale of goods or rendition of
services in the ordinary course of business consistent with past practice),
purchases or other acquisitions for consideration of Indebtedness or Stock, and
any other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP.

     

    “Investment
Property” means any “investment property” as such term is defined in the
Code and includes all of the Borrower’s now owned or hereafter acquired right,
title, and interest in investment property, and any and all supporting
obligations in respect thereof.

     

    “IRC”
means the Internal Revenue Code of 1986, as in effect from time to
time.

     

    “Lender”
has the meaning set forth in the preamble to this Agreement.

     

    “Lender
Expenses” means all (a) costs or expenses (including taxes and insurance
premiums) required to be paid by any Loan Party under any of the Loan Documents
that are paid or incurred by the Lender, (b) fees, costs, or charges, including
costs of travel and lodging, paid or incurred by the Lender in connection with
the Lender’s transactions with any Loan Party, and (c) the Lender’s reasonable
fees and expenses (including attorneys’ fees) incurred in structuring, drafting,
reviewing, administering, enforcing, or amending the Loan
Documents.

     

    “Lender-Related
Person” means, with respect to the Lender, the Lender, together with the
Lender’s Affiliates, and the officers, directors, managers, members, employees,
and agents of the Lender and its Affiliates.

     

     “Lien”
means any interest in an asset securing an obligation owed to, or a claim by,
any Person other than the owner of the asset, whether such interest shall be
based on the common law, statute, or contract, whether such interest shall be
recorded or perfected, and whether such interest shall be contingent upon the
occurrence of some future event or events or the existence of some future
circumstance or circumstances, including the lien or security interest arising
from a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, security agreement, conditional sale or trust receipt, or
from a lease, consignment, or bailment for security purposes.


    
      
         


      

      
        A-8

        
          

        

      

      
         


      

    


    “Loan
Documents” means this Agreement, the Disbursement Letter, the Promissory
Note, any other note or notes executed by the Borrower in connection with this
Agreement and payable to the Lender, and any other agreement, document, or
instrument entered into, now or in the future, by any Loan Party and delivered
to the Lender in connection with this Agreement or the transactions contemplated
hereby, as any or all of the foregoing may be amended, restated, supplemented,
and/or renewed from time to time.

     

    “Loan
Party” means each of the Borrower and each Guarantor, and “Loan
Parties”
means the Borrower and the Guarantors collectively.

     

    “Loans”
means all loans, advances of credit, and other sums now or hereafter advanced by
or on behalf of the Lender to or for the benefit of Borrower.

     

    “Material
Adverse Change” means (a) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of any Loan Party, (b) a material impairment of any
Loan Party’s ability to perform its obligations under the Loan Documents to
which it is a party or of the Lender’s ability to enforce the Obligations or
realize upon the Collateral, or (c) a material impairment of the enforceability
or priority of the Lender’s Liens with respect to the Collateral.

     

    “Maximum
Revolver Amount” has the meaning set forth in Section
2.1.

     

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

     

    “Negotiable
Collateral” means “letter-of-credit rights,” “instruments,” “documents,”
“deposit accounts,” “chattel paper” and “supporting obligations” as such terms
are defined in the Code and includes all of the Borrower’s now owned and
hereafter acquired right, title, and interest with respect to letters of credit,
letter of credit rights, instruments, promissory notes, drafts, documents,
deposit accounts, and chattel paper (including electronic chattel paper and
tangible chattel paper), and any and all supporting obligations in respect
thereof.


    
      
         


      

      
        A-9

        
          

        

      

      
         


      

    


     “Obligations”
means all loans, advances, debts, principal, interest (including any interest
that, but for the provisions of the Bankruptcy Code, would have accrued),
premiums, liabilities (including all amounts charged to the Loan Parties
pursuant hereto), obligations, fees, charges, costs, Lender Expenses (including
any fees or expenses that, but for the provisions of the Bankruptcy Code, would
have accrued), lease payments, guaranties, covenants, and duties of any kind and
description owing by the Loan Parties to the Lender, whether pursuant to or
evidenced by the Loan Documents or otherwise, and irrespective of whether for
the payment of money, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, and including all interest not
paid when due and all Lender Expenses that any Loan Party is required to pay or
reimburse by the Loan Documents, by law, or otherwise.  Any reference
in this Agreement or in the Loan Documents to the Obligations shall include all
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, and supplements, thereto and thereof, as applicable, both prior
and subsequent to any Insolvency Proceeding.

     

    “Overadvance”
has the meaning set forth in Section
2.6.

     

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

     

    “Permitted
Discretion” means a determination made in good faith and in the exercise
of reasonable (from the perspective of a secured lender) business
judgment.

     

    “Permitted
Dispositions” means (a) sales or other dispositions by the Borrower in
the ordinary course of the Borrower’s business of Equipment that is
substantially worn, damaged, or obsolete, (b) sales by the Borrower of Inventory
to buyers in the ordinary course of business, (c) the use or transfer of money
or Cash Equivalents by the Borrower in a manner that is not prohibited by the
terms of this Agreement, the other Loan Documents, the Chapter 11 Plan or
otherwise in the ordinary course of business, and (d) the licensing by the
Borrower, on a non-exclusive basis, of patents, trademarks, copyrights, and
other intellectual property rights in the ordinary course of the Borrower’s
business.

     

    “Permitted
Investments” means (a) investments in Cash Equivalents, (b) investments
in negotiable instruments for collection, and (c) advances made in connection
with purchases of goods or services in the ordinary course of
business.

     

    “Permitted
Liens” means (a) Liens held by the Lender, (b) Liens for unpaid taxes
that either (i) are not yet delinquent, or (ii) do not constitute an Event of
Default hereunder and are the subject of Permitted Protests, (c) the interests
of lessors under operating leases, (d) purchase money Liens or the interests of
lessors under Capital Leases to the extent that such Liens or interests secure
Permitted Purchase Money Indebtedness and so long as such Lien attaches only to
the asset purchased or acquired and the proceeds thereof, (e) Liens arising by
operation of law in favor of warehousemen, landlords, carriers, mechanics,
materialmen, laborers, or suppliers, incurred in the ordinary course of the
Borrower’s business and not in connection with the borrowing of money, and which
Liens either (i) are for sums not yet delinquent, or (ii) are the subject of
Permitted Protests, (f) Liens arising from deposits made in connection with
obtaining worker’s compensation or other unemployment insurance, (g) Liens or
deposits to secure performance of bids, tenders, or leases incurred in the
ordinary course of the Borrower’s business and not in connection with the
borrowing of money, (h) Liens granted as security for surety or appeal bonds in
connection with obtaining such bonds in the ordinary course of the Borrower’s
business, and (i) Liens resulting from any judgment or award that is not an
Event of Default hereunder.


    
      
         


      

      
        A-10

        
          

        

      

      
         


      

    


    “Permitted
Protest” means the right of any Loan Party to protest any Lien (other
than any such Lien that secures the Obligations), taxes (other than payroll
taxes or taxes that are the subject of a United States federal tax lien), or
rental payment, provided that (a) a reserve with respect to such obligation is
established on the Books in such amount as is required under GAAP, (b) any such
protest is instituted promptly and prosecuted diligently by any Loan Party in
good faith, and (c) the Lender is satisfied that, while any such protest is
pending, there will be no impairment of the enforceability, validity, or
priority of any of the Liens in favor of the Lender.

     

    “Permitted
Purchase Money Indebtedness” means, as of any date of determination,
Purchase Money Indebtedness incurred after the Closing Date in an aggregate
amount outstanding at any one time not in excess of $2 million.

     

    “Permits”
has the meaning set forth in Section
5.21.

     

    “Person”
means natural persons, corporations, limited liability companies, limited
partnerships, general partnerships, limited liability partnerships, joint
ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.

     

    “Projections”
means the Borrower’s forecasted (a) balance sheets, (b) profit and loss
statements, and (c) cash flow statements, all prepared on a consistent basis
with the Borrower’s historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.

     

    “Promissory
Note” means the revolving note from the Borrower to the Lender in the
form of Exhibit
E hereto.

     

    “Purchase
Money Indebtedness” means Indebtedness (other than the Obligations, but
including Capital Lease Obligations), incurred at the time of, or within 20 days
after, the acquisition of any fixed assets for the purpose of financing all or
any part of the acquisition cost thereof.

     

     “Record”
means information that is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable form.

     

    “Remedial
Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
release or threatened release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (d) conduct any other
actions authorized by 42 USC § 9601, et seq.


    
      
         


      

      
        A-11

        
          

        

      

      
         


      

    


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

     

    “Retiree
Health Plan” means an “employee welfare benefit plan” within the meaning
of Section 3(1) of ERISA that provides benefits to persons after termination of
employment, other than as required by Section 601 of ERISA.

     

    “Revolving
Credit Loans” has the meaning set forth in Section
2.1.

     

    “Revolving
Credit Maturity Date” has the meaning set forth in Section
2.1.

     

    “SEC”
means the United States Securities and Exchange Commission and any successor
thereto.

     

    “Securities
Account” means a “securities account” as that term is defined in the
Code.

     

    “Solvent”
means, with respect to any Person on a particular date, that such Person is not
insolvent (as such term is defined in the Uniform Fraudulent Transfer
Act).

     

    “Stock”
means, as to any Person, all shares, interests, partnership interests, limited
liability company interests, participations, rights in, or other equivalents
(however designated) of such Person’s equity (however designated) and any
rights, warrants, or options exchangeable for or convertible into such shares,
interests, participations, rights, or other equity.

     

     “Subsidiary” of a Person means a
corporation, partnership, limited liability company, or other entity in which
that Person directly or indirectly owns or controls the Stock having ordinary
voting power to elect a majority of the board of directors (or appoint other
comparable managers) of such corporation, partnership, limited liability
company, or other entity.

     

     “Termination
Event” means (a) a Reportable Event with respect to any Benefit Plan or
Multiemployer Plan; (b) the withdrawal of the Borrower, any Subsidiary of the
Borrower, 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 by the Borrower, any Subsidiary of
the Borrower, or any of ERISA Affiliate to terminate a Benefit Plan pursuant to
Section 4041 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 the
Borrower, any Subsidiary of the Borrower, or any of ERISA Affiliate from a
Multiemployer Plan.

     

     “Voidable
Transfer” has the meaning set forth in Section
17.5.


    
      
         


      

      
        A-12

        
          

        

      

      
         


      

    


    EXHIBIT
B

     

    FORM OF BORROWING
REQUEST


    
      
         


      

      
        B-1

        
          

        

      

      
         


      

    


    EXHIBIT
C

     

    CONDITIONS
PRECEDENT

    


    (a)         the
Closing Date shall occur on or before March 31, 2010;

     

    (b)         the
Confirmation Order shall be in full force and effect and shall not have been
reversed, stayed, modified or amended absent the written consent of the
Lender;

     

    (c)         the
Lender shall have filed financing statements and fixture filings with respect to
the Collateral against the Borrower as required by the Lender;

     

    (d)         the
Lender shall have received each of the following documents, in form and
substance satisfactory to the Lender:

     

    (i)           the
Disbursement Letter;

     

    (ii)          the
Promissory Note;

     

    (iii)         a
W-9 form duly completed for the Borrower;

     

    (iv)         evidence
that all parties with any interest in real property subject to a lease to
Borrower have received notice of the Borrower’s approved disclosure statement
and proposed plan of reorganization through the solicitation process;
and

     

    (v)          leasehold
mortgages for all real property subject to a lease to Borrower, executed by
Borrower.

     

    (e)         the
Lender shall have received a certificate from the Secretary of each Loan Party
attesting to (i) the resolutions of such Loan Party’s Board of Directors
authorizing its execution, delivery, and performance of this Agreement and the
other Loan Documents to which such Loan Party is a party and authorizing
specific officers of such Loan Party to execute the same and (ii) the incumbency
and signatures of such officers;

     

    (f)          the
Lender shall have received copies of each Loan Party’s Governing Documents, as
amended, modified, or supplemented to the Closing Date, certified by the
Secretary of such Loan Party;

     

    (g)         the
Lender shall have received a certificate of status with respect to each Loan
Party, dated within 10 days of the Closing Date, such certificate to be issued
by the appropriate officer of the jurisdiction of organization of such Loan
Party, which certificate shall indicate that such Loan Party is in good standing
in such jurisdiction;


    
      
         


      

      
        C-1

        
          

        

      

      
         


      

    


    (h)           the
Lender shall have received certificates of status with respect to each Loan
Party, each dated within 30 days of the Closing Date, such certificates to be
issued by the appropriate officer of the jurisdictions (other than the
jurisdiction of organization of such Loan Party) in which its failure to be duly
qualified or licensed would constitute or result in a Material Adverse Change,
which certificates shall indicate that such Loan Party is in good standing in
such jurisdictions;

     

    (i)           the
Lender shall have received a certificate of insurance, together with the
endorsements thereto, as are required by Section
6.6, the form and substance of which shall be satisfactory to the
Lender;

     

    (j)           the
Borrower shall have paid to the Lender all Lender Expenses incurred in
connection with the transactions evidenced by this Agreement;

     

    (k)           the
Lender shall be satisfied that the Lender has been granted and continues to have
a perfected, first priority lien in the Collateral;

     

    (l)           all
other documents and legal matters required by the Lender in connection with the
transactions contemplated by this Agreement shall have been delivered, executed,
or recorded and shall be in form and substance satisfactory to the Lender;
and

     

    (m)          the
Chapter 11 Plan shall have become effective by its terms.


    
      
         


      

      
        C-2

        
          

        

      

      
         


      

    


    EXHIBIT
D

     

    FORM OF COMPLIANCE
CERTIFICATE


    
      
         


      

      
        D-1

        
          

        

      

      
         


      

    


    EXHIBIT
E

     

    FORM OF REVOLVING CREDIT
NOTE


    
      
         


      

      
        E-1